Fair Work Commission|2021-08-06

Michael Hudson v Metcash Trading Limited [2021] FWC 2765 (6 August 2021)

[2021] FWC 2765 [Note: An appeal pursuant to s.604 (C2021/5021) was lodged against this decision.]

s.394 - Unfair dismissal

[1] On 11 December 2020 Mr Michael Hudson (the Applicant) made an application to the Fair Work Commission (Commission) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for a remedy in respect of his dismissal by Metcash Trading Limited (the Respondent/Metcash).

[2] On 23 November 2020 Mr Hudson's employment was terminated with immediate effect for serious misconduct following what Metcash contends was a serious safety incident (the incident) that occurred on 27 October 2020. On that day, Mr Hudson was observed using his mobile phone while operating a forklift in a warehouse aisle which Metcash consider to be a "high risk area". Metcash submit this was in breach of company policy warranting dismissal.

[3] Mr Hudson does not deny the conduct occurred; however, he submits that, taking into account his length of service and unblemished safety record, the dismissal was a disproportionate response, and his dismissal is unfair. Mr Hudson is seeking reinstatement.

[4] For the reasons set out below, I find the decision to terminate Mr Hudson's employment was harsh and therefore unfair.

[5] Section 396 of the Act requires that the following matters be decided before the merits of the application may be considered. I am satisfied that Mr Hudson's application was made within the 21-day period prescribed by s.394(2) of the Act. Metcash is not a small business employer within the meaning of the Act and therefore the Small Business Fair Dismissal Code does not apply. The dismissal was not a case of genuine redundancy.

[6] At the time of his dismissal the Metcash Trading Limited Dry Grocery and NDC Enterprise Agreement 2019[1] (the Agreement) applied to Mr Hudson's employment, and he earned less than the high-income threshold. Mr Hudson had completed a period of employment with Metcash that was at least the minimum employment period required by s.382 of the Act. I am satisfied that Mr Hudson was a person protected from unfair dismissal.

[7] The matter was conciliated on 8 January 2021 however the matter was unable to be resolved. The matter was subsequently listed for hearing before me on 14 and 15 April 2021.

[8] Mr Hudson was represented by Mr Angus MacKenzie. Mr Hudson gave evidence on his own behalf and Mr Angelo Buljan, Supervisor at the Laverton North Distribution Centre, also gave evidence on his behalf. Mr Steve Vassallo was not required for cross-examination and his witness statement was admitted into evidence by consent of the parties, subject to some objections made on behalf of the Respondent.

[9] Metcash was represented by Mr Mark Sant. The following witnesses gave evidence on behalf of Metcash:

Mr Demos Mitchell, Inventory Manager - Laverton North Distribution Centre;
Ms Christine Henaghan, Safety, Health and Environment Manager (Victoria, Tasmania and New Zealand);
Ms Emma Addison, Logistics Operations Manager - Victoria;
Ms Kristina Sachdeva, Warehouse Supervisor - Laverton North Distribution Centre;
Mr John Formosa, Warehouse Supervisor - Laverton North Distribution Centre;
Mr Michael Caruana, Warehouse Manager - Laverton North Distribution Centre; and
Mr Mark Van Den Oever, Warehouse Manager (Dry Grocery and National Distribution Centre) - Laverton North Distribution Centre.

[10] The facts in this matter are largely uncontested and are set out below with the evidence of the parties as presented.

[11] Mr Hudson commenced employment with Metcash at its Laverton North Distribution Centre (Laverton site/Distribution Centre) on 11 March 1997. Metcash has four warehouses at its Laverton site - the dry grocery warehouse, the National Distribution Centre (NDC) warehouse, the perishables warehouse, and the ALM (Liquor) warehouse. There are about 500 to 600 permanent and agency labour hire workers working in the various warehouses at the Distribution Centre.

[12] At the time of his dismissal Mr Hudson performed the role of a Storeperson in the dry grocery warehouse. His duties included using a forklift to take stock from the receiving area of the warehouse and put away or replenish stock in other areas of the warehouse, and using an electric pallet jack (EPJ) to travel through the warehouse to pick and assemble stocks for orders. Prior to this he had performed a number of other roles with Metcash, most recently being Warehouse Supervisor in the ALM warehouse (19 November 2012 - 31 July 2015) and then in the dry grocery warehouse (1 August 2015 - 3 April 2016). In this role he delivered toolbox talks to his team.

[13] On 27 October 2020 after taking his morning "smoko break" Mr Hudson drove his forklift out of the battery room into aisle B1. Halfway down the aisle Mr Hudson heard his phone ring. He answered his phone, told the person on the other end to wait a moment, and then drove a short distance with his mobile phone to his ear, stopped again, and dismounted his forklift and continued to talk on his mobile phone. Mr Hudson then moved further away from the centre of the aisle into a pick slot in the racking to make sure he was not in the way and because he was having difficulty hearing the caller. After the call when he turned around to face toward the end of the aisle, he saw Mr Demos Mitchell walking around the forklift toward him.

[14] Mr Hudson's explanation for his actions was that he answered his mobile phone whilst driving after seeing that the caller was the parts distributor whose call he had been waiting on. Mr Hudson had been trying to source car components and a replacement for a faulty item he had purchased which he required in order to make some repairs to his vehicle, being the only source of transport his family owned. The COVID-19 lockdown was making it somewhat difficult to source and obtain the part he was waiting on and he was concerned about missing the call.

[15] After hanging up from the call Mr Hudson saw Mr Demos Mitchell walking around the forklift towards him. Mr Hudson submits that he immediately realised he had done something stupid, he had had a "brain fade," and was sorry for his conduct and for potentially endangering his own and others' safety. Mr Hudson says it was a serious lack of judgement and he immediately regrated his actions.

[16] Mr Mitchell approached Mr Hudson and asked whether the call was an emergency and Mr Hudson explained it was not. Mr Mitchell sent Mr Hudson back to work and said he would have him paged to discuss the matter further.

[17] Immediately after the incident Mr Mitchell went to see Mr Mark Van Den Oever (Warehouse Manager (Dry Grocery and National Distribution Centre) - Laverton North Distribution Centre) in his office and explained what had occurred. Mr Mitchell and Mr Van Den Oever reviewed the CCTV footage of the incident which shows Mr Hudson answering his phone whilst operating the forklift. A short time later, Mr Hudson was directed via the warehouse public announcement system to attend the office of Mr Van Den Oever. Mr Hudson made no attempt to deny that he had taken a phone call and immediately took responsibility for his conduct, expressing remorse for breaking the rules and compromising safety in the warehouse.

[18] During the meeting with Mr Van Den Oever, Mr Hudson was shown the CCTV footage of the incident and asked to prepare a statement of what had happened. Mr Hudson was offered the opportunity to have a support person present. Mr Hudson took up that opportunity and Mr Tapara, a work colleague, attended the meeting at Mr Hudson's request. Mr Hudson prepared a handwritten statement providing details of the incident and gave it to Mr Van Den Oever. Mr Hudson was verbally informed by Mr Van Den Oever that he would be stood down on full pay pending the outcome of an investigation into the incident and was handed a suspension letter. Before leaving the meeting Mr Hudson requested a copy of the statement he had given to Mr Van Den Oever and Mr Mitchell obliged by providing a copy.

[19] After the meeting Mr Mitchell escorted Mr Hudson back to the floor where he returned the forklift and clocked off before leaving the premises. Mr Hudson said by the time he reached his car he was physically shaking. He rang his wife, took some time to compose himself and then drove home.

[20] On 5 November 2020 Mr Van Den Oever and Mr Admir Lalic (Warehouse Supervisor) met with Mr Hudson and his support person, Mr Steve Vassallo (SDA Union Organiser), to present the allegations and seek his response. Mr Van Den Oever read out an allegations letter to Mr Hudson (Allegations Letter) which was then given to him.

[21] On 6 November 2020 Mr Hudson provided Mr Van Den Oever with a written response to the allegations in which he acknowledged using his mobile phone whilst operating a forklift, advised that he used his mobile phone to speak to a distributor in relation to delivery of spare parts for his motor vehicle, advised of personal circumstances including relating to the issues with his car and associated delivery of spare parts, and expressed contrition for his behaviour.

[22] On 11 November 2020 Mr Van Den Oever and Mr Lalic met with Mr Hudson and Mr Vassallo. In that meeting Mr Van Den Oever read out a show cause letter (Show Cause Letter) detailing the investigation into the allegations and informing him that the allegations had been substantiated and Metcash was considering terminating his employment. Mr Hudson was then handed a copy of the Show Cause Letter.

[23] On 13 November 2020 Mr Hudson provided Mr Van Den Oever with a written response to the Show Cause Letter. In his response letter he explained that he had been waiting on a component for his vehicle which he needed urgently so he could keep his car running which was his main source of transport to and from work. He also explained the issues COVID-19 had caused in being able to source said component. In his written response Mr Hudson explained he had read the policy when it was handed to him and even though the policy had not been formally explained to him, he now acknowledges that he is not to use his mobile phone in the warehouse. Mr Hudson provided an apology and requested consideration be given to his unblemished safety record, his 22 years of loyal service to the organisation, and that the incident was an isolated occurrence. Mr Hudson also wrote that he would accept a warning for his conduct.

[24] After considering Mr Hudson's response and all the circumstances, Metcash determined that Mr Hudson's conduct was sufficiently serious to warrant the termination of his employment. On 23 November 2020, Ms Emma Addison (Logistics Operations Manager - Victoria) and Mr Van Den Oever attended a meeting with Mr Hudson, his support person, and Mr Vassallo where Ms Addison read out a termination letter advising Mr Hudson of the decision to terminate his employment effective that day for serious misconduct. The termination letter was then given to Mr Hudson. Metcash say that, having regard to Mr Hudson's clear disciplinary history and length of service, Mr Hudson received a payment in lieu of notice.

[25] Metcash submits it had drawn "a line in the sand" with the use of mobile phones in the warehouse. Mr Hudson had breached that "line in the sand" because he was in control of a forklift, driving in the warehouse in a 'High Risk Area' when he answered his mobile phone. Mr Hudson says he was aware of the PED Protocol however the wasn't aware the consequence of a first breach would result in his dismissal.

[26] There has been a cultural change in Metcash's approach to work health and safety, driven by Ms Addison since her commencement in December 2018. This cultural change has included educating employees about work health and safety, including during regular toolbox meetings; taking a consistent approach to safety, and safety breaches; building a culture of employees reporting all incidents, including minor incidents, to managers and supervisors as soon as possible after those incidents occur; and reviewing each safety incident carefully to see what further action ought to be taken to control safety risk.

[27] The PED Standard was developed during 2018 and a toolbox meeting was held in the dry warehouse regarding the PED Standard which Mr Hudson attended. On 6 December 2018, the PED Standard was re-released as the PED Protocol and came into effect at the Distribution Centre on 1 February 2019. The PED Protocol sets out Metcash's requirements regarding mobile phone use while at work. A toolbox talk was held in February 2019 to discuss the PED Protocol, which Mr Hudson did not attend.

[28] In November 2019 the PED Protocol was reviewed and updated, and 'High Risk Areas' and 'Low Risk Areas' introduced. It also included a statement to the effect that a breach of the PED Protocol in a 'High Risk Area' could lead to disciplinary action up to and including termination of employment. Under the PED Protocol, a 'High Risk Area' is an area where vehicles and mobile plant or moving equipment operates (excluding the car parks). In a 'High Risk Area', team members are prohibited from using a mobile phone whilst in control of mobile plant or equipment. Team members who are not in control of mobile plant or equipment (called 'pedestrians') who are in a 'High Risk Area' are prohibited from using personal electronic device (PEDs) unless they are in a 'Designated Safe Area', which is an area that is separated and protected from moving objects or equipment. This includes, for example, canteens, offices, lunchrooms, physically protected designated walkways, and areas separated from mobile plant behind a barrier.

[29] Following the finalisation of the updated PED Protocol, Metcash decided to draw a 'line in the sand' about the use of mobile phones in 'High Risk Areas', which it says was considered necessary to cause a culture change regarding mobile phone use. On 11 December 2019 Metcash conducted toolbox talks with employees informing them of the changes to the PED Protocol, including the introduction of 'High Risk Areas' and the inclusion of a statement that a breach of the PED Protocol in a 'High Risk Area' could lead to disciplinary action up to and including termination of employment. The updated PED Protocol was handed out to employees at the toolbox talks and posted on noticeboards after the toolbox talk based on usual business practices. Mr Hudson had not attended the 11 December 2019 toolbox talk however, he did attend a catch-up toolbox talk with the same content on 12 December 2019. Mr Hudson signed the Register that same day confirming his attendance.

[30] Toolbox talks typically occur at least once a month. All team members are required to attend toolbox talks and they are usually run by Warehouse Supervisors. During the toolbox talks supervisors use PowerPoint slides on a projector to assist with presenting the topics to be discussed. Due to COVID-19 restrictions Metcash made changes in the way toolbox talks are conducted. From around March 2020 due to the requirements for social distancing the Warehouse Supervisor would call up employees individually or in small groups. Employees were given a time slot of 15 minutes during which they would read the toolbox talk from a document provided and were then given the opportunity to ask questions about it before signing their attendance. Employees were able to make a request to their supervisor for additional time if required.

[31] On 16 June 2020 Mr Hudson attended a toolbox talk during which Mr Formosa handed him a copy of the PowerPoint slides to read. Mr Formosa informed Mr Hudson that if he had any questions he could come back and see him. Mr Hudson was instructed that once he had read the slides and he was comfortable he was to return to Mr Formosa and sign the register that all employees who have attended a toolbox talk sign.

[32] The June 2020 toolbox agenda contained 7 items: the National Safety update, Todays Safety Message (Airlocks and Rigid Vehicle Movements), Hazard and Incident Reporting, Personal Electronic Devices (PEDs), Code of Conduct, Site General Updates and Questions. The PED section contained the following:[2]

"Whilst in control of a vehicle, mobile plant or equipment :Use of non company PED is prohibited"

and____________________________________________________________

'Pedestrians must remain stationary and are only permitted to use PEDs in Designated Safe Area'

The PED protocol applies to all team members, contractors and visitors at all sites of Metcash Group, and applies to all areas of Metcash controlled workplaces.

Cameras, GPS navigational devices, Mobile phones, devices used for communications of data, data storage and retrieval, Two-way Radios, UHF Radios, ipods (or other personal music playing devices/boom boxes), iPads (or other table technologies), laptops and smart watches. The use of voice-picking headsets and hearing aids is outside the scope of this protocol.

High Risk Area- all areas where mobile plant, mobile equipment or vehicles move, not including carparks

Low Risk Area- areas where vehicles do not move, for example; General Offices, Washrooms, Meeting Rooms, Canteen/Meal Rooms.

Designated Safe Area-areas which enable concentrate on PED-related-activity which is separated from and protected from moving objects or equipment.

Actions that may be taken by Metcash should there be a breach in a high risk area. This is, a. "Failure to adhere to this protocol may result in disciplinary action, up to and including termination of employment (or engagement)"."

[33] The next agenda item, Code of Conduct, states that it applies to all team members, casual team members and contractors and they are expected to behave appropriately, and ensure the safety, health, and wellbeing of others. It similarly states that any breach may result in disciplinary action up to and including termination.

[34] On 10 September 2020 Mr Hudson attended another toolbox talk (September Toolbox). The same approach followed at the June toolbox was applied to the September toolbox. Mr Hudson was provided with a PowerPoint presentation; he was told to read the presentation and sign the Register which he did.

[35] The Safety Update in the September toolbox provided that the PED Protocol safe zones had been reviewed and new signage and floor stickers were being introduced to help identify approved safe zone areas. It was confirmed that the areas identified were for company issued PED only and all personal devices were restricted to existing safe zones.

[36] Section 387 of the Act sets out the criteria for considering whether a dismissal was harsh, unjust or unreasonable:

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant."

[37] The type of conduct which may fall within the phrase 'harsh, unjust or unreasonable' was explained by the High Court of Australia in Byrne v Australian Airlines Ltd.[3] McHugh and Gummow JJ explained as follows:

"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."[4]

[38] I will now consider each of the matters set out in s.387 of the Act.

Was there a Valid Reason for the dismissal- s.387(a) and Other Relevant Matters - s.387(h)

[39] The employer must have a valid reason for the dismissal of the employee, although it need not be the reason given to the employee at the time of the dismissal.[5] The reason for the dismissal should be "sound, defensible and well founded"[6] and should not be "capricious, fanciful, spiteful or prejudiced."[7]

[40] The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[8] The question the Commission must address is whether there was a valid reason for the dismissal related to the employee's capacity or conduct (including its effect on the safety and welfare of other employees).[9]

[41] In cases relating to alleged conduct, the Commission must make a finding, on the evidence provided, whether, on the balance of probabilities, the conduct occurred.[10] It is not enough for an employer to establish that it had a reasonable belief that the termination was for a valid reason.[11]

[42] The reasons for the dismissal of Mr Hudson are set out in the 11 November 2020 Show Cause Letter and in more specific detail in the allegations letter. The specific conduct relied on by Metcash for dismissing Mr Hudson was that he had breached the Metcash Personal Electronic Devices Protocol by using his mobile phone in location that had been designated a 'high risk area' and his conduct fell short of the standard reasonably expected of Metcash employees.

[43] Mr Hudson does not deny talking on his mobile phone in the warehouse and he is genuinely remorseful for his actions. Mr Hudson admits to speaking on his mobile phone while standing next to the forklift, before moving into a pick slot to continue the call. Mr Hudson was cognisant that neither of these areas were a 'Designated Safe Area' which is the only area a pedestrian is allowed to use a mobile phone. However, he contends that Metcash did not make it clear to him that his actions would result in the termination of his employment. He also contends that the updated PED Protocol was not properly implemented and he was not provided training in it. He submits that the policy is not well understood by employees at the site and that no one had described or explained to him the November 2019 amendment as a 'line in the sand'. He submits that Metcash has not been consistent with other breaches of the policy. He contends the PED Protocol has been breached by other employees who were not dismissed and at worst were counselled, and his dismissal for breach of the policy is harsh.

[44] Mr Hudson's evidence is that he immediately admitted to his conduct, has been contrite at all times, and that the incident was a 'brain fade' that is out of character, and he is otherwise a safe, hard working, and conscientious employee. Mr Hudson argued that there was no clear 'line in the sand' because there was no specified difference between what had previously been communicated to employees and what was communicated after the roll out of the PED Protocols.

[45] Mr Hudson was not present at the toolbox meeting which occurred on 11 December 2019; he instead attended the toolbox talk the next day with Ms Sachdeva. Mr Hudson signed the register confirming that this had occurred. The December 2019 toolbox talk introduces the key changes to the PED Protocol and states clearly that a 'line in the sand' had been drawn and that what had been tolerated before was no longer accepted and a failure to comply with the PED Protocol would have serious consequences for ongoing employment.

[46] There is some contention as to whether or not Mr Hudson received a copy of the PED Protocol during the December 2019 toolbox talk. However, he concedes that it was possible that he may have, and he just could not remember. Although he submits that he does not recall being provided with the PED Protocol, it is clear from the evidence Mr Hudson had a reasonable understanding of the PED Protocol and what would constitute a breach. Mr Hudson had on at least two occasions been provided with information about the PED protocols in PowerPoint slides at the toolbox talks. Mr Hudson has held supervisory roles and safety roles with Metcash and had signed off on attending the toolbox meetings held in December 2019 and June 2020, all of which dealt with the requirement not to use a PED whilst operating mobile plant and equipment.

[47] Mr Hudson was aware that a breach of the PED Protocol may result in disciplinary action up to and including termination of employment, and he had gained an understanding as to what constituted a breach from the toolbox talks. From the information provided in the December 2019 toolbox talk, Mr Hudson simply did not expect that he would be dismissed for a first-time breach, considering his clean safety record and length of service. Mr Hudson thought the statement that "a breach of the PED Protocols may result in disciplinary action up to and including termination" would mean that Metcash would weigh all the factors and he may have been provided with a first and final warning at most.

[48] Mr Hudson argued that there was no valid reason for his dismissal because he had not been provided with the PED Protocol and was not sufficiently trained in the terms of the Protocol. I accept that it would be difficult for an employee to comply with a policy or procedure that they had not been provided with, especially in circumstances where there was evidence that the employee had insufficient knowledge of the content of the policy or procedural requirements or there had been no training about the content or expectations of a policy or procedure. It would also be difficult for an employee in those circumstances to comply with a policy that had not been implemented. However, I do not accept that this is the case in the present circumstances. There is no evidence that the PED Protocol was withheld from Mr Hudson and that Mr Hudson was unable to obtain a copy of the PED Protocols if he so desired. On the evidence before me, I have formed the view that it was likely that Mr Hudson had access to the PED Protocol during the December 2019 toolbox talk, and if not, given his history of employment, he would have known how to access the PED Protocol if it was his intention to do so. Regardless, I make the following observations.

[49] The information pertaining to the PED Protocol contained in the December 2019 toolbox talk is comprehensive. It takes the written words from the PED Protocol and operationalises it by way of providing examples of how the Protocol operates using examples in photographic, graphic and in written form. It is a comprehensive explanation of the Protocol and a reasonable person would ordinarily deduce a better understanding of the Protocol from the materials provided in the toolbox talk than by simply just reading the PED Protocol on its own. The toolbox materials provided to employees sets out Metcash's expectations in clear and well-defined terms so that employees could not be mistaken as to where and when they could use a PED. Those clearly defined terms, being high and low risk areas and what is a designated safe area, were explained in the toolbox talk documents provided Mr Hudson. I am satisfied that Metcash has met its obligation to ensure Mr Hudson had been trained and adequately informed about the contents in PED Protocol. The consequence of this is that Mr Hudson was aware at the time he took the phone call he was breaching the PED Protocol, which he does not deny and this was a valid reason for his dismissal.

[50] However, was Mr Hudson's dismissal harsh? The "line in the sand" in the present circumstances simply refers to Metcash ensuring that employees should be fully aware of its approach to any breach of the PED Protocols which is that it may take disciplinary action and a breach could result in disciplinary action up to and including termination of employment. The 'line in the sand' was communicated in clear terms and it has not been suggested that Metcash has a zero-tolerance policy which would result in an employee being immediately dismissed for any breach of safety, and this was certainly not Metcash's intention. The 'line in the sand' simply suggested that any future breaches of the PED Protocol will not be ignored and may be dealt with through the disciplinary process. Any disciplinary process must be fair and the outcome must not be disproportionate to the conduct that occurred when one takes into consideration all of the relevant factors that are to be considered.

[51] Mr Hudson was fully cognisant of the PED Protocols at the time of the incident and through a genuine momentary lapse of judgement he knowingly breached the protocol. He had a reasonable understanding that a breach of the PED Protocol could result in disciplinary action 'up to and including dismissal'. Because the training highlighted that employees may be subject to disciplinary action up to and including termination, Mr Hudson made the assumption the use of terms "may" and "up to" meant that some reasonable consideration would be given to his length of service, his clean disciplinary record, and his exemplary safety record. Mr Hudson simply did not expect he would be dismissed for a first incident, especially one that did not cause an accident or injury, and especially during a period where the country was being affected by the COVID-19 pandemic.

[52] Mr Hudson alleges there has been inconsistent application of the disciplinary outcomes arising from breaches of the PED Protocol. I do not accept this to be the case. It is apparent from the evidence that each breach of a safety policy is considered on its merits. When deciding whether a breach of a safety policy should result in termination of employment, the decision makers involved consider all of the circumstances surrounding the breach including the seriousness of the breach, whether the employee was aware of the requirements of the relevant safety policy they have breached, the employee's disciplinary history, and any other factors that might be relevant to the particular situation.

[53] In deciding whether to terminate Mr Hudson's employment, Ms Addison says she decided on balance to terminate Mr Hudson's employment. The messaging to employees about the 'line in the sand' being drawn provides that some sort of disciplinary action could be taken. It does not suggest a breach would automatically result in dismissal and this was not Metcash's intention. It is Ms Addison's evidence that in drawing a 'line in the sand' Metcash has not adopted a "zero tolerance" approach to a breach of the PED Protocol in a 'High Risk Area' and does not make termination of employment an automatic outcome for such a breach of the PED Protocol. Although she says she considered other factors, it appears Ms Addison has on this occasion taken a 'zero tolerance approach' when considering whether or not to terminate Mr Hudson's employment.

[54] Metcash does not have a 'zero tolerance policy' and at no stage has it communicated otherwise. Metcash has presented to its employees through toolbox talks that a failure to adhere to the PED Protocol "may result in disciplinary action, up to and including termination of employment (or engagement)" (emphasis added). When deciding what disciplinary action could be taken, the merits and surrounding circumstances should be considered. Ms Addison says she did consider Mr Hudson's length of service being 23 years, his explanation for his conduct, the regret he had expressed for his conduct, and the fact that he had a clean disciplinary record. However, she still came to the decision that an isolated incident that did not cause injury or harm warranted dismissal, an outcome that I find was disproportionate had Ms Addison genuinely considered all of the factors. It is apparent that Mr Hudson, although he possessed a clean safety and disciplinary record, was used as an example for what could happen when drawing a 'line in the sand' and not what should have happened.

[55] Mr Hudson had 23 years of service. He had no disciplinary issues and a clean safety record. He is an honest person and was a dedicated and loyal employee. Mr Hudson did not attempt to hide the fact that he had taken a phone call in breach of the PED Protocol, he apologised for his actions, was clearly and genuinely remorseful, and provided reasons for his momentary lapse of judgement which had been affected by the surrounding circumstances and impacted by the COVID-19 pandemic. Although Mr Hudson did not need to repair his vehicle that very day, it is evident that ongoing delays in repairing the vehicle would have placed him at a greater risk of an unplanned breakdown of the vehicle which would be likely to affect his ability to get to work. While it is not the Commission's place to step into the shoes of an employer and determine what an employer should have done in a particular situation, it was open to Metcash to issue Mr Hudson a first and final warning which would have been a proportionate outcome. Immediately proceeding to terminate Mr Hudson's employment was clearly disproportionate and overly harsh.

[56] Although I find no fault with Metcash's implementation of its safety protocols and I have found there was a valid reason for the dismissal, the outcome was disproportionate and for the reasons set out above, I find that Mr Hudson's dismissal was harsh in the circumstances.

Notification of the Valid Reason -s.387(b) and an Opportunity to Respond -s.387(c)

[57] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made[12], and in explicit[13] and plain and clear terms.[14] In Crozier v Palazzo Corporation Pty Ltd a Full Bench of the Australian Industrial Relations Commission dealing with a similar provision of the Workplace Relations Act 1996 stated the following:

"As a matter of logic procedural fairness would require that an employee be notified of a valid reason for the termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted."[15]

[58] An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality.[16]

[59] Metcash provided Mr Hudson with sufficient information about the allegations that led to his termination in meetings at each stage of the process. Those reasons were also documented and provided to Mr Hudson in well written and informative correspondence. Mr Hudson was initially advised in a face-to-face meeting that he would be stood down on full pay whilst Metcash undertook an investigation. This was subsequently followed up by a letter that was handed to Mr Hudson. The letter contained details of the meeting that took place during which he was informed he was being stood down, and who attended that meeting including the details of the support person. The letter explained the nature of the investigation that was to be conducted being an alleged breach of safety, and identified the date the alleged conduct occurred. The letter also explained the reason Metcash had chosen to suspend Mr Hudson and that he wasn't required to undertake or perform any duties during his suspension. The letter provided details as to the timeframe Mr Hudson could expect to hear from Metcash and the process it intended to follow, including what information would be made available to him and at what stage in the process he could expect to receive information from Metcash. The letter then went on to deal with other matters one would ordinarily expect to see in such correspondence, which included information about confidentiality, victimisation, and the support services that would be made available throughout the process.

[60] Mr Hudson was subsequently provided with a detailed letter of allegations which outlined the process for providing his response to the allegations. The letter restated the confidentiality, victimisation and support services information provided in the previous correspondence.

[61] After receiving Mr Hudson's response, Metcash met with Mr Hudson and provided him with a Show Cause Letter that outlined both the allegations and the responses Mr Hudson had provided, that Metcash had taken into consideration. Mr Hudson was provided with an opportunity to provide reasons why his employment should not be terminated.

[62] I find no fault in the procedure Metcash adopted to ensure Mr Hudson was at all times informed of the allegations, the process, and the reasons it was considering that led to his dismissal. Mr Hudson was at all times during the process made aware of the allegations and he was given a reasonable opportunity to respond. The response was considered by Metcash prior to making the decision to terminate Mr Hudson's employment.

Unreasonable Refusal of a Support Person - s.387(d)

[63] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal.[17] With respect to this consideration, the Explanatory Memorandum states:

"This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.[18]

[64] Mr Hudson was given access to a support person and had a support person present with him in each of the meetings he attended with Metcash.

Warnings regarding Unsatisfactory Performance - s.387(e)

[65] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, if the dismissal related to unsatisfactory performance by the person, the Commission must take into account whether the person had been warned about that unsatisfactory performance before the dismissal.[19] Unsatisfactory performance is more likely to relate to the employee's capacity to do the job, than their conduct.[20] The Commission must take into account whether there was a period of time between an employee being warned about unsatisfactory performance, and a subsequent dismissal. This period of time gives the employee the opportunity to understand their employment is at risk and to try and improve their performance.[21]

[66] Mr Hudson was not dismissed for poor performance, and therefore this is not a relevant factor.

Impact of the Size of the Respondent on Procedures Followed and Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(f)-(g)

[67] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal.[22] Further, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal.[23]

[68] Metcash is a large employer, and it has in place appropriate procedures that were followed. I found Metcash conducted a fair and reasonable investigation process. Metcash are to be commended on the processes it followed through the disciplinary process.

[69] For the reasons set out above I find that Mr Hudson was dismissed for a valid reason however the dismissal was harsh in the circumstances. Having determined that Mr Hudson's dismissal was harsh, I find the dismissal to be unfair and will now determine what remedy if any should apply.

[70] Mr Hudson seeks reinstatement. Metcash opposes reinstatement.

[71] Section 390 of the Act states:

When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person's reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstance of the case.

[72] Section 391 of the Act states:

(1) An order for a person's reinstatement must be an order that the person's employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person's employer at the time of the dismissal; and

(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

(b) the period of the person's continuous service with the employer, or (if subsection (1A) applies) the associated entity.

(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:

(a) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement; and

(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement."

[73] As is apparent from s.390(3), compensation can only be ordered "if reinstatement of the person in inappropriate". As Mr Hudson seeks reinstatement, it is necessary in the first instance to consider if it is appropriate or otherwise.

[74] Determining the question of whether reinstatement is inappropriate involves the exercise of a discretion and the balancing of relevant considerations based on the evidence. A loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, that is providing the loss of trust and confidence is soundly and rationally based.[24]

[75] In Thinh Nguyen and another v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australian Chapter (Nguyen)[25] the Full Bench conveniently summarised the approach required as follows:

"[27] The following propositions concerning the impact of a loss of trust and confidence on the question of whether reinstatement is appropriate may be distilled from the decided cases:

Whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate but while it will often be an important consideration it is not the sole criterion or even a necessary one in determining whether or not to order reinstatement.
Each case must be decided on its own facts, including the nature of the employment concerned. There may be a limited number of circumstances in which any ripple on the surface of the employment relationship will destroy its viability but in most cases the employment relationship is capable of withstanding some friction and doubts.
An allegation that there has been a loss of trust and confidence must be soundly and rationally based and it is important to carefully scrutinise a claim that reinstatement is inappropriate because of a loss of confidence in the employee. The onus of establishing a loss of trust and confidence rests on the party making the assertion.
The reluctance of an employer to shift from a view, despite a tribunal's assessment that the employee was not guilty of serious wrongdoing or misconduct, does not provide a sound basis to conclude that the relationship of trust and confidence is irreparably damaged or destroyed.
The fact that it may be difficult or embarrassing for an employer to be required to re-employ an employee whom the employer believed to have been guilty of serious wrongdoing or misconduct are not necessarily indicative of a loss of trust and confidence so as to make restoring the employment relationship inappropriate.

[28] Ultimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive. In making this assessment, it is appropriate to consider the rationality of any attitude taken by a party." [footnotes omitted]

[76] If a loss of trust and confidence does exist, it is not necessarily conclusive that that reinstatement would be inappropriate. A loss of trust and confidence is only relevant where it is soundly and rationally based, otherwise it is irrelevant to whether reinstatement is appropriate.

[77] Mr Van Den Oever submits that reinstatement would not be appropriate in the circumstances because Mr Hudson made a decision to breach an important safety policy when he was aware of the requirements. Mr Van Den Oever gave evidence that given Mr Hudson's disregard for safety, he did not have confidence that Mr Hudson would follow Metcash's safety policies and procedures in the future.

[78] Ms Addison gave evidence that while the incident involving Mr Hudson was a one off, Mr Hudson could have seriously hurt himself and or someone else. Ms Addison's evidence is that she has no confidence Mr Hudson would follow the safety rules and policies and that reinstating Mr Hudson would be a danger to employees. Ms Addison submits reinstating Mr Hudson would send the wrong message about safety to other employees.

[79] Mr Formosa also gave evidence that he would be concerned if Mr Hudson was to be reinstated and he would always question Mr Hudson's compliance with safety rules and policies if he was to be reinstated. This was a view shared by Mr Caruana.

[80] It is not in contention that Mr Hudson had a clean safety record and there is no evidence to suggest that he had not complied with the safety rules and policies at any other time in his 23 years of service. There is unchallenged evidence in these proceedings that Mr Hudson was a loyal and truthful employee. Mr Hudson presented as an honest person in these proceedings, at times to his own detriment. Mr Hudson did not lie about the circumstances that occurred and took responsibility for what had occurred. I am not satisfied that Metcash has established a sound basis for claiming a loss of trust and confidence in Mr Hudson in circumstances where he breached a safety rule once in his 23 years of service and was honest about the breach and gave a commitment to comply with all policies and procedures moving forward.

[81] The unchallenged evidence in these proceedings is that Mr Hudson has had an impeccable safety record for 23 years. I am confident that should Mr Hudson have been issued with a first and final warning, he would have accepted the warning graciously and would have committed to complying with the safety rules moving forward.

[82] Mr Renfrey, a work colleague of Mr Hudson, gave evidence that he had worked alongside Mr Hudson for 20 years. His evidence was that Mr Hudson had good communication skills and a calmness about him. Mr Renfrey's evidence was that he always felt safe around Mr Hudson because he was a courteous and careful driver who had never broken safety rules and to do so was out of character. Mr Renfrey was confident that if Mr Hudson was to be returned to his role, he would not be a threat to his or anyone else's safety.

[83] Mr Buljan is a Supervisor at the Laverton site and first met Mr Hudson in the year 2000. Mr Buljan's evidence was that Mr Hudson was an honest person who had a great attitude to safety and always worked hard and wanted to do the right thing by the company. Mr Buljan's evidence was that he would not hesitate to have Mr Hudson back at work and trusted him to be safe in the workplace.

[84] I do not consider returning Mr Hudson to his employment would present a safety risk to Metcash or its employees, neither would it undermine Metcash's safety policies. There has been no criticism of the roll out of the PED Protocols or the Protocol itself. As stated earlier in this decision, there was a valid reason for the dismissal, and neither Mr Hudson nor any other employee should take a decision to reinstatement him as condoning his conduct. The decision to reinstate Mr Hudson is on the basis that the dismissal was harsh taking into account the relevant surrounding circumstances. Metcash applied a zero-tolerance approach and did not apportion relevant weight to Mr Hudson's impeccable safety record and his length of service and the conditions under which the incident occurred.

[85] I have considered Mr Hudson's conduct throughout the disciplinary process and note that there is no suggestion that there has been any other conduct that I should consider that would convince me that there has been a breakdown in the relationship that would advise against reinstatement. I have considered Mr Hudson's evidence and I am satisfied the experience has had a profound impact on him. Mr Hudson indicated he would not resist providing an undertaking that he speak publicly in the workplace about the error of his actions and make a declaration to comply with the PED Protocol in the future.

[86] Mr Hudson is to be reinstated to the position in which he was employed immediately before the dismissal. The reappointment should occur within 3 weeks of the issue of the order giving effect to this decision.

[87] I have considered Mr Hudson's length of service and I am satisfied that continuity of service should be ordered. I am also satisfied that the period should count towards Mr Hudson's continuous service.

[88] I am satisfied Metcash should pay to Mr Hudson an amount for his lost remuneration subject to the following deductions. There is no contest that the misconduct occurred, and a breach of safety should not be condoned under any circumstances. I deduct 25% of the compensation amount due to the breach of the PED Protocol.

[89] Mr Hudson has provided evidence that he gained casual employment after he had been dismissed from his employment. Mr Hudson submits since his dismissal he has obtained earnings of $12,412.75 gross.

[90] I have therefore decided that Mr Hudson should be paid 21 weeks at $1,183.85 gross minus the deductions for serious misconduct and the known amount earned by Mr Hudson since his dismissal. I therefore order Mr Hudson be paid an amount of $9,336.00 gross, subject to applicable taxes and inclusive of appropriate superannuation at 9.5% to be paid to Mr Hudson's nominated superannuation account.

[91] In reinstating Mr Hudson, I do not convey that he should not be subject to a disciplinary outcome for his conduct. It is however not the role of the Commission to determine what alternative penalty should be imposed. This is a matter for Metcash, however I make the following observations. Mr Hudson admitted to the conduct that occurred and had previously submitted that he expected to be disciplined for his conduct. Mr Hudson thought he might have received a first and final warning. Mr Hudson was also amendable to addressing his conduct in toolbox talks to assist Metcash in ensuring employees understand the importance of compliance with the PED Protocol. It is my view that an opportunity to encourage compliance with safety procedures is one that would work in Metcash's favour and would assist in achieving its desired outcome, compliance with the PED Protocol.

[92] An Order[26] reflecting this decision will be issued with this decision.

A. Mackenzie of Maurice Blackburn for the Applicant.

[2] Witness statement of Emma Addison dated 24 February 2021 at 38, Annexure EA-4.

[5] Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-8.

[6] Selvachandran v Peterson Plastics Pty Ltd [1995] IRCA 333; (1995) 62 IR 371 at 373.

[8] Walton v Mermaid Dry Cleaners Pty Ltd [1996] IRCA 267; (1996) 142 ALR 681 at 685.

[10] King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213 [24].

[12] Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41].

[13] Previsic v Australian Quarantine Inspection Services Print Q3730.

[15] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at [73].

[16] RMIT v Asher [2010] FWAFB 1200; (2010) 194 IR 1 at 14-15.

[18] Explanatory Memorandum, Fair Work Bill 2009 (Cth) [1542].

[20] Annetta v Ansett Australia Ltd (2000) 98 IR 233, 237.

[21] Johnston v Woodpile Investments Pty Ltd T/A Hog's Breath Café - Mindarie [2012] FWA 2 [58].

[24] Lee v Superior Wood Pty Ltd [2020] FWCFB 1301.

Printed by authority of the Commonwealth Government Printer

Michael Hudson v Metcash Trading Limited [2021] FWC 2765

At a glance

Court

Decision date

Source

Judgment (169 paragraphs)

Michael Hudson v Metcash Trading Limited [2021] FWC 2765 (6 August 2021)

Parties

Legislation Cited (1)

Cases Cited (7)