Chevron Australia Pty Ltd T/A Chevron v Mr Glenn Rogers

[2015] FWCFB 5354

[2015] FWCFB 5354

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Chevron Australia Pty Ltd T/A Chevron
v
Mr Glenn Rogers

(C2015/1884 and C2015/2483)

VICE PRESIDENT CATANZARITI
COMMISSIONER CAMBRIDGE
COMMISSIONER BULL MELBOURNE, 18 AUGUST 2015

Appeals against decisions [2015] FWC 897 and [2015] FWC 2271 of Deputy President Gooley to reinstate and compensate employee; serious safety breach, appeals heard together. Permission to appeal granted on compensation appeal, compensation order quashed. Appeals otherwise dismissed.

[1] On 9 February 2015, Gooley DP issued a decision [2015] FWC 897 which concluded that the respondent in these appeals, Mr Glenn Rogers had been harshly terminated by his employer (the appellant in these proceedings), Chevron Australia Pty Ltd T/A Chevron (Chevron) resulting in a finding of unfair dismissal. The Deputy President issued an Order [PR560870] to reinstate Mr Rogers to the position in which he was employed immediately before the termination of his employment. The Order was to come into effect 21 days from the date of the decision.

[2] In the Deputy President’s decision she provided the parties with an opportunity to make submissions as to any orders to be made under s.391(3) and (4) of the Fair Work Act 2009 (the FW Act). In the Deputy President’s further decision of 31 March 2015, [2015] FWC 2271, the Deputy President ordered [PR562685], that in addition to reinstating Mr Rogers, Chevron:

“1) pay Mr Glenn Rogers $35,347.74 less any tax instalments it is obliged by law to withhold and remit to the Australian Taxation Office;

2) recognise Mr Glenn Rogers' service as continuous since he commenced employment on 31 May 2006, for all purposes;

3) reinstate Mr Glenn Rogers' annual leave entitlement to 496.14 hours; and

4) reinstate Mr Glenn Rogers' personal leave entitlement to the amount he had as at 20 May 2014 plus an additional 64.44 hours.”

[3] On 27 February 2015, Chevron filed an appeal against the decision to reinstate Mr Rogers (C2015/1884). The matter was listed for hearing on 9 April 2015, as ‘permission to appeal hearing only’. Having regard to the appellant’s written submissions of 26 March 2015, Mr Shariff of Counsel was granted permission to appear for the appellant pursuant to s.596(2)(a) of the FW Act.

[4] During the permission to appeal hearing, Mr Shariff advised the Full Bench, (then comprising of Catanzariti VP, Harrison DP and Bull C) that Chevron intended to also appeal the 31 March 2015, decision of the Deputy President. That Full Bench determined that with the two appeals being inextricably linked, it would be appropriate for the matter to be adjourned and that the two appeal applications to be heard together.

[5] On 15 April 2015, the Full Bench as currently constituted, determined that in an effort to “avoid unnecessary inconvenience to the parties, and to avoid generating unnecessary cost and expense”, that the Permission to Appeal and the Appeal in both matters be dealt with at the same time.

[6] The appeals were heard together on 3 July 2015. Mr Shariff of Counsel for the appellant and Mr Heathcote a solicitor for the respondent were granted leave to appear.

Background

[7] At the time of Mr Rogers’ termination on 20 May 2015 1, he was the appellant’s Acting Permit Coordinator based on Barrow Island, which is located some 70 kilometres off the Western Australian Pilbara coast, a position he had occupied since September 2012.

[8] The applicant’s permit to work system is designed to ensure that when maintenance or repair work is undertaken, it is safe to do so. Permits to work are issued by the Permit Coordinator who also closes off the permits at the finish of the specified task.

[9] On 23 February 2014, Compressor 2 at the Barrow Island Compressor Station was shut down. This was an emergency shut down because an operator heard a gas leak coming from the high pressure gas discharge valve. It was noted that the Fire and Gas Detection System for Compressor 2 was tagged out and inhibited rendering the system ineffective. On inspection it was noted that the Fire and Gas Detection System had been inhibited since 21 January 2014, when the Compressor Station was shut down for a major maintenance activity. The compressor provides high pressure gas to power a turbine which provides electricity to the WA Oil site operations area on Barrow Island.

[10] It was ascertained that on 21 January 2014, Mr Rogers, as acting Permit Coordinator had issued an Electrical Isolation Certificate - 5112. This was required to ensure there was no power going to the compressor during the shut down.

[11] On the same day, Mr Rogers also issued a Chevron Isolation Certificate – 8041 in relation to Compressor 2. The Chevron Isolation Certificate requires any electrical isolations and safety devices to be noted. It is the parent document capturing all isolations associated with the Permit to Work allocated to any task that requires isolations.

[12] In association with the compressor is the Fire and Gas Detection System which in the event of a fire or gas leak emits an audible alarm and causes the compressor to shut down. The Fire and Gas Detection System is not normally required to be turned off to repair the compressor but a permit was sought to turn off the fire and gas detection system as the use of an overhead crane during the repair work had the potential to set off false alarms.

[13] On 21 January 2014, Mr Rogers issued an Equipment Inhibit Certificate – 3012 which was countersigned by Mr Mike Cullingford, the Permit Authority.

[14] Although Mr Rogers recorded the electrical isolation and the safety device inhibit on a whiteboard in the Permit Office, he did not record them on the Chevron Isolation Certificate. The two dedicated spaces provided in the document, titled Electrical Isolations and Safety Device Inhibit, which is for the recording of all electrical isolations and safety devices inhibited, were left blank.

[15] Mr Rogers also failed to include the Equipment Inhibit Certificate on the Hot Work Permit (No: 16227) under the heading titled Related Permits and Certificates & JHA’s.

[16] The inclusion of the Equipment Inhibit Certificate on both the Isolation Certificate and the Hot Work Permit are barriers to ensure a plant cannot be restarted without the appropriate safety measures being taken.

[17] On 23 February 2014, an investigation commenced into the release of an estimated 1.93 kg of gas from the compressor station discharge cylinder valve. This had occurred whilst the Fire and Gas Detection System had remained isolated for 14 days after the restart of the compressor at the completion of maintenance activities.

[18] The investigation concluded that:

• There was inadequate work oversight or enforcement;



• Training associated with lockout and tag- out processes were inadequate; and



• The appropriate procedures or safe work practices were not utilised. 2

[19] On conclusion of the investigation, Mr Rogers was sent correspondence on 6 May 2014, signed by the General Manager Human Resources Chevron which stated that the investigation had determined that he did not place the inhibit certificate on the isolation permit and that his actions constituted a failure to perform key requirements of his role and a failure to follow safety procedures. The correspondence asked him to respond to a number of matters, being the failure to place the Inhibit Certificate on the initial permit on 21 January 2014, as well as failure to remove the inhibit on Fire and Gas Detection System at the end of the job on 9 February 2014.

[20] The correspondence further stated that the failures had the potential to cause serious harm and injury to persons and serious loss to Chevron. As a result Chevron was considering the status of his continued employment. Mr Rogers, was suspended on full pay and requested to respond if he wished, by 9 May 2014.

[21] On 9 May 2014, Mr Rogers’ legal representative provided a written response. The response acknowledged that errors had occurred, but categorised the errors as either clerical, minor or less serious than alleged. The response indicated that others should also share the blame. The response concluded by stating that Mr Rogers did not wish to trivialise any error that has safety implications and requested that regard be had for his long service record.

[22] Mr Rogers was invited to a meeting held on 20 May 2014 at which his employment was terminated. Written confirmation was provided relying upon the reasons given in the 6 May 2014 correspondence, the written termination letter was read to Mr Rogers at the meeting.

[23] But for Mr Rogers’ coverage by the Chevron Texaco Certified Agreement approved by the Australian Industrial Relations Commission on 28 February 2005 (PR956148), Mr Rogers would have been unable to bring his claim of unfair dismissal under the FW Act. This is due to his base rate of pay being $143,000, 3 which is above the salary threshold for non-award/agreement covered employees. There is no salary threshold for award/agreement covered employees.4

[24] The first appeal is against the decision of the Deputy President which found that the dismissal of Mr Rogers was unfair and ordered reinstatement.

[25] In summary, the appeal grounds are that the Deputy President:

i. failed to make findings on, and otherwise failed to take account of considerations relevant to the gravity of the employee’s misconduct;

ii. in relying on mitigating factors, the Deputy President erred in principle and had regard to irrelevant considerations;

i. erred in considering a significant mitigating factor that another Permit Co-ordinator who failed to have regard to the existence of the Inhibit Certificate was not dismissed;

ii. in concluding that the dismissal was harsh, was manifestly unreasonable and unjust;

iii. in considering whether reinstatement was appropriate, the Deputy President asked the wrong question;

iv. failed to take into account considerations relevant to whether reinstatement was an appropriate remedy; and

v. erred in regarding as a significant mitigating factor the respondent’s acceptance of the nature and character of his wrongdoing.

Relevant appeal principles

[26] An appeal in relation to an unfair dismissal matter is governed by the provisions of ss. 604 and 400 of the FW Act. Section 604 deals with appeals generally. These requirements are modified with respect to unfair dismissal appeals by s.400 of the Act which provides:

“Section 400 Appeal Rights

(1) Despite subsection 604(2), FWC must not grant permission to appeal from a decision made by FWC under this Part unless 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.”

Public Interest

[27] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. 5 In GlaxoSmithKline Australia Pty Ltd v Makin6, a Full Bench of the Commission identified some of the considerations that may attract the public interest:

“[26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only by the objects of the legislation in question 7.

[27] Although the public interest might be attracted where a matter raises issue 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….”

[9] In Coal & Allied Mining Services Pty Ltd v Lawler and others 8, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 as ‘a stringent one’. The Commission must not grant permission to appeal unless it considers that it is ‘in the public interest to do so’

Appealable Error

[28] 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 an appealable error. 9 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.10

[29] Appeals on a question of fact in unfair dismissal applications face a more stringent process as they may only be made on the ground that the decision involved a “significant error of fact’ (s.400(2)). We note that the appellant in its appeal grounds characterises the alleged errors of fact as ‘significant’.

[30] An appeal under s.604 of the Act involves an appeal by way of rehearing, with the powers of the Full Bench being exercisable only if there is an error on the part of the primary decision-maker see Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission 11(Coal and Allied v AIRC). The majority12 of the High Court in that case explained in the following passage how error may be identified where a discretionary decision is involved:

“[21] Because a decision-maker charged with the making of a discretionary decision has some latitude as to the decision to be made, the correctness of the decision can only be challenged by showing error in the decision-making process (See Norbis v Norbis (1986) 161 CLR 513 at 518-519). And unless the relevant statute directs otherwise, it is only if there is error in that process that a discretionary decision can be set aside by an appellate tribunal.”

[31] The principles applicable to the identification of appealable error were stated in the High Court decision of House v The King 13 as follows:

“The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.”

[32] In Miller v Australian Industrial Relations Commission 14, the Federal Court of Australia discussed the approach to be taken by a Full Bench when considering the granting of leave to appeal:

"[50] Whether error falling within the well-known categories identified in House v R has been established, at least where the asserted error is one of law or fact, rather than the application of a broad standard, is generally not to be determined by the application of the test whether the decision on such a point was ‘reasonably open’. Such asserted errors are generally themselves not the subject of a discretionary judgment but discrete, intermediate decisions made by the primary decision maker along the way to the final, overall judgment which is regarded as a discretionary one.”

[51] The question is one of overall impression and, despite the particular phrases in the Full Bench's reasons tending in a contrary direction, it is our firm conclusion that a ‘reasonably open’ test was applied in the consideration of the asserted errors, rather than the test of whether it was seriously arguable that the Senior Deputy President had actually been wrong."

[33] The principle that mere preference for a particular result is not a proper basis to interfere with a discretionary decision upon appeal was reiterated by the High Court in Norbis v Norbis 15in the following way:

“The principles enunciated in House v. The King were fashioned with a close eye on the characteristics of a discretionary order in the sense which we have outlined. If the questions involved lend themselves to differences of opinion which, within a given range, are legitimate and reasonable answers to the questions, it would be wrong to allow a court of appeal to set aside a judgment at first instance merely because there exists just such a difference of opinion between the judges on appeal and the judge at first instance. In conformity with the dictates of principled decision-making, it would be wrong to determine the parties’ rights by reference to a mere preference for a different result over that favoured by the judge at first instance, in the absence of error on his part. According to our conception of the appellate process, the existence of an error, whether of law or fact, on the part of the court at first instance is an indispensable condition of a successful appeal.”

[34] It is not sufficient to demonstrate appealable error to contend that the first instance decision-maker failed to give a particular matter ‘sufficient weight’ or failed to have ‘proper regard’ to it unless this amounted in substance to a failure to exercise the discretion exercised.

[35] In the High Court decision of Gronow v Gronow 16 Aickin J (with whom Mason and Wilson JJ agreed) said17:

“It is however a mistake to suppose that a conclusion that the trial judge has given inadequate or excessive weight to some factors is in itself a sufficient basis for an appellant court to substitute its own discretion for that of the trial judge. As Kitto J said in Lovell v Lovell 18:

‘The proposition that the appeal court will consider whether ‘no sufficient weight’ has been given to relevant considerations is not inconsistent with the principle that the appeal court does not deal with the appeal as if it were exercising the original jurisdiction; even if it considers that insufficient weight has been given to some relevant consideration, it will still not substitute its judgment for that of the primary judge unless it comes clearly to the conclusion for that reason that the discretion has been exercised wrongfully.’

It is clear that test will not be satisfied merely by reason that the appellate court, considering the matter de novo, would itself have arrived at a different result.”

[36] Similarly, in the High Court decision in Queensland Electricity Commission, Re; Ex parte Electrical Trades Union 19the majority (Mason CJ, Wilson and Dawson JJ)said that failure to give sufficient weight to a relevant factor did not “generally speaking ... entitle an appellate court to overturn the discretionary decision of a primary judge”.

[37] In Milillo v Konnecke 20 the NSW Court of Appeal (Ipp JA, with whom Macfarlan JA and Sackville JA agreed) said that it was incorrect that in respect of a discretionary decision inadequate weight could give rise to appellant intervention, and that when an appellate court said a matter was given “little or no weight”, this was “akin to saying that the relevant factor was not considered at all”, which was strictly in accordance with the test for appellate intervention recognised in House v The King.

[38] In Coal and Allied v AIRC 21, the High Court characterised a discretionary decision-making process in the following way:

“19. ‘Discretion’ is a notion that ‘signifies a number of different legal concepts’. In general terms, it refers to a decision-making process in which ‘no one [consideration] and no combination of [considerations] is necessarily determinative of the result.’ Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject-matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment.” (References omitted)

[39] As outlined above, the High Court considered the nature of discretions arising from workplace relations legislation in Coal and Allied v AIRC. As far as appeals against such decisions, their Honours further said 22:

“21. Because a decision-maker charged with the making of a discretionary decision has some latitude as to the decision to be made, the correctness of the decision can only be challenged by showing error in the decision-making process. And unless the relevant statute directs otherwise, it is only if there is error in that process that a discretionary decision can be set aside by an appellate tribunal. The errors that might be made in the decision-making process were identified, in relation to judicial discretions, in House v The King …”

Conclusion

[40] We have applied the above described appeal principles to our consideration of these appeals. Our task is to determine whether the Deputy President erred in the exercise of her discretion. It is only if a significant error is identified in the decisions that we are able to embark upon a merits reconsideration of the matters before the Deputy President.

[41] In certain respects at least, a decision on the reasonableness of reinstatement is a decision of a discretionary nature. Usually, such a decision can only be successfully challenged on appeal if it is shown that the discretion was not exercised correctly. It is not open to this appeal bench to substitute our view on the matters that fell for determination before the Deputy President in the absence of an error of an appealable nature in the decisions at first instance.

First Appeal

[42] When Mr Rogers signed off on the Isolation Certificate on 9 February 2014 he did not ensure that all permits associated with the work had been signed off. As the Inhibit Certificate was recorded on the whiteboard, it was incumbent on him to check the whiteboard on each occasion he closed off a permit. It was a significant breach of safety procedures to authorise de-isolation of the compressor without ensuring that the Inhibit Certificate was closed off. The continual failure to notice that the Inhibit Certificate was not closed off was also a breach of the safety procedure. On this basis, the Deputy President found that a valid reason for his termination existed.

[43] The Deputy President accepted that Mr Rogers did not comply with the requirement to include the details of the Inhibition Certificate on the Hot Work Permit or the Isolation Certificate. However she concluded that the failure to make the necessary annotation on the Hot Work Permit was a mistake and the failure to make the necessary annotation on the Isolation Certificate was due to a lack of training. The appellant has not demonstrated that these conclusions were erroneous or not available on the evidence.

[44] The appellant places emphasis on the respondent being a “highly paid employee” with a gross salary of $223,704 per annum, who was reinstated despite it being held that there was a valid reason for the dismissal. As discussed above, Mr Rogers’ base salary was $143,400 with the balance made up in a field allowance, a transport allowance and an employer superannuation contribution. While the respondent’s salary is high, there was no evidence that Mr Rogers’ salary would be considered high in the oil and gas industry or the appellant’s workforce. The emphasis on Mr Rogers’ salary by the appellant as indicating he should face a more stringent test is in our view misplaced.

[45] It was submitted that the Deputy President failed to have regard to the gravity of Mr Rogers’ misconduct. We cannot see how this ground of appeal can be made out. The Deputy President stated that the breach of safety was serious and that his conduct warranted disciplinary action. 23 The role occupied by Mr Rogers was acknowledged as one which is required to ensure that jobs do not conflict with other jobs and compromise safety by the issuing of permits and the closing off of those permits at the conclusion of work.24

[46] The appellant argues that the Deputy President took into account irrelevant considerations. In particular, having determined that the failure to include the reference to permits on the appropriate forms did not constitute a valid reason for termination. Accordingly, this meant the fact that he had not been trained to properly complete the isolation certificates could not then become a relevant factor in determining whether the dismissal was harsh.

[47] There were number of mitigating factors that were taken into consideration which the Deputy President considered which rendered the dismissal harsh. The reference to the lack of training may have been out-of-place, but is not a significant error in light of other matters properly taken into consideration. These included Mr Rogers’:

● long service with the appellant and its predecessors 25;

● recent favourable performance review, 26

● non previous involvement in a breach of safety or other disciplinary or performance issues; 27

● conduct not being the result of a conscious decision not to follow procedure 28;

● age and inability to find alternative employment. 29

[48] Other factors included:

● the existence of a serious failure in Chevron’s safety systems in regard to its checks and balances 30; and

● another permit co-ordinator not being dismissed for essentially the same conduct. 31

[49] The Deputy President accepted that other employees who were involved were not dismissed because they were assessed by the appellant as being less culpable. Although it was not clear to the Deputy President why persons who also signed off on the first Hot Work Permit were treated differently, there was no failure to take into account Mr Rogers’ level of culpability.

[50] In stating that Chevron’s evidence is insufficient to support a finding that reinstatement was inappropriate 32 the appellant argues that the Deputy President asked herself the wrong question. The question the appellant states should have been posed was whether reinstatement would be appropriate.

[51] Once a determination of harshness has been found, the Commission may order a person’s reinstatement or the payment of compensation. 33 Section 390(3)(a) of the FW Act specifically states that the Commission must not order payment of compensation unless satisfied that reinstatement of the person is inappropriate. This is the question that was asked by the Deputy President in the first instance, as such, this ground of appeal has no substance.

[52] We remain unconvinced from the submissions of the appellant that the Deputy President failed to take into account all relevant considerations. While the concentration and emphasis on certain aspects within the decision have not been made to the level demanded by the appellant it has not been established that the decision is attended by any significant factual error, nor does it amount to appealable error in accordance with the authorities detailed above.

[53] The appeal grounds seek to challenge the weight given to certain factors and allege that certain matters were not taken into account because they are not articulated in detail in the decision. In our view, the appeal grounds in many aspects seek a reconsideration of the primary question before the Deputy President. It is inappropriate for this appeal bench to do so in the absence of demonstrable error.

[54] We note and concur with the Deputy President’s observations that Mr. Rogers was performing an acting role as the permit coordinator, it was not his substantive position, and he is not required to be returned to a position that he occupied on a temporary basis. 34 As of 16 May 2008, Mr. Rogers was substantially employed as a Field Operator.35

[55] The Deputy President went on to state that upon reinstatement Chevron is entitled to take disciplinary action against Mr. Rogers for his conduct. On this basis, contrary to the appeal submissions, it is clear that the Deputy President did take into account the importance of proper administration and Mr Rogers’ oversight of the permit to work safety system.

[56] We have considered the circumstances of the dismissal and the grounds of appeal advanced by the appellant. In our view, the decision of the Deputy President in relation to reinstatement is an orthodox exercise of the discretion provided under s.390. The Deputy President applied the correct tests and considered the applicable circumstances. The question of whether the dismissal was harsh warranting reinstatement required a broad judgement based on the circumstances. Having heard the evidence and submissions of the parties, the Deputy President was well placed to exercise that judgment. It has not been demonstrated to our satisfaction that any significant errors of fact were made or that her discretion was not properly exercised.

[57] The appeal does not give rise to any public interest considerations. Reliance on the applicant’s industry being inherently hazardous to enliven public interest is not of itself a sufficient ground and is not supported by the decision in GlaxoSmithKline Australia Pty Ltd v Makin, referred to above. Unlike the decision in Parmalat Food Products Pty Ltd v Wililo 36 relied upon by the appellant, the Deputy President did not find the employee’s actions to amount to serious misconduct involving deliberate acts. The Deputy President held that “there was no suggestion that this error was a malevolent act or that there was a conscious decision not to follow procedure.”37

[58] Nor is a there a demonstration of a diversity of decisions at first instance sufficient to raise public interest considerations, with the need for this Full Bench to articulate in the appellant’s words “the proper application of principle in cases involving breaches of safety procedures”. 38

[59] Permission to appeal on the decision of 9 February 2015 is refused and the appeal dismissed.

Second Appeal

[60] As stated above, in addition to the Deputy President’s reinstatement order and decision of 9 February 2015, on 31 March 2015 the Deputy President ordered that Chevron:

1. Pay Mr Rogers $35,347.74 less tax;

2. Recognise his service as continuous since 31 May 2006;

3. Reinstate Mr Rogers’ annual leave entitlement to 496.14 hours; and

4. Reinstate his personal leave entitlement applying as at 20 May 2014 plus an additional 64.44 hours.

[61] Reasons for these Orders were also delivered on 31 March 2015.

[62] The appellant’s grounds of appeal summarised are:

1. The Deputy President erred in making the Orders by failing to take into account relevant factors;
2. Erred in finding that the Orders would result in a “substantial reduction” in the amount paid to the respondent;
3. Erred in finding that the Orders should send a message to Mr Rogers that there was a valid reason for his termination and but for the dismissal being harsh, the dismissal would not have been unfair;
4. In combination with the decision to reinstate, the sanction imposed is grossly disproportionate to the seriousness of the misconduct; and that
5. The Orders are unjust and unreasonable

[63] On reinstatement, an order for back pay or lost earnings to restore the employee to the position they would have been in but for the dismissal may be made. Section 391(3) of the FW Act provides that the Commission may, if it considers it appropriate to do so, make an order to cause the employer to pay an employee an amount for the “remuneration” lost, or likely to be have been lost, by the employee because of the dismissal.

[64] As a general proposition, the term "remuneration" is a broader concept than salary or wages. 39 It is submitted by the appellant that the Orders made by the Deputy President in addition to the respondent’s reinstatement results in Mr Rogers receiving all the income he would have otherwise, but for certain allowances plus credits for annual and personal leave that he would have accrued had he remained in employment. The appellant argues that in effect the two decisions of the Deputy President, when combined, results in the respondent incurring no penalty for his conduct that led to his dismissal. The Deputy President stated that by not including the transport and field allowance this would send a message to Mr Rogers that but for the finding that his dismissal was harsh, his dismissal would not have been unfair.40

[65] In this case we have an employee for whom it was found a valid reason existed for his termination, however due to a number of circumstances the dismissal was found to be harsh and reinstatement was ordered.

[66] In the Deputy President’s decision she accepted Chevron’s submission that Mr Rogers should not be back paid the ‘field allowance’ and the ‘transport allowance’ because he had not been required to work in the field on an even time roster on Barrow Island, nor incur any transport costs. 41 However, the Deputy President went on to state had it not been for his conduct she would not have made these deductions.42

[67] We accept, as put by the appellant, that it is difficult to reconcile the finding by the Deputy President that the field allowance and transport allowance should not be back paid as Mr Rogers was not working in the field nor incurring travel costs and at the same time regarding the non-payment of these allowances as a form of penalty. 43

[68] The appellant submits that there has been no effective penalty which is grossly disproportionate based on the seriousness and gravity of the safety breach which they term as misconduct. This is particularly the case where the Deputy President has consistently characterised Mr Rogers’ conduct as a serious breach of safety:

i. a breach of the procedures 44

ii. breach of a significant safety procedure 45

iii. his breach was serious 46

iv. a serious mistake 47

v. a serious breach of safety 48

vi. a serious error 49

[69] Where the remedy for a finding of unfair dismissal is compensation without a concomitant order for reinstatement, s.392(3) places a specific requirement on the Commission to reduce the amount it would otherwise order by an appropriate amount on account of any misconduct that contributed to the employer’s decision to dismiss. Where there is a finding of unfair dismissal and the remedy is reinstatement under s.391, the requirement is for the Commission to make any order about lost remuneration it considers appropriate pursuant to s.391(3).

[70] In the decision of Lawrence v Coal & Allied Mining Services Pty Ltd T/A Mt Thorley Operations/Warkworth 50theFull Bench determined that a deduction due to misconduct was appropriate stating at [44]:

“…In this way the importance of the respondent's policies will be vindicated and no other employee ought be able take any comfort from this decision that breaches of the Isolation Policy will do other than expose them to serious consequences…”

[71] In the present case, Mr Rogers’ serious breach of safety exposed himself and others to a potential catastrophic risk by allowing Compressor 2 to run without the Fire and Gas Detection System being re-activated. The Deputy President held that Mr Rogers, in authorising the de-isolation of the compressor without ensuring that the Inhibit Certificate was closed off and his continual failure to rectify this was a valid reason for the termination of his employment.

[72] This was not a situation of reinstatement of employment following a determination that no valid reason existed. Rather, the circumstances surrounding the incident combined with Mr Rogers’ long service, previous exemplary record and inability to find alternate work made the termination harsh. In these circumstances, the Deputy President needed to consider whether it was ‘appropriate’ to also make an order requiring the employer to pay an amount for lost remuneration. Or put another way, is it ‘suitable or proper’ 51 to also make an order for lost remuneration.

[73] The Deputy President in determining that a sum of $35,374.74 should be paid to Mr Rogers considered that the disallowance of the field and transport allowance was a substantial reduction in the amount to be paid and should indicate to Mr Rogers that there was a valid reason for his dismissal.

[74] With respect, this is a conclusion that we are unable to agree with and was not available having regard to the conclusions that the Deputy President had already arrived at. The Deputy President in acknowledging Mr Rogers’ ‘serious error’ accepted that he ‘should not receive in compensation the equivalent of the monies he would have earned had he not been terminated.’ In doing so, the Deputy President awarded compensation of $35,347.74 (gross) after making a number of deductions, including a deduction for the transport and field allowance.

[75] The reasons for Mr Rogers’ reinstatement were clearly articulated by the Deputy President which we have referred to above. However, we are unable to ascertain the reasons for ordering part compensation together with the reinstatement order where Mr Rogers was clearly at fault in a serious safety breach. This is all the more so having regard for the monies paid to Mr Rogers on termination which totalled $90,970.14 gross, made up of accrued leave, days off in lieu, loadings, pay in lieu of notice and superannuation. In particular, the figure is made up of:

i. $19,464.15 in lieu of 5 weeks’ notice;

ii. $7,949.51 in field loading;

iii. $3,309.23 of accumulated additional hours to be taken as days off;

iv. $24,114.07 of unused annual leave;

v. $5,907.95 of leave loading on annual leave ;

vi. $28,574.80 in lieu of unused long service leave; and

vii. $1,527.70 in superannuation contributions

viii. $4,412.31 days off in lieu 52

(Less $4,289.58 in deducted overpayments resulted in a total pay-out on termination made by Chevron of $90,970.14.)

[76] We agree with the Deputy President that a message should be sent that the safety breach was a valid reason for termination. On this basis, the compensation order made by the President did not match the message that was intended to be sent.

[77] In Harley Schofield and Mark Winterton v Broadmeadow Mine Services Pty Ltd  53 Hatcher VP stated the following in ordering reinstatement and no compensation:

“[62] However I will not make any order for lost remuneration under s.391(3). Mr Winterton engaged in negligent conduct which resulted in him breaching a fundamental safety requirement at the Mine. Although I have found that dismissal was a disproportionate response to this conduct, it was conduct which was worthy of a lesser but still significant disciplinary response. The financial loss which Mr Winterton has suffered from his dismissal will serve as an appropriate sanction for his conduct. It will also serve as a reminder to him and others of the necessity for strict compliance with the Life Saving Rules.”

[78] The importance of safe operations on the employer’s worksite cannot be underestimated; we are of the view the Deputy President made a significant error in exercising her discretion to award compensation in addition to the reinstatement of Mr Rogers. The disablement of the Fire and Gas Detection System exposed persons and plant to a potential catastrophic event. In having regard to the breach of safety and in seeking to act as a deterrent for other breaches of safety procedures or policies at the workplace, no compensation ought to have been ordered.

[79] We grant leave to appeal on the question of compensation as being in the public interest to ensure that an effective sanction is imposed considering the gravity of the possible consequences resulting from Mr Rogers’ serious safety breach.

[80] The Orders made by the Deputy President of 31 March 2015 are quashed effectively meaning that Mr Rogers is re-instated as per the Deputy President’s decision of 9 February 2015 without any further orders for compensation, continuity of service or reinstatement of any entitlements as contained in the Orders of 31 March 2015.

VICE PRESIDENT

Appearances:

The appellant: Mr Shariff of Counsel

The respondent: Mr Heathcote Solicitor

Hearing details:

Sydney with VC to Perth

9 April 2015 Permission to appeal hearing only

3 July 2015

Final written submissions:

16 July 2015 correspondence from Chevron

 1   Mr. Rogers was paid 5 weeks’ pay in lieu of notice

 2   See document 13 of Appeal Book Volume 1 ABU Investigation Report

 3   Plus allowances

 4   S.382(b) of the FW Act

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

 6  [2010] FWAFB 5343

 7   Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing O’Sullivan v Farrer (1989) 168 CLR 210

 8   [2011] FCAFC 54 at [43]

 9   Wan v AIRC [2001] FCA 1803 at [30]

 10   GlaxoSmithKline Australia Pty Ltd v Makin[2010] FWAFB 5343 at [26]-[27]; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28]

 11   (2000) 203 CLR 194

 12   Gleeson CJ, Guadron and Hayne JJ

 13   (1936) 55 CLR 499 per Dixon, Evatt and McTiernan JJ at 504

 14   (2001) 183 ALR 419

 15   (1986) 161 CLR 513 at 518

 16   (1979) 144 CLR 513

 17   Ibid at 537

 18   (1950) 81 CLR 513 at 533

 19   [1987] HCA 27; (1987) 72 ALR 1

 20   [2009] NSWCA 109

 21   [2000] 203 CLR 194 at 204

 22   [2000] 203 CLR 194 at 205

 23   At [83] and [86] of the 9 February 2015 Decision

 24   At [4] of the 9February Decision

 25   At [68] of the 9 February 2015 decision. We note that Mr. Rogers commenced with Chevron in 2006 and prior to that had earlier periods of employment and had been made redundant, see PN49 of the appeal transcript.

 26   At [68] and [80] of the 9 February Decision

 27   At [68] and [80] of the 9 February Decision

 28   At [71] of the 9 February Decision

 29   At [72] and [73] of the 9 February Decision n

 30   At [82] of the 9 February Decision

 31   At [83] of the 9 February Decision

 32   At [90] of the 9 February Decision

 33   S.390(1)

 34   At [91] of the 9 February 2015 Decision

 35   Exhibit R7- witness statement of Jelske Lauwers, appeal book at p.822

 36  [2011] FWAFB 1166

 37   At [71] of the 9 February 2015 Decision

 38   See 1.5 of the appellant’s outline of submissions on permission for leave to appeal dated 26 March 2015.

 39   Keith Miller & Sons Builders Pty Limited v Flemming (1999) 91 IR 399

 40   At [27] of the 31 March Decision

 41   At [15] of the 31 March Decision

 42   Ibid

 43   At [27] of the 31 March Decision

 44   At [55] of the 9 February Decision

 45   At [56] of the 9 February Decision

 46   At [83] of the 9 February Decision

 47   At [85] of the 9 February Decision

 48   At [7] of the 31 March Decision

 49   At [15] of the 31 March Decision

 50  [2010] FWAFB 10089 at [44]

 51   Definition of ‘appropriate’ in Australian Concise Oxford Dictionary 5^th Edition

 52   At [12] of 31 March Decision

 53  [2014] FWC 9309 at [62]

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