Fair Work Act 2009

s.604 - Appeal of decision

Appeal against decision [2018] FWC 846 of Deputy President Barclay at Hobart on 8 February 2018 in matter number U2017/5484 - dismissal for safety breach - valid reason - opportunity to make submissions on sanction - decision rule adopted - error- appeal upheld.

[1] Nyrstar Hobart Pty Ltd (Nyrstar) has lodged an appeal, for which permission is required, against a Decision[1] issued by Deputy President Barclay on 8 February 2018, in which he determined that Mr Peter Brain had been unfairly dismissed.

[2] Mr Brain was employed as a plant operator at Nyrstar's zinc smelter and production facility in Hobart. He was dismissed for having breached the company's safety rules by removing a 'Person in Control Tag' and a 'Live Testing Statement' from the control panel of a zinc dust elevator, and then starting the equipment. Maintenance was being carried out on the equipment at the time. Mr Brain received a termination letter from the Company, stating that his actions were in breach of a critical safety procedure and had placed himself and others in a potentially life-threatening situation.

[3] Mr Brain claimed that his dismissal was unfair. He said that there was no valid reason for his dismissal, and that in any event his dismissal was harsh, unjust or unreasonable, having regard in particular to his 37 years of service.

[4] The Deputy President found that there was a valid reason for dismissal, as Mr Brain had committed a serious safety breach that potentially exposed a maintenance worker to the risk of injury. However, he concluded that the dismissal was harsh, and that the company should have afforded Mr Brain an opportunity to make submissions to it on the proposed sanction of dismissal.

[5] An appeal under s.604 of the Fair Work Act 2009 (Cth) (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.[2] There is no right to appeal and an appeal may only be made with the permission of the Commission.

[6] 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.'

[7] In Coal & Allied Mining Services Pty Ltd v Lawler and others the Federal Court characterised the test under s.400 as 'stringent'.[3] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.[4] 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.'[5]

[8] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error.[6] However, the fact that the member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.[7]

[9] For the reasons given below, we have concluded that the Deputy President erred in considering that it was incumbent on the company to hear from Mr Brain about the proposed sanction for his conduct, namely dismissal. In our view, the Deputy President adopted a decision rule and thereby imposed an unwarranted fetter on his discretion. This constituted appealable error. It manifested an injustice. Accordingly, we find that the public interest for the purposes of granting permission to appeal under s.400(1) has been enlivened, and we therefore grant permission to appeal.

[10] The company advanced seven grounds of appeal. The first ground contends that the Deputy President erred in fact and law by failing to take into account and balance all of the relevant factors in s.387, and by taking into account and applying irrelevant or additional factors. Ground 2 concerns the finding that there was a valid reason for dismissal and does not allege error. Ground 3 submits that the Deputy President erred in law by applying tests and considerations that were inconsistent with a proper application of s.387.

[11] Ground 4 contends that the Deputy President erred in connection with his conclusion that it was incumbent on the company to afford Mr Brain an opportunity to make submissions on the proposed sanction; and that he made inconsistent findings, namely that the conduct was serious but not serious enough to warrant dismissal in its own right. Various sub-grounds are advanced, to which we shall return.

[12] The fifth ground of appeal alleges errors of fact in certain conclusions as to whether Mr Brain knowingly endangered another employee. The sixth ground of appeal advances a series of contentions concerning the gravity of Mr Brain's conduct, and alleged inconsistencies in the Deputy President's findings in relation to this conduct. Ground seven contends that the Deputy President misapplied the decision in BlueScope Steel Limited v Sirijovski[8] by assessing Mr Brain's serious safety breach as operational negligence.

[13] We deal firstly with those elements of the fourth ground of appeal that concern the Deputy President's conclusion that the company did not afford Mr Brain an opportunity to make a submission on the proposed sanction of dismissal, and the significance of this in the Deputy President's decision.

[14] Section 387 of the Act directs the Commission, in considering whether a dismissal was harsh, unjust or unreasonable, to take into account a number of matters. The Deputy President considered each of these matters in turn. First, he concluded that the company had a valid reason to dismiss Mr Brain (s.387(a)). He found that Mr Brain had taken it upon himself to ignore tags on equipment, failed to enquire whether relevant work had in fact finished, and energised the equipment in question when he had no authority to do so, thereby creating a potentially dangerous situation, especially for a particular maintenance worker who was working on the conveyor at the time and who was potentially in harm's way.[9]

[15] The Deputy President further concluded that Mr Brain was informed of the reasons for his dismissal, and was afforded a sufficient opportunity to respond (ss387(b) and (c)).[10] He also considered the matters referred to in ss.387(d), (e) and (f).[11] The consideration identified in s.387(g) is not referred to but does not appear to have been relevant.

[16] It is not necessary for us to say anything about these matters, other than to note that, in connection with his consideration of s.387(b), the Deputy President foreshadowed his concern about the company not having given Mr Brain an opportunity to make submissions about sanction;[12] and in connection with his consideration of s.387(f), he indicated that he would later address the company's 'failure to properly deal with the matter of sanction', which he considered to be 'significant'.[13]

[17] The Deputy President then addressed s.387(h), namely any other matters that the Commission considers relevant. At [52], he stated:

'A very significant matter is that of the Applicant having an opportunity to make submissions in relation to sanction.'

[18] The Deputy President noted that at a meeting between Mr Brain and company representatives on 2 May 2017, the question of mitigating circumstances was discussed, but that this concerned mitigating considerations in relation to the conduct, not the sanction for that conduct. Passages of transcript are then cited, after which the Deputy President states:

'[55] What then occurred is that the Respondent considered the information they had from the Applicant arising out of the 2 May 2017 meeting and proceeded to terminate the Applicants (sic) employment. It is clear that the Applicant was never given a chance to put anything in mitigation of sanction. In my view this is a significant flaw.

[56] The Respondent submitted that notwithstanding this failure the conduct was so serious as to justify termination whatever the Applicant might have said. It is to be noted that Mr Reeves took part in some discussions about sanction. However, I do not know what Mr Reeves said about the Applicants (sic) current situation.

[57] I do not regard the Applicants (sic) conduct as so serious at to justify termination without specifically hearing from the Applicant about sanction. I agree the conduct was serious. However, I do not regard it as misconduct justifying termination of itself. The better description of the matter is perhaps operational negligence.'

[19] The Deputy President then noted that, had Mr Brain been given an opportunity to make submissions on sanction, he would have been able to give the employer further information in respect to, or emphasise, a number of matters, including his 37 years of service with the company and its predecessors, the absence of any formal warnings for safety issues, the fact that he would in all likelihood find it impossible to obtain other work in Hobart, and his significant financial obligations. The Deputy President concluded:

'[60] I have decided that the termination of the employment was harsh. It was incumbent on the Respondent to hear from the Applicant before imposing sanction. The conduct of itself is not sufficiently serious to justify dismissal without more. (Emphasis added)'

[20] Within the rubric of the company's fourth ground of appeal, several contentions are advanced. Ground 4(b) submitted that the Deputy President erred in finding that a failure to provide an opportunity to Mr Brain to put submissions in mitigation of sanction was a significant flaw. Ground 4(c) submitted that excessive weight was given to this consideration. Ground 4(f) said that it was an irrelevant consideration. Ground 4(g) contended that the Deputy President erred in law by imposing an 'obligation' on the company to hear from Mr Brain before imposing a sanction. This intersected with a contention raised under the sixth ground of appeal, to the effect that the Deputy President had applied an additional test concerning an opportunity for Mr Brain to make submissions to the employer on sanction.[14]

[21] We do not accept the first three sub-grounds above. Section 387 directs the Commission to take into account particular matters, as well as any other matters that the Commission considers relevant. If the Commission considers relevant the question of whether an employee should have been afforded an opportunity to make submissions to the employer about sanction, it may be taken into account. We do not agree that this matter was a plainly irrelevant consideration. Section 387 requires individual members to assess and weigh such matters for themselves. That an appeal bench might consider a member to have given too little or too much weight to a particular consideration will not generally constitute a basis for concluding that the member's discretion miscarried. In some cases, affording excessive or insufficient weight to a matter might be associated with an error of the 'second category' contemplated in House v The King[15]; but affording too much or too little weight to a matter is not a category of error.[16]

[22] However, in our opinion there is substance in the contention that the Deputy President erred in finding that it was incumbent on the company to hear from Mr Brain about the sanction of dismissal before imposing it.

[23] Section 387 requires the Commission to approach the consideration of whether a dismissal was harsh, unjust or unreasonable in a particular way. It directs the Commission to take certain matters into account. It does not stipulate criteria that must be satisfied in order for a dismissal to be fair or unfair. Nor does it authorise the Commission to develop or apply its own criteria.

[24] In Esso Australia Pty Ltd v AMWU, CEPU and AWU,[17] the Full Bench stated:

'[58] In our view the adoption of a decision rule or principle of the type proposed in Australia Post No.1 and Airport Fuel Services would be an inappropriate fetter on the exercise of what the legislature clearly intended would be a discretionary decision. As Bowen LJ observed in Gardner v Jay:

"When a tribunal is invested by Act of Parliament or by Rules with a discretion, without any indication in the Act or Rules of the grounds upon which the discretion is to be exercised, it is a mistake to lay down any rules with a view to indicating the particular grooves in which the discretion should run, for if the Act or the Rules do not fetter the discretion of the Judge why should the court so do."[18] (Footnotes omitted)

[25] It is necessary to adopt a fair reading of the Decision under appeal as a whole, and not employ an appellate 'fine tooth comb'[19] with a view to discerning some inadequacy of expression.[20] We have considered whether by saying it was 'incumbent' on the company to afford Mr Brain an opportunity to make submissions to it on sanction, the Deputy President meant only that it would have been appropriate for the company to do this, and that this was a consideration he assessed as relevant. There are several reasons why we have concluded that this was not the Deputy President's meaning.

[26] First, the words 'incumbent on' are categorical. They mean 'necessary for' or 'required of'. The ordinary meaning of the sentence is that, in the Deputy President's view, the company had to afford an opportunity for submissions on sanction. However, it is not incumbent on an employer to take any particular steps. Practically speaking, if an employer does not have a valid reason for dismissal, does not notify the employee of the reasons for dismissal and does not afford the employee an opportunity to respond to allegations_,_ these matters will count against it in an unfair dismissal hearing. However, while the Act requires the Commission to take these and other matters into account, they are not the subject of incumbency. They are not criteria.

[27] Secondly, at the commencement of his consideration of 'other relevant matters', the Deputy President states that 'a very significant matter is that of the Applicant having an opportunity to make submissions in relation to sanction.'[21] This is framed as a statement of principle. The Act recognises no such principle. We note that in the public service (but rarely in the private sector) one finds disciplinary procedures that entail as a final step an opportunity for an employee to make submissions on the sanction that the employer proposes to adopt. A member might form the view that the absence of such a step in any given case is a relevant consideration and worthy of certain weight. But it is not to be regarded as a rule.

[28] Thirdly, it appears to us that Mr Brain was, in substance, provided with an opportunity to make submissions on sanction. The allegations against him were very serious. They were put to him. The Deputy President found that Mr Brain was informed of the reasons which led to his dismissal, and that the factual matrix (removing tags and starting the equipment) was not complicated. His Honour found that there was 'no reason to suspect that what (Mr Brain) was told and what was in the (stand down) letter was not sufficient to put the Applicant on notice about what was to be discussed and what the employer was considering'.[22] There appears to be no reason why Mr Brain could not have made a submission about the possible sanction of dismissal. The Deputy President states however that the company failed to give Mr Brain an opportunity to make 'proper representations about sanction'.[23] The perceived deficiency would appear to be that the company did not provide Mr Brain with a separate, formal opportunity to make a submission on the decision to dismiss him. His Honour's questioning of Ms Wade is consistent with this conclusion:

You didn't send the applicant a show-cause letter in respect of sanction,_[24]_did you? ---- We didn't send a show-cause letter, no.

So the applicant didn't get a chance to make a submission to you about the sanction it was proposed to impose on him?--- As we thought we were clear in the first meeting around the fact that we were considering termination ...[25]

[29] The perceived shortcoming in the company's approach was procedural rather than substantive, yet it was significant enough to countervail a serious safety breach. This further suggests to us that the Deputy President considered the opportunity to make submissions on sanction was a matter that carried some normative status, and that it should ordinarily be afforded.

[30] Fourthly, the Deputy President lists the matters that Mr Brain could have raised, had he been given the proper opportunity to make submissions on sanction. These were said to be that Mr Brain had worked for the respondent and its predecessors for 37 years; that he had received no formal warnings for safety issues; that he would find it practically impossible to obtain alternative work in Hobart given his skill set; and that he had significant financial obligations. Also cited is 'the issue of trust and confidence.'[26] Clearly, the employer was aware of the first two mentioned issues already, and would likely have had some understanding of the third, namely the state of the job market in Hobart for persons with the skill sets possessed by its employees. Mr Brain's financial circumstances may not have been known to the company; but again there does not appear to have been any impediment to Mr Brain raising these and other issues in mitigation of a possible sanction of dismissal. These considerations reinforce our conclusion that the Deputy President considered the 'opportunity to make submissions on sanction' was a formal concern that he approached as a criterion for fair dismissal.

[31] The Deputy President stated that he did not regard the present case to be one where the conduct was 'so serious as to justify termination without specifically hearing from the Applicant about sanction'.[27] Clearly this statement contemplates that the Deputy President believed there may be cases where the conduct is sufficiently serious that no opportunity to make submissions on sanction is warranted. But this does not tell against our conclusion that the Deputy President adopted a decision rule. The notional rule was not that there must always be an opportunity for submissions on sanction, but that in all bar a sufficiently serious case it is incumbent on the employer to afford an employee such an opportunity.

[32] In our opinion, by concluding that it was incumbent on the company to hear from Mr Brain about the proposed sanction for his conduct, the Deputy President fettered the exercise of his discretion in a manner not authorised by the Act. This was an error of law.[28]

[33] It is appropriate to consider whether there is utility in upholding the appeal on the basis of the error that we have identified: if the error were found to be inconsequential, the answer might be 'no'. We take note of the fact that in the 'summary of outcome' towards the beginning of the Decision, the Deputy President remarks that 'a single safety breach over a 37 year career of the type the Applicant is guilty of does not justify dismissal'.[29]

[34] However, this statement must be read in the context of the relevant paragraph, and the Deputy President's overall reasoning. In the summary paragraph, the Deputy President states that although there had been a 'serious safety breach', he had determined that the dismissal was harsh. He then notes that the company failed to seek submissions from Mr Brain as to sanction. The Deputy President's reasoning in relation to the harshness of the dismissal does not indicate that he considers that Mr Brain's length of service rendered the termination harsh. Rather, harshness arose from the company's failure to afford an opportunity to Mr Brain to make submissions on the actual proposed sanction, which submissions might also have addressed his length of service.

[35] The Deputy President found that there was a valid reason for dismissal, that Mr Brain was informed of the reasons which led to termination, and that he was given an opportunity to respond to the allegations in question. But he considered that the 'failure to properly deal with the matter of sanction' was 'significant.'[30] The Deputy President's consideration of 'other relevant matters' starts and ends with discussion of this point. He concludes that the 'conduct of itself is not sufficiently serious to justify dismissal without more'.[31] What more was required was evidently the separate opportunity to make submissions on sanction.[32] The Deputy President's finding that the dismissal was harsh was to a significant degree the result of his determination that it was incumbent on the company to hear from Mr Brain on sanction.[33]

[36] In our view, this is not a case where the error in question was of no or little consequence, such that the same result would have been reached irrespective of the error. The error that we have identified fundamentally affected the Deputy President's approach to his consideration of 'other relevant matters', and his determination that the dismissal was harsh.

[37] For the above reasons, the Decision was affected by appealable error. The appropriate course is for us to quash the Decision and remit Mr Brain's unfair dismissal application to another member for rehearing.

[38] Given our conclusions above, it is not necessary for us to determine the other grounds of appeal.

[39] For the reasons given, we consider that it is in the public interest to grant permission to appeal, and that the appeal should be upheld. We order as follows:

• (1) Permission to appeal is granted.

• (2) The appeal is upheld.

• (3) The Decision ( [2018] FWC 846) is quashed.

• (4) Mr Brain's application for an unfair dismissal remedy is referred to Commissioner Lee for rehearing.

[1] [2018] FWC 846.

[2] Coal and Allied v AIRC [2000] HCA 47; (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.

[3] [2011] FCAFC 54; (2011) 192 FCR 78 at [43].

[4] Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54; (2011) 192 FCR 78 at [44]- [46].

[5] [2010] FWAFB 5343, 197 IR 266 at [27].

[6] Wan v AIRC [2001] FCA 1803; (2001) 116 FCR 481 at [30].

[7] GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 at [26]- [27].

[8] [2014] FWCFB 2593.

[14] See ground 6(b)(i) and (iv); and discussion before the Full Bench at [45] and [56].

[15] [1936] HCA 40; (1936) 55 CLR 499.

[16] Director of Consumer Affairs Victoria v Alpha Flight Services Pty Ltd [2015] FCAFC 118, at [26]-[27].

[17] [2015] FWCFB 210.

[19] Minister for Immigration and Ethnic Affairs v Wu Shan Liang, 185 CLR 259 at 29.

[24] Note: the transcript wrongly records 'section' instead of 'sanction'.

[28] Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd t/as Richmond Oysters [2018] FWCFB 901 at [47].

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