Fair Work Act 2009

s.604 - Appeal of decision

Appeal against decision [2017] FWC 4574 of Commissioner Riordan at Sydney on 3 November 2017 in matter number U2017/1865.

Decision of Deputy President Gooley and Deputy President Anderson

[1] This is an appeal by Illawarra Coal Holdings Pty Ltd against the decision[1] and orders of Commissioner Riordan made on 3 November 2017 in which he found that the termination of Mr Matthew Gosek was harsh, unjust and unreasonable.[2] Commissioner Riordan ordered that:

• Mr Gosek be reinstated within seven days of his decision to his former position and shift.[3]

• Mr Gosek maintain his continuity of service of employment with Illawarra Coal.[4]

• Illawarra Coal pay to Mr Gosek his base rate of pay since his termination minus any monies paid to Mr Gosek for notice and leave. Mr Gosek's earnings since 31 January 2017 must also be deducted, subject to any legitimate business start-up costs encountered by Mr Gosek for which he has not claimed a tax deduction. I also impose a 25% penalty on any surplus for Mr Gosek's poor conduct. Mr Gosek is also to be paid the appropriate superannuation contribution for this entire period on his base rate into his nominated superannuation account.[5]

[2] On 9 November 2017, Deputy President Gooley stayed the operation of the decision[6] and published her reasons.[7]

[3] The appeal was listed for both permission to appeal and the merits of the appeal and we granted permission for both parties to be represented as we were satisfied that the matter involved some complexity that it would enable the matter to be dealt with more efficiently.

[4] Mr Gosek had been employed by Illawarra Coal for more than 11 years[8] as an electrical technician. In addition, Mr Gosek was the Lodge President for the Construction, Forestry, Mining and Energy Union (CFMEU).[9]

[5] A member of the CFMEU made a complaint about Mr Goedde, the Mine Deputy. Mr Gosek represented the member in relation to this complaint. The allegations were not substantiated. The complainant told Mr Joel Plavecky, the operations manager and the decision maker, that he considered the investigation was flawed.[10]

[6] On 4 October 2016, Mr Gosek, who was not rostered for work, went to the pub and was drinking. During the course of the afternoon Mr Gosek telephoned Mr Plavecky and complained about the investigation and told him he would refer the matter to the coal industry regulator if the complaint was not further investigated.

[7] Mr Gosek then sent a text message to seven of his colleagues and his supervisor. The text message said "dogs"[11] (allegation 2). The eight employees rang Mr Gosek to discuss the text. Mr Gosek could not remember what he said in these conversations but it was not contested that the phone calls involved tense and heated discussions. It was not disputed that Mr Gosek used inappropriate language and called his colleagues a variety of names including "f**king dog" and "dog c***" (allegation 1). It was not disputed that Mr Gosek was under the influence of alcohol when he had these conversations.[12] The Commissioner found allegations 1 and 2 to be substantiated.

[8] In relation to allegation 1, the Commissioner found that:

• Mr Gosek initiated the call to Mr Pomana.[13]

• The other employees called Mr Gosek.[14]

• Mr Gosek used inappropriate language with seven colleagues.[15]

• The conversation with Mr Pomana was unwelcome and challenging.[16]

[9] In relation to allegation 2, the Commissioner found that:

• this type of language is "commonly used in the mine".[17]

• there was no evidence that any employee had been disciplined for using this type of language.[18]

• Mr Gosek accepted that the language was inappropriate and unnecessary.[19]

• Mr Gosek intended the use of the word "dog" to be derogatory.[20]

• Mr Gosek intended to convey to his colleagues his disappointment as Lodge President about their role in the investigation and his view that they had not upheld union principles and they had lied to the investigator.[21]

[10] Mr Pomana Mr Gosek's supervisor gave evidence at the hearing but none of the other employees were called.

[11] Illawarra alleged that Mr Gosek also threatened his colleagues during those conversations. The threats included threats to kick persons out of the Lodge, withdraw union support, hunt that person down and destroy them and challenge that person to a physical altercation[22] (allegation 3).

[12] The Commissioner found that there had been "inappropriate threats" but did not make findings in relation to the individual allegations.

[13] However in relation to allegation 3, the Commissioner found that:

• Mr Plavecky's concern that the employees might be threatened and victimised down the track by the CFMEU and its members and that the threats in relation to their union membership might be carried out was an overreaction and he made his decision based on his uninformed conclusions about the internal workings of the CFMEU.[23]

• He found that the threats were inappropriate and were unwelcomed by the employees and was a breach of the Code of Business Conduct.[24]

• He found that Mr Gosek was powerless to implement the threats in relation to the union membership.[25]

• He found that Mr Gosek's conduct, despite being conduct that occurred outside of hours, was at odds with his duty as an employee to comply with the Code of Business Conduct.[26]

[14] The conduct occurred over 4-5 hours and started at 3pm. The calls varied in length from a couple of minutes to up to 48 minutes (allegation 4). This was not contested and hence was substantiated by the Commissioner.

[15] The employees and in some cases their families viewed the conduct as offensive, intimidating or unwelcome (allegation 5).

[16] The Commissioner found that overwhelming reaction of the eight employees was that Mr Gosek's conduct was unwelcome and offensive.[27] While not expressly stated this finding substantiated allegation 5.

[17] The Commissioner then concluded that Illawarra Coal had a valid reason for terminating Mr Gosek (s.387(a)).

[18] The Commissioner's findings in relation to s.387(b)-(g) are not subject to appeal and accordingly we do not address them.

[19] The Commissioner had regard to the following matters under s.387(h) and made the following findings:

• The usual procedures followed by Illawarra in investigation matters were not followed.[28]

• The final investigation report did not include the detailed and considered recommendation from the initial report.[29]

• The final report was not a complete report because it did not include the mitigating factors raised by Mr Gosek.[30]

• Ms Thew and Mr Plavecky lacked experience in disciplinary processes.[31]

• Mr Hatfield, who was not called to give evidence, would have been able to provide relevant evidence about the investigative process including matters that were taken into account by Illawarra.[32]

• The outcome of the investigation into another employee's complaint about another employee's conduct was inconsistent with the outcome of the investigation into Mr Gosek's conduct.[33]

• In an earlier incident where an employee who had not made a formal complaint and did not want a matter taken further that request was respected.[34]

• None of Mr Gosek's colleagues made a formal complaint or requested an investigation.[35]

• The decision of Mr Plavecky to conduct an investigation into Mr Gosek's conduct was inconsistent.[36]

• Mr Gosek's conduct was a one off incident involving seven colleagues and the phone calls were made by the employees.[37]

• Mr Gosek made sincere apologies and was contrite.[38]

• The hearsay evidence about the employees' non-acceptance of the apology was of little weight or persuasive value.[39]

• Mr Gosek was prepared to resign as Lodge President in order to be reinstated.[40]

• Given that, Mr Gosek would not have any capacity to "re-offend" in the future.[41]

• The type of language used is commonplace in the community and in this workplace.[42]

• There is no evidence that any employee of Illawarra has been disciplined for swearing.[43]

• Mr Gosek was suffering from depression, on very strong medication and was affected by alcohol.[44]

• Mr Gosek was angered by the treatment of his co-worker.[45]

• Mr Gosek did not swear at Mr Pomana.[46]

[20] In his conclusion, the Commissioner made further findings not made earlier:

• Illawarra Coal did not know until 3 January 2017 that Mr Gosek had a serious mental health issue which he had been dealing with since the middle of 2016.[47]

• Mr Gosek's conduct breached Illawarra's bullying and harassment policy. Mr Gosek's conduct was viewed by the recipients as "unwelcome, humiliating, intimidating or offensive" and was harassment.[48]

• Other employees had breached the same policy and were not disciplined or dismissed.[49]

• Mr Gosek's conduct differed in that it involved undeliverable threats of retribution.[50]

• Mr Gosek's conduct was not serious misconduct.[51]

• The words "f***ing" and "c***" are very commonplace and including the word "dog" does not necessarily make the phrase more offensive or intimidatory.[52]

• Illawarra had no right to interfere in the operation or conduct of the CFMEU.[53]

• The employees knew that Mr Gosek could not simply expel them from the Union.[54]

• There is no evidence of any adverse conduct directed to the employees since October 2016.[55]

• That one of the employees welcomed Mr Gosek's invitation for a physical altercation.[56]

• The threat of physical violence was Mr Gosek "talking through his hat" and was unlikely to eventuate.[57]

• In some of the conversations the employees used inappropriate language which was overheard by members of their families. Mr Gosek was not responsible for this.[58]

• The employees may have lost trust and confidence in Mr Gosek as Lodge President.[59]

• Mr Pomana accepted Mr Gosek's apology and wants to help him deal with his personal issues.[60]

• Mr Gosek's conduct did not involve theft, malingering or acting in a fraudulent manner.[61]

• There was no evidence of unsafe or poor performance.[62]

• Illawarra do not have a bona fide reason to have lost trust and confidence in Mr Gosek.

• Mr Gosek is under an ongoing management of a mental health program and he is taking strong medication which has a long list of adverse side effects.[63]

• Mr Gosek's behaviour was at the lower end of the scale.[64]

• Mr Plavecky did not apply the "Just Culture Tree" in a manner which was fair and just.[65]

• Mr Plavecky's process was subjective with a prejudged outcome.[66]

• There was a lack of procedural fairness in the investigation process.[67]

• Mr Hatfield did not agree with Mr Plavecky's recommendation.[68]

• Mr Plavecky had decided to terminate Mr Gosek no matter what the mitigating circumstances.[69]

• At the time of the incident Mr Gosek was suffering work related stress.[70]

• The side effects of the drug include anxiety, agitation, panic attacks, hostility, aggressiveness and short term memory loss.[71]

• Alcohol exacerbates the side effects of the drug.[72]

• Mr Gosek was drinking excessively at the time of the incident and was unaware of the combination of the alcohol/drug cocktail.[73]

• Illawarra did not accept Mr Gosek's medical circumstances was a mitigating factor in the conduct.[74]

[21] The Commissioner held that the termination was harsh, unjust or unreasonable.

[22] The Commissioner determined that reinstatement was an appropriate remedy.[75]

[23] In reaching this conclusion, the Commissioner had regard to:

• Mr Gosek had taken responsibility for his behaviour. He admitted his conduct and apologised.

• Reinstatement would not be seen as the Commission or Illawarra condoning the conduct.[76]

• Mr Pomana would be able to deal with the situation if Mr Gosek were reinstated.[77]

• Mr Gosek offered to resign as Lodge President.[78]

• Mr Gosek could be successfully integrated back into the team.[79]

• Mr Gosek should not nominate for a position on the Lodge Committee whilst employed by Illawarra[80] and hence would not be in a position to overreact to any like situation in the future.[81]

[24] The Commissioner then gave consideration to the issue of continuity of service and the amount of back pay. He took into account the amount earned since termination and deducted 25% for Mr Gosek's poor conduct.

[25] We set out the grounds of appeal at Appendix A to this decision.

[26] Illawarra accepted that the relevant conduct relied upon by it was essentially found by the Commissioner.[82]

[27] The gravamen of Illawarra's appeal was not about the valid reason but about harshness and the weighing exercise.[83]

[28] It was the failure of the Commissioner to properly characterise the gravity of the conduct that is at the core of Illawarra's appeal. [84]

[29] This caused the Commissioner's discretion to miscarry both in relation to the finding that the dismissal was harsh and that reinstatement was appropriate.

[30] Illawarra described Mr Gosek's conduct on 4 October 2016 as misconduct as he sent text messages (with the word "dog') to seven colleagues and his supervisor. He engaged in tense and heated discussions with these employees which were abusive, threatening and intimidatory.[85]

[31] Mr Follett, Counsel for Illawarra, submitted that in conduct cases the Commission is required to make factual findings in relation to:

• the conduct including the nature of the conduct and its gravity;

• any aggravating circumstances associated with the conduct; and

• any relevant mitigating circumstances.[86]

and then weigh all these matters together to determine if the dismissal was harsh, unjust or unreasonable.

[32] Illawarra submitted that this is a discretionary evaluative judgement and the discretion miscarries if the process is not undertaken or if irrelevant/relevant matters are taken into account in the weighing process or if the gravity or nature of the conduct is mischaracterised or not properly considered.[87]

[33] The gravamen of Illawarra's submission is that the Commissioner "never properly considered and weighed the gravity of Mr Gosek's misconduct because he mischaracterised it."[88]

[34] Illawarra submitted that the Commissioner characterised the misconduct as swearing and inappropriate language. He was then said to have concluded that it was harsh, unjust or unreasonable to single out Mr Gosek for this and dismiss him for his language and that no other employee had been disciplined for bad language.[89]

[35] Illawarra submitted that this had no relevance to the gravity of Mr Gosek's misconduct. The other situations were not comparable and in equating the conduct the Commissioner's discretion miscarried.[90]

[36] Illawarra submitted that while the language complained of may be commonly used in the mine, conduct of the type Mr Gosek engaged in was not. It submitted that the fact that there was no evidence of discipline for swearing was irrelevant.

[37] The Commissioner mischaracterised the threats made by Mr Gosek and their opprobrium.[91]

[38] Illawarra submitted that the Commissioner downplayed the gravity of the threats by having regard to whether Mr Gosek could legally carry out the threats. It was submitted that the threats made by Mr Gosek, the Lodge President, did not lose their gravity merely because he did not have the legal capacity to follow through with the threat. It was submitted that this approach ignores reality. It further submitted that the Commissioner ignored the real gravity of some of the other threats made.[92]

[39] Illawarra further submitted that the Commissioner had regard to an irrelevant consideration namely that Mr Gosek would no longer be Lodge President in assessing whether he was likely to reoffend.[93]

[40] Illawarra submitted that the employer's internal decision-making process is an irrelevant consideration as to whether the dismissal is unfair. Provided the employee was afforded procedural fairness, the internal investigation is irrelevant. As such, the Commissioner erred when he had regard to the internal decision making process.[94]

[41] In the alternative, Illawarra submitted that in reaching his conclusions about the internal decision making process the Commissioner had regard to an irrelevant consideration namely the insertion by Mr Plavecky of his own recommendation into the report. Further the fact that the mitigating reasons were not included in the final report was irrelevant given the evidence that Mr Plavecky was aware of them and considered them.[95]

[42] Illawarra further submitted that in drawing the Jones v Dunkel inference from the absence of Mr Hatfield as a witness and concluding as a consequence that the dismissal was unreasonable, he erred. It was submitted that there was no need to call Mr Hatfield to explain the process because it was not relevant. Further, Mr Plavecky was the decision maker and Mr Hatfield could not give evidence of his state of mind. Further, his absence was explained.[96] The decision maker was called and cross-examined. No more was required.

[43] Illawarra further submitted that the finding that Mr Hatfield did not agree with Mr Plavecky and that Mr Plavecky had made up his mind to dismiss Mr Gosek, no matter what, was not open in the absence of direct cross-examination about it or without direct evidence.[97]

[44] Illawarra submitted that the Commissioner erred when he equated Mr Gosek's conduct with Mr Goedde and Mr Donnelly's conduct. It was submitted that the conduct was not comparable and therefore irrelevant.[98]

[45] Further, the Commissioner erred when he found that the outcome of investigation of Mr Gosek's conduct and Mr Goedde's conduct was inconsistent and that the lack of an investigation into Mr Donnelly's conduct was inconsistent.[99]

[46] Illawarra submitted that the Commissioner erred in finding that the misconduct did not involve a breach of contract. It submitted that the Commissioner, by concluding that wilful misconduct involved a breach of contract but misconduct did not, erred. Further it submitted the finding that the conduct was not serious misconduct was also an error.[100] It submitted that the Commissioner erred in finding that the conduct was not wilful because Mr Gosek's conduct was wilful because he knew it was wrong and still did it. It was submitted that his apologies and concessions are evidence of this.[101]

[47] Illawarra further submitted that if Mr Gosek wanted to justify or excuse his conduct he needed to bring sufficiently credible, acceptable evidence about cause and effect and there was none.[102] Illawarra, below, put the submission that given the lack of medical evidence the Commission could not find that the mixing of alcohol and his medication contributed to his conduct or that his depression contributed to his conduct.[103]

[48] Illawarra submitted that the Commissioner erred in finding that Illawarra refused to accept Mr Gosek's medical circumstances as mitigating factors when the evidence established that they did.[104]

[49] Illawarra submitted that the Commissioner failed to give adequate reasons. It was submitted that he did not identify and explain what the valid reasons were. While he said he would take things into consideration he did not explain how or why they were relevant or how he weighed or evaluated them. His reasons, it was said, do not disclose the steps which lead to the particular result.[105]

[50] Illawarra submitted that Mr Gosek's resignation from Lodge President was an irrelevant consideration in assessing the likelihood that Mr Gosek would re-offend as his threats of reprisals and victimisation had nothing to do with him being Lodge President or on the Lodge Committee.

[51] Illawarra submitted that the Commission did not have regard to the matters relied upon by Illawarra in opposing reinstatement set out at paragraph [122] (a), (b) and-(e) of the decision and that these were relevant considerations. It was submitted that the Commissioner did not have regard to the likelihood that Mr Gosek would reoffend and the impact of reinstatement.[106]

[52] Illawarra further submitted that the Commissioner erred, when having found the dismissal to be unfair, reasoned that the employee was entitled to reinstatement unless the employer persuades the Commission otherwise.[107] It submitted that there is no de facto presumption in favour of reinstatement.[108]

[53] Illawarra submitted that the Commission should have had regard to the impact of a reinstatement order on the employees and the ability of the crew to work together. It submitted that he was entitled to rely on the uncontested, contemporaneous statements about the misconduct and its impact on them.[109]

[54] Illawarra submitted that paragraphs [127] and [132] of the decision contain assertions and there are no reasons provided for those conclusions.

[55] Ms Howell, who represented Mr Gosek, submitted that the finding by the Commissioner that the termination was harsh because Illawarra did not give sufficient consideration to Mr Gosek's severe depression; that he was under a mental health plan; he was taking strong medication which had side effects; and that the side effects were typified by the behaviour of Mr Gosek on this one off occasion, stands alone and is not dependant on any other finding.[110]

[56] Ms Howell submitted that Illawarra's real complaint was that the Commissioner did not give true weight to the conduct and particularly the threats. It was submitted that the Commissioner correctly identified the conduct at [16] of the decision and gave them sufficient weight.[111] It was put that once the Commissioner made findings about Mr Gosek's mental state, then the words used by Mr Gosek were of little import.[112] Further, it was submitted that there was no direct evidence of the misconduct. It was submitted that the interview records and notes from the investigations were the only evidence of what was said as Mr Gosek did not remember any details. It was submitted that the failure of Illawarra to call the seven employees make it impossible to assess and test the threats in their full context.[113]

[57] Ms Howell submitted that the Commissioner assessed the question of a valid reason by reference to each of the reasons relied upon by Illawarra and found that there was valid reason.[114]

[58] Ms Howell submitted that the Commissioner was entitled to have regard to the use of obscene and abusive language by other employees in evaluating the seriousness of the conduct.[115]

[59] Ms Howell submitted that the Commissioner did not confine the threats to technicalities of expulsion from the union or loss of employment. It was submitted that the Commissioner was entitled to have regard to Mr Gosek's capacity to carry out the threats in assessing the gravity of the threats.[116]

[60] Ms Howell submitted that the Commissioner was entitled to have regard to the recommendation of Mr Hatfield and Ms Thew that Mr Gosek should resign as Lodge President and that this would allay some of Mr Plavecky's fears. It was submitted that this would militate against a finding of a valid reason but nevertheless the Commissioner found there was a valid reason for the dismissal.[117]

[61] Ms Howell submitted that the employer's internal decision making process is not irrelevant. The Commission must determine if the decision was reasonable and if the Commission considers it to be relevant, then regard to it can be had under s.387(h). It was submitted that both parties made submissions below and Illawarra relied upon the decision making process to assert that the dismissal was not disproportionate. It was submitted that Illawarra should not be able to make this argument for the first time on appeal.[118]

[62] Ms Howell submitted that the Commissioner was entitled to find that the employer's decision making procedure gave rise to unfairness. It was submitted that the Commissioner's findings at [80]-[83] of the decision were based on unchallenged facts.[119] It submitted that the matters referred to at ground 6(b) and (c) of the grounds of appeal are relevant and gave rise to unfairness or unreasonableness. Had Mr Gosek had the benefit of a favourable recommendation by the independent investigator and a final report setting out all the mitigating factors, the outcome may have been different.[120]

[63] Ms Howell submitted that it was open to the Commissioner to draw a Jones v Dunkel inference from the failure of Illawarra to call Mr Hatfield. He was available and his absence was not explained. Further, it was submitted that the inference that Mr Hatfield considered that Mr Gosek should not be dismissed was available and correct.[121]

[64] Ms Howell submitted that the inference that Mr Plavecky was determined to dismiss Mr Gosek, no matter what, was the subject of submissions from both parties below. It was submitted that Illawarra should not be able to raise this new argument on appeal. It was submitted that the proposition was put to Mr Plavecky and was supported by other evidence. It was open to the Commissioner to reject Mr Plavecky's denial in light of other evidence.[122]

[65] Ms Howell submitted that the Commissioner did not find Mr Gosek's conduct to be the equivalent of other employees.[123] It was submitted that there were relevant inconsistencies. The other employees were not even reprimanded for conduct which was a breach of the Code of Conduct. Mr Gosek was dismissed.[124]

[66] Ms Howell submitted that the Commissioner was not required to determine this issue but did so in dealing with Illawarra's contentions. It submitted that Illawarra's submissions on appeal, that Mr Gosek's conduct was wilful because he was reckless as to the impact his intoxication, was not put to Mr Gosek below.[125]

[67] Ms Howell submitted that the proposition that Mr Gosek's conduct was not affected by the combination of severe depression, heavy medication and alcohol was not put below.[126] It was submitted that there was ample evidence to support the finding. Mr Gosek's evidence to this effect was not challenged and Mr Plavecky accepted that Mr Gosek was not his normal self. It was submitted that Mr Gosek was not required to call medical evidence as the matters relied upon were not in dispute.[127]

[68] Ms Howell submitted that ground 12 ignores what was said by the Commissioner at [110]. The Commissioner did not say that Illawarra had refused to have regard to Mr Gosek's medical condition, only that they gave insufficient weight to it. It was put to Mr Plavecky that he had given no weight to the mitigating factors and the Commissioner was entitled to reject Mr Plavecky's denials. If, as put by Illawarra, this is irrelevant it cannot be a significant error of fact.[128]

[69] Ms Howell submitted that the Commissioner sufficiently exposed the essential grounds as to why he decided that the dismissal was unfair. He found that the dismissal was unfair because insufficient weight had been given to the mitigating factors.[129]

[70] The Commissioner found each of the allegations relied upon by Illawarra to be proved.[130] Each of the reasons for finding unfairness was explained. It was submitted that the Commissioner was not required to identify the precise weight to be given to each of the factors.[131]

[71] Ms Howell submitted that the Commissioner did not apply[132] the wrong test when determining that reinstatement was not inappropriate. The Commissioner had regard to the matters raised by Illawarra and the Commissioner rejected those submissions.[133]

[72] There was no direct evidence of the impact of reinstatement on the employees save for Mr Pomana's evidence which was considered. His evidence was that he did not want Mr Gosek dismissed and he would be happy for him to have his job back. There was also evidence that the other employees did not want a formal disciplinary process and had accepted Mr Gosek's apology. It was open to the Commissioner to give no weight to the hearsay evidence and opinion evidence that was advanced.[134]

[73] Ms Howell submitted that the Commissioner gave adequate reasons for his decision to reinstate at [127]-[132]. Those reasons must be understood in light of the earlier findings of fact.[135]

[74] An appeal under s.604 of the Fair Work Act 2009 (the Act) is an appeal by way of rehearing and the Commission's powers on appeal are only exercisable if there is error on the part of the primary decision maker.[136] There is no right to appeal and an appeal may only be made with the permission of the Commission.

[75] This appeal is one to which s.400 of the Act applies. Section 400 provides:

"(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.

(2) 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."

[76] In Coal & Allied Mining Services Pty Ltd v Lawler and Others, the Federal Court characterised the test under s.400 as 'stringent'.[137]

[77] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.[138] In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:

"... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters."[139]

[78] Alternatively, the second ground for granting permission to appeal is that the decision is attended with sufficient doubt to warrant its reconsideration or that substantial injustice may result if leave is refused.[140]

[79] In determining whether permission to appeal should be granted, we have reviewed and considered all material filed by the parties including all submissions, correspondence and relevant authorities.

[80] We note that a decision under appeal is of a discretionary nature and such a decision can only be successfully challenged on appeal if it is shown that the discretion was not exercised correctly. We note that it is not open for us to substitute our view on the matters that fell for determination before the Commissioner in the absence of error of an appealable nature in the Commissioner's original decision. As the High Court said in House v The King[141]:

"The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. 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 may exercise its own discretion in substitution for 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 unreasonable 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."

[81] Grounds 1, 2 and 3 overlap and we will consider them together.

[82] It was not in dispute that the role of the Commission in misconduct cases is to determine if the conduct occurred. In this case there is no dispute that the conduct occurred.[142] We are satisfied that Illawarra's complaint that the Commissioner mischaracterised the conduct because he had regard to irrelevant considerations is valid.

[83] We accept that by focusing on the language and not the totality of the conduct the Commissioner downplayed the character of the conduct. The problem was not that Mr Gosek swore at this work mates. The conduct involved an expletive filled tirade which included threats directed at employees because they participated in an investigation. While the evidence supported a finding that the term "dog" was used in other contexts in this workplace, in this context however, as was acknowledged by Mr Gosek, it was used to describe people that he believed had ratted on their mate.[143] Mr Gosek believed that they had lied.[144]

[84] In relation to the threats, the Commission in weighing the seriousness of the threats had regard to the fact that Mr Gosek was powerless to implement the threats in relation to union membership. We do not consider this to be an irrelevant consideration although, to warrant a finding in the terms made, it needed an evidentiary basis. However the Commissioner downplayed the seriousness of the threats by focusing on the fact that Mr Gosek could not implement the threats rather than focusing on the reasons the threats were made. Mr Gosek made the threats because the employees had participated in an investigation. Because he disagreed with the outcome of the investigation, he formed the view that the employees had lied.

[85] Further, while it was legitimate to have regard to what Mr Gosek could or could not do under the rules of the CFMEU, this mischaracterised the threats. He was threatening that the employees would be ostracised from the union and that Mr Gosek had the backing of the men.[145]

[86] The Commissioner found that the employees knew that Mr Gosek could not simply expel them from the Union.[146] While it is not clear of the evidentiary basis of this conclusion that was not the gravamen of Mr Gosek's threats. That the rules of the CFMEU do not provide for a process to enable these threats to be made out does not reduce the seriousness of the threats. Mr Gosek's statements to the employees were, in effect, that he would take action to give effect to his threats.

[87] The Commissioner further downplayed the threat of physical violence. While he said he had taken the physical threats seriously and described them as inappropriate[147] he downplayed at least one of the threats because he formed the view that Mr Gosek was likely to come off second best. He concluded that the threat was unlikely to be acted upon.

[88] We do not accept that the Commissioner had regard to an irrelevant consideration when he found that this type of language was commonly used in the mine and there was no evidence that any employee had been disciplined for the use of such language. In determining whether there was a valid reason for the dismissal, this was a relevant consideration.

[89] The Commissioner characterised Mr Gosek's conduct as being at the lower end of the scale. This conclusion was not open to the Commissioner on the evidence before him.

[90] We are satisfied that the Commissioner did not properly characterise the conduct. While he determined that there was a valid reason for the dismissal, the mischaracterisation of the conduct meant that he was not able to properly weigh the existence of the valid reason against the mitigating factors raised by Mr Gosek.

[91] We do consider that the offer of Mr Gosek to stand down as Lodge President was a relevant consideration in determining if reinstatement was appropriate. However, we agree that it was not relevant to whether Mr Gosek would repeat the conduct. Mr Gosek may have been involved in this investigation because he was Branch President but it was not in his capacity as Branch President that he engaged in this conduct.

[92] We agree that any flaws in this internal decision making process was an irrelevant consideration in determining if there was a valid reason for the dismissal. The role of the Commission, in determining if there is valid reason for dismissal based on the conduct of the employee, is to determine if the conduct occurred based on the evidence before the Commission and not based on the evidence before the decision maker. If the employer reached that conclusion based on a flawed investigation then that is irrelevant. The Commission is not being asked to determine if the employer had reasonable grounds for believing the conduct occurred. It is difficult to see how any flaws in the investigation could be a relevant factor. Here the Commissioner had regard to the internal decision making process under s.387(h). Even if we were to accept that there were flaws in the investigation, it is for the Commission to determine if the conduct occurred; if the employee was afforded procedural fairness as provided for in s.387(b), (c) and (d); and whether there were mitigating factors which would make the dismissal harsh. A dismissal may be unfair even if the employer's internal decision making process is fair and a fair internal dismissal process will not by itself turn an unfair dismissal into a fair one.

[93] Because of our conclusion in relation to ground 5, we do not need to address these grounds.

[94] We do not accept that the Commissioner equated Mr Gosek's conduct with that of Mr Goedde and Mr Donnelly. What the Commissioner contrasted was the difference in the response of Illawarra particularly to Mr Donnelley's conduct which was abusive language directed at another employee in the workplace. The Commissioner took into account that there had been no formal complaint and that Mr Layton did not want the matter to go further. Similarly in this matter there was no formal complaint by the employees and no-one requested an investigation. In Mr Gosek's case the investigation occurred. In the case of Mr Goedde it was determined not to take the matter further because it was a one off incident. The Commissioner noted that the same could be said for Mr Gosek's conduct albeit it involved seven colleagues. We do not consider that the Commissioner erred when he had regard to these other incidents.

[95] Even if the Commissioner erred in finding that the misconduct did not involve a breach of contract and we make no findings about this, this was not a matter the Commissioner had to determine. Even if the Commissioner erred in finding that the conduct was not serious misconduct, and we make no findings about this again, this was not a matter that the Commissioner had to determine when determining if the dismissal was harsh, unjust or unreasonable.

[96] We are not satisfied that the Commissioner erred in finding that the conduct was not wilful misconduct sufficient to amount to a breach of his employment contract. As the Commissioner correctly noted, Illawarra did not classify the conduct as serious misconduct. Rather than dismiss him summarily, it paid four weeks in lieu of notice.

[97] We are also satisfied that the Commissioner was entitled to rely on the evidence before him of the impact of the medication as well as Mr Gosek's mental health issues. Illawarra put before the Commissioner material about the side effects of the medication.[148] It was not put to Mr Gosek in cross examination that his medication or his mental health did not have an impact on his conduct. However the Commissioner went further and held that alcohol exacerbates the side effects of the particular medication prescribed to Mr Gosek. There was no evidence below of the extent to which (if any) alcohol exacerbates the side effects of this particular drug, or the quantum of alcohol which would need to be consumed and over what period before having effects on a person such as Mr Gosek so as to render conduct involuntary.[149] To the extent that the Commissioner drew conclusions on these matters (for example, by concluding that "the side effects are typified by the behaviour of Mr Gosek on this one-off occasion") he erred.

[98] The Commissioner was entitled to have regard to the impact of excessive alcohol on Mr Gosek's behaviour. There was no challenge to the evidence that he had been drinking excessively. While the drunk's defence may have been removed from the criminal law, the Commissioner did not err when he had regard to the role alcohol played in this. However, it is also the case that those who consume alcohol must take responsibility for their actions. The evidence before the Commissioner that this was not a one-off instance of Mr Gosek consuming alcohol. Nor was it the first occasion that he had consumed alcohol whilst taking medication. To have concluded, as the Commissioner did, that Mr Gosek "was unaware of the consequences of the alcohol / drug cocktail" is not a sufficient basis on which to conclude that the employer's response to his pleas in mitigation was unreasonable.

[99] For the same reasons that we are of the view that the internal decision making is not relevant, we do not consider it relevant whether the employer had regard to the mitigating factors or not. Even assuming that Illawarra ignored the mitigating factors, the Commission has to have regard to them in deciding if the dismissal was harsh. That the employer formed a different view either based on all the facts or not is not the question. The Commission is not assessing the reasonableness of the employer's decision.

[100] We are not satisfied that the Commissioner failed to given adequate reasons. The Commissioner explained why he formed the view that there was a valid reason for the dismissal and why he considered the mitigating factors meant that the termination was harsh. That we have found error in his characterisation of the conduct and hence that he was not in a position to properly weigh the mitigating factors against the conduct does not mean he did not provide adequate reasons for his decision.

[101] The proper characterisation of the conduct is a critical step in a finding of a valid reason for dismissal. We are satisfied that by characterising this conduct as being at the lower end of the scale[150] the Commissioner took into account irrelevant considerations and failed to have regard to relevant considerations. As a consequence his discretion miscarried. Because of this conclusion it is not necessary for us to consider the grounds of appeal that deal with remedy.

[102] We have decided to grant permission to appeal and quash the decision and orders of Commissioner Riordan. We are satisfied for the reasons set out above that the Commissioner erred in his characterisation of the conduct of Mr Gosek. This error meant he was not able to properly weigh the mitigating factors. We are satisfied that the decision is attended with sufficient doubt to warrant its reconsideration.

[103] The decision and orders of Commissioner Riordan are therefore quashed and an order to that effect will issue with this decision.

[104] The Full Bench will hear and determine the application by Mr Gosek on the basis of the material currently before the Commission. Should any party wish to make further submissions in relation to the application they should do so by noon on 9 March 2018.

[105] For the reasons that follow I am satisfied that the Commissioner properly exercised his discretion in finding that Mr Gosek was dismissed unfairly and in ordering the remedy he did. I would therefore dismiss the appeal.

[106] In House v The King[151] the High Court describes the role of an appellate court (or in the case of a Fair Work Commission - the Full Bench) when the decision maker has exercised a discretion:

"The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. 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 may exercise its own discretion in substitution for his if it has the materials for doing so."[152]

[107] Illawarra Coal (the appellant) contends that the ultimate conclusion reached by the Commissioner - that the termination was harsh unjust or unreasonable - was open if the Commissioner had properly exercised his discretion. However, the appellant submits that while there was a range of factors to be considered and weighed in deciding this matter, the Commissioner, in making an evaluative judgement, made numerous House v The King errors such that the exercise of the discretion fundamentally and materially miscarried.

[108] The appellant submits that characterising Mr Gosek's misconduct as swearing and use of inappropriate language did not consider the context which included threatening, abusive and intimidating behaviour, victimisation and threats of physical harm.

[109] In Director of Consumer Affairs Victoria v Alpha Flight Services Pty Ltd[153] the Full Federal Court considered how to apply House v The King in circumstances where the appellant argued insufficient weight was given to the issue of general deterrence. The Court held:

"26 What was involved in the present case was an exercise of discretion. Accordingly, to demonstrate error, it was necessary to establish an error of the kind referred to in House v The King (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ. That is to say there must be a specific error, such as acting upon a wrong principle, allowing extraneous or irrelevant matters to guide or affect the exercise of discretion, mistaking the facts or not taking into account some material consideration (the "first category" of error) or, if the nature of the error is elusive, on the facts the result reached was "so unreasonable or plainly unjust [in this case, that the penalties imposed were "manifestly inadequate"] that the appellate court may infer that there has been a failure [by the primary judge] properly to exercise the discretion" (the "second category" of error).

27 The mere fact that an appellate court considers that a trial judge in the exercise of his or her discretion has given too little or too much weight to any particular consideration has not generally been treated as sufficient to vitiate the exercise of the discretion. Nevertheless, giving undue (or, for that matter, inadequate) weight to a particular factor may be causative of a second category error (Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321 at [3] to [6] per Gleeson CJ and Hayne J), and may cause or reveal a first category error in an unusual case. We would read references in House v The King to questions of weight in this light. Certainly, the preponderance of later authority has not treated either undue weight or inadequate weight as a separate category of error (see for example Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; (2010) 269 ALR 1 (CFMEU v Cahill) at [29], Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 (Markarian) at [25], Schneider Electric (Australia) Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 2; (2003) 127 FCR 170 (Schneider Electric) at [39] and J McPhee & Son (Australia) Pty Ltd v Australian Competition and Consumer Commission [2000] FCA 365; (2000) 172 ALR 532 at [154]). Indeed, in CFMEU v Cahill at [46] Middleton and Gordon JJ were quite emphatic about it:

Complaints about too much weight or insufficient weight given to particular matters in the exercise of the sentencing discretion do not fall within any of the kinds of errors identified in House ... They are not the kinds of errors that an appellate court is or should be concerned with in a sentencing appeal. A sentencing appeal is not a rehearing.

33 Where questions of weight arise for consideration in an appeal from a discretionary judgment, the appellate court is undertaking a different exercise from the exercise in which the primary judge was engaged. It is not free to give its own weighting to a relevant factor for the purposes of then concluding that any less weight given to that factor by the primary judge bespeaks error."[154]

[110] And in Australian Competition and Consumer Commission v Cement Australia Pty Ltd[155] the Full Court of the Federal Court said:

"the ACCC's appeal ground 8 asserts an error of law in failing to have "adequate regard to the quantum or magnitude of the benefits" (our emphasis). But failing to have adequate regard is not per se an error of law or an error in and of itself in either the first or second House v The King sense. A criticism of failing to have adequate regard is in reality a challenge to his Honour's weighting. We adopt what the Full Court said on that aspect in Director of Consumer Affairs Victoria v Alpha Flight Services Pty Ltd [2015] FCAFC 118 at [25] - [32] per Barker, Katzmann and Beach JJ."[156]

[111] I note that the appellant does not seek to prosecute a "second category" error - that is, no reasonable decision maker, acting reasonably, could have reached that outcome.[157] Instead, the appellant seeks to rely on a "first category" error.

[112] The Commissioner concluded there was a valid reason for the dismissal on the basis of Mr Gosek's misconduct on 4 October 2017, but that ultimately the decision to terminate was harsh, unjust or unreasonable.

[113] The appellant submits that in this case the Commission is required to make proper findings with respect to the conduct, taking into account both aggravating and mitigating circumstances.

What findings did the Commissioner make with respect to the conduct and did he take into account the aggravating and mitigating circumstances?

[114] The Commissioner dealt with each of the allegations of inappropriate conduct that formed the basis of the termination, as outlined in the letter of termination.[158] His reasons and conclusions are summarised below.

[115] Allegation 1: "participation in abusive and intimidatory and derogatory phone calls and texts to 7 fellow CFMEU members and shift maintenance supervisor." The Commissioner found it uncontested that the applicant used inappropriate language and that the conversation with Mr Pomona was unwelcome and challenging. He took this into account.

[116] Allegation 2: "text message stated the word 'dog' and subsequent phone conversations dog c*** and f***ing dogs". The Commissioner cited and took into account relevant authorities about unnecessarily bad language that may be given some tolerance in the workplace. He took the derogatory language and the criticisms of employees into account appropriately and in accordance with authority.

[117] Allegation 3: "... Subsequent phone conversations... You made variety of intimidatory threats for example: ongoing involvement and support with the union; being involved in court cases other Lodge members will know what they had done; and ongoing employment."

[118] The Commissioner found that the threats were unwelcomed by the employees, and further they were inappropriate and a breach of South 32's code of business conduct. He found that the misconduct occurred out of hours, noting the caution around termination because of out of hours conduct, citing relevant authorities.

[119] The Commissioner considered these phone conversations, concluding that Mr Plavecky had overreacted to Mr Gosek's threats. In addition, the Commissioner agreed with the applicant's evidence that in fact he has no power or authority as Lodge President to expel any member of the Lodge, withdraw union support and absolutely no capacity to terminate an employee. The Commissioner therefore concluded that Mr Plavecky's assumption affected the basis on which he formed his conclusions around Mr Gosek's conduct.

[120] Nonetheless, he concluded that Mr Gosek's conduct was at odds with his duty to comply with the South 32 code of business conduct.

[121] Allegation 4: "...activities extended over a period of 4 to 5 hours.... Calls varied in length from a couple of minutes up to 48 minutes."

[122] The Commissioner took into account Mr Gosek's conduct, his admission of that conduct and contrition the next day once he was in a position to reflect on his behaviour, his memory of what happened, and accounts of things he did not remember. In doing so no error is revealed.

[123] Allegation 5: "those employees and in some cases their families viewed your conduct as offensive intimidating or unwelcome."

[124] The Commissioner noted that none of the seven employees gave evidence and this was unfortunate. He had been obliged to consider this evidence without the direct evidence of employees. His conclusion on this point was that the evidence established that the overwhelming reaction of the eight colleagues was that Mr Gosek's conduct was unwelcome and offensive. The Commissioner then concluded that there was a valid reason for terminating Mr Gosek's employment.

[125] In deciding there was a valid reason, the Commissioner took into account both the language used by the applicant in texts and follow-up telephone calls, and the verbal and physical threats. In addition, the Commissioner considered the context in relation to both language and conduct. The Commissioner was entitled to assess and indeed is required to weigh up the context in which the language and threats occurred. He weighed the seriousness of the threats against his conclusion that Mr Gosek could not implement them.

[126] The appellant submits that the result was that the Commissioner failed to have regard to a relevant consideration, being the true nature and effect on gravity of the applicant's misconduct. I do not agree. The Commissioner dealt in his decision with both the bad language aspect of the misconduct and the threats of the misconduct. His decision was that the threats were unwelcome by the employees, that they were inappropriate and therefore a breach of the South 32 code of business conduct.

[127] The Commissioner made findings on the inappropriateness of Mr Gosek's behaviour. He wrote: "I have taken very seriously Mr Gosek's challenge to 2 of the employees to a physical altercation. Such conduct is inappropriate".[159] The Commissioner did not downplay the threats but conducted a weighing exercise. He considered the very serious nature of a challenge to a physical altercation. He did not diminish the serious nature of the language used or the challenge, but balanced it against the practical reality that in his view the further offensive conduct was unlikely to happen.

[128] Such a weighing up exercise is appropriate in the circumstances_._ The Commissioner took into account that the conduct was offensive, intimidatory and there was threatening language (including threats of violence but no actual violence), and threats of reprisal. The Commissioner's assessment of the evidence before him was that Mr Gosek was unlikely or unable to realise these threats while he was severely affected by alcohol and depression and given the reality of his actual position and authority.

[129] Was then the conclusion reached by the Commissioner, after characterising the behaviour and the context in which the behaviour occurred, including Mr Gosek's next-day admission, remorse and contrition, open to him on the evidence? The Commissioner's conclusion is not so unreasonable or plainly unjust that there has been a "second category" error. This is because he has considered the conduct on 4 October, in addition to both the aggravating and mitigating circumstances.

[130] But is there a "first category" House v The King error as suggested by the appellant? The appellant's argument is essentially that too little weight was given to the aggravating factors: the verbal and physical threats. However on the authority of Alpha Flight Services, whether an appellate court, or in this case the Full Bench, considers that the Commissioner, in the exercise of his discretion, has given too little or too much weight to any particular consideration is generally not treated as sufficient to vitiate the exercise of the discretion. To conclude otherwise would fall into the error often quoted from House v The King, ie: "if they had been in the position of the primary judge, they would have taken a different course."[160] In my view it is not open on the evidence for this Full Bench to so re-characterise the conduct.

[131] The Commissioner took into account the relevant misconduct - the texts, the phone calls, the threats and invitations to physical altercation, and threats of reprisal - and concluded there was a valid reason for the dismissal. The Commissioner's finding and characterisation is not a House v The King error of either limb.[161] Further, to separate out the finding of validity elevates the consideration in s.387(a) of the Act in the way the Full Court of the Federal Court found impermissible in Coal & Allied.

Was the termination harsh unjust or unreasonable?

[132] The Commissioner took into account the range of other matters in s.387(h) of the Act and found that the dismissal was harsh, unjust or unreasonable.

[133] Essential to the exercise of the discretion is the applicant's mental illness and, on the day in question, his alcohol abuse. I note here, without making any finding (as none is necessary for this appeal), that it is notorious that alcohol has a serious dis-inhibitory effect for some individuals including aggression or actual violence. Further, it is a notorious fact that depression and medicinal treatments such as the Cymbalta prescribed for Mr Gosek may exacerbate feelings of anxiety, irritability, hostility and other behavioural manifestations. Whether or not those side effects were present in Mr Gosek's case, and whether there was an interaction between his medicines and alcohol is not germane to this appeal. It is enough to note (as the Commissioner found) that the complained-of conduct took place in the context of Mr Gosek's depression, his medication, and his being severely affected by alcohol at the time. I further add that the Commissioner's finding did not go to excusal of the behaviour, but to a rational explanation, one that was not contradicted by the appellant in evidence.

[134] The Commissioner wrote about a plethora of reasons why Mr Gosek's termination was harsh, unjust or unreasonable, including:

• his unblemished record for over 11 years;

• no inappropriate behaviour prior to this behaviour in his role as CFMEU Lodge President;

• possible side-effects of the antidepressant medication Cymbalta;

• the treatment of other employees where there had been allegations of bullying or harassment; and

• the off-duty nature of the misconduct.

[135] These reasons provide a rational basis for concluding a dismissal was harsh, unjust or unreasonable.

[136] The appellant submits that there was a mischaracterisation and a failure to have regard to the actual misconduct concerning the issue of investigations surrounding other employees. Further, these errors affected the discretionary decision and the Commissioner later identified the differing outcomes and said "to terminate Mr Gosek for behaviour of this kind, and in any event at the lower end of the scale, would be unfair. [162]

[137] The Commissioner did not equate the treatment of Mr Gosek with other employees.[163] Further, there is no error, having identified all the behaviour which aggravated the applicant's culpability and having weighed the mitigating factors he concluded that the behaviour was "in any event" at the lower end of the scale. That another member at first instance may have concluded differently on the characterisation of the conduct or where it sits on a scale of seriousness is not a matter for this Full Bench in considering the Commissioner's exercise of his discretion.

[138] Having identified the particular individual facts that are relevant, the Commissioner considered the notion of a "fair go" provided for under the Act:

"Mr Gosek has a statutory entitlement to a "fair go". Society is slowly trying to deal with the issues of mental health in the workplace. Mr Gosek has bared his soul for all to see that he has been suffering from severe depression since mid 2016, that he is under the ongoing management of a mental health plan and that he is taking strong medication which has a long list of adverse side effects. These side effects are typified by the behaviour of Mr Gosek on the "one-off" occasion of 4 October 2016. This was a "one off" incident. Illawarra Coal did not give this mitigating circumstance sufficient consideration which makes Mr Gosek's termination harsh".[164]

[139] The appellant submits that the Commissioner erred in having regard to the employer's internal process, what recommendations were made and any mitigating factors.

[140] The task before a member under s.387 of the Act is to assess the fairness or otherwise of a termination. This requires a determination as to whether the conduct occurred (including the seriousness of that conduct), and whether there were any mitigating factors that should be taken into account. In my view the Commissioner satisfied himself that conduct occurred and addressed, at length, his own view on seriousness and on mitigation. As part of that satisfaction he looked to the processes of the employer during the investigation and found them inadequate. The Commissioner was entitled to have regard to those processes and the employer's decision when making his own assessment as required under s.387.

[141] Although the conduct of the Mr Gosek on the day in question was clearly inappropriate, for the reasons detailed in this decision, the Commissioner took into account the conduct of the applicant and a range of other matters and concluded that the termination of Mr Gosek's employment was also unfair. That is, the decision reached by the Commissioner was that Mr Gosek's behaviour was unacceptable but explainable. Therefore a finding the dismissal was unfair was available to the Commissioner. No error is revealed.

[142] I add that the alternative grounds of appeal not dealt with by the majority (grounds 6-8 in alternative to ground 5) likewise are not made out. The Commissioner clearly had regard to Mr Plavecky's evidence and reached a conclusion different from that urged by the company. He did not err in the ways mentioned in those grounds (including the alleged Jones v Dunkel error), but engaged in a weighing exercise of the evidence before him. These grounds of appeal amount to re-litigation of the matters at first instance and must be rejected.

[143] The Commissioner reinstated Mr Gosek and provided compensation for lost wages with a 25% penalty for misconduct.

[144] In the appeal, the appellant contends that once the Commissioner decided that the dismissal was harsh, unjust or unreasonable he found that the employee was entitled to be reinstated unless an order is not appropriate. The appellant submits that the Commissioner was wrong and involves an abrogation of the Commissioner's responsibility to determine the question of appropriateness.

[145] The Commissioner provided reasons why reinstatement was appropriate. Further the Commissioner found Illawarra Coal had no bona fide reason to suggest they had lost trust and confidence in Mr Gosek.

[146] The Commissioner sets out this conclusion on the decision to reinstate. This is because:

• the Commissioner concluded Mr Gosek was genuine in relation to his apologies and contrition; and

• Mr Pomona (as supervisor of Mr Gosek) has indicated pragmatically he will deal with the situation if Mr Gosek was to be reinstated.

[147] The Commissioner's decision on reinstatement and the details of the remedy ordered were based on relevant considerations and did not take into account irrelevant matters.

[148] It has not been shown that there is any error of such significance in the Commissioner's decision as would warrant interference by an appeal bench. The Commissioner considered the inappropriate language and threatening conduct, including potential physical altercations, and concluded there was a valid reason for the termination, but the dismissal was unfair.

[149] In my view the decision of the Commissioner is not attended with any error of the kind referred to in House v The King, and the appeal should be dismissed.

By repeatedly characterising the gravamen of Mr Gosek's misconduct as being swearing or the use of inappropriate language (at paras [49]-[56], [91]-[93], [104] and [111]), the Commissioner erred by:

• (a) mistaking the facts, namely that Mr Gosek's conduct constituting the valid reason involved the use of swear words and other inappropriate language in the context of numerous instances of threatening, abusive, victimising and intimidating behaviour against other employees, including threats of physical harm and other reprisals, because of and associated with their participation in a company investigation into other unrelated, inappropriate employee behaviour;

• (b) failing to have regard to a relevant consideration, being the true nature, effect and gravity of Mr Gosek's misconduct; and

• (c) having regard to irrelevant considerations, namely the evidence about the use of swearing and similar language at the workplace (at para [53]-[55], [91], [104] and [111]) and the lack of disciplinary matters involving inappropriate language (at paras [91] and [93]), when the valid reason relied upon was not merely swearing or inappropriate language.

In dealing with Mr Gosek's threats to employees of reprisals and victimisation by the CFMEU and its members as limited to the mere technical act of expelling members from the CFMEU or terminating their employment (and whether Mr Gosek had that capacity) (at paras [60]-[62], [64], [94] and [105]-[106]), the Commissioner erred by:

• (a) mistaking the facts, namely that Mr Gosek's threats (and the employer's corresponding concerns) went far beyond these technicalities and were fundamentally related to broader reprisal action and victimising behaviour by Mr Gosek and others (see paras [58]-[59]);

• (b) failing to have regard to a relevant consideration, being the true nature, effect and gravity of Mr Gosek's threats; and

• (c) having regard to irrelevant considerations, namely Mr Gosek's legal incapacity to expel members from the CFMEU Lodge or otherwise terminate their employment (paras [60]-[62], [64] and [105]-[106]).

Further to ground 2 above, the Commissioner erred by having regard to an irrelevant consideration, namely that Mr Gosek's resignation from his position as CFMEU Lodge President would have meant that he "would not have any capacity to 're-offend' in the future" (at [90]), when the nature and extent of his offending (having regard to his threats of reprisals and victimising conduct) had nothing to do with his position as Lodge President or otherwise.

By failing to properly identify and make findings as to Mr Gosek's "conduct" and what constituted a valid reason for dismissal (at paras [66], [73] and [96]), the Commissioner was unable to properly weigh or assess the gravity of that misconduct against all other relevant matters in assessing overall harshness, etc, thereby acting on a wrong principle and/or failing to have regard to relevant considerations.

The Commissioner erred by acting on a wrong principle and/or having regard to irrelevant considerations in considering whether the termination was harsh, unjust or unreasonable, namely the employer's internal investigation process, what recommendations were made (or not made) and what mitigating factors were before the decision-maker (or not) (paras [80]-[83] and [113]-[116]). The Commission's task was to consider the statutory criteria for itself.

In the alternative to ground 5 above, the Commissioner erred by:

• (a) failing to have regard to relevant considerations in assessing the investigation, namely that Mr Plavecky was aware of all mitigating factors relevant to the termination and gave evidence that he took them all into account;

• (b) having regard to irrelevant considerations in assessing the investigation, namely that the final peer reviewer of the decision did not receive a full copy of the report with all mitigating circumstances in it (at paras [36] and [81]-[82]); and

• (c) having regard to irrelevant considerations in assessing the investigation, namely that initial recommendations from an initial report were not within the final report (at paras [81]-[82] and [114]-[116]).

The Commissioner erred by acting on a wrong principle and/or having regard to irrelevant considerations in his application of Jones v Dunkel to Mr Hatfield and his associated drawing of inferences (at paras [83] and [116]), when his absence was explained (he no longer worked for the employer), he had no relevant evidence to contribute (see ground 5 above, including also on the question of Mr Plavecky's state of mind or motivations) and thereby nothing to explain or contradict and it was not open to infer that any failure to call him was because the employer feared to do so.

Further to ground 7 above, the Commissioner erred by acting on a wrong principle by drawing a Jones v Dunkel inference of damaging evidence (not merely that it would not have assisted), including contrary to direct evidence to the opposite effect (at para [116]) and by drawing an inference/making an assumption about Mr Hatfield's evidence which was nothing more than speculation and conjecture to fill gaps in the evidence (at para [116]), rather than a more probable inference.

By taking account of and having regard to the facts and circumstances surrounding the conduct of Mr Goedde and/or Mr Donnelly (at paras [84]-[88], [101]-[102] and [112]), the Commissioner erred by:

• (d) mistaking the facts, namely that the employer's approach to the conduct and investigations of Mr Goedde and Mr Donnelly was relevantly inconsistent with that involving Mr Gosek; and

• (e) having regard to irrelevant considerations in assessing harshness, etc, namely the alleged inconsistency of treatment as between Messrs Goedde, Donnelly and Gosek in circumstances which were not relevantly or sufficiently similar.

The Commissioner erred by acting on a wrong principle and/or failing to have regard to relevant considerations regarding harshness, etc, by finding that Mr Gosek's conduct:

• (a) was not in breach of his contract of employment (at para [103]); and

• (b) was not relevantly, serious and wilful misconduct (at para [103]).

The Commissioner erred by acting on a wrong principle and/or having regard to irrelevant considerations in assessing the degree of culpability for, and gravity of, Mr Gosek's misconduct, by relying on unsubstantiated assertions, opinions and speculation about the impact and effect of alcohol, drugs and Mr Gosek's mental state on his misconduct (at paras [93], [99], [110] and [117]).

The Commissioner erred by having regard to an irrelevant consideration in assessing harshness, etc, namely that the employer refused to accept Mr Gosek's medical circumstances as a mitigating factor for his conduct (at para [117]).

Further or alternatively to grounds 1-12 above, the Commissioner erred by failing to give any, or any adequate, reasons as to why or how he took into account various matters which he considered relevant to his various, ultimate conclusions (see paras [49], [55], [57], [63]-[64], [66], [71]-[72], [77], [82]-[83], [86]-[90], [94] and [105]-[107]).

1. The Commissioner erred by having regard to an irrelevant consideration, namely that Mr Gosek's resignation from his position as CFMEU Lodge President would have meant that he "would not have any capacity to 're-offend' in the future" if reinstated (at paras [90] and [132]), when his capacity to re-offend (having regard to his threats of reprisals and victimising conduct) had nothing to do with his position as Lodge President, being on the Lodge Committee or otherwise.

2. The Commissioner erred by failing to have regard to relevant considerations in considering whether reinstatement was appropriate, namely the matters identified in para [122](a)-(e) of the decision.

3. The Commissioner erred by failing to have regard to relevant considerations in considering whether reinstatement to his former position and shift was appropriate, namely the nature of his misconduct involving threatening, abusive and intimidating behaviour (including threats of physical violence) to the other employees on that same shift.

4. Further or alternatively to grounds 15-16 above, the Commissioner erred by failing to give any, or any adequate, reasons for finding (at [127] and [132]) that reinstatement was appropriate and that Mr Gosek could be successfully reintegrated back into his crew.

The Commissioner significantly erred in fact regarding his findings as to the nature of Mr Gosek's misconduct and his threats to other employees.

The Commissioner significantly erred in fact by finding (at [84]-[88], [101]-[102] and [112]) that the employer's approach to the facts and circumstances surrounding the conduct of Mr Goedde and/or Mr Donnelly was inconsistent with that involving Mr Gosek.

The Commissioner significantly erred in fact by finding (at [113] and [116]) that Mr Plavecky had a fixed view about a preferred outcome to the investigation.

The Commissioner significantly erred in fact by failing to find that Mr Plavecky was aware of and had taken into account all mitigating circumstances which had been raised.

The Commissioner significantly erred in fact by finding (at [116]) that Mr Hatfield did not agree with Mr Plavecky's recommendation.

The Commissioner significantly erred in fact by finding (at [117]) that the employer refused to accept Mr Gosek's medical circumstances as a mitigating factor.

Permission to appeal should be granted in the public interest because the grounds of appeal involve:

important questions of principle regarding the Commission's obligations to properly identify the conduct which constitutes (or is said to constitute) a valid reason for dismissal and make appropriate findings about those matters (including their gravity), in order to properly weigh and assess those findings against other relevance matters;

important questions of principle about the interaction between an employer's investigation and reasoning process in making a decision to dismiss an employee and the Commission's role in assessing the statutory criteria in section 387 of the Fair Work Act 2009 (Cth);

a significant error of principle in mischaracterising (and thereby, significantly downplaying the seriousness of) the evidence substantiating the valid reason;

errors of principle in the Commission's drawing and use of Jones v Dunkel inferences;

the circumstances in which the Commission can use self-serving, unqualified opinion evidence about the impact or effect of alcohol, drugs or mental state to justify, explain and/or mitigate unchallenged misconduct;

a significant departure from existing Full Bench authority about the circumstances in which alleged differential treatment as between employees can be properly taken into account in considering harshness, etc;

numerous allegations of a substantial miscarriage of justice in the Commission's determinations and characterisations of the conduct, including that the dismissal was harsh, unjust or unreasonable and that reinstatement was the appropriate remedy; and

a consideration of the proper discharge of the Commission's function in providing adequate reasons for its decisions, including in particular, the adequacy of merely stating that something is taken into account without explaining how or why or what impact it had on any ultimate decision.

[1] [2017] FWC 4574

[7] [2017] FWC 5885

[8] [2017] FWC 4574 at [1]

[12] Ibid at [15] and the finding at [49] and [50]

[85] Submissions of Illawarra Coal at [4]

[104] Submissions of Illawarra Coal at [39]

[110] Submissions of Mr Gosek at [5]-[6]

[136] This is so because on appeal the Commission has power to receive further evidence, pursuant to s607(2); see Coal and Allied v AIRC [2000] HCA 47; (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ

[137] [2011] FCAFC 54; (2011) 192 FCR 78 at [43] per Buchanan J (with whose judgment Marshall and Cowdroy JJ agreed)

[138] O'Sullivan v Farrer [1989] HCA 61; (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ; applied in Hogan v Hinch [2011] HCA 4; (2011) 85 ALJR 398 at [69] per French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54; (2011) 192 FCR 78 at [44]- [46]

[139] [2010] FWAFB 5343, 197 IR 266 at [27]

[140] Esso Australia Pty Ltd v AMWU and ors [2015] FWCFB 210 at [7]

[141] [1936] 55 CLR 499

[142] Appeal Book page 413 at [52] and 9/11/17 Transcript at PN 171

[143] Appeal Book page 77 at Transcript PN 330

[145] Appeal Book pages 1010, 1033, 1037, 1049 and 1057

[146] [2017] FWCFB 4574 at [105]

[149] [2017] FWC 4574 at [117]

[151] (1936) 55 CLR 499

[152] Ibid at [80], cites the balance of this decision from the judgement of Dixon, Evatt and McTiernan JJ.

[153] [2015] FCAFC 118

[155] [2017] FCAFC 159

[157] Submissions of the appellant - see footnote 10

[158] Letter of Termination dated 31 January 2017

[160] House v The King [1936] HCA 40; 55 CLR 499, 505.

[161] see Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54 as to a second limb error.

[163] see paragraph [94] of this decision

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