s.394 - Application for unfair dismissal remedy

Cement Australia Holdings Pty Ltd T/A Cement Australia

[1] On 11 September 2025, Mr Leigh Potter filed an application pursuant to s 394 of the Fair Work Act 2009 (Cth) (the Act) seeking a remedy in relation to unfair dismissal with respect to his former employer, Cement Australia Holdings Pty Ltd T/A Cement Australia (Cement Australia).

[2] The matter was the subject of a hearing conducted on 23 January 2026 after earlier, the parties had filed and served written materials. Both parties were granted permission to be represented by a lawyer or a paid agent pursuant to s 596 of the Act. Mr McLean of Counsel appeared for Cement Australia. For most of the proceeding, Mr Alkan represented Mr Potter although, as is mentioned further below, Mr Alkan did not appear at the hearing and Mr Potter represented himself.

• [3] The application was made within the period required by s 394(2) of the Act. Cement Australia conceded the dismissal did not occur as a result of a genuine redundancy and that it is not a small business within the meaning of s 23 of the Act[1]. There appears to be no basis upon which it can be said that Mr Potter is not a person protected from unfair dismissal within the meaning of s 382 of the Act and I find this to be so.

[4] The matters leading up to and relating to the termination of Mr Potter's employment are reasonably straightforward. Cement Australia is a cement manufacturer and distributor. Mr Potter was employed by Cement Australia to work at its Railton site in 2017. Prior to this he was consistently allocated to work for Cement Australia as a labour hire worker since about 2002. Mr Potter was engaged as a Silo Operator. His duties included maritime and rail unloading operations, silo operations and other control room duties. The organisation of the work involves a Silo Operator, such as Mr Potter, working alone. Several safety critical tasks are part of the work, such as the need to work in physical proximity to moving trains and the operation of what Mr Potter accepted is "heavy machinery". The work must be carried out in a manner in which a Silo Operator is vigilant to the risk of cement dust escaping as a range of processes involving the loading and unloading of cement material are carried out. The safe operation of much of the machinery is also the Silo Operator's task to monitor as the processes are undertaken by various workers including Mr Potter, tradespeople and rail employees.

[5] On Monday 11 August 2025, shortly after reporting for work, Mr Potter was required to undergo a random drug test. The test was performed by way of an oral swab. The test was "non positive". Mr Potter was stood down and driven home by the Production Manager, Mr Goldsmith. His sample was later tested in a laboratory which found it positive for amphetamines and methamphetamines.

[6] Cement Australia issued Mr Potter with a letter inviting him to a disciplinary meeting to discuss the allegation that he had tested positive for amphetamine and methamphetamine which is a breach of its drug and alcohol policy and its "Life Saving Rules". At the meeting, Mr Potter said he had snorted two lines of "speed" during the morning of Saturday 9 August 2025.

[7] On 21 August 2025 Mr Potter was sent another letter asking him to show cause as to why his employment should not be terminated, and to attend another meeting. Mr Potter provided a written reply and said he understood the seriousness of his conduct, that it was an isolated lapse in judgement, and offered to undergo rehabilitation. In the days that followed there was some discussion about the proposition that Mr Potter resign his employment but this did not eventuate and on 28 August 2025 Cement Australia advised him his employment was terminated. The letter he was provided confirming this, said the reason for the termination of his employment was that he had engaged in serious misconduct.

[8] Cement Australia has a drug and alcohol policy. While Mr Potter provided in evidence a copy of a policy dated June 2017, he conceded during the hearing the policy had been reviewed as of May 2025. This reviewed policy, which was effective when Mr Potter was dismissed, was provided in evidence by Cement Australia.

[9] This policy provides, relevantly, that the Breath Alcohol Content limit is 0.00% and other drug limits are the cut off levels prescribed in Australian Standards. Employees who breach these limits are to be managed in accordance with a procedure set out in the policy, which can include disciplinary action. The policy also provides for, among other things, a random testing protocol in relation to alcohol and drug screening. Another policy called the Cement Australia Life Saving Rules also says, "never work under the influence of alcohol or drugs".

[10] Mr Tueon gave evidence for Cement Australia. Mr Tueon is the Operations Manager at Railton. Mr Tueon said that in March and April 2025 Mr Potter completed induction and refresher courses in which there were reminders as to the contents of the policies outlined above. Mr Potter had earlier in his employment received similar instruction. None of this evidence was contested by Mr Potter, who conceded that he had been trained in at least "some parts" of the policy and reminded of it in pre-shift meetings.

[11] Mr Potter conceded in his evidence that when he ingested the drugs, he was not aware of their strength or potency.

[12] The result of the laboratory drug test showed the presence of both amphetamines and methamphetamines. The quantity of methamphetamine was more than 16 times the testing cut off contained in the relevant Australian Standard.

[13] Dr Michelle Williams was commissioned by Cement Australia to provide an expert report relating to Mr Potter's positive drug test which was tendered in evidence. Dr Williams also gave oral evidence and was subjected to cross examination. Her report was prepared in accordance with the Harmonised Expert Witness Code of Conduct. Having examined the results of Mr Potter's drug test, Dr Williams said that the test showed an "extremely high value of methamphetamine". She also said this high value indicates a "very recent consumption" and that she considered it more likely than not the consumption occurred around two hours prior to the swab. She said it was implausible, given the level of drug detected, that the last consumption occurred more than eight hours prior to the swab. She said this was particularly due to the very high test result, and also because the detection method was "oral fluid" which has a short detection window. She said that if the drugs were consumed on the Saturday morning, as Mr Potter asserts, the amount ingested to return a result as high as that which was still detected on Monday would, at the time the drugs were taken, be of a quantity approaching toxic or death levels.

[14] Dr Williams also said that the effects of methamphetamine are dose dependent, but it impairs executive function, attention, mental flexibility and working memory. After acute effects, when withdrawal occurs, there can be intense craving, anxiety, fatigue, slower reflexes and impairment in daily functioning. She said that whether the last drug was consumed two days prior to the test or two hours prior to the test, the individual would have been impaired. She said if the consumption of the drug been about two hours prior to the test, which she considered to be likely, at the time the test was taken the individual would have been experiencing acute effects including euphoria, agitation and altered cognition including poor memory and concentration.

[15] Mr Potter maintained in his oral evidence that he consumed the drugs on Saturday - his day off - and disputes the proposition that he did so on Monday morning - only hours before he reported to work and was tested.

[16] Mr Potter also disputes the proposition that he was impaired when at work on Monday morning. He said that Mr Goldsworthy, who drove him home, said that he was "normal and calm".

Mr Potter's conduct during investigation process

[17] Mr Potter was immediately forthcoming about this matter when asked to account for himself by his employer. He said he did use "speed" - he said on his day off (the Saturday) - and that it was a stupid decision - that he was struggling emotionally due to not having seen his children due to ongoing family law proceedings and problems with his ex-partner. In his response to the "show cause" letter he apologised and said he was committed fully to engaging with any corrective action, including counselling, regular drug testing, participating in education or rehabilitation programs or formal reviews into his conduct and performance.

[18] Section 387 of the Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account:

1. 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
2. whether the person was notified of that reason; and
3. whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
4. 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
5. if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal; and
6. 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
7. 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
8. any other matters that the Commission considers relevant.

• [19] I am required to consider each of these factors, to the extent they are relevant to the factual circumstances before me[2].

[20] After having considered Mr Potter's written material, I asked Mr Potter at the commencement of the hearing whether my impression that his case is based on four key propositions is correct. He confirmed that this is the case. Those propositions are:

• [21] That the decision to "summarily dismiss" Mr Potter was disproportionate[3] - his conduct was not sufficient to justify the severity and gravity of the" response[4] - taking into account several migratory factors.
• a. That Cement Australia failed to genuinely consider the available evidence[5] and that its conduct "cast the spectre of pre-determination"[6] and was "going through the motions" in its investigation of and consideration of Mr Potter's conduct[7].
• b. That Cement Australia did not comply with its own policies by inappropriately conducting his drug test, by not conducting it in a private location and allowed the disclosure of private information to third parties[8]. He also argued that it had failed to ensure employees were "duly educated on the specifics of drug and alcohol management" and were not distributed with alcohol and drug self-testing kits[9].
• c. That Mr Potter's conduct did not amount to serious misconduct within the meaning of the Act, because it was not "substantial and wilful" or "wilful and deliberate"[10].

[22] Apart from agreeing with my suggestion that from my examination of his written materials, his submissions were based on these four key propositions, Mr Potter did not make any oral submissions at the hearing.

• [23] The proposition that the termination of Mr Potter's employment was disproportionate was based on several submissions, including that he said his employment with Cement Australia, which had extended over a relatively long period of time, involved an "unblemished tenure of service"; that there is a wide discretion afforded to Cement Australia in its policies; that Mr Potter did not feel impaired or affected when he attended work; that there is no evidence he was impaired; that he was not selected for testing because he exhibited impairment but was selected randomly, that the incident was one-off and isolated; that he accepted responsibility, apologised and offered remedial action, that the dismissal had a significant impact upon him including severe financial and reputational harm and occurred at a time when he was experiencing personal challenges, that other employees who had committed similar transgressions were treated leniently, and that he genuinely believed he was not breaching the drug and alcohol policy[11].
• [24] Two of the submissions made by Mr Potter can be dispensed with swiftly. During the hearing, it emerged there was little substance to the proposition that other employees had been treated differently to Mr Potter. His evidence was that the discretion he says exists in Cement Australia's policy to deal with breaches by means other than termination of employment had been exercised in the past on "several occasions". However, this evidence was largely vague and generalised. He provided two specific examples which were the subject of an Order I made at Mr Potter's application, that Cement Australia produce documents in relation to them. It turned out these two examples were from 2104 and 2018 and they did not assist Mr Potter. There was insufficient evidence before me to allow a conclusion these examples compared "apples with apples"[12], in so far as the employees concerned had been treated differently, particularly taking into account they occurred under a different drug and alcohol policy, a significant time past, involving different drugs and circumstances. If Mr Potter knows more about these cases such that he thinks they are appropriate comparators to his situation, it was not in the evidence before me.

[25] The proposition that Cement Australia did not comply with its own drug and alcohol policy was based on two key submissions: first, that it had not supplied employees with drug and alcohol self-test kits; and secondly, that the test itself had not been conducted in private or information had been disclosed to third parties. It emerged at the hearing there was little basis for these submissions. Any obligation that Cement Australia provide employees with drug and alcohol self-test kits could not be identified in the version of the drug and alcohol policy having application to Mr Potter at the time of his dismissal and may have been a part of a previous policy. It also appeared the test was conducted in private, because at the time it was undertaken, only Mr Potter and the tester were present on site. Later, when a train arrived, some employees of Tas Rail were present on site, and may have somehow learned Mr Potter had undergone a drug test, because by then he had been stood down from work and was leaving site. This may have been embarrassing for Mr Potter but it did not occur because the test wasn't conducted appropriately or privately or an inappropriate disclosure had been made.

[26] I will address Mr Potters other submissions below.

[27] Cement Australia made submissions in relation to each of the factors I am required to consider pursuant to s 387 of the Act. I consider these submissions below.

Was there a valid reason for dismissal related to Mr Potter's capacity or conduct?

• [28] It is well established that order to be a valid reason relating to an employee's capacity or conduct, the reason for the dismissal should be "sound, defensible or well founded" and should not be "capricious, fanciful, spiteful or prejudiced" [13].
• [29] In Rode v Burwood Mitsubishi[14] a Full Bench of the Australian Industrial Relations Commission held: "... the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that she or she acted in the belief that the termination was for a valid reason".
• [30] Merely establishing the factual basis for the reason for dismissal does not by itself demonstrate it was a valid reason. Dismissal must be a justifiable response to the relevant conduct or issue of capacity[15]. A reason not of sufficient gravity to justify dismissal is not sound, defensible or well-founded[16].
• [31] However, 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[17].

[32] The particular problem for Mr Potter in this matter is that while he filed reasonably comprehensive written submissions, the evidence did not ultimately support those submissions. In the absence of his representative, Mr Alkan, who had, by the time of the hearing, exited the stage, Mr Potter was largely unable to deal with the inconsistencies between the way he had sought to put his case and the evidence as it unfolded before the Commission.

[33] In particular, much of the evidence from Dr Williams, upon which her conclusions were based, was essentially unchallenged. She concluded that Mr Potter had likely ingested methamphetamine not long before coming to work on 11 August 2025 and that his assertion - that he had consumed the drugs on the Saturday morning prior - "implausible". Dr Williams also said it was likely Mr Potter was impaired, to some extent, taking into account the nature of the test result. This means (a) he was untruthful about when he said he ingested the drugs, (b) turned up to work to use heavy machinery, in a safety critical environment, in an impaired and unfit state to do so, and (c) breached his employer's drug and alcohol policy. I consider that Dr Williams evidence must be accepted and thus these conclusions are inescapable.

• [34] Cement Australia submitted that it's policy, at least in so far as it requires employees to not attend for work with proscribed substances in their system, is evidently a lawful and reasonable one, and that a breach of such a policy will generally, particularly in the context of a safety-critical work environment, constitute a valid reason for dismissal. Mr Potter countered this submission by suggesting it appears to "fundamentally neglect the role that intention plays in establishing a valid reason for dismissal", citing the well-known caution by a Full Bench of the Commission in B, C and D v Australian Postal Corporation T/A Australia Post[18] that a finding that an employee has failed to comply with policies and procedures does not mean that a dismissal is harsh, unjust or unreasonable"[19].
• [35] I consider Mr Potter has mischaracterised or misunderstood Cement Australia's submission in this regard. It is well-established that where an employee who attends for work and returns a positive test for a prohibited substance, this may, of itself, constitute a valid reason for dismissal[20]. Whether the dismissal is harsh, unjust or unreasonable will depend on the circumstances. In this matter, Cement Australia submitted, correctly in my view, that Mr Potter conceded that the policy was reasonable, that he knew about it, and he breached it.
• [36] "Serious misconduct" is defined in the Fair Work Regulations 2009 (the Regulations) as having its ordinary meaning[21]. Examples of serious misconduct include "wilful or deliberate behaviour that is inconsistent with the continuation of the contract of employment. It also includes being intoxicated at work[22]. However, even where conduct is alleged to be "serious misconduct", a finding that the conduct falls within the definition of serious misconduct provided in reg 1.07 of the Regulations is not necessary for the conduct to amount to a "valid reason"[23].

[37] Above, I observed that some of Mr Potter's submissions lack foundation. The same can be said about his submission that his conduct cannot be said to be "serious misconduct" because it was not "wilful" or that otherwise, his conduct lacked "intent". His submission appears to be based on the proposition that by the time Mr Potter attended for work he believed the drugs would be out of his system. But again, the evidence does not support this assertion. It supports the notion that Mr Potter ingested the drugs not long before reporting for work. Obviously this did not occur accidentally - the drugs were ingested intentionally. It cannot be said therefore that the conduct was not wilful or deliberate.

[38] Ultimately, Mr Potter says that a different course of action was available to Cement Australia than dismissal - such as a remedial or educative response. To some extent he complains the choice to terminate his employment was harsh which I will deal with further below. In so far as he says the decision to terminate was not sound, defensible or well founded because the conduct was not of sufficient gravity, I do not agree. Cement Australia said Mr Potter's duties are performed in an isolated, safety critical operating environment and there are potentially serious consequences if a Silo Operator does not carry out their duties diligently. If anything, this is an understatement. The loading and unloading of cement onto trains using heavy machinery in proximity to moving vehicles presents an obvious health and safety risk to the persons engaged in that work, not to mention the environmental and public safety risk associated with escaping cement dust. The danger of such work being performed by a person having only recently ingested methamphetamine is obvious and the decision to terminate that person's employment due to that conduct has a sound basis.

[39] I consider Cement Australia had a valid reason to terminate Mr Potter's employment and this weighs in favour of a finding the dismissal was fair.

Was Mr Potter notified of the reason for dismissal and given a chance to respond?

• [40] Notification of the valid reason for dismissal must be given to the employee explicitly and in plain and clear terms. And crucially, this must occur before the decision to terminate the employment is made[24]. An employee protected from unfair dismissal should be notified of a valid reason for the termination of their employment before a decision is taken to terminate that employment so that they can provide a response before the decision is final[25].
• [41] Mr Potter was provided with the eventual reason for the termination of his employment before the decision was made, in the form of a disciplinary letter, and a "show cause" letter, and afforded an opportunity to respond, which he exercised through attending meetings (assisted by his Union) and providing a written response. He argues that this process was not genuine, because Cement Australia failed to genuinely consider "available evidence" and simply went "through the motions" in this process. He asserts that in the final meeting, at which his employment was terminated, rather than genuinely exploring "the mitigatory factors and alternative outcomes proposed" Cement Australia instead "co-opted the Applicant's own support person to pressure the Applicant into resigning"[26]. I do not consider the evidence supports these submissions and assertions. Mr Tueon set out in his statement the various considerations he took into account in making the decision to terminate Mr Potter's employment, after having first having heard and considered his responses[27]. His decision was not made before having heard Mr Potter's responses, but only after he took time to consider them. The discussion which occurred about Mr Potter resigning his employment, which continued after the meeting via email for some days, was one he participated in, was not pressured into, and ultimately decided it was not the course of action he wanted to pursue. This conversation having occurred is not indicative of a disingenuous process or fait accompli. Mr Potter's submission that the process was predetermined is fundamentally based on the fact that it resulted in an outcome other than that which he had hoped it would.

[42] I consider that Mr Potter was notified of the reason for the dismissal and given a chance to respond and this weighs in favour of a conclusion that the dismissal was not unfair.

Did Cement Australia unreasonably refuse to allow Mr Potter to have a support person present to assist at discussions relating to the dismissal and was he provided with warnings?

[43] It appeared to be agreed that these are not relevant factors in this matter and I consider that to be so. These factors weigh neither for or against a conclusion that the dismissal was unfair.

To what degree would the size of Cement Australia's enterprise or the absence of human resources management specialists be likely to impact on the procedures followed in effecting the dismissal?

• [44] Mr Potter submitted in effect that Cement Australia is not a small business and has dedicated HR personnel and a substantive management structure, has policies and procedures relevant to the alleged conduct, and yet appeared to conduct a "paper exercise"[28]. This submission is not borne out by the evidence. Having said that, I do not consider Cement Australia's size or internal human resources expertise to be factor weighing for or against a finding that Mr Potter's dismissal was unfair.

[45] I consider several other matters relevant to the question as to whether the termination of Mr Potter's employment was harsh, unjust and unreasonable.

[46] I consider it appropriate to take into account the effect over Mr Potter's personal and economic circumstances resulting from his dismissal. I did not understand Mr Potter has been successful in obtaining another job. He lost his job with Cement Australia suddenly, and after about eight years employment. He maintained that his conduct during his service had been good and broadly satisfactory, which was not contradicted. These are matters weighing in favour of a conclusion the decision to terminate the employment, instead of adopting some other approach, was harsh. Cement Australia submitted that Mr Potter's length of service and the effect of termination over his personal and economic circumstances does not mean the decision becomes unfair or harsh simply because these consequences are serious. I accept this submission - but nevertheless consider it is appropriate to take the consequences for Mr Potter into account in relation to the overall assessment of the dismissal.

[47] Cement Australia submitted I should take into account the seriousness of Mr Potter's conduct. I consider it appropriate I do so. Mr Potter appeared to struggle to accept the seriousness of his conduct. This may because on his narrative, he ingested the drugs on Saturday, with mates before the footy, and thought he would be OK by Monday morning. The evidence simply does not support this narrative. On the evidence before me he arrived to work in a safety critical environment with a scientifically measured level of drugs in his system described as "extremely high". He was impaired, even if he thought he wasn't. His conduct was a risk to himself, any work colleagues who may have arrived on the next train, to his employer and to public safety. These matters weigh against a finding that the termination of his employment was unfair.

[48] It is largely on this basis that I do not accept Mr Potter's submission that the dismissal was harsh because Cement Australia could have adopted a different course of action, such as remedial or educative support. It could have adopted such a course but chose not to, given the seriousness of the conduct. The fact it adopted this option, instead of others available to it, does not make the decision harsh in circumstances where the conduct is of the level of seriousness I consider it to be.

[49] Mr Potter submitted I should accept he has been subjected to "differential treatment" in relation to his dismissal, as opposed to other employees of Cement Australia who in similar circumstances were dealt with differently. As I have outlined above, the evidence simply did not support this proposition and I do not accept it.

[50] Mr Potter also submitted I should consider his dismissal harsh, because it was disproportionate in relation to the conduct. He said this was an isolated incident and an inadvertent mistake with no lasting harm. I have addressed this proposition above. I have also described above how I do not accept Mr Potter's mistake was inadvertent, and to characterise it as one with no lasting harm misunderstands the nature of the risk. I do not agree the dismissal was disproportionate to the conduct.

Is the Commission satisfied that the dismissal of Mr Potter was harsh, unjust or unreasonable?

• [51] I have made findings in relation to each matter specified in s 387 of the Act. I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable[29]. The weight of these considerations bears in favour of a finding that the dismissal of Mr Potter was not harsh, unjust and unreasonable and I find Mr Potter was not unfairly dismissed.

[52] Having found as I have that Mr Potter's dismissal was not harsh, unjust or unreasonable, the application is dismissed.

• [53] An Order[30] will issue to that effect.

Mr James McLean of Counsel appearing for the Respondent

[1] Respondent's Outline of Submissions, 5 December 2025, [14]

[2] Sayer v Melsteel Pty Ltd [2011] FWAFB 7498 [14]

[3] Submissions for the Applicant, 18 November 2025, [34]

[8] Witness Statement of Mr Leigh Potter, 18 November 2025, [38]

[10] Submissions for the Applicant (Further Submissions), 12 December 2025 [45], [47]

[12] See John Sexton v Pacific National (ACT) Pty Ltd PR931440 [2003] AIRC 506 [36]

[13] Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333; (1995) 62 IR 371 [373]

[15] Raj Bista v Glad Group Pty Ltd t/a Glad Commercial Cleaning [2016] FWC 3009 [34]

[16] Kylie Smith v Bank of Queensland Ltd [2021] FWC 4 [124], [126]

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

[18] [2013] FWCFB 6191

[20] Sydney Trains v Reece Goodsell [100]

[21] Fair Work Regulations 2009 r 1.07(1)

[23] Joshua Jiminez v Accent Group t/a Platypus Shoes (Australia) Pty Limited [2016] FWCFB 7201 [17] - [18]

[24] Newton v Toll Transport [2021] FWCFB 3457 [182]

[25] Crozier v Palazzo Corporation (1996) 98 IR 137 [73]

[26] Submissions for the Applicant [48]

[27] Witness Statement of Simon Tueon, 5 December 2025, [73] - [82]

[28] Submissions for the Applicant [59]

[29] ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) IR 117 357 [51]; Edwards v Giudice [1999] FCA 1836 [6] - [7]

[30] PR795905

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