The Federal Court has dismissed an appeal against a decision of the Full Bench of Fair Work Australia ordering an employer to reinstate a long-serving employee after finding that he was unfairly dismissed.

Implications for employers

Points of interest from this case include:

  • In making a decision to terminate an employee’s employment, employers must consider all the circumstances. In this case, the nature of the misconduct, the long and unblemished record of the employee and the potential impact of termination on him and his family, were all important issues.
  • The employer must ensure that the reason for termination is correctly identified and consistent with its own policies. In this case, the safety breach was incorrectly identified in the employer’s termination letter as a breach of one of the employer’s “Golden Rules”.
  • Employers must ensure safety messages are constantly reinforced and that the consequences of a breach of safety practices are clearly articulated.

Background

The employee had worked for the employer as a full time employee for approximately 28 years.  Although principally employed as a shot firer, at the time of his dismissal he had been tasked with working with water pumps used to de-water pools of water at the Mount Thorley/Warkworth Mine outside of Newcastle.

On 8 February 2010, two external contractors had been engaged to conduct repair work on a pipe connected to the diesel-powered water pump on which the employee was working.  Before commencing repair work, the contractors affixed their own personal safety locks to the isolator switch of the water pump, which prevented the pump from being switched on whilst any workers were carrying out work.

Use of isolation safety locks before working on equipment was one of the employer’s “Golden Rules’” regarding workplace safety.  Employees were aware that breach of a Golden Rule could lead to disciplinary action including termination.  An Isolation Procedure had also been put in place to minimise the risk of potential accidental or unexpected start-up of machinery or plant, movement of materials during servicing or any other interaction or exposure to other risks of personal injury.  The Isolation Procedure stated that ‘personal locks may never be removed other than by their owner, other than in the presence of and under the supervision of the General Manager or his/her appointed nominee, and in accordance with a documented procedure'.

After the contractors had completed their repairs, they left to attend to another job, leaving the personal safety locks affixed.  In the course of performing his work, the employee removed the contractor’s personal isolation locks from the water pump.  The contractors, upon returning to the area, noticed that their locks had been removed and contacted their supervisor. Following an investigation, the employee confessed to removing the safety locks and was subsequently dismissed.  The letter of termination stated that the employee’s conduct in removing the safety lock was a ‘serious and clear breach’ of one of the Golden Rules.

Initial decision of Fair Work Australia

In determining whether the employee’s dismissal was harsh, unjust or unreasonable, Commissioner MacDonald identified a number of factors operating in the employee’s favour.  The Commissioner noted that the employee had 28 years of service, was known to be hardworking, worked in a safety critical role and had a previously unblemished disciplinary and safety record.  The employee was also 55 years old and the major breadwinner of his family, and had demonstrated remorse in relation to his actions.

Commissioner MacDonald was also satisfied that, prior to removing the safety isolation locks, the employee had driven the length of the pipeline and saw that no one was working on the pipeline.  The Commissioner found that it was unlikely that anyone would have recommenced work on the pipe and, even if they had, the chance of injury was remote.

Despite these considerations, Commissioner MacDonald ultimately found that the employer had a valid reason for termination and the employee’s dismissal should be upheld.  The Commissioner considered that the dismissal was not harsh, unjust or unreasonable as the employee had deliberately and consciously breached a critical safety procedure in a working environment where assumptions about the likelihood of risk to another worker were not acceptable.

Appeal to the Full Bench

On appeal, the Full Bench of Fair Work Australia considered that the employee’s breach of the isolation procedure, while not trivial, was far from being at the most serious end of the scale.  The Full Bench noted that, in the particular circumstances of the case, the safety risk posed by the actions of the employee in removing the contractors’ isolation locks was, for all practical purposes, non-existent.

In addition to the factors considered by Commissioner MacDonald, the Full Bench noted that given his age, the employee would almost inevitably find it difficult to secure alternative employment at a similar level of remuneration, particularly given that it was likely that any employer in the coal industry would be concerned to know why he had left his previous job, and would likely be wary of engaging a person dismissed for a safety breach.  The Full Bench also considered the fact that the dismissal was likely to cause the employee and his family serious hardship.

The Full Bench also noted that the prohibition against removing another person’s safety isolation lock was not itself a “Golden Rule”, but a requirement of the employer’s Isolation Procedure.  The Isolation Procedure did not provide that breaches of the procedure would lead to disciplinary action, let alone dismissal.  Accordingly, the Full Bench accepted that although the employee’s misconduct may have reasonably called for a disciplinary sanction and potentially a period of suspension without pay, it would not have justified dismissal.

Given the above findings, the majority of the Full Bench decided that termination of the employee’s employment in all the circumstances was manifestly harsh.  An order was made to have the employee reinstated, along with a deduction equivalent to three months’ salary from the arrears of wages, in recognition of the importance of the employer’s safety procedures and the serious consequences of breaching the Isolation Procedure.

Appeal to the Federal Court

Following the Full Bench’s decision to overturn the employee’s dismissal, the employer appealed to the Federal Court.  Under section 400 of the Fair Work Act, the Full Bench must not grant leave to appeals concerning applications alleging unfair dismissal unless it considers that it is in the public interest to do so.  The employer alleged that the Full Bench, in giving the employee permission to appeal, committed jurisdictional error as it either misunderstood the nature of the jurisdiction granted to it, or it failed to exercise its jurisdiction as required by law.

The appeal was heard by a Full Court.  The Court found that the Full Bench of FWA clearly understood the nature of its jurisdiction, had regard to the statutory limitations on its jurisdiction and did not fail to exercise its jurisdiction.

Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54