Dean Cordowiner v Ashton Coal Operations Pty Limited

[2019] FWC 2525

[2019] FWC 2525

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Dean Cordowiner
v
Ashton Coal Operations Pty Limited
(C2019/470)

DEPUTY PRESIDENT SAUNDERS NEWCASTLE, 12 APRIL 2019

Dispute under the disputes settlement procedure in an enterprise agreement – dispute concerning warning – warning unreasonable.

Introduction and background

[1] Mr Dean Cordowiner is a Mechanical Technician/Fitter employed by Ashton Coal Operations Pty Ltd (Ashton Coal) to work at the Ashton Coal underground mine near Singleton (Mine). On 8 August 2018, Mr Cordowiner was allocated the task of replacing Banjo fittings on a man transport vehicle designated as “PT10” (PT10). Mr Andrew Dunn, Undermanager at the Mine, conducted a safety interaction with Mr Cordowiner whilst he was undertaking that task on 8 August 2018. In view of that safety interaction, Ashton Coal conducted an investigation and at its conclusion, issued Mr Cordowiner with a final written warning for serious misconduct, namely, failing to isolate before lifting the rear chassis of PT10 to change the Banjo fittings.

[2] Mr Cordowiner raised a dispute in relation to the final written warning with Ashton Coal under the dispute settlement procedure in the Ashton Coal Operations Pty Limited – Ashton Underground Mine Enterprise Agreement 2012 (2012 Enterprise Agreement). There is no dispute that Mr Cordowiner was covered by the 2012 Enterprise Agreement on 8 August 2018 and that it ceased to operate in relation to Mr Cordowiner when the Ashton Coal Operations Pty Limited – Ashton Underground Mine Enterprise Agreement 2018 (2018 Enterprise Agreement) came into operation on 23 October 2018. Mr Cordowiner is covered by the 2018 Enterprise Agreement.

[3] An application pursuant to s 739 of the Fair Work Act 2009 (Cth) (Act) was filed in the Fair Work Commission (Commission) by the CFMMEU on behalf of Mr Cordowiner. There is no dispute that the Commission has jurisdiction to deal with the dispute concerning the final warning issued to Mr Cordowiner, including by arbitration, under the disputes procedure in clause 4.7 of the 2018 Enterprise Agreement.

[4] On 4 February 2019, the parties participated in a conciliation conference before the Commission to attempt to resolve the dispute. Following that conciliation conference, Ashton Coal changed the final written warning to a formal warning and issued a letter to Mr Cordowiner to that effect on 15 February 2019. Mr Cordowiner disputes the formal warning issued to him on 15 February 2019. He contends that it was unjust and unreasonable in the circumstances for Ashton Coal to impose such disciplinary action on him. Ashton Coal denies those allegations.

[5] Evidence was given in support of Mr Cordowiner’s case by Mr Jeff Drayton, Vice President of the CFMMEU, Northern Mining & NSW Energy District, and Mr Michael Taggart, Electrician employed by Ashton Coal at the Mine and CFMMEU Ashton Lodge President. Ashton Coal called evidence from Mr Dunn, Mr Barry McKay, Engineering Manager at the Mine, Ms Amanda Farrell, Human Resources Superintendent, and Mr Aaron McGuigan, Operations Manager at the Mine.

Role as private arbitrator

[6] The disputes procedure in clause 4.7 of the 2018 Enterprise Agreement does not contain any limitation of the type envisaged in s 739(3) of the Act on the Commission’s power to arbitrate a dispute under that clause. Therefore, I have a broad discretion to arbitrate the dispute under clause 4.7. 1 However, I must not make a decision that is inconsistent with the Act or the 2018 Enterprise Agreement.2

[7] The Enterprise Agreement does not deal with the topic of disciplinary action, nor does it incorporate a disciplinary policy. The question of disciplinary action is a matter of managerial prerogative and the Commission as the arbitrator of a dispute concerning a warning or other disciplinary action taken against an employee would not interfere with the employer’s decision unless it was unjust or unreasonable. 3

[8] A decision to impose particular disciplinary action on an employee may be unjust if, for example, the employee did not engage in the misconduct alleged by the employer.

[9] As to unreasonableness, in Mac v Bank of Queensland Limited, 4 Vice President Hatcher considered the meaning of unreasonableness in the context of an application for orders to stop bullying [references omitted]:

“[90] The second observation is that unreasonableness and its converse, reasonableness, are familiar legal concepts applicable in a range of diverse contexts. In Giris Pty Ltd v Federal Commissioner of Taxation Windeyer J said: “It is, of course, true that, as a measure in fact of time, space, quantity and conduct, reasonableness is a concept deeply rooted in the common law...”. Where, in an anti-bullying case such as this one, the requisite repeated unreasonable behaviour towards the workers is said to be constituted by or include unreasonable discretionary managerial decisions directed to that worker, some useful guidance may be obtained in assessing whether the definitional standard in s.789FD(1)(a) is met from decisions concerning judicial review of administrative discretionary decision-making. In Minister for Immigration and Citizenship v Li the High Court considered the standard of unreasonableness applicable to such decision-making. The plurality (Hayne, Kiefel and Bell JJ), in considering the well-known formulation of unreasonableness stated in Associated Provincial Picture Houses Ltd v Wednesbury Corporation, said that the legal standard of unreasonableness “should not be considered as limited to what is in effect an irrational, if not bizarre, decision - which is to say one that is so unreasonable that no reasonable person could have arrived at it”. They concluded their analysis by saying: “Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification”. That formulation provides a useful yardstick for the application of the provision in a case such as this one.

[91] The third observation is that in order for conduct to be reasonable, it does not have to be the best or the preferable course of action. In Bropho v Human Rights & Equal Opportunity Commission, in interpreting the word “reasonably” as it appeared in s.18D of the Racial Discrimination Act 1975 (Cth), French J (as he then was) said:

“[79] ... It imports an objective judgment. In this context that means a judgment independent of that which the actor thinks is reasonable. It does allow the possibility that there may be more than one way of doing things ‘reasonably’. The judgment required in applying the section, is whether the thing done was done ‘reasonably’ not whether it could have been done more reasonably or in a different way more acceptable to the court.”

[10] The exercise of a managerial discretion to impose a formal warning on an employee will be unreasonable if no reasonable person in the position of the employer could have made the decision. 5 However, for reasons analogous to those given by Hatcher VP in Mac v Bank of Queensland, I am of the view that the concept of unreasonableness in the context of a managerial discretion to impose a formal warning on an employee is not so limited and extends to a decision which lacks an evident and intelligible justification.

[11] The question in these proceedings is not whether the disciplinary action imposed on Mr Cordowiner was harsh. 6 Considerations of harshness may, however, in particular circumstances result in, or contribute to, a finding of unreasonableness. I considered this issue in McKenzie v Liddell Colleries Ltd in the following way:7

“[14] An issue arose between the parties in relation to whether I could, or should, in my role as private arbitrator of the dispute, have regard to whether the disciplinary action was harsh in all the circumstances. It was submitted on behalf of Ms McKenzie that I could and should have regard to the harshness of the disciplinary action, including the alleged disproportionality between the disciplinary action and the seriousness of the incident, the mitigating factors associated with the conduct, the alleged failure by Liddell to comply with the Corrective and Disciplinary Policy, Ms McKenzie’s remorse, the length and quality of Ms McKenzie’s employment with Liddell, and alleged inconsistent disciplinary action taken by Liddell. In support of those submissions Ms McKenzie relied on a range of decisions by various members of the Commission, including unfair dismissal decisions.

[15] There is an obvious difference between the role of the Commission in deciding an unfair dismissal application under the Act and the role of the Commission in acting as an arbitrator to resolve a dispute concerning disciplinary action in accordance with the disputes settlement clause in an Enterprise Agreement. In the former type of case, the Commission is obliged by the terms of s.387 to consider whether the dismissal was harsh. In the latter type of case, the terms of the Enterprise Agreement may, or may not, expressly require the Commission to have regard to the harshness of particular disciplinary action when arbitrating such a dispute under a disputes settlement procedure. In the present case, there is no such express term in the Enterprise Agreement. However, that does not, in my view, mean that considerations of harshness are irrelevant. In my opinion, it is relevant in the present dispute to have regard to whether the disciplinary action imposed on Ms McKenzie by Liddell was harsh as part of my determination of whether Liddell acted within the limits of its discretionary power to take disciplinary action. The question of harshness arises in this way - Liddell will have acted outside the scope of its discretionary power to take disciplinary action against Ms McKenzie if it took disciplinary action against her that no reasonable employer could ever have taken because it was so harsh in the circumstances. That is obviously a “high bar” for any applicant to get over.”

What happened on 8 August 2018?

[12] There is little dispute about the relevant events which took place on 8 August 2018.

[13] On 8 August 2018, Mr Cordowiner worked afternoon shift, commencing at 2pm. At the commencement of his shift, Mr Cordowiner was informed by the relevant Shift Engineer that he needed to repair a leak on the rear differential on PT10.

[14] Mr Cordowiner proceeded to the workshop where PT10 was located. Prior to commencing work on PT10, Mr Cordowiner was informed by Mr Matthew Skornia, the shift fitter who was finishing his shift, that the Banjo fitting was leaking in the rear differential on PT10. Mr Cordowiner approached PT10 and noticed that it had an out of service tag on it and the name recorded on the out of service tag was Matthew Skornia. Mr Cordowiner also observed a small cardboard box sitting on the work bench in the workshop. New Banjo fittings were in the cardboard box.

[15] Mr Cordowiner proceeded to isolate PT10 by the main isolation valve which is located between the two front passenger seats. The main isolation valve has a handle on it. Mr Cordowiner turned the handle clockwise towards the direction of the ceiling and placed an isolation clasp on it. Mr Cordowiner then locked his personal isolation lock on the clasp.

[16] After isolating PT10, Mr Cordowiner entered the service pit beneath PT10 to observe the leaking Banjo fitting which is located on the top side of the rear differential. The service pit is an area which is approximately 1.5 metres deep and is situated in the floor of the workshop. The service pit provides fitters with the ability to access the area underneath equipment to observe it and work on it. Mr Cordowiner always isolates equipment and machinery before entering the service pit to observe all work on such equipment and machinery. Isolating such equipment and machinery ensures that it cannot be operated by another employee who may enter the workshop and not observe Mr Cordowiner in the service pit beneath the equipment or machinery.

[17] After observing the leaking Banjo fitting, Mr Cordowiner left the service pit and proceeded to attach chains, which were attached to the workshop crane, to PT10. Mr Cordowiner did this by placing the chains under the rear bumper bar brackets of PT10. The purpose behind attaching the rear of PT10 to the workshop crane was to lift the chassis of PT10 about 300 millimetres; so that the differential was separated from the chassis and Mr Cordowiner could then access the leaking Banjo fitting to replace it.

[18] Mr Cordowiner then proceeded to use the crane to lift the rear of PT10 about 300 millimetres and placed chassis stands under the chassis to support the weight of PT10. Mr Cordowiner then isolated the crane and replaced the leaking Banjo fitting.

[19] Once the leaking Banjo fitting had been replaced, Mr Cordowiner de-isolated the crane and lifted PT10 so that he could remove the chassis stands. Mr Cordowiner then lowered PT10 to the workshop floor and unchained PT10 from the crane. He then de-isolated PT10 by removing his personal isolation lock from the main isolation valve in PT10. Mr Cordowiner then tested his repair of the leaking Banjo fitting and was satisfied that he had successfully repaired the leak.

[20] Mr Cordowiner then approached Mr Skornia, who was writing his shift report, and asked him what he should do with the left over Banjo fittings in the cardboard box. Mr Skornia informed Mr Cordowiner that he was to replace the other three, non-leaking Banjo fittings on PT10 with the left over Banjo fittings.

[21] Mr Cordowiner decided to undertake set inspections on transporters arriving from underground before returning to PT10 to replace the remaining Banjo fittings.

[22] After completing the set inspections, Mr Cordowiner returned to the workshop where PT10 was situated to replace the other three, non-leaking Banjo fittings. The cranes chains were still near the rear of PT10 (which was facing the entrance to the workshop), so Mr Cordowiner decided to lift the rear chassis of PT10 and isolate thereafter, as the isolation valve is at the front of PT10. Relevantly, PT10 still had an out of service tag on it and there were no other persons present in the workshop.

[23] At about 4pm, as Mr Cordowiner was in the process of using the crane to lift the rear chassis of PT10 about 300 millimetres, Mr Dunn approached him and asked how his meeting with Human Resources (in relation to a separate matter) went. Mr Cordowiner said “It went all good … it’s all finished.” Mr Dunn went on to say that while he was there he would perform a safety interaction, which involves a discussion with an employee, usually at random, to ensure the employee is undertaking a task safely and in accordance with Ashton Coal’s processes and procedures.

[24] There is some dispute between Mr Cordowiner and Mr Dunn as to the precise nature of what was said by each of them during the safety interaction, but I am of the view that the outcome of those disputes will not have a material bearing on the determination of this matter. As such, I will not make findings in relation to the disputed parts of that conversation. It is uncontroversial that:

•  Mr Cordowiner explained to Mr Dunn the task he was undertaking and Mr Dunn asked whether Mr Cordowiner had isolated PT10. Mr Cordowiner answered that question in the negative;

•  Mr Dunn told Mr Cordowiner that he was to isolate PT10 before doing or starting work;

•  Mr Dunn asked Mr Cordowiner whether he had undertaken a PRIDE, which is a form of risk assessment, prior to the task. Mr Cordowiner said that he had on the job before;

•  Mr Dunn and Mr Cordowiner also had a discussion about the suitability of the lifting point Mr Cordowiner was using to lift the rear of PT10;

•  Mr Dunn did not inform Mr Cordowiner that he had breached the isolation procedure or any other policy or procedure; and

•  Mr Dunn left the workshop after the conclusion of the safety interaction.

[25] Mr Cordowiner then proceeded to use the crane to continue lifting the rear of PT10 about 300 millimetres. He then placed chassis stands under the chassis to support the weight of PT10 and isolated the crane. Next, Mr Cordowiner isolated PT10 and replaced the remaining three, non-leaking Banjo fittings. After checking the repair, Mr Cordowiner lowered the rear of PT10 to the workshop floor, de-isolated PT10, refilled the water and diesel in PT10, and placed PT10 on the “go” line for operational use.

[26] It has not been suggested that Mr Cordowiner ever had an intention to replace the remaining Banjo fittings without first isolating PT10.

Did Mr Cordowiner breach a relevant obligation?

[27] In the letter of allegations dated 31 August 2018 and the formal warning dated 15 February 2019, it is contended that Mr Cordowiner breached his obligations under clause 6.1 of the Energy Isolation Procedure, which is applicable at the Ashton Coal underground mine:

“6.1 Types of Energy

Plant and Equipment powered by any form of energy needs to be positively isolated from the source of energy prior to any person performing maintenance or ‘break in work’ on that plant or equipment. Energy sources may be either primary energy, secondary energy or a combination of both primary energy and secondary energy.”

[28] Mr Cordowiner gave evidence that he was not aware of, nor had he been trained in, the Energy Isolation Procedure prior to the incident on 8 August 2018. I accept Mr Cordowiner’s evidence in that regard. Ashton Coal did not adduce any evidence to prove that Mr Cordowiner had been trained in the Energy Isolation Procedure.

[29] Mr Cordowiner did, however, accept that he was trained in isolation and the 12 step isolation process. The 12 step isolation process is as follows:

(a) Step 1 – identify all energy sources, which may include electrical energy, mechanical energy, chemical energy and/or gravitational energy;

(b) Step 2 – advise relevant parties;

(c) Step 3 – isolate and secure;

(d) Step 4 – placed tags, locks or permits;

(e) Step 5 – verify isolation, including by trying to start the equipment after the isolation has been carried out;

(f) Step 6 – commence work;

(g) Step 7 – complete work;

(h) Step 8 – check work;

(i) Step 9 – clear area;

(j) Step 10 – remove tags, locks or permits;

(k) Step 11 – restore energy; and

(l) Step 12 – check operation.

[30] The 12 step isolation process forms a core component of the Energy Isolation Procedure and as such, I am of the opinion that Mr Cordowiner’s lack of awareness and training in relation to the Energy Isolation Procedure is of no real significance in this case. Particularly, in circumstances where Mr Cordowiner accepts that he was trained in isolation.

[31] What is of significance in this case, is the contest between the parties as to the construction of the expression “commence work” in Step 6 of the isolation process. Mr Cordowiner contends that the commencement of work is the substantive maintenance work being undertaken, such as replacing Banjo fittings, and does not include preparatory steps such as using a crane to lift the rear chassis of PT10. Ashton Coal, however, contends that the commencement of work includes preparatory steps such as using a crane to lift plant or equipment before repairs or maintenance activities are undertaken. Based on the competing contentions set out above in relation to the proper construction of the expression “commence work” in Step 6 of the isolation process, I am satisfied the expression is ambiguous or susceptible of more than one meaning.

[32] The expression “commence work” must be construed in context, having regard to the purpose of the isolation process. The purpose of isolation is to ensure that employees are not exposed to the risk of the unintended operation of plant or equipment or an unexpected or uncontrolled release of energy. This purpose supports the broader meaning of “commence work” for which Ashton Coal contends. As to context, the first step of the isolation process is to “identify all energy sources, which may include electrical energy, mechanical energy, chemical energy and/or gravitational energy”. In order to undertake this step, it is necessary to consider all the activities which must be undertaken to complete the task at hand, including preparatory steps such as lifting plant or equipment before repair or maintenance activities are conducted. Further, Mr Cordowiner had been trained in the requirement to isolate “whenever people are working on or near an energy source and may be harmed by the uncontrolled release of the energies”. 8 This context also supports the broader meaning of the expression “commence work” for which Ashton Coal contends.

[33] Although the expression “commence work” in Step 6 of the isolation process is capable of being construed in the different ways contended by the parties, I am satisfied, for the reasons given in the previous paragraph, that the proper construction of the expression “commence work” in Step 6 of the isolation process is the commencement of work including preparatory steps. Accordingly, the isolation process, on its proper construction, required Mr Cordowiner to isolate PT10 before lifting its rear chassis with the crane, as did the general training Mr Cordowiner received in isolation 9 and clause 6.1 of the Energy Isolation Procedure.

[34] When considering Mr Cordowiner’s conduct on 8 August 2018 and the formal warning issued to him by Ashton Coal, it is also relevant to have regard to the following:

(a) the 2012 Enterprise Agreement, which was in operation at the time of the incident on 8 August 2018, contains the following relevant provisions:

“1.4 Objective of Agreement

this agreement represents the agreed conditions of employment and the site-specific conditions that apply to the Mine.

The objective of this agreement is to provide a framework for the development and ongoing operation of a safe, low cost and efficient mine, delivering quality product to the customer, with satisfactory returns on investment for shareholders.

This agreement is designated to enable the following:

…

ii) A work environment where safety comes first and high standards of safety and productivity are the norm.

…

4.1 Employee and ACOL Obligations

…

(g) It is a condition of employment that each employee:

(i) complies with all ACOL directions relating to the safety and effective working of the mine;

(ii) complies with all ACOL safety policies, procedures and requirements;…”

(b) coalmines are inherently dangerous workplaces, which necessitates that employees be held to a high standard in respect of their conduct and compliance with applicable safety and statutory requirements; and

(c) Ashton Coal has responsibilities under the Work, Health and Safety Act 2011 (NSW) (WHS Act), including its primary duty of care under s 19 thereof.

[35] By acting in a manner contrary to the proper construction of the isolation process, Mr Cordowiner:

•  engaged in “serious misconduct” within the meaning of the Yancoal Disciplinary Policy, in that he breached a “safety regulation which put themselves or another person in danger”. I address separately below the extent of the risk or danger to which Mr Cordowiner’s conduct on 8 August 2018 gave rise;

•  contravened clause 6.1 of the Energy Isolation Procedure;

•  contravened clause 4.1(g) of the 2012 Enterprise Agreement; and

•  contravened s 28 of the WHS Act, in that he did not “co-operate with any reasonable policy or procedure of the person conducting the business or undertaking relating to health or safety at the workplace that has been notified to workers”.

Investigation

[36] Ashton Coal’s investigation into the events on 8 August 2018 got off to a poor start. At 11:19pm on 8 August 2018, Mr Dunn sent an email which contained an incorrect assumption to Mr McKay and Mr Kane Carpenter, Production Manager at the Mine (Email). The Email was in the following terms:

“Can you guys please have a look at my last safety direction I did with Dean Cordowiner.

A few points to discuss.

•  Isolation of diesel equipment for servicing. Dean did not have the machine isolated. The rear of the machine was suspended by the workshop crane and he was in the pit working on the brakes. The machine did have an OOS tag on it. We need to clarify requirements.

•  Lifting of either end of the transport. I have seen this several times. The WS fitters hoist from the bumper attachment points. During discussion with Dean we could not both be sure if this was rated or acceptable however he said that’s what we have always done. Can you clarify if this is rated and where we could find documents to support this.

Thanks and happy to discuss.”

[37] Mr Dunn conceded in his oral evidence that he had assumed Mr Cordowiner was in the service pit working on PT10 when it had not been isolated. Mr Dean also accepted that he did not observe Mr Cordowiner working in the service pit at a time when PT10 had not been isolated, nor did he have any other evidence to support his assumption in that regard.

[38] The safety interaction document completed by Mr Dunn following his discussion with Mr Cordowiner on 8 August 2018 included the following relevant information:

•  Principal hazard - Lifting, Cranage and Suspended Loads

•  Key discussion points - lifting points, procedure for task, pride, isolation

•  What was done well? – OOS tag on transport, Pride completed for different task

•  What could be done better? - Personal isolation of machine, suitable lifting points for lifting machines, chock suspended load

•  Issues identified? - No procedure for task, designated lifting points not utilised / known / engineered

[39] Mr Cordowiner accepts that he would have been in breach of Ashton Coal’s policies and procedures if he had been in the service pit working on PT10 when it had not been isolated. Working in such a manner would have put Mr Cordowiner at risk, because he could have been at risk of being injured by PT10 if another employee had come into the workshop and operated it at a time when Mr Cordowiner was beneath PT10 in the service pit.

[40] However, Mr Cordowiner denies that he has ever been in the service pit working on PT10 when it had not been isolated. I accept Mr Cordowiner’s evidence in that regard. There is no evidence to the contrary and Ashton Coal did not make any such allegation in these proceedings. Mr Dunn simply made a wrong assumption and then communicated his wrong assumption to Mr McKay and Mr Carpenter.

[41] Mr Dunn claimed in his oral evidence that he effectively corrected his wrong assumption by explaining the true situation to Mr McKay in a discussion on about 9 August 2018. I do not accept that evidence. In cross-examination, Mr McKay accepted that when the letter of allegations was sent to Mr Cordowiner on 31 August 2018, he continued to believe that Mr Cordowiner had been working in the service pit on the PT10 when it had not been isolated. He also gave evidence that in a “fact finding meeting” he conducted on 28 August 2018, together with Ms Farrell, the two allegations discussed with Mr Cordowiner were as follows:

(a) he was in the service pit working on the brakes when the machine was not isolated; and

(b) he lifted PT10 from the bumper attachment points.

[42] Based on this incorrect assumption, Mr McKay set out the following specific allegations in his letter of allegations dated 31 August 2018:

“On 8th August 2018, it is alleged that while you are servicing and repairing the brakes on PT10 in the Ashton Surface Workshop, you lifted the vehicle from an inappropriate lifting point, failed to isolate and worked underneath the vehicle without having chocked the suspended load.”

[43] By letter dated 4 September 2018, Mr Cordowiner provided a detailed response to the letter of allegations dated 31 August 2018. Mr Cordowiner’s response to the isolation allegation was as follows:

“…Response to the allegation two - failing to isolate PT10 contrary to the isolation procedure

with regards to the allegation that I failed to isolate PT10, I adamantly deny that prior to replacing any Banjo fittings that I failed to isolate PT10. I isolated PT10 prior to changing the leaking Banjo fitting and prior to changing the three (3) other Banjo fittings. From reading Mr McKay’s correspondence, I assume the allegation that I failed to isolate is in relation to not chocking. Under the isolation procedure, after isolating primary energies, secondary energy sources, if present, will require isolation.

Given PT10 was lifted with chains from the crane, and chassis stands were under the chassis, there were no other additional hazards.

If it is alleged that I failed to isolate because I did not further chock PT10, I admit that I did not chock PT10, but say I did not do so because it was not necessary. The workshop floor is level. Furthermore, it is custom and practice not to chock PT10s when lifted and supported by stands in the workshop. There are several maintenance tasks that are performed without chocks (i.e. changing tires, changing diesel particulate filters, set inspections etc)…”

[44] After receiving Mr Cordowiner’s response to the letter of allegations, Mr McKay gave advice to Mr McGuigan in relation to the outcome of the investigation and whether any disciplinary action to be taken against Mr Cordowiner. Mr McKay was of the view that Mr Cordowiner should receive a final written warning for serious misconduct. At the time Mr McKay formed that view and communicated to Mr McGuigan, Mr McKay was not sure whether Mr Cordowiner had been working in the service pit on PT10 when it had not been isolated. Rather than investigating that issue further or accepting Mr Cordowiner’s response that he had isolated PT10 prior to changing the Banjo fittings, Mr McKay changed tack. He formed the view that Mr Cordowiner had acted inappropriately by failing to isolate PT10 prior to lifting PT10 to change the Banjo fittings.

[45] Mr McGuigan accepted or agreed with Mr McKay’s advice and proceeded to issue a final written warning for serious misconduct to Mr Cordowiner on 11 September 2018. In that letter, Mr McGuigan stated that two of the three specific allegations put to Mr Cordowiner on 31 August 2018 were “unsubstantiated” but one of those three specific allegations was “substantiated”. The part of the letter concerning the “substantiated” allegation is in the following terms:

“Allegation Two:

‘On 8 August 2018, it is alleged that while you were servicing and repairing the brakes on PT10 in the Ashton Surface Workshop, you failed to isolate.’

Substantiated – The investigation has found that you failed to isolate prior to lifting PT10 to change the banjo fittings on 8 August 2018.”

[46] The same allegation and finding are set out in the formal warning letter from Ashton Coal to Mr Cordowiner dated 15 February 2019, which replaced the earlier final written warning letter dated 11 September 2018.

[47] There is a clear disconnect between the allegation and the finding. The allegation is a failure to isolate “while you were servicing and repairing the brakes on PT10 in the Ashton Surface Workshop”, whereas the finding is a failure to isolate “prior to lifting PT10”. I am satisfied on the evidence before me that the finding of a failure to isolate “prior to lifting PT10” was never put to Mr Cordowiner for his response, either in the letter of allegations dated 31 August 2018 or at any meeting with Mr Cordowiner, including without limitation the meetings on 28 August and 12 September 2018, prior to the finding being made and the disciplinary sanction of a final written warning for serious misconduct being imposed on Mr Cordowiner. This failure constitutes a denial of natural justice and a breach of the disciplinary policy applicable at Ashton Coal’s underground mine, which requires that “any concerns or allegations made against [an employee] … will be clearly communicated to them” and the employee “will be given an opportunity to respond to any concerns or allegations made against them.” 10

[48] The failure of Ashton Coal to put the allegation of failing “to isolate prior to lifting PT10” to Mr Cordowiner during the investigation had real and significant consequences for him. While I accept that any response given by Mr Cordowiner to that allegation would have been unlikely to impact Ashton Coal’s finding that Mr Cordowiner breached the isolation policy and procedure, the failure to put the allegation to Mr Cordowiner during the investigation meant that Mr Cordowiner was denied the opportunity to respond to it, as he has in these proceedings, by informing Ashton Coal that he and other employees of Ashton Coal who engage in such work regularly lift a transport vehicle such as PT10 before isolating it and they have never been trained or instructed otherwise. As a consequence, Ashton Coal took disciplinary action against Mr Cordowiner without having conducted a proper investigation as to whether such a practice existed and, if so, whether it was contrary to any training or instruction and whether any supervisors or managers were aware of the practice.

Practice at the workplace

[49] Mr Cordowiner gave evidence as follows in relation to his practice of lifting and isolating PT10: 11

“When I am required to lift and isolate equipment, I do so in any order, except for when I am required to enter the service pit. I usually either lift or isolate first, depending upon which direction I am coming from the vehicle at. For example, on the day of the incident, I lifted PT10 on the second occasion prior to isolation because I had finished 103s [set inspections] and was walking from the transporters towards the rear of the PT 10 where the chains were located.”

[50] Mr Taggart has worked for Ashton Coal at the Ashton Underground Mine since about 22 October 2007. Mr Taggart gave the following evidence in his witness statement about the relevant practice at the mine: 12

“Isolation Process

7. In my role, I perform electrical work on mine machinery, including PJBs. I have performed work on PT10.

8. I am familiar with and have received training in the Underground Operations Eastern Regions Energy Isolation Procedure (‘the Isolation Procedure’).

9. I understand that prior to performing maintenance work or break in work on plant and equipment, it is a requirement under the Isolation Procedure to positively isolate any form of energy from the source of energy.

10. Is often necessary to lift plant and equipment in the workshop prior to commencing maintenance work.

11. I am sometimes required to lift plant and equipment, including PJBs prior to commencing maintenance work.

12. I do not have a set procedure in relation to the timing of isolating when lifting is required.

13. I isolate either before or after I lift the equipment, but always before I perform maintenance work. I understand this is consistent with the Isolation Procedure as I isolate prior to performing maintenance work.

14. I regularly witness other: mine workers lifting prior to isolating in the manner described above.

15. I have never been instructed or received training to the effect that I am required to isolate prior to lifting equipment.

16. I have never been spoken to by management of Ashton or disciplined in relation to lifting prior to isolating.

17. As the Ashton Lodge President, I am not aware of any members who have ever been disciplined for lifting prior to isolating, except for the Applicant.”

[51] Mr Taggart also gave oral evidence to the following effect:

•  he has seen most trades people at the mine perform their duties;

•  he has observed other tradespeople at the mine lifting and then isolating plant and equipment. That is the normal practice at the mine, but he has observed some people isolating and then lifting;

•  he has observed Shift Engineers, who supervise tradespeople at the mine, witness the practice of lifting and then isolating plant and equipment; and

•  he is unsure of whether Undermanagers or other senior Managers at the mine have observed the practice of lifting and then isolating plant and equipment.

[52] Mr Dunn gave oral evidence that he has not seen employees at the mine isolate and then lift equipment, but nor has he seen employees lift and then isolate equipment. It is just something that Mr Dunn has not observed as an interaction in the workshop. Accordingly, Mr Dunn’s evidence is neutral in relation to whether there is a practice at the mine, as alleged by Mr Cordowiner and Mr Taggart.

[53] Mr McKay gave oral evidence that he is not aware of any employee at the mine lifting equipment before isolating it. Mr McKay stated that shortly before giving evidence, he reviewed more than 30 safety observations from the workshop and did not see any mention of isolation breaches. However, he accepted that those safety observations do not state whether employees are lifting before isolating or isolating before lifting. Mr McKay has not observed any employees lifting before isolating, nor has he observed employees at the mine isolate and then lift. It is only very rarely, if ever, that Mr McKay does safety observations in the workshop. Mr McKay also gave evidence that on the day before the hearing in the Commission he spoke to one employee in the workshop who told Mr McKay that he isolated before lifting equipment. However, the evidence did not disclose whether the employee to whom Mr McKay spoke changed his or her practice recently or as a result of Ashton Coal’s investigation into the events on 8 August 2018. Having regard to all those circumstances, I consider Mr McKay’s evidence is neutral in relation to whether there is a practice at the mine, as alleged by Mr Cordowiner and Mr Taggart.

[54] Mr McGuigan gave oral evidence in chief to the effect that he has not seen employees at the mine lift and then isolate machines, but he has seen employees at the mine isolate and then lift machines. Mr McGuigan did not give evidence as to how many such observations he has made or over what period of time he made them. During his cross examination, Mr McGuigan gave some evidence about a general understanding he had from speaking to Ms Farrell that questions had been asked about the practices of employees at the mine in relation to lifting and isolating. Such evidence is at least second hand hearsay. No attempt was made to adduce such evidence in the witness statements filed by Ashton Coal, notwithstanding the issue of the practice at the mine was squarely raised in Mr Taggart’s witness statement. Further, Ms Farrell did not give any evidence about such questions or inquiries. For all those reasons, I am not prepared to accept as reliable evidence the limited comments made by Mr McGuigan during his cross examination about questions or inquiries into the existence or otherwise of a relevant practice at the mine.

[55] Mr Cordowiner and Mr Taggart gave consistent evidence about the practice at the mine concerning lifting and isolating relevant equipment and machines, together with the lack of any training, instruction or disciplinary action (save for the warning issued to Mr Cordowiner) in relation to the topic. Their evidence in relation to these matters has not been seriously challenged. The limited evidence given by Ashton Coal’s witnesses in relation to the alleged practice does not cause me to doubt, to any significant extent, the evidence given by Mr Cordowiner and Mr Taggart on the topic. In those circumstances, I accept that evidence as reliable and truthful.

Inconsistent treatment

[56] Differential treatment of comparable cases can be a relevant matter to consider in determining whether disciplinary action is unjust or unreasonable. 13

[57] The evidence to which I have referred above in relation to the practice at the Ashton Coal underground mine establishes that:

(a) Mr Cordowiner’s conduct in lifting the chassis of PT10 before isolating it was consistent with the normal practice at the mine; and

(b) Mr Cordowiner is the only person who has been disciplined for engaging in such conduct.

[58] It follows that Mr Cordowiner has received differential treatment from other employees who have engaged in the same, or comparable, conduct. This weighs in favour of Mr Cordowiner’s contention that the formal warning he received was unreasonable and unjust.

Condonation/Toleration

[59] A history of toleration or condonation of misconduct by an employer can bear on the question of whether disciplinary action taken in respect of the misconduct was unreasonable or unjust. 14

[60] The concept of condonation embraces notions of waiver and election. 15 Deputy President Wells helpfully summarised the principles applicable to the concept of condonation in Cannan & Fuller v Nyrstar Hobart Pty Ltd [references omitted]:16

“Condonation

[255] The principle behind the Applicants’ submission of condonation is that an employer, with full knowledge of an employee’s misconduct and continues to employ him, cannot later rely on that misconduct to dismiss the individual. Thus, by knowing the behaviours of Mr Cannan and Mr Fuller and electing to continue the employment of them, Nyrstar ‘condoned’ their conduct and ‘waived’ the right to terminate their employment contracts.

[256] The practical manifestation of this principle in the employment context is that a wronged party has the right to elect, in the face of a breach of a condition of an employment contract, either to continue the contract or terminate it for breach. In order for condonation to be present, an employee must provide that:

•  the employer had full knowledge of the conduct;

•  despite this, the employer retains the employee’s services; and

•  with this election, the employer has deliberately given up the right to dismiss the employee summarily.”

[61] An appeal against Deputy President Wells’ decision in Cannan & Fuller v Nyrstar Hobart Pty Ltd was dismissed by a Full Bench of the Commission. 17

[62] The evidence to which I have referred above in relation to the practice at the Ashton Coal underground mine establishes that:

(a) Mr Cordowiner’s conduct in lifting the chassis of PT10 before isolating it was consistent with the normal practice at the mine; and

(b) Shift Engineers, who supervise tradespeople at the mine, have witnessed the practice engaged in by Mr Cordowiner of lifting and then isolating plant and equipment, but no disciplinary action has been taken to stop or alter the practice, nor have relevant tradespersons such as Mr Cordowiner received training on the specific topic.

[63] Given that Shift Engineers are the supervisors of tradespeople such as Mr Cordowiner at the mine, they have actual or apparent authority to observe and take action to alter conduct at the mine which is inconsistent with a policy or procedure which applies at the mine. It follows that the full knowledge of the Shift Engineers in relation to the practice in which Mr Cordowiner engaged constitutes full knowledge by Ashton Coal. 18 Despite Ashton Coal’s full knowledge of the practice in which Mr Cordowiner engaged, it retained his services. As a result, Ashton Coal condoned or tolerated Mr Cordowiner’s breach of the isolation process and this weighs in favour of Mr Cordowiner’s contention that the formal warning he received was unreasonable and unjust.

Risks to health, safety and property

[64] In considering whether the decision to issue a formal warning to Mr Cordowiner was objectively reasonable, it is relevant to have regard to the risks, if any, to which his conduct gave rise.

[65] The task of attaching the lifting crane to PT10 in order to lift the rear chassis of PT10 about 300 millimetres involved the use of chains which were connected to the crane in the workshop. The chains were hooked around the bumper bar brackets of PT10 at two points, which were about two feet apart. The bumper bar brackets on PT10 are located at about thigh height. It is not necessary to bend down to complete the task of attaching the chains to PT10.

[66] The cabin of PT10 is not enclosed by sheet metal; there is mesh around the cabin. 19 An employee who is standing at the rear of PT10 can look straight into it. I therefore accept Mr Cordowiner’s evidence that even if an employee did something unexpected and contrary to requirements by entering the workshop and getting into PT10 to operate it when Mr Cordowiner was standing nearby, such as at the rear of PT10 hooking the chains around the bumper bar brackets, he would see the other employee. Further, in order to operate PT10, the employee would have to get into the front of PT10, start PT10 in neutral, put it into gear, and release the brakes on PT10. Mr Cordowiner would obviously take steps to stop the other employee operating PT10 or, at the very least, get out of the way. The possibility that Mr Cordowiner could be injured in such circumstances is, in my opinion, extremely low. Injury could only occur if (a) Mr Cordowiner was distracted and did not see another employee enter the workshop, get into PT10 and operate it and (b) Mr Cordowiner could not get out of the way of PT10 when it was being operated by the other employee. If such an injury did occur, however, it could be very serious. It follows that Mr Cordowiner’s conduct in lifting the rear chassis of PT10 without first isolating it gave rise to some risk to his health and/or safety. It also gave rise to the risk of damage to PT10 if an employee tried to operate it while it was chained to the crane in the workshop. There was also the possibility that an employee trying to operate PT10 while it was chained to the crane in the workshop could injure themselves in doing so. In my opinion, accepting Mr McGuigan’s evidence that risk is a function of the probability of something occurring and the consequences if it does occur, the risks I have identified above existed but were low, particularly in view of the extremely low probability of injury or damage.

[67] Contextually, it is relevant that machines such as PT10 are used in the Ashton Underground mine to transport employees around the mine and when they are not being used to transport employees, the machines are parked in a stationary position. The possibility that an employee could get into a parked machine such as PT10, and operate it in an unexpected or dangerous way, near employees who are working or walking in close proximity, is extremely low, but it could happen. The possibility of injury or damage in such circumstances is only slightly less than the possibility of damage or injury to Mr Cordowiner or another employee if an employee entered the workshop and operated PT10 when Mr Cordowiner was placing chains around the bumper bar brackets, using the crane to lift the rear chassis of PT10 about 300 millimetres, or standing near PT10 when it was not isolated.

[68] The scenario involving an employee unexpectedly entering the workshop and operating PT10 when Mr Cordowiner was standing near PT10 is to be contrasted to a circumstance in which Mr Cordowiner was in the service pit beneath PT10, in which event it would be difficult, if not impossible, for another employee entering the workshop to see Mr Cordowiner or for Mr Cordowiner to see the other employee enter the workshop or approach PT10. The risks associated with such a scenario are significant. It is therefore not surprising that Mr Cordowiner gave evidence, which I accept, that he always isolates PT10 before going into the service pit.

Was the formal warning issued to Mr Cordowiner on 15 February 2019 unjust or unreasonable?

[69] I am satisfied that the decision to issue a formal warning to Mr Cordowiner was not unjust because he engaged in the conduct alleged (lifting PT10 before isolating it) and by doing so he breached, on its proper construction, Ashton Coal’s isolation process in which he had been trained.

[70] The fact that Mr Cordowiner acted in a manner inconsistent with Ashton Coal’s isolation process (in which he had been trained) and thereby breached his obligations set out in paragraphs [33] to [35] above, coupled with the fact that his conduct in lifting PT10 before isolating it gave rise to some risk to health and safety and damage to property, weighs in favour of a finding that the imposition of the formal warning was reasonable. Notwithstanding these matters, the individual circumstances of a particular case may give rise to a finding that particular disciplinary action was objectively unreasonable. 20

[71] In all the circumstances of this case, I am satisfied that the formal warning was unreasonable, in that no reasonable employer in the position of Ashton Coal would have issued Mr Cordowiner with a formal warning, or taken any other disciplinary action against him, in connection with his conduct on 8 August 2018. In reaching this state of satisfaction, I have taken into account all the circumstances, as disclosed in the evidence and submissions made in these proceedings, but am particularly persuaded by the following:

(a) although Mr Cordowiner breached the isolation process, the relevant part of it is ambiguous and Mr Cordowiner has never been specifically trained or instructed to lift PT10 before isolating it;

(b) the extent of the risk or danger to which Mr Cordowiner’s conduct on 8 August 2018 gave rise was low;

(c) Mr Cordowiner acted in accordance with the normal practice at the Mine by lifting the rear chassis of PT10 before isolating it;

(d) by imposing a formal warning on Mr Cordowiner for his failure to isolate PT10 before lifting it, Ashton Coal afforded him differential treatment from other employees who have engaged in the same, or comparable, conduct;

(e) Ashton Coal had knowledge, through its Shift Engineers, of the practice in which Mr Cordowiner engaged, but did not take any disciplinary or other relevant action against him or any other employee to stop or alter the practice. Ashton Coal’s condonation or toleration of the conduct weighs in favour of a finding of unreasonableness; and

(f) Ashton Coal made wrong assumptions during its investigation and failed to comply with Yancoal’s Disciplinary Policy by failing to ensure that “any concerns or allegations made against [an employee] … will be clearly communicated to them” and the employee “will be given an opportunity to respond to any concerns or allegations made against them.” 21 These deficiencies in Ashton Coal’s investigation process had a real and substantial impact on the outcome of the investigation, in that they denied Mr Cordowiner an opportunity to explain the practice at the mine and how it had been condoned or tolerated. Had Ashton Coal given Mr Cordowiner the opportunity to respond to the allegation of failing to isolate before lifting the chassis of PT10 and, importantly, conducted a proper investigation into the practice, as a reasonable employer would have, the existence of the practice and the knowledge of it by Shift Engineers at the mine would have been uncovered.

Conclusion

[72] For the reasons stated, I am satisfied that Mr Cordowiner has demonstrated that the decision by Ashton Coal to issue him with a formal warning for his conduct on 8 August 2018 was objectively unreasonable in all the circumstances. I am also satisfied, for the reasons stated, that no reasonable employer in the position of Ashton Coal would have taken any other disciplinary action against Mr Cordowiner in connection with his isolation of PT10 on 8 August 2018.

[73] Accordingly, my determination of the present dispute is that the formal warning issued by Ashton Coal to Mr Cordowiner on 15 February 2019 was unreasonable and must be withdrawn by Ashton Coal and not relied on for any reason.

DEPUTY PRESIDENT

Appearances:

Ms J Short, Legal Officer of the CFMMEU, on behalf of the applicant;

Mr T Sebbens, solicitor from Ashurst, on behalf of the respondent.

Hearing details:

2019.

Newcastle:

April, 2.

Printed by authority of the Commonwealth Government Printer

<PR706902>

 1   Lend Lease Project Management and Construction (Australia) Pty Limited v CFMEU[2015] FWCFB 1889 at [22]

 2 s.739(5) of the Act

 3   Australian Federation Union of Locomotive Enginemen v State Rail Authority of New South Wales(XPT Case) (1984) 295 CAR 188; Lend Lease Project Management and Construction (Australia) Pty Limited v CFMEU[2015] FWCFB 1889 at [26]-[27]

 4   [2015] FWC 774

 5   CFMEU v HWE Mining[2011] FWA 8288 at [12]

 6   XPT Case at 191

 7   [2017] FWC 590

 8   Exhibit R2 at p. 156

 9   Ibid

 10   Exhibit A2 at DC-10, p. 5

 11   Exhibit A2 at [19]

 12   Exhibit A4 at [7]-[17]

 13   See by analogy but only in relation to injustice and unreasonableness: Darvell v Australian Postal Corporation[2010] FWAFB 4082 at [21]-[24]; B, C and D v Australian Postal Corporation T/A Australia Post[2013] FWCFB 6191 at [42]

 14   See by analogy but only in relation to injustice and unreasonableness: B, C and D v Australian Postal Corporation T/A Australia Post[2013] FWCFB 6191 at [42]

 15   Phillips v Foxall (1872) LR 7 QB 666 at 680

 16   [2014] FWC 5072

 17   Nyrstar Hobart Pty Ltd v Cannan & Fuller[2015] FWCFB 888 at [52]-[55] in relation to the issue of condonation

 18 s 739 of the Act

 19   Exhibit A2 at DC-2

 20   See by analogy but only in relation to injustice and unreasonableness: B, C and D v Australian Postal Corporation T/A Australia Post[2013] FWCFB 6191 at [41]-[48]

 21   Exhibit A2 at DC-10, p. 5