Key Points:

No matter how grave and destructive an employee's conduct may be, the employer must also look at the issues from the employee's perspective.

In 1973 Elton John had a hit with "Saturday Night's Alright for Fighting". While even this is, with the greatest of respect to Elton John and his lyricist Bernie Taupin, a dubious proposition, no night (or day) at work is alright for fighting.

Yet, in a recent decision of Commissioner Hampton in Gwatking v Schweppes Australia Pty Ltd [2015] FWC 3969, an employee successfully challenged the termination of his employment, notwithstanding that he was found to have actively participated in a physical altercation.

The case is yet another reminder of the complexities and nuances in any decision to terminate employment.

Soft drink, hard decision: a fight on the production line

Mr Mark Gwatking was employed as a fitter operator by Schweppes Australia Pty Ltd at its Payneham factory in South Australia. At the time of his dismissal, he had served Schweppes for over 30 years.

The Payneham facility contains a production line for Schweppes soft drink products. Mr Gwatking and other employees were responsible for monitoring different stages of the production line to ensure it operated correctly. Communication and effective interaction between employees was an important part of the work processes.

On 9 January 2015, Mr Gwatking was overseeing the automated capping of soft drink bottles, but some caps did not go on properly. Further down the line, another employee, Mr FW, noticed this and threw at least one bottle into the drip trap beneath the production line, in the direction of Mr Gwatking. As the bottle wasn't capped, the contents sprayed near Mr Gwatking. He retaliated by throwing a half-full bottle in Mr FW's direction.

Although the bottle did not hit Mr FW, Mr FW was angered and a heated verbal exchange ensued.

Lunch was called and both men proceeded towards the lunchroom. Mr FW, still smarting at the bottle thrown at him, approached Mr Gwatking and came face to face with him. Both men started yelling at each other and soon found themselves grabbing the other by the shirt. Punches were thrown (although none connected) and the two pushed and shoved each other. Eventually, other employees intervened to physically separate the two. For some time afterward, the two continued to trade heated verbal attacks.

Both men were equal participants in the scuffle which took place. As Commissioner Hampton described it, "[b]oth Mr FW and Mr Gwatking were actively involved in the altercation and both were being aggressive, physically and verbally".

Schweppes suspended both men on pay and investigated the incident. This found that both Mr Gwatking and Mr FW were involved in "a serious incident which breached numerous company policies". During the course of the investigation, when asked about his conduct, Mr Gwatking stated, "it's a man's right to fight back".

Mr Gwatking's employment was brought to an end with five weeks' pay in lieu of notice. Mr FW's employment was also terminated for his part in the altercation.

Mr Gwatking challenged the decision to terminate his employment on the basis that it was harsh, unjust or unreasonable.

The Commission's view: consider all the circumstances

Section 385(1) of the Fair Work Act 2009 (Cth) defines an unfair dismissal as one that is "harsh, unjust or unreasonable". Section 387 records the criteria by which "harshness etc" is to be determined.

An important criterion is whether there was a "valid reason" for the termination. It has been said in previous cases that "[t]he absence of a valid reason will almost invariably render the dismissal unfair" (Parmalat Food Products Pty Ltd v Wililo [2011] FWAFB 1166).

On the facts, Mr Gwatking's conduct was held to amount to a valid reason. Even if Mr Gwatking was provoked by Mr FW, his conduct went beyond self-defence or a reasonable response to provocation. In the ensuing melee, Mr Gwatking was just as active and aggressive as Mr FW.

However, the Commission emphasised that "an overall assessment" is required and in this respect, the impact of loss of employment in Mr Gwatking's personal circumstances was a critical factor. Mr Gwatking had served Schweppes for over 30 years. He was more than 50 years old, and his "relatively narrow skill-set" represented a "significant" mitigating factor. This, with the fact that Mr FW had provoked at least the initial verbal exchange, meant that the dismissal was harsh.

Reinstatement however was found to be inappropriate. Mr Gwatking's lack of contrition and remorse in particular was a reason for Schweppes to lose trust and confidence that he would act appropriately in future if reinstated.

Compensation was therefore determined to be the appropriate remedy. After applying a reduction both for the prospect of his repeat misconduct and his actual misconduct, Mr Gwatking was awarded 19 weeks' pay.

Lesson for employers: reconcile competing interests

In some respects, this case illustrates the delicate balancing of competing interests, which is often at the core of employment disputes. In this case, it was Schweppes' desire to maintain a safe and peaceful workplace, as against Mr Gwatking's individual concern at the impact of termination upon him. Finding the right balance can be difficult but employers should attempt to do so.

As a general proposition, fighting at a workplace is different to a unilateral assault. If one employee hits or otherwise physically harms a colleague (who does not retaliate) this will, in most circumstances, be considered a more serious infringement of employment obligations. Having said that, a single instance of mutual physical violence could be so serious that it renders the continuation of employment untenable. Each case turns on its facts and circumstances.

The old schoolyard approach of simply holding each participant equally responsible for an altercation has no place in the context of unfair dismissal. An employer should properly investigate the circumstances surrounding the altercation and act in a manner that is consistent with any relevant findings.

Termination is the most serious disciplinary step and the impact on the employee of such action must be carefully considered having careful regard to the circumstances of that employee. In this decision the Commission affirmed that subjective factors (particularly the personal circumstances of the employee) must also be given due consideration in the decision-making process. As Commissioner Hampton observed, the reconciliation of competing interests is part of the essence of the unfair dismissal regime:

"in considering whether a reason is valid, the requirement should be applied in the practical sphere of the relationship between an employer and an employee where each has rights, privileges, duties and obligations conferred and imposed on them. That is, the provisions must be applied in a practical, common sense way to ensure that the employer and employee are each treated fairly".