BP Refinery (Kwinana) Pty Ltd v Tracey

1. The originating application for judicial review be dismissed.
2. Any party wishing to seek costs is to notify the Court and the other party of the order it seeks within seven days. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THE COURT: 1 By its originating application the applicant (BP) sought an order that a writ of certiorari be issued, the effect of which would be to quash the decision of the Full Bench of the Fair Work Commission (the Full Bench) in Scott Tracey v BP Refinery (Kwinana) Pty Ltd [2020] FWCFB 820. The Full Bench allowed an appeal against a Deputy President of the Fair Work Commission in Scott Tracey v BP Refinery (Kwinana) Pty Ltd [2019] FWC 4113. 2 The Deputy President had been satisfied that BP's dismissal of Mr Tracey was not harsh, unjust or unreasonable and thus was not unfair within the meaning of s 385 of the Fair Work Act 2009 (Cth) (the FW Act). The Deputy President was satisfied that there were valid reasons for the dismissal of Mr Tracey arising from his involvement in the making and distribution of a video which, it was alleged, depicted BP representatives involved in negotiations of a new enterprise agreement with BP employees as Nazis. The video depicts extracts from the film Downfall in which Hitler acts in a highly agitated and aggressive manner when informed by his Generals that his regime has lost the Second World War. Mr Tracey was involved in adding captions to the extract which used dialogue from the negotiations between BP and its employees. The Deputy President concluded that a reasonable person would consider the video inappropriate and offensive with the consequence Mr Tracey's involvement in the making and distribution of the video contravened various BP policies. These contraventions, the Deputy President found, constituted valid reasons for the dismissal of Mr Tracey and underpinned the conclusion that his dismissal was not harsh, unjust or unreasonable and, accordingly, was not unfair within the meaning of s 385 of the FW Act. 3 The Full Bench reached a contrary view. The Full Bench recognised that the Deputy President was making an evaluative judgment about the character of the content of the video: [23]. At [25] the Full Bench said it did not accept that it was reasonably open for the video to be characterised in the way it was by the Deputy President. According to the Full Bench, leaving aside the cultural context set by the fact that the scene from Downfall had gained status as a meme, the video did not compare BP representatives to Hitler or to Nazis in the sense of suggesting their conduct was comparable in inhumanity or criminality. Rather, the video, for satirical purposes, compared the position BP had reached in the enterprise bargaining process to the situation confronting Hitler and the Nazi regime in April 1945. 4 At [26] the Full Bench said this conclusion was reinforced once consideration was given to the development of the use of this clip from Downfall as a meme. The Full Bench explained that the clip had been used thousands of times for over a decade for creating satirical depictions of contemporary situations, the result of which was to culturally disassociate the clip from the historical events portrayed in the film. The Full Bench said that anyone with knowledge of the meme could not seriously consider that the use of the clip was to make some point involving Hitler or Nazis. 5 At [27] the Full Bench accepted that there was no doubt that the clip would be understood by the viewer as satirising BP's conduct during the enterprise agreement bargaining process but said this, by itself, did not make the video offensive or inappropriate. The bargaining process had been heated and protracted and, according to the Full Bench, was approaching its nadir, so that it was understandable that persons in the opposing camps might between themselves be critical of the other party's position and conduct. As such, the Full Bench considered that members of BP's negotiating team could not genuinely have been surprised that employees would be strongly critical of BP's conduct during the course of the bargaining. 6 At [28] the Full Bench stressed that it was important to distinguish between criticism of the other party's position and conduct during an industrial dispute and targeted disparagement of an individual in the other camp. According to the Full Bench the video engaged in the former activity through the use of satire, but not the latter. The fact that the video satirised the way in which BP had conducted itself through the agency of one of its employees, Mr Swayn, did not mean that the video was personally denigrative of him. The Full Bench noted that Mr Swayn had not given evidence so there was no proper basis for concluding that he considered the video targeted him or even that he was personally offended by it. Further, the Full Bench said that the evidence did not support the proposition that any other character in the video could be identified with any particular person in BP's bargaining or management team. 7 The Full Bench then said this: [29] For these reasons, we consider that it was not reasonably open to the Deputy President to find that Allegation 1 in the dismissal letter constituted a valid reason for dismissal. The allegation was premised on the proposition that the video was offensive and inappropriate because it compared BP's negotiating team to Hitler and Nazis - a proposition which we consider to be unsustainable. The Deputy President's consideration of whether Allegation 2 also constituted a valid reason for dismissal was infected by her conclusion that the video was offensive and inappropriate on the same basis, and for that reason was also attended by appealable error. [30] The Deputy President's erroneous determination that there was a valid reason for Mr Tracey's dismissal was fundamental to her decision that his dismissal was not unfair and that his unfair dismissal remedy application should be dismissed. Because the decision was affected by error in this way and manifests an injustice to Mr Tracey, and because the appeal raises issues of general application concerning the capacity of employees to engage in legitimate criticism of management in the conduct of an industrial dispute, we consider that the grant of permission to appeal would be in the public interest. Accordingly, permission to appeal is granted as required by s 604(2) of the FW Act. The appeal is upheld on the basis of grounds 1-5, and the decision is quashed. It is unnecessary in those circumstances to consider any of the other grounds of appeal. 8 The Full Bench then proceeded to determine for itself whether BP's dismissal of Mr Tracey was unfair. It did so by reference to the requirements of ss 396 (about which there was no issue) and 387 (whether the dismissal was harsh, unjust or unreasonable) of the FW Act and, in particular, whether there was a valid reason for Mr Tracey's dismissal related to his character or conduct. The Full Bench did not consider that the allegations against Mr Tracey had been made out because, as it had concluded, it did not characterise the video as offensive or inappropriate in the circumstances: [34]. Having regard to all of the factors in s 387 of the FW Act the Full Bench found that Mr Tracey's dismissal was unjust and unreasonable because there was no valid reason for his dismissal and was harsh because of the mitigating factors which it had identified (his unblemished employment record, the context of a tense and embittered industrial environment, his expression of contrition and action in taking the video down as soon as he became aware it had come to BP's attention, and financial hardship and personal distress caused by the dismissal). Accordingly, the Full Bench found Mr Tracey's dismissal unfair: [35]. 9 BP's originating application, as pressed during the hearing, alleges two errors by the Full Bench. First, it is said that the Full Bench misconceived its appellate function as the Deputy President's decision was discretionary, with the consequence that the Full Bench could set aside the Deputy President's decision only if satisfied that the Deputy President had made an error of the kind identified in House v The King (1936) 55 CLR 499 at 505 (House v The King) as follows: It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court can exercise its own discretion in substitution of his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonably or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. 10 According to BP, the Full Bench did not find an error of the requisite kind in its review of the decision of the Deputy President. Rather, the Full Bench merely substituted its own evaluation of Mr Tracey's conduct for that of the Deputy President and treated that as sufficient jurisdictional authority for the orders it made quashing the decision of the Deputy President and ordering Mr Tracey's reinstatement. 11 Second, BP contended that on the basis that the question whether Mr Tracey's conduct was offensive or inappropriate within the meaning of BP's Code of Conduct involves a question of fact (which, we note, was common ground in the appeal) the Full Bench was required to but did not consider s 400(2) of the FW Act. Section 400(2) provides that: Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.