Fair Work Act 2009_

s.394 - Unfair dismissal

[1] Donald Pettifer ("the applicant") has made an application pursuant to s.394 of the Fair Work Act 2009 ("the Act") seeking an unfair dismissal remedy concerning the termination of his employment by MODEC Management Services Pte Ltd ("the respondent").

[2] The respondent places its employees with host companies, albeit under arrangements which are different from at least some typical labour hire-type arrangements. Under the particular arrangements that existed between the applicant and the respondent, the contract of employment between them was specifically referenced to the undertaking of work on a project, namely on the Pyrenees Venture - which is a floating production, storage and offloading ("FPSO") vessel. It is a large crude oil ship converted to remain stationed off the coast of Exmouth, Western Australia, for the processing of crude oil. The applicant had initially been based in China in pre-operations as the facility was converted from a crude oil tanker into an FPSO. From 2009, the applicant worked in the position as a General Service Operator on the Pyrenees Venture. The relevant host employer, for the want of a better description, was BHP Billiton Petroleum Inc ("BHPB"). The applicant had an unblemished employment record throughout the period of his employment until an incident occurred on 30 October 2015, which BHPB characterised as a "near miss".

[3] It is unnecessary to recount the evidence as to the incident and what followed up to 12 November 2015, as the applicant's evidence and the submissions in this regard were entirely uncontested by the respondent. Indeed, more generally, there were no issues of any real substance in any factual dispute. Instead, it is the question of whether the respondent's dismissal of the applicant, which was essentially to follow from a decision of BHPB that the applicant be removed from its operations, was an unfair dismissal and whether there should be an order for an unfair dismissal remedy.

[4] On 12 November 2015, a BHPB representative telephoned the respondent's Country Operations Manager, Gary Kennedy consequent upon the near miss incident. Mr Kennedy's evidence as to the content of the telephone conversation was as follows:

"3. On 12 November 2015, I received a telephone call from a representative of the BHPB in regards to the Applicant's work on the Pyrenees facility. He said words to the effect that:

In our view Mr Pettifer has demonstrated unacceptable safety behaviours and is considered a risk to our operation and I am therefore informing you the BHPB is exercising its right under the contract to exclude Mr Pettifer from working or attending at the facility.

Based on my understanding of the incident and the outcome of the Fair Treatment Assessment it was my intention to bring Don to the office for a disciplinary hearing as required of MODEC policy.

6. I requested the BHPB follow-up with an email or letter confirming their decision."

[5] Mr Kennedy emphasised that he was surprised at BHPB's decision.

[6] BHPB subsequently sent emailed correspondence to Mr Kennedy, which read:

"As discussed earlier on the phone, based on the outcome of the event investigation arising from the near miss on 30 October 2015 and subsequent HR review, the company requests per Clause 18 of the Contract, that Don Pettifer is removed from the Pyrenees site and excluded from work associated with Pyrenees. The company considers Don's safety behaviours to be a liability and not in the best interests of the field. The company requests that the contractor replaces Don with a suitable qualified person approved by the company. In addition, Don's attendance at the Control of Work session will no longer be required and arrangements for him to attend should be cancelled. Please find attached fair treatment assessment for the event."

[7] Clause 18 of the contractual arrangements between BHPB (referred to below as the Company) and the respondent (referred to below as the Contractor) to which BHPB referred reads as follows:

The Contractor shall employ and ensure that its subcontractor employ for the work under the Contract, only such persons who are careful, skilled, experienced and competent in their respective trades and callings.

Prior to appointing any person who shall perform work under the Contract in respect of the Operations and Maintenance Services, the Contractor must provide the Company with a detailed curriculum vitae of such person.

The Company Representative may direct the Contractor to have removed from the Site, or from any activity connected with the work under the Contract, within such time as the Company Representative reasonably directs, any subcontractor or person employed in connection with the work under the Contract, whose involvement the Company Representative considers not to be in the best interests of the Project.

The costs associated with removing such persons shall be borne by the Contractor. The person shall not be employed elsewhere on the Site or on activities connected with the work under the Contract without the prior written approval of the Company. Within a reasonable period of time those persons who have been removed from the work under the Contract shall be replaced at the expense of the Contractor if the Company so requires by other suitable qualified persons Approved by the Company."

[8] On 13 November 2015, the respondent's Human Resources Manager, Karen Clarke, sent email correspondence to the applicant which read:

"… Following the incident on board Pyrenees Venture on 30th October 2015 we have received a directive from BHPB instructing MODEC that you Donald Pettifer, are refused entry to return to the Pyrenees field. BHPB have cited safety behavioural issues, that they do not condone and as such they do not wish to have you return to the facility, this is effective immediately.

BHPB like all other clients have the right under the general contract (they have the authority) to implement their decision.

Can you please contact me early next week to discuss."

[9] In the time that followed various communications on 12-13 November 2015, a number of developments ensued. For their part, the respondent's representatives were not unsympathetic to the applicant. One of the respondent's witnesses considered that what had occurred concerning the incident might, for example, have been the subject of a warning; another wrote that the respondent was unsure why BHPB had reacted so strongly.

[10] The respondent made endeavours to try to find an alternative placement for the applicant, but none was available either in Australia or New Zealand. (It appears the respondent's New Zealand office could not consider employing the applicant at the time due to a payment-type issue, which was beyond the control of the respondent's Australian operations.) The Maritime Union of Australia ("the MUA"), of which the applicant was a member, made its own endeavours in conjunction with the respondent to seek expressions of interest from other employees of the respondent with a view to arranging a swap/transfer of the applicant to another FPSO (not operated by BHPB) named MV-11, but no expressions of interest were forthcoming by the cut-off date.

[11] Relevantly, on 25 November 2015, the respondent gave the applicant written notice of termination of employment in the following terms:

"We refer to the recent discussion with you and your Union Representative held on Thursday 19th November 2015. As you are aware MODEC Management Services Pte Ltd ("MMS Pte Ltd") have been instructed by our client BHP Billiton that you are to be "removed from the Pyrenees site and excluded from work associated with Pyrenees".

As we have no suitable full time positions for your role within Australia we are left with no alternative but to terminate your employment contract. Accordingly, we are giving you five weeks' notice effective from Wednesday 25th November 2015; therefore your position on Pyrenees Venture FPSO will be terminated on Wednesday 30th December 2015. You will be provided with a Statement of Sea Service.

MMS Pte Ltd pays 2 weeks in arrears and 2 weeks in advance, on the 15th of each month. Therefore you will be paid on 15 December 2015 for days worked between 1st December and your last working day plus any outstanding payments owed.

On behalf of myself and the Pyrenees Venture Team we would like to wish you all the best for the future."

[12] Following the notice of termination of employment, the respondent continued to seek alternative employment placements for the applicant. Subsequent representations by the MUA to the respondent during the notice period seeking to suspend the termination of employment pending certain selection processes did not result in a reversal of the decision.

[13] The respondent's evidence was that due to a downturn in its workforce requirements, and the closing of one of its facilities it remained the case, even as at the date of the hearing before the Commission, that the respondent does not have any work positions into which it could place the applicant. There was no evidence to contradict the respondent's evidence in this regard.

[14] The applicant submitted that the contract of employment between the applicant and the respondent specifies the work was for the Pyrenees project. The respondent has a contract with BHPB to supply labour for the project, and BHPB refused supply of the applicant by purporting to assert its rights pursuant to the contract. Section 385 of the Act provides the applicant may make an application for an unfair dismissal remedy against the respondent. The submissions continues that, in relation to any such application, the Commission must consider whether there was a valid reason for the dismissal related to the applicant's capacity or conduct. Here, the respondent did not claim that the dismissal was for reasons of capacity or conduct; indeed, the respondent admits there was no conduct or capacity reason that warranted dismissal. The applicant had a lengthy period of service with the respondent and an excellent employment record. Matters such as these factors, the applicant submitted, rendered the dismissal harsh, unjust or unreasonable; and there should be a finding that the applicant was unfairly dismissed - with the remedy of reinstatement sought as the primary remedy or, alternatively, compensation.

[15] The respondent submitted that it did not terminate the applicant's employment due to any findings of misconduct. Rather, the termination of employment occurred through the enforcement by BHPB of the clause in its commercial contract requiring the respondent to remove the applicant from the Pyrenees project. The decision by BHPB made it impossible for the respondent to fulfil the requirements of the employment contract with the applicant, and the requirement to terminate the contract of employment was beyond the respondent's control. Nonetheless, the submissions continued, the respondent made all reasonable attempts to place the applicant in a suitable alternative role, but without success (and it remains the case the respondent has no suitable alternative position in which the applicant could be placed). In all the circumstances, the termination of the applicant's employment was not, the respondent submitted, harsh, unjust or unreasonable - with the result the application should be dismissed.

[16] As to the preliminary matters required to be considered pursuant to s.394 of the Act, there was no contest between the parties and I otherwise find that the application was made within time; the applicant was a person protected from unfair dismissal; the respondent is not a small business employer, so consideration of the Small Business Fair Dismissal Code does not arise; and the dismissal was not a case of genuine redundancy.

[17] I am satisfied the applicant was dismissed by the respondent, because his employment with the respondent was terminated on the respondent's initiative, albeit after it had made endeavours to find alternative placements following the decision of BHPB to exercise its contractual rights.

[18] Section 387 of the Act specifies matters which must be taken into account in considering whether the 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."

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)

[20] The respondent did not rely on any matter related to the applicant's capacity or conduct as a reason for the dismissal, so the question as to whether any such reason was a valid one does not arise. As the applicant submitted, the respondent did not make any finding of wrong-doing on the part of the applicant. Indeed, the respondent's witnesses were not unsympathetic to the applicant and had their own view about what might otherwise have occurred in relation to the incident.

[21] As noted above, the dismissal did not turn on the applicant's capacity or conduct. The reason for the dismissal was set out in the respondent's letter advising of the termination of employment. The reason given was that the respondent had been instructed by its client, BHPB, that the applicant was to be "removed from the Pyrenees site and excluded from work associated with Pyrenees", and that as the respondent had no suitable full-time positions within Australia, the respondent was left with no alternative but to terminate the applicant's employment contract.

Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[22] The dismissal did not relate to any reason related to the capacity or conduct of the applicant.

Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

[23] There was no evidence of any unreasonable refusal by the respondent to allow the applicant to have a support person present to assist at any discussions relating to the dismissal. The applicant's union was involved in discussions and emailed communications about the situation.

If the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal

[24] The dismissal of the applicant did not relate to concerns by the respondent concerning unsatisfactory performance (and the applicant had never previously been warned or counselled about any matter arising in his employment with the respondent).

The degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal/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

[25] The respondent is not a small business employer and it had in-house human resources personnel. The respondent's staff made reasonable endeavours to find another placement for the applicant following BHPB's decision.

Any other matters that the Commission considers relevant

[26] The applicant submitted that the respondent did nothing to investigate the legitimacy of BHPB's concern and, moreover, the alleged wrong-doing was not serious enough to warrant dismissal. The submissions continued that the applicant had been a long-term employee of the respondent who had not been the subject of any disciplinary attention, and there was nothing in his work history to suggest he could not continue to be a part of the respondent's workforce. The applicant's submissions strongly advocated for reinstatement, more particularly given the financial consequences of the applicant's unemployment following the dismissal (including having to sell the family home).

[27] The submissions for each party referred to labour hire type-cases including Dale v Hatch Pty Ltd [2016] FWCFB 922 and Kool v Adecco Industrial Pty Ltd T/A Adecco [2016] FWC 925, albeit neither decision is directly in point given the particular circumstances of this case. (Reference was also made to other cases including Toms v Harbour City Ferries Pty Limited [2015] FCAFC 35 and Parmalat Food Products Pty Ltd v Wililo [2011] FWAFB 1166 at [24] as to "valid reason"). Here, the applicant was employed specifically to work on the Pyrenees project; this was set-out in the contract of employment. The commercial contract between the respondent and BHPB gave the latter specified rights as to those who were permitted to work on the Pyrenees project. Upon BHPB's exercise of those contractual rights, which was a matter beyond the respondent's control, the applicant could no longer work on the Pyrenees Venture. The respondent, through Mr Kennedy, was informed simply that the decision had been made. As the submissions for the respondent pointed out, there was nothing, in practical terms, the respondent could do as to the circumstances that had unfolded concerning the actions and decision of BHPB. The respondent subsequently made endeavours to find alternative placements for the applicant locally and overseas, but the there was no suitable vacancy. Moreover, the collaborative approach between the respondent and the MUA concerning trying to facilitate a "swap" for the applicant to be placed on the MV-11 FPSO was also ultimately unsuccessful in relation to the applicant. Thus, the respondent did not have another role into which the applicant could be placed (and it had also made about 70 employees redundant a few months earlier) after the decision of BHPB, and proceeded to effect the termination of employment as advised in the letter of 25 November 2015 with a payment in lieu of notice.

[28] In all the circumstances, I have not been satisfied that the applicant's dismissal was harsh, unjust or unreasonable. As such, an order dismissing the application issues with these reasons.

A. Jacka of The Maritime Union of Australia, for the applicant.

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