Illawarra Coal Holdings Pty Ltd v Matthew Gosek

[2017] FWC 5885

[2017] FWC 5885

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.604—Appeal of decision

Illawarra Coal Holdings Pty Ltd
v
Matthew Gosek
(C2017/6113)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 15 NOVEMBER 2017

Appeal against decision [2017] FWC 4574 of Commissioner Riordan at Sydney on 3 November 2017 in matter number U2017/1865 – stay application.

[1] On 3 November 2017, the Fair Work Commission 1 found that Mr Matthew Gosek was unfairly dismissed by Illawarra Coal Holdings Pty Ltd. In that decision, Commissioner Riordan ordered that:

1. Mr Gosek be reinstated within seven days of the decision to his former positon and shift. 2

2. Mr Gosek maintain his continuity of service of employment with Illawarra Coal. 3

3. Illawarra Coal pay to Mr Gosek his base rate of pay since his termination minus any monies paid to Mr Gosek for notice and leave. Mr Gosek’s earnings since 31 January 2017 must also be deducted, subject to any legitimate business start-up costs encountered by Mr Gosek for which he has not claimed a tax deduction. Commissioner Riordan also imposed a 25% penalty on any surplus for Mr Gosek’s poor conduct. Mr Gosek is also to be paid the appropriate superannuation contribution for this entire period on his base rate into his nominated superannuation account. 4

[2] Illawarra Coal have appealed the decision and sought a stay of the decision.

[3] The stay application was heard on 9 November 2017 and after the hearing I issued an order staying the decision. These are my reasons for doing so.

[4] At the hearing I granted permission for the parties to have legal representation as I was satisfied that the matter involved some complexity and it would enable the matter to be dealt with more efficiently if legal representation was permitted. Neither party opposed permission being granted.

[5] The Grounds for the Appeal are:

Harsh, unjust or unreasonable

1. By repeatedly characterising the gravamen of Mr Gosek's misconduct as being swearing or the use of inappropriate language (at paras [49]-[56], [91]-[93], [104] and [111]), the Commissioner erred by:

(a) mistaking the facts, namely that Mr Gosek's conduct constituting the valid reason involved the use of swear words and other inappropriate language in the context of numerous instances of threatening, abusive, victimising and intimidating behaviour against other employees, including threats of physical harm and other reprisals, because of and associated with their participation in a company investigation into other unrelated, inappropriate employee behaviour;

(b) failing to have regard to a relevant consideration, being the true nature, effect and gravity of Mr Gosek's misconduct; and

(c) having regard to irrelevant considerations, namely the evidence about the use of swearing and similar language at the workplace (at para [53]-[55], [91], [104] and [111]) and the lack of disciplinary matters involving inappropriate language (at paras [91] and [93]), when the valid reason relied upon was not merely swearing or inappropriate language.

2. In dealing with Mr Gosek's threats to employees of reprisals and victimisation by the CFMEU and its members as limited to the mere technical act of expelling members from the CFMEU or terminating their employment (and whether Mr Gosek had that capacity) (at paras [60]-[62], [64], [94] and [105]-[106]), the Commissioner erred by:

(a) mistaking the facts, namely that Mr Gosek's threats (and the employer's corresponding concerns) went far beyond these technicalities and were fundamentally related to broader reprisal action and victimising behaviour by Mr Gosek and others (see paras [58]-[59]);

(b) failing to have regard to a relevant consideration, being the true nature, effect and gravity of Mr Gosek's threats; and

(c) having regard to irrelevant considerations, namely Mr Gosek's legal incapacity to expel members from the CFMEU Lodge or otherwise terminate their employment (paras [60]-[62], [64] and [105]-[106]).

3. Further to ground 2 above, the Commissioner erred by having regard to an irrelevant consideration, namely that Mr Gosek's resignation from his position as CFMEU Lodge President would have meant that he "would not have any capacity to 're-offend' in the future" (at [90]), when the nature and extent of his offending (having regard to his threats of reprisals and victimising conduct) had nothing to do with his position as Lodge President or otherwise.

4. By failing to properly identify and make findings as to Mr Gosek's "conduct" and what constituted a valid reason for dismissal (at paras [66], [73] and [96]), the Commissioner was unable to properly weigh or assess the gravity of that misconduct against all other relevant matters in assessing overall harshness, etc, thereby acting on a wrong principle and/or failing to have regard to relevant considerations.

5. The Commissioner erred by acting on a wrong principle and/or having regard to irrelevant considerations in considering whether the termination was harsh, unjust or unreasonable, namely the employer's internal investigation process, what recommendations were made (or not made) and what mitigating factors were before the decision-maker (or not) (paras [80]-[83] and [113]-[116]). The Commission's task was to consider the statutory criteria for itself.

6. In the alternative to ground 5 above, the Commissioner erred by:

(a) failing to have regard to relevant considerations in assessing the investigation, namely that Mr Plavecky was aware of all mitigating factors relevant to the termination and gave evidence that he took them all into account;

(b) having regard to irrelevant considerations in assessing the investigation, namely that the final peer reviewer of the decision did not receive a full copy of the report with all mitigating circumstances in it (at paras [36] and [81]-[82]); and

(c) having regard to irrelevant considerations in assessing the investigation, namely that initial recommendations from an initial report were not within the final report (at paras [81]-[82] and [114]-[116]).

7. The Commissioner erred by acting on a wrong principle and/or having regard to irrelevant considerations in his application of Jones v Dunkel to Mr Hatfield and his associated drawing of inferences (at paras [83] and [116]), when his absence was explained (he no longer worked for the employer), he had no relevant evidence to contribute (see ground 5 above, including also on the question of Mr Plavecky's state of mind or motivations) and thereby nothing to explain or contradict and it was not open to infer that any failure to call him was because the employer feared to do so.

8. Further to ground 7 above, the Commissioner erred by acting on a wrong principle by drawing a Jones v Dunkel inference of damaging evidence (not merely that it would not have assisted), including contrary to direct evidence to the opposite effect (at para [116]) and by drawing an inference/making an assumption about Mr Hatfield's evidence which was nothing more than speculation and conjecture to fill gaps in the evidence (at para [116]), rather than a more probable inference.

9. By taking account of and having regard to the facts and circumstances surrounding the conduct of Mr Goedde and/or Mr Donnelly (at paras [84]-[88], [101]-[102] and [112]), the Commissioner erred by:

(d) mistaking the facts, namely that the employer's approach to the conduct and investigations of Mr Goedde and Mr Donnelly was relevantly inconsistent with that involving Mr Gosek; and

(e) having regard to irrelevant considerations in assessing harshness, etc, namely the alleged inconsistency of treatment as between Messrs Goedde, Donnelly and Gosek in circumstances which were not relevantly or sufficiently similar.

10. The Commissioner erred by acting on a wrong principle and/or failing to have regard to relevant considerations regarding harshness, etc, by finding that Mr Gosek's conduct:

(a) was not in breach of his contract of employment (at para [103]); and

(b) was not relevantly, serious and wilful misconduct (at para [103]).

11. The Commissioner erred by acting on a wrong principle and/or having regard to irrelevant considerations in assessing the degree of culpability for, and gravity of, Mr Gosek's misconduct, by relying on unsubstantiated assertions, opinions and speculation about the impact and effect of alcohol, drugs and Mr Gosek's mental state on his misconduct (at paras [93], [99], [110] and [117]).

12. The Commissioner erred by having regard to an irrelevant consideration in assessing harshness, etc, namely that the employer refused to accept Mr Gosek's medical circumstances as a mitigating factor for his conduct (at para [117]).

13. Further or alternatively to grounds 1-12 above, the Commissioner erred by failing to give any, or any adequate, reasons as to why or how he took into account various matters which he considered relevant to his various, ultimate conclusions (see paras [49], [55], [57], [63]-[64], [66], [71]-[72], [77], [82]-[83], [86]-[90], [94] and [105]-[107]).

Reinstatement

14. The Commissioner erred by having regard to an irrelevant consideration, namely that Mr Gosek's resignation from his position as CFMEU Lodge President would have meant that he "would not have any capacity to 're-offend' in the future" if reinstated (at paras [90] and [132]), when his capacity to re-offend (having regard to his threats of reprisals and victimising conduct) had nothing to do with his position as Lodge President, being on the Lodge Committee or otherwise.

15. The Commissioner erred by failing to have regard to relevant considerations in considering whether reinstatement was appropriate, namely the matters identified in para [122](a)-(e) of the decision.

16. The Commissioner erred by failing to have regard to relevant considerations in considering whether reinstatement to his former position and shift was appropriate, namely the nature of his misconduct involving threatening, abusive and intimidating behaviour (including threats of physical violence) to the other employees on that same shift.

17. Further or alternatively to grounds 15-16 above, the Commissioner erred by failing to give any, or any adequate, reasons for finding (at [127] and [132]) that reinstatement was appropriate and that Mr Gosek could be successfully reintegrated back into his crew.

Significant errors of fact

18. The Commissioner significantly erred in fact regarding his findings as to the nature of Mr Gosek's misconduct and his threats to other employees.

19. The Commissioner significantly erred in fact by finding (at [84]-[88], [101 ]-[102] and [112]) that the employer's approach to the facts and circumstances surrounding the conduct of Mr Goedde and/or Mr Donnelly was inconsistent with that involving Mr Gosek .

20. The Commissioner significantly erred in fact by finding (at [113] and [116]) that Mr Plavecky had a fixed view about a preferred outcome to the investigation.

21. The Commissioner significantly erred in fact by failing to find that Mr Plavacky was aware of and had taken into account all mitigating circumstances which had been raised.

22. The Commissioner significantly erred in fact by finding (at [116]) that Mr Hatfield did not agree with Mr Plavecky's recommendation.

23. The Commissioner significantly erred in fact by finding (at [117]) that the employer refused to accept Mr Gosek's medical circumstances as a mitigating factor.

Permission to appeal

Permission to appeal should be granted in the public interest because the grounds of appeal involve:

1. important questions of principle regarding the Commission's obligations to properly identify the conduct which constitutes (or is said to constitute) a valid reason for dismissal and make appropriate findings about those matters (including their gravity), in order to properly weigh and assess those findings against other relevance matters;

2. important questions of principle about the interaction between an employer's investigation and reasoning process in making a decision to dismiss an employee and the Commission's role in assessing the statutory criteria in section 387 of the Fair Work Act 2009 (Cth);

3. a significant error of principle in mischaracterising (and thereby, significantly downplaying the seriousness of) the evidence substantiating the valid reason;

4. errors of principle in the Commission's drawing and use of Jones v Dunkel inferences;

5. the circumstances in which the Commission can use self-serving, unqualified opinion evidence about the impact or effect of alcohol, drugs or mental state to justify, explain and/or mitigate unchallenged misconduct;

6. a significant departure from existing Full Bench authority about the circumstances in which alleged differential treatment as between employees can be properly taken into account in considering harshness, etc;

7. numerous allegations of a substantial miscarriage of justice in the Commission's determinations and characterisations of the conduct, including that the dismissal was harsh, unjust or unreasonable and that reinstatement was the appropriate remedy; and

8. a consideration of the proper discharge of the Commission's function in providing adequate reasons for its decisions, including in particular, the adequacy of merely stating that something is taken into account without explaining how or why or what impact it had on any ultimate decision.

Consideration

[6] In deciding whether to issue a stay, the Commission needs to be satisfied that the party seeking the stay has made out an arguable case that has some reasonable prospect of success, in respect of both the question of permission to appeal and the substantive merits of the appeal, having regard to the additional hurdle in unfair dismissal related appeals set out in s.400 of the Act. Further consideration must be given to whether the balance of convenience favours the granting of a stay.

[7] This assessment is necessarily carried out without the benefit of hearing the party’s full argument and without the opportunity to undertake a thorough analysis of the case material.

[8] The Commissioner, at first instance, found that there was a valid reason for the dismissal 5 and that Mr Gosek had been afforded procedural fairness.6 He was critical of the investigation process adopted by Illawarra Coal.7 He further found that there was inconsistent treatment, he considered Illawarra Coal’s investigation of allegations against other employees as well as examples of other employees using inappropriate language without being disciplined.8 He had regard to Mr Gosek’s contrition9 and the likelihood that Mr Gosek would reoffend.10 He had regard to the fact that the language was commonplace in the community and at large and in this workplace.11 He further had regard to Mr Gosek’s medical condition.12

[9] It is not necessary for the purpose of the stay application to consider each of the grounds of appeal. I have therefore focused on the gravamen of Illawarra Coal’s complaint 13 namely, that in mischaracterising Mr Gosek’s conduct as essentially involving swearing and in appropriate language, the Commissioner failed to assess the gravity of the conduct and hence fell into error. This complaint relates both to the decision to find the dismissal harsh and the finding that reinstatement was appropriate.14

[10] Mr Follett submitted that in this case the balance of convenience was almost all one way. 15 The decision ordered the reinstatement of Mr Gosek amongst other orders. Ms Bryony Andrew the Operation Manager gave unchallenged evidence of the training that would need to be provided to Mr Gosek before he could perform his work. She also gave hearsay evidence about the attitudes of other employees to his return.

[11] Mr Follett submitted that if the appeal is successful, Mr Gosek would be removed from the workplace again. He submitted that it would be difficult for the employees who were at the receiving end of Mr Gosek’s conduct. Further, Mr Follett indicated that, subject to an undertaking by Mr Gosek to repay monies if the appeal was successful, Illawarra Coal would pay Mr Gosek his full weekly wage pending the hearing and determination of the matter.

[12] In response Ms Howell submitted that balance of convenience was not all one way. She submitted that Mr Gosek has suffered a loss of income and he had been self-employed as an electrician since his dismissal and he had wound down his business because he was to be reinstated. Further, it was submitted, that the longer he was out of the mining industry he was at risk of deskilling. It was submitted that Mr Gosek should receive the benefit of the decision in the absence of any compelling reasons in favour of the stay.

[13] It was submitted that the case is a simple matter which because of the way it was run below has some unusual characteristics. The Respondent below called no direct evidence about Mr Gosek’s conduct in circumstances where Mr Gosek could not remember what he had said.

[14] It was submitted that the Appellant is seeking to overturn factual findings made by the Commissioner at first instance and those findings were open to the Commissioner on the evidence before him.

[15] It was submitted that the Commissioner did make findings of fact in relation to each allegation as put forward by the Appellant below at paragraphs [48]-[72] of the decision. It was said the Commissioner accepted the allegations albeit he disagreed with the assessment of the seriousness of the allegations for a range of reasons. It was said that the use of the language was an important part of the case put below and it was one of the reasons the decision was made to dismiss Mr Gosek.

[16] I am satisfied that there is an arguable case in relation to appeal grounds [1], [4] and [16] both in relation to permission to appeal and the merits of the appeal. There is an arguable case that the Commissioner equated Mr Gosek’s conduct with that exhibited more generally at the workplace. However it is arguable that he had insufficient regard to the context in which the conduct occurred; that the language used was directed at specific employees; that it involved threats of violence; and that it involved threats to the employees’ employment and union membership.

[17] For example the Commission assessed the threats of retribution made by Mr Gosek to his fellow union members through the prism of Mr Plavecky’s concern for those individuals. The Commissioner determined that Mr Plavecky had overreacted. In assessing the threats he had regard to the fact Mr Gosek did not have the power under the union’s rules to carry through his threat. It is arguable that by concluding that these threats were merely inappropriate, the Commissioner mischaracterised the conduct and hence failed to have regard to the seriousness of the allegation.

[18] I do not accept the submission that the balance of convenience is all one way. I also do not accept the submission that prima facie balance of convenience favours the Appellant. As the Full Bench said in Coal and Allied Operations Pty Limited v Crawford and others 16 “where the balance of convenience lies may be sometimes difficult to discern, but in our view no purpose is served by formulating generalisations about where the balance might lie in particular types of cases. All of the circumstances must be considered.”17

[19] In this case I am satisfied that the balance of convenience favours the granting of a stay. In reaching this conclusion I have not had regard to the evidence of Ms Andrew about the attitude of some unidentified employees. I note her evidence that the supervisor advised that he would stand down as the supervisor if he was returned but I accept Ms Howell’s unchallenged submission that he had indicated at the hearing that he wished to stand down from that position for different reasons.

[20] If the Appellant is successful in the appeal then it would have been required unnecessarily to re-induct Mr Gosek to the workplace and he would be working with some of the employees who made complaints about his behaviour. While I accept that Mr Gosek has reorganised his affairs assuming he was returning to work, the appeal is to be heard within a short period of time. On balance I am not satisfied that the reinstatement of Mr Gosek in this interim period is appropriate.

DEPUTY PRESIDENT

Appearances:

M. Follett for the Appellant.

C. Howell for the Respondent.

Hearing details:

2017.

Melbourne, Perth and Sydney: by video link:

November 9.

<Price code C, PR597592>

 1   [2017] FWC 4574

 2   Ibid at [133]

 3   Ibid at [134]

 4   Ibid at [134]

 5   Ibid at [48]-[73]

 6   Ibid at [74]-[76]

 7   Ibid at [80]-[83]

 8   Ibid at [84]-[88]

 9   Ibid at [89]

 10   Ibid at [90]

 11   Ibid at [91]-[92]

 12   Ibid at [93]

 13   Grounds 1 and 4 of the Grounds for the Appeal

 14   Ground [16] of the Grounds for the Appeal

 15   Submissions of the Appellant at [8]

 16 109 IR 409

 17   At [17]

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