AWU, NSW (on behalf of Stojanovski) v BlueScope Steel

HEARING DATES: 10/07/2004 DATE OF JUDGMENT: 10/18/2004

Mr J Nolan (of counsel) instructed by Maurice May Lawyers (Ms R May) LEGAL REPRESENTATIVES: Mr D Lloyd, solicitor Blake Dawson Waldron Lawyers

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

FULL BENCH CORAM: Walton J, Acting-President Grayson DP Murphy C 18 October 2004 Matter No IRC 4305 of 2004

THE AUSTRALIAN WORKERS' UNION, NEW SOUTH WALES (on behalf of Vince Stojanovski) v BLUESCOPE STEEL (AIS) PTY LTD (formerly called BHP STEEL (AIS) PTY LTD)

Application by The Australian Workers' Union, New South Wales (on behalf of Vince Stojanovski) for leave to appeal and appeal against a decision of Commissioner O'Neill given on 1 July 2004 in matter no. IRC 5415 of 2003 REASONS FOR DECISION OF THE COMMISSION [2004] NSWIRComm 304

1 These reasons relate to orders made by the Full Bench in Wollongong on 7 October 2004 granting leave to appeal, upholding the appeal and reinstating the appellant's member Mr Vince Stojanovski on certain terms.

2 At the time of his dismissal on 19 September 2003, Mr Stojanovski had been employed in the steelworks for 33 years. On 18 September 2003 at approximately 12.30am, Mr Stojanovski attended work on the night shift roster and commenced operating the TM 80 overhead crane (80 tonne capacity). He was an hour or so late for work having been rostered to commence his shift at 11.30pm on 17 September 2003. He was telephoned by the shift supervisor when he did not attend for work at the rostered commencing time and is said to have admitted sleeping in.

3 At or about 2.00am he was observed by another operator to be driving the overhead crane in an erratic manner and in the process, to have caused damage to the heavy coils being handled on the crane. The operator discussed his concerns with a fellow operator and then reported the matter to the shift supervisor.

4 The shift supervisor, accompanied by two other supervisors then observed Mr Stojanovski load a coil off centre onto a skid causing the coil to rock down into place and to then reverse the crane causing the C hook to strike the mobile sleeve rack. (We observe that the coils can weigh between 25 and 30 tonnes).

5 Mr Stojanovski was asked to come down from the crane for the purpose of undergoing a drug and alcohol test. On the evidence accepted by the Commissioner, when Mr Stojanovski finally agreed to come down from the crane after initially refusing and making gestures from the crane cabin, he was angry and agitated and his breath smelt of alcohol.

6 He was asked repeatedly and refused repeatedly to take a drug and alcohol test and after behaving in an abusive and allegedly threatening manner towards the supervisors he left the workplace and went home.

7 His dismissal from employment on 19 September 2003 was followed four days later by what is known as a dismissal appeal conference with management at which he was represented by the Australian Workers' Union New South Wales (AWU) and following which, the decision to dismiss was confirmed. We note here the evidence led by the employer to the effect that Mr Stojanovski through his union representatives at the appeal conference, showed remorse for his actions, indicated his willingness to comply with the drug and alcohol policy and undergo random testing for a six month period and offered his apologies to whomsoever such apologies were deemed due.

8 In his decision of 1 July 2004, O'Neill C stated: I have considered all of the evidence in respect to this matter and it has become quite obvious throughout the course of the proceedings that in my view the Applicant Mr Stojanovski was given more than a fair go by the Company. The Commission does not support the view that the Applicant Mr Stojanovski was victimised, threatened, harassed or intimidated in any way at all. It is the view of the Commission that the Applicant Mr Stojanovski had over reacted and had refused a reasonable request by his employers firstly to come down from his crane and secondly to refuse a reasonable request for a drug and alcohol test particularly in regard to Mr Stojanovski's previous behaviour. It is also obvious in my opinion based upon the evidence and the balance of evidence that Mr Stojanovski reacted in a way which was aggressive towards his Supervisor, it is quite clear to the Commission that Mr Stojanovski had touched the Supervisor Mr Holman and that touching of any employee in the workplace is a totally unacceptable procedure, particularly in the manner in which this incident occurred. It was not acceptable for the Applicant Mr Stojanovski to refuse to take the drug and alcohol test. I turn now to the incident which occurred when Mr Stojanovski then claiming harassment went home. In my view this was simply a reaction by Mr Stojanovski to the incidents (sic) which had occurred previously where he had refused to accept the drug and alcohol test. Mr Stojanovski in order to avoid taking the test then decided to go home thus placing the Company in the position where it was no longer possible to take the test and to prove one way or the other what the position was of Mr Stojanovski. The reality of the situation was that if Mr Stojanovski had in any way not been well enough to come to work though (sic) the purposes of reacting to alcohol or some other problem then he should have had the curtesy (sic) to have the Company informed that he was not available to present himself for work and someone else should have been organised. It is a totally unacceptable practice to come to work when an employee is not in a fit state. The actions of Mr Stojanovski certainly gave cause for concern by the Company. There is no doubt in my opinion that the following occurred based upon the evidence given;

· Mr Holman smelt what seemed like alcohol on Mr Stojanovski's breath when he was speaking to him · That there was clearly a report of erratic crane driving from other operators · That the Supervisors had witnessed Mr Stojanovski load a coil incorrectly · The Supervisors had witnessed Mr Stojanovski hit the mobile sleeve rack · That Mr Stojanovski had initially refused and delayed coming down from his crane · That Mr Stojanovski had made gestures to Mr Holman that were out of character · That Mr Stojanovski had acted in an inappropriate manner towards all three Supervisors when asked about his driving and the damaged coils · That Mr Stojanovski following this refused a request that he undertake a drug and alcohol test which was repeated more than once and there is no excuse for this as the company can at any time can ask an employee to take a drug and alcohol test and there should be not (sic) problem with so doing In my opinion the Company is required to manage what is considers to be unsafe employees and it has a right to test for causes following a significant incident. In my opinion the incidents which occurred with Mr Stojanovski are more than sufficient to warrant him taking the test. In considering this matter it also must be remembered that on previous occasions Mr Stojanovski has had warnings for similar types of behaviour. Under the circumstances therefore it seems to me that very little can be done to help Mr Stojanovski. Mr Stojanovksi acted in an aggressive and abusive manner towards his Supervisors. He refused a reasonable request with respect to the drug and alcohol test which are an extreme matter of safety at the steel works and he refused a reasonable request to come down from his crane. There is not doubt in my mind that the incidents did occur and that Mr Stojanovski was responsible for them. I have also formed the view that Mr Stojanovski was avoiding the drug and alcohol test because of what he feared may well have been the outcome from them. Under the circumstances therefore it is my opinion the Mr Stojanovski has put himself outside the reasonable control of his employers and therefore no longer should be placed in employment at the steel works. In the Application therefore of Mr Stojanovski I find was not dismissed in a harsh, unjust and unreasonable manner. They had every cause and reason to terminate his employment which with a bit of thought by Mr Stojanovski could have well been corrected in another way, therefore the application is dismissed and the case concluded. We note that the proceedings before O'Neill C the respondent expressed its case in the alternative (although this was not acknowledges in the Commissioner's decision.

Leave to appeal 9 Section 188(1) of the Industrial Relations Act 1996 (the Act) provides that an appeal to a Full Bench of the Commission may be made only with the leave of the Full Bench.

10 Section 188(2) requires that leave be granted if the Full Bench is of the opinion that the matter is of such importance that in the public interest, leave should be granted.

11 The principles applicable to the granting of leave to appeal have been settled by the Commission in Knowles v Anglican Church Property Trust (No.2) (1999) 95 IR 380 and also by the line of Full Bench cases which have followed and applied that decision. ..(See also Mitchforce v Starkey (2002) 117 IR 122; Al-Shennag v Bankstown City Council Civic Services Group (2002) 188 IR 138; King v State Bank of New South Wales (No 2) [2002] NSWIRComm 353; Weisser v Spur Group Pty Ltd (2003) 121 IR 89 and Peden v Lake Macquarie Refrigeration Pty Ltd [2004] NSWIRComm 66.)

12 In this matter there are two factors warranting the grant of leave. First, the application of the drug and alcohol policy of Bluescope Steel (AIS) Pty Ltd ("Bluescope") is a matter of significant importance for industrial relations and occupational health and safety at the steelworks and has been recently the subject of consideration by a Full Bench of the Commission: Australian Workers Union, New South Wales v BHP Steel (AIS) Pty Ltd [2003] NSWIRComm 461 (Drug & Alcohol Case). Secondly, it is important to correct errors in the Commissioner's decision which bear upon the operation of that policy and the fair treatment of employees under it.

13 As counsel for the appellant correctly submitted, it is apparent from the material before us that the contest below involved a contention by the AWU on behalf of Mr. Stojanovski that the employer failed to properly follow the Alcohol and Other Drugs Management Procedure.

14 As we have mentioned, that procedure was the subject of extensive consideration and comment by a Full Bench of the Commission in the Drug & Alcohol Case and it is important to note in that case the distinction between an employee's first refusal to undergo a test and further or subsequent refusals.

15 The procedure, as considered and commented upon by the Full Bench in that case was relevantly expressed in the following terms: -

An employee who refuses to undertake an alcohol and other drugs test will be deemed to have a positive result. Further, refusal by an employee to submit to, or co-operate fully with the administration of any alcohol and other drugs test (as outlined in 6.2) will be treated in the same manner as any other refusal to comply with a Company policy or procedure. A disciplinary discussion will take place with the department head and appropriate disciplinary action taken will be based on all the circumstances. As a minimum, this will result in the refusal being treated in the same manner as a positive test result.

16 In the proceedings before the Full Bench in the Drug & Alcohol Case, the AWU complained that the above clause was ambiguous and liable to cause confusion and on one construction, could contain an element of double jeopardy in that refusal to undertake a test on the one hand is deemed to be a positive test result (with the accompanying consequence among other things of being required to retest before being allowed back to work) and then additionally, refusal is to be treated as a disciplinary matter in the same way as any other refusal on the part of an employee to comply with the employer's policy or procedure.

17 In considering that complaint and the employer's response to it, the Full Bench said this: [19.32] For it's part, BHP argued that no evidence had been led pointing to elements of confusion and secondly, that this clause is clearly referrable to a first refusal (which invokes the deemed positive result) and a further refusal (which has other connotations). We would observe that the comma after the word "Further" in the second sentence of the existing clause 8.0 of the Policy lends itself to a different construction than that for which BHP contends and adds weight to the AWU contention. The comma has the effect of giving the word "Further" the same or similar meaning as the words "in addition to the foregoing". If the comma were removed, the word "Further" would be given its adjectival meaning by reference to the word following it namely, the word "refusal". We are of the view that there should be a form of disciplinary sanction available for appropriate use in cases where there is repeated refusal to undertake tests. This is particularly so when it is considered that the AWU has adopted a position in support of a testing regime per se. [19.33] For clarity, we recommend the removal of the comma after the word "Further" at the beginning of the second sentence of the existing clause 8. We otherwise make no recommendation for change to this clause. Again, however, we point to the need for considerable care to be exercised by BHP in the implementation of this aspect of the Policy particularly as to the reasons why an employee may refuse to undertake a test. A clear example of the inappropriate application of disciplinary sanctions is to be found in the decision of the Full Bench of the Western Australian Industrial Relations Commission in Larkin v Boral Construction Materials Group Ltd 2003 (WAIRC 07963, 20 March 2003). In that case, it was found that the employee's dismissal following a refusal to undertake a drug test was an oppressive exercise of the employer's right to dismiss and it seems to us that the case stands as others may also, as a clear statement of the need to approach the use of disciplinary sanctions within the context of the Policy with due care and caution.

18 In dealing with the matter that way, whilst at the same time, leaving the refusal clause substantially as it was, it is clear that the Full Bench construed the clause as intending to treat a first refusal differently from repeated refusals to undertake tests.

19 In the proceedings before O'Neill C BlueScope contended that it had not dismissed Mr Stojanovski not for refusing to test for alcohol and/or other drugs but for serious misconduct in verbally abusing and threatening his supervisors.

20 In opening the employer's case, Mr Lloyd, solicitor said this:- Can I ask the Commission by way of asking to turn to the applicant's application for relief that was filed on 30 September and can I ask you to go to the final page which is a letter from BHP Steel to the union in relation to Mr Stojanovski? It explains that the applicant was dismissed on 19 September for serious misconduct and states that "whereby following erratic operation of a crane and refusal of a drug and alcohol test, Mr Stojanovski verbally abused and threatened supervisors". The relevant background is the erratic operation of the crane and the refusal of the drug and alcohol test but the serious misconduct that we rely upon is Mr Stojanovski, we say verbally abusing and threatening the supervisors. Those gentlemen are Mr Holman, Mr Chalker and McMaster who are all to give evidence in the proceedings.

21 We note that the employer maintained its position in that regard in the written submissions it filed on 5 March 2004 in these proceedings which confirmed that the manifestation of serious misconduct relied upon in dismissing Mr Stojanovski was his abusive and threatening conduct towards his supervisors.

22 The decision of the Commissioner however, from the conclusions we have extracted above, seems to us to rest heavily upon Mr Stojanovski's refusal to take the drug and alcohol test. The Commissioner's conclusions as to Mr Stojanovski's abusive behaviour towards his supervisors played an insignificant role in the Commissioner's final deliberations. We consider that in so concluding the Commissioner fell into error.

23 As our earlier reference to the Full Bench decision in the Drug & Alcohol Case makes clear, a first refusal to take a drug and alcohol test per se would not constitute a proper basis for summary dismissal.

24 Having said that, it is understandable from the evidence adduced by the employer in the case below that the Commissioner may have formed the view, notwithstanding the employers formal contention to the contrary, that primacy had been given in deciding to dismiss Mr Stojanovski, to his refusal to take the drug and alcohol test. Certainly, there was a significant amount of attention given to the refusal in the series of investigative meetings and interviews conducted by the employer in the days leading up to the dismissal. We would observe if that were the case, that such action on the part of the employer in the circumstances of this case namely, where there had been a first refusal to test, would be at odds with the primary emphasis of the Alcohol and Other Drugs Management Procedure which is directed at behaviour modification rather than disciplinary sanction.

25 We would observe, however, that the Commissioner was correct in concluding that the employer was well within its rights and acted entirely consistently with its obligations under the occupational health and safety legislation in requesting Mr Stojanovski to cease operating the crane and to undertake a drug and alcohol test.

26 There is a further consideration relevant to that issue. It is plain some mitigating circumstances required consideration by the Commissioner. The evidence before the Commissioner makes it clear that the three supervisors took the matter beyond where there had been a simple request to take a test and a refusal by Mr Stojanovski with the consequential deemed positive result and removal from the workplace.

27 In fact, the supervisors pursued Mr Stojanovski to the locker room and in the process made repeated requests of him in an attempt to induce him to take the test. Mr Stojanovski became increasingly irate and abusive and eventually left the workplace. The better course in hindsight may well have been to make the request in clear and unequivocal terms and to then invite the worker, upon refusal, to vacate the workplace.

28 Having said that, we should not be heard as condoning in any way the abusive and threatening conduct of Mr Stojanovski (see for example, Federated Ironworkers Association of Australia, NSW Division v Australian Iron and Steel Pty Ltd, McClelland J, No 285 of 1979, 2 May 1999). Such conduct was found by the Commissioner to have occurred. It was a finding open to the Commissioner on the evidence and we do not disturb it. (See Abboud v NSW Department of Education (1999) 92 IR 32). It was reprehensible conduct and open to disciplinary sanction.

29 Even in the light of the Commissioner's error in relation to the drug and alcohol policy this may have proved fatal to the appeal. However, that is not the end of the matter. The appeal squarely raised the issue of the harshness of the dismissal on the appeal.

30 There is considerable force in the contention of Mr Nolan of counsel for the appellant that O'Neill C failed to consider, as he should have, the consequences for Mr Stojanovski of dismissal. As we noted at the outset, Mr Stojanovski had been employed at the steelworks for 33 years and in the circumstances, the Commissioner was obliged to determine whether or not the termination of his employment was harsh in its consequences for his personal and economic situation as well as whether it was disproportionate to the gravity of the misconduct which the employer alleged. (See Byrne & Ors v Australian Airlines (1995) 61 IR 32; Electricity Commission of NSW t/as Pacific Power v Crump (1993) 48 IR 296 at 302). Further the Commissioner did not address himself to whether or not the termination of Mr Stojanovski's employment was too severe a penalty in all of the circumstances. (See also Little v Commissioner of Police [2001] NSWIRComm 9; Transport Workers' Union of Australia, NSW Branch on behalf of Joseph Vallis v TNT Australia Pty. Limited [2002] NSWIRComm 46; Federated and Municipal and Shire Council Employees Union of Australia NSW Division on behalf of Gregory Bowman v City of Sydney Council [2001] NSWIRComm 91; Police Association of NSW on behalf of Adam Tregonning v NSW Police Service [2000] NSWIRComm 14).

31 In Byrne, above, the High Court (per McHugh and Gummow JJ) said this at 72:- It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.

32 In the result, we consider that the failure of the Commissioner to adequately consider these matters represented an error of law and principle. We are of the view after careful consideration of the material before us that, whilst the termination of Mr Stojanovski may not have been unreasonable or unjust, it was nonetheless harsh having regard to the length and generally satisfactory nature of his 33 years of service in the steelworks, his age (56 years), his contrition in the appeal's process as well as its lack of proportion to the gravity of his misconduct.

33 In the result, we consider that this is an appropriate case for us to uphold the appeal as a result of the error demonstrated in the decision at first instance and then to substitute our own decision. We are of the view that, in all the circumstances, there is merit in Mr Nolan's submission that the Full Bench should substitute an order of the kind suggested in the alternative by the employer before O'Neill C namely, that Mr Stojanovski be reinstated without back pay, with a final warning and that he be required to submit to appropriate testing in accordance with the return to work requirements of the Alcohol and Other Drugs Management Procedure.

34 We confirm the following orders:- 1. That leave to appeal be granted. 2. That the appeal be upheld. 3. That Mr Stojanovski be reinstated in his former position on terms not less favourable than those that would have been applicable if he had not been dismissed effective on and from Monday, 10 October 2004, subject to the following conditions: (a) Mr Stojanovski submit to and pass appropriate testing in accordance with the return to work requirements of the Alcohol and Other Drugs Management Procedure, including meeting any undertaking for random testing earlier given by Mr Stojanovski; (b) there be placed on Mr Stojanovski's record a final warning in relation to his conduct on 18 September 2003. (c) Mr Stojanovski shall have full continuity of service for the purpose of any calculation of redundancy benefits.

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