McGrath v Sydney Water Corporation
[2013] FWC 793
•17 APRIL 2013
[2013] FWC 793 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s 394 - Application for unfair dismissal remedy
Paul McGrath and Maitland Hayward
v
Sydney Water Corporation t/as Sydney Water
(U2012/9756; U2012/9757)
DEPUTY PRESIDENT SAMS | SYDNEY, 17 APRIL 2013 |
Applications for unfair dismissal remedies - alleged failure to comply with health and safety procedure - ‘isolation’ of electrical power - risk to health and safety of others - employer investigation - dishonesty during investigation - serious misconduct - allegations not substantiated - no valid reason for dismissals - future redundancies - procedural unfairness - lengthy periods of unblemished service - reinstatement not inappropriate - lost remuneration heavily discounted for dishonesty - associated orders.
INTRODUCTION
[1] This decision will determine unfair dismissal applications filed by Paul McGrath and Maitland Hayward (the ‘applicants’) seeking reinstatement and associated orders, pursuant to the provisions of Ch 3 - Part 3-2 of the Fair Work Act 2009 (the ‘Act’). The applicants were dismissed by Sydney Water Corporation (the ‘respondent’ or ‘Sydney Water’) on 5 September 2012, following an investigation and findings that they had failed to comply with Sydney Water’s Lockout/Tag Out (LOTO) procedure (HSP049) when carrying out the electrical ‘isolation’ on WS0194 Reservoir, Yagoona, New South Wales on 16 May 2012 and that this failure caused a real risk to the health and safety of others attending the site.
[2] Both applicants are experienced electricians (Level 4) with 43 years service (Mr McGrath) and 34 years service (Mr Hayward). They were employed under the Sydney Water Trades and Apprentices Enterprise Agreement 2010 [AE878307] (the ‘Agreement’). Mr Hayward has no disciplinary record and Mr McGrath had one written warning from May 2012, which was under appeal and is contested. They strongly denied that they had failed to comply with Sydney Water’s policies and procedures, and in any event, there was never any real risk to the health and safety of others attending the site. The allegations against the applicants are identical and were detailed in separate letters to them of 24 July 2012 as follows:
‘Following the fact finding investigation you are required to attend a meeting with myself and a Human Resources Representative to respond to the following allegations.
1. It is alleged that you failed to comply with the LockOut / TagOut procedure (HSP 049) while carrying out the electrical ‘isolation’ on WS0194 Reservoir, specifically,
a. you failed to ensure all energy sources into or within a device must be ‘isolated’ prior to work commencing.
b. you failed to ensure all isolations must be tested for effectiveness prior to commencement of any work - ie the equipment must be proved de-energised and shown to have no stored energy.
c. you failed to ensure all isolations must have the appropriate tag applied at each ‘isolation’ point.
d. you failed to ensure wherever possible each isolation point must be locked out as well as tagged.
e. you failed to ensure that ‘isolated’ equipment was proved isolated from all sources of energy. This includes ensuring that there are no alternate sources of energy (eg dual feeds, hydraulic, mechanical etc) to the equipment and that there is no stored energy. It should be noted that attempting to start equipment does not always prove equipment is ‘isolated’ as there may be additional sources of power to the equipment.
f. you failed to comply that the effect of the isolation on the Water / Wastewater system shall be identified. If necessary the SOC and/or the relevant asset owner should be notified.
g. you failed to attach a yellow “out of service” tag to the isolation point/s ensuring that all information is completed.
h. you failed to fit a Silver Control Lock used by Sydney Water electrical personnel to maintain an electrical isolation overnight.
i. it is alleged that you knowingly made false statements on your risk assessment that SWMS E01 and E04 had been complied with.
2. It is alleged that you failed to demonstrate the level of personal responsibility required of an employee with your level of qualifications and experience when you failed to complete the work within a suitable time frame (2 hours)
3. It is alleged that you failed to demonstrate the level of personal responsibility required of an employee when you failed to comply with using the FRM in accordance with the FRM Usage Policy. This includes competent completion of Safe Work Method Statements prior to work and Risk Assessments.
4. It is alleged that you have breached the Sydney Water Health and Safety policy and your actions may have led to the injury or death of other staff or contractors. Specifically, you have created a serious hazard, failed to provide a safe working environment and not used safe systems of work’
[3] The applicants were suspended on full pay from that day pending the finalisation of an investigation. Following the investigation, including a number of interviews with the applicants and other Sydney Water employees and inspections of the work, Allegations 1, 3 and 4 were substantiated and Allegation 2 was not substantiated. The applicants were invited to respond to the outcome and they provided further information which Sydney Water investigated.
[4] However, on 5 September 2012, the applicants were summarily dismissed by a letter from Mr Geoff Mossman, Manager MED. Although they were in slightly different terms, both letters contained the following:
‘Inspection of the top of the reservoir and of access records demonstrate that the top of the reservoir was not accessed, and therefore that “the tails” were not removed. I have inspected the site with electrically qualified staff, supervisor and OHS representative, including a demonstration on-site of the LOTO procedure. I am satisfied that you did not follow the LOTO procedure, and that this caused real risk to the health and safety of others attending that site.
Outcome
It is my view that the allegations are substantiated and the proposed outcome which was provided to you on 20 August 2012 is appropriate. Your conduct was a real risk to safety which may have caused injury or death of divers entering the reservoir and is a serious breach of Sydney Water safety procedures.
Your employment with Sydney Water is terminated effective today, Wednesday 5 September 2012. You will be paid accrued entitlements.’
[5] The applications for reinstatement were filed on 19 September 2012 by the applicants’ Union, the Communications, Electrical and Plumbing Union (the ‘Union’) and listed for conciliation on 17 October 2012. The conciliation was unsuccessful and the matters were joined and listed for arbitration on 4, 5 and 6 February and 6 March 2013, Mr J Kennedy, Solicitor, representing the applicants and Ms E Brus of Counsel representing Sydney Water were both granted permission to appear pursuant to s 596 of the Act.
EVIDENCE
[6] At the outset of proceedings, I determined that the evidence in one matter shall be the evidence in the other. The following persons provided written and/or oral evidence in the proceedings:
• Mr Hayward;
• Mr McGrath;
• Mr Stevce Stanojevic, Facility Technician, Sydney Water;
• Mr Ewen Young, Control Technician, Sydney Water;
• Mr Liam Whelan, Acting Maintenance Supervisor, Sydney Water;
• Mr Edward Filipic, Supervisor, Sydney Water;
• Mr Robert Barna, Supervisor, Sydney Water;
• Mr Peter Murdoch, Electrical Fitter Mechanic, Sydney Water;
• Mr Douglas Hobart, Workplace Health and Safety Coordinator, Sydney Water;
• Mr Geoffrey Mossman; Business Unit Manager, Mechanical Electrical Delivery, Sydney Water and
• Mr Michael Cox, Area Manager, Mechanical Electrical Delivery, Sydney Water.
[7] The following is a list of abbreviations used frequently throughout this decision:
• LOTO - Lock out/ Tag out;
• SOC - Systems Operations Centre;
• OCR - Operational Change Request;
• FRM - Field Resource Management;
• SWMS - Safe Work Method Statement;
• MED - Mechnical/Electrical Deliver; and
• IRS - Incident Reporting System
[8] In addition, there was some interchanging in the evidence of the names of the various pieces of equipment. I have endeavoured to standardise the expressions such as to make it clear that the Mixer Starter Panel is in the Mixer Starter Panel Box. There are three fuses in the Mixer Starter Panel. It powers the Mixer, which is a large agitator in the reservoir. The Council Meter Panel is in a separate and distinct Council Meter (Supply) Box and it supplies energy to the Mixer Starter Panel.
The applicants
Maitland Hayward
[9] Mr Hayward is 58 years old and is married with one child. In his written statement, he said that his wife, a former employee of Sydney Water, is currently suffering from serious medical problems and he is her primary carer. Mr Hayward had been first employed by Sydney Water in March 1978 as an Electrical Mechanic. Prior to the incident that led to his termination, he had never had any disciplinary issue at work. The last position that he held was as an Electrical Tradesperson in the position of a Level 4 Control Electrician. He believes that he will struggle to find another job with the same type of work, conditions and pay.
[10] Mr Hayward deposed he last received training in the LOTO procedure in 2006. The focus of the procedure was on the use of different coloured locks and tags. The procedure had been raised ‘regularly’ at toolbox meetings, as many of the assets on which the electricians worked were not compatible with the procedure because they cannot be physically locked out and have no designated point for attaching tags. Sydney Water Management had often been questioned about this, but had never given an answer.
The alleged safety incident
[11] On 15 May 2012, Mr Hayward received a courtesy text from Mr Ed Filipic, the Sydney Water Maintenance Supervisor at around 8:15pm assigning him to a job at Reservoir WS0194 the following day. On 16 May 2012, he arrived at the unmanned site at approximately 6:30am. He received a text from his usual partner, Mr Ewen Young, advising him that he was off sick. As there were staff shortages, only Mr McGrath was left in the gang. He was at work on 16 and 17 May 2012. Mr Filipic rang Mr Hayward 15 minutes later to say that Mr McGrath would be working with him that day.
[12] Mr Hayward said that the work record was transferred to his mobile Field Resource Management (FRM) computer at 6:57am. He attached a printout from his FRM which reflected this. However, there were some discrepancies. While the FRM disclosed that he was ‘on route’ and ‘on site’ at 7:00am, he was already on site at that time. The computer forced him to enter these times to accept the work order. In addition to being used for work order pro-formas, the FRM was used to access email, connect to the internet and to connect to IICats Panels onsite. There was a problem with the FRM in that the charger plug did not fit into the plug directly and the battery was often low. This problem was resolved on 18 May 2012 when he used his own charger from his car.
[13] Mr Hayward deposed that the job that the work order set out was to ‘isolate’ the reservoir Mixer Motor and any cathodic protection in order to make it safe for divers to enter the reservoir for maintenance. The Mixer is a large propeller which circulates water throughout the reservoir. Mr Hayward decided that the job should be done in accordance with Sydney Water’s Safe Work Method Statements E01 ‘De-Energising, Energising and Commissioning Electrical Circuits’ and E04 ‘Testing Equipment’. Copies of these statements were annexured to Mr Hayward’ statement.
[14] Mr Hayward said that he carried out the initial risk assessment by identifying and entering into his FRM additional hazards and SWMSs needed for the job. This was done in order to access the work order. He left the FRM in the car as normal. However, he could not say whether the risk assessment was transmitted elsewhere by the FRM. Mr Hayward said that he did not carry out any manual work or access an electronic panel prior to Mr McGrath’s arrival on site.
[15] Mr Hayward said that on Mr McGrath’s arrival on site between 7:00 and 7:15am, he told Mr McGrath what the job was and that he had performed a risk assessment on the FRM. They agreed that there were no further hazards on the site and that Mr Hayward would check for cathodic protection, while Mr McGrath would do the Mixer ‘isolation’.
[16] Mr Hayward explained that cathodic protection was used in some reservoirs in the form of anodes that serve to protect the structure of the reservoir through electrolysis. Accordingly, part of his job was to see if there was electrical supply for cathodic protection anywhere on site. He also said that there were four panels at Reservoir WS0194: the IlCats panel (for communications and monitoring of the reservoir), the Council Meter Panel Box (which has the power meter and other supply fuses) the Dosing Panel and the Mixer Starter Panel. The Council Meter Panel and the Mixer Starter Panel Box were adjacent to each other. All panels are within a 20-30 meter radius. The Council Meter panel is accessible by a key that all Sydney Water field employees have in their possession. Mr Hayward noted that non-Sydney Water staff, such as meter readers, would have access to this box.
[17] Mr Hayward opened the Council Meter Panel Box with his key and looked to see what was there. He realised from his observations that power was coming in from the street and then distributed to the Mixer Starter Panel. The Council Meter Panel also supplied power to the IlCats panel. He noted further that, while the Council Meter Panel box was lockable, it would be easy to unlock, as so many people were in possession of a key, including non-Sydney Water personnel. There was no place for a silver electric lock to be attached in accordance with the LOTO procedure.
[18] Mr Hayward decided that it would not be safe to leave the fuse wedges out in the Council Meter Panel as supply voltage could be exposed by touching the fuse holders. As a result, he decided that it would be best to ‘isolate’ at the Mixer Starter Panel, which has a lock on its Box with its own key. Fewer people have access to this panel so it is more secure. Mr Hayward engaged in a discussion with Mr McGrath, who said words to the effect of: ‘I will ‘isolate’ the Mixer in the Mixer starter panel. I will just ‘isolate’ the fuses in there.’
[19] Mr Hayward said that there was no lockable switch in the meter panel, only fuses. Mr McGrath told him that pulling the fuses would be the best method of isolating the Mixer. Mr McGrath started this work at 7:24am, which was shown in the IICats record (annexed to Mr Hayward’s statement). The purpose of this is to remotely alert someone in the SOC that the Mixer is offline. Mr McGrath removed the fuses and put tape across the fuse slots. He then closed the panel and locked the door of the Mixer Starter Panel Box with the external lockable handle.
[20] Mr Hayward claimed that he went to the top of the reservoir to look for cathodic protection, but was unable to find it. He tried to call Mr Brian Woods, a co-worker to ask if there was anywhere on site that he had missed, but Mr Woods did not answer. Accordingly, Mr Hayward formed the view that there was no cathodic protection on site. He was not involved in the development of the specific Asset ‘isolation’ procedure for the work order, or the actual work done in the reservoir, only the ‘isolation’ and lock/out tagging of the Mixer Motor and cathodic protection. He believed that he performed this work in line with the relevant SWMSs.
[21] Mr Hayward said that the Asset Isolation Procedure needs to be signed off by the electrician who did the ‘isolation’ and that, accordingly, he expected to go back to Reservoir WS0194 to meet the team doing reservoir maintenance. This did not occur and he was not directed to return to site or advised as to when the maintenance work would occur.
[22] Mr Hayward said that he and Mr McGrath started cleaning up at approximately 7:43am and had shut and left the site by 8:00am. As they were leaving, he noticed an ‘out of service’ tag on the handle of the Mixer box. On returning to the car, he also noticed that the FRM was in ‘sleep’ mode. It had not been charging as the vehicle was off and needed to be charged before it could be used. He turned the vehicle on and fixed the problem with the charger plug not fitting correctly. He turned the FRM back on as he left to return to the Daceyville Depot, as he needed to use the GPS system.
[23] Mr Hayward deposed that once at the Daceyville Depot, he assisted Mr Filipic to unload his ute. He noticed that the FRM had gone into shutdown mode again. He discussed this fault with Mr Filipic, who told him that he should complete a paper risk assessment form. When he attended the Waverley Reservoir for a job, he completed a paper risk assessment form and entered the relevant times into the FRM for the job at Reservoir WS0194 after lunch and after it had been charged up. The paper based risk assessment forms were also reentered into the FRM. When they finished work at the Waverley Reservoir, Mr Hayward went back to the Daceyville Depot to get missing IICats modems and take them back to Parramatta.
[24] Mr Hayward said that on 17 May 2012, he and Mr McGrath went to site SP001 in the city for a previously booked appointment. While they were there, Mr Filipic called between 8:00 and 8:30am from Reservoir WS0194. Mr Filipic said that he had gone to the site to reassure the contractors who were entering the reservoir that the Mixer was isolated’. The conversation was in words to the effect of:
Filipic: | I’m here at the reservoir, I have the asset owner representative on speaker, can you tell me if you have done the ‘isolation’? |
Hayward: | Yes we did. |
Filipic: | There is no tag anywhere and I can’t access the Mixer panel, I don’t have a key for it. |
Hayward: | I will put you over to Paul. |
Mr Hayward then passed the phone over to Mr McGrath and walked away. He did not hear the ensuing conversation between Mr McGrath and Mr Filipic.
[25] Mr Hayward said that he and Mr McGrath returned to the Daceyville Depot for lunch. While they were there, Mr Filipic told him that he had removed the fuses from the Council Meter Panel at Reservoir WS0194 in order to reassure the contractors.
[26] Mr Hayward deposed that he and Mr McGrath went back to Reservoir WS0194 in order to wait for the contactors to exit the reservoir. While there, they noticed that the ‘out of service’ tag was no longer attached to the Mixer Starter Panel. They looked around, but were unable to find it. He assumed someone had taken it off. There were no visible additional tags or locks on any other panels or equipment on site. He and Mr McGrath left Reservoir WS0194 after the contractors exited the reservoir.
Compliance with procedures
[27] In his evidence, Mr Hayward responded individually to each of the allegations put to him by the respondent (see para [2]). He denied Allegations 1(a) and 1(b). He had observed Mr McGrath remove the Mixer Motor control fuses and tape over the fuse sockets. This is the normal procedure with this type of ‘isolation’. He also saw Mr McGrath test the supply side of the fuses, which showed a voltage present. Mr McGrath told him that he had tested the load side running out to the Mixer Motor and that no voltage was present. The supply came from the Council Meter Panel and they could not lock out that panel in accordance with Sydney Water procedures, as it powers other equipment on the site and other persons need access to it. The job was not to de-energise and ‘isolate’ the entire site.
[28] In response to Allegations 1(c), 1(d), 1(g) and 1(h) (see para [2]), Mr Hayward stated that it was not possible to comply with the LOTO procedure as the Mixer Starter Panel is not designed to be ‘tagged’ in accordance with the procedure. He noted that he saw the ‘out of service’ tag on the outside handle of the box when leaving the site. Mr Hayward also said that it was not possible to fit a Sydney Water silver electrical lock to the Mixer Starter Panel. The Mixer Starter Panel was locked out by Mr McGrath, who locked the external handle with his key. Only certain Sydney Water employees would have a key to this handle.
[29] Mr Hayward denied Allegation 1(e) (see para [2]) and said that the process that he observed Mr McGrath undertake (see para [19]) meant everything reasonably required to ensure that the Mixer Motor was electrically ‘isolated’ had been carried out. No other sources of energy to the Mixer Motor were present. He had himself checked for cathodic protection and had found none.
[30] Mr Hayward denied Allegation 1(f) - that he had failed to comply with the requirement that the effect of the ‘isolation’ on the Water/Wastewaters System be identified. He said that because the owner of the asset was Sydney Water, it was required to create an OCR. The SOC would then be notified. There was no record of the OCR being created and, accordingly, it was Sydney Water that had failed to follow its own procedures. Because the OCR was not created, the SOC was not advised of the work being carried out and the ‘isolation’ of the Mixer Starter Panel created an alarm which was reported as a breakdown. As a result, another electrician, Mr Peter Murdoch, was sent out to the site to identify the problem. Mr Hayward believed it was Mr Murdoch who reported the matter to management and to Mr Doug Hobart (the OH&S Representative). He said that he and Mr Murdoch had ‘fallen out’ earlier in 2012 over the creation of Field Technician positions by Sydney Water.
[31] Mr Hayward denied Allegation 1(i) (see para [2]) that he had knowingly made false statements relating to the Safe Work Method Statement (SWMS). He said that he had completed the SWMS honestly and to the best of his ability. He was unaware of which part of the SWMS was said to be false.
[32] Although Allegation 2 (see para [2]) was subsequently found to be not substantiated, Mr Hayward said that he was disturbed that this was not reviewed before it was put in writing. He denied Allegation 3 (see para [2]). He believed that aside from 16 and 17 May 2012, his record of FRM use would have been good and he attributed the failure to create timely FRM records to the battery problems he described above (see para [12]). He had never seen or been issued with an FRM policy.
[33] Mr Hayward denied Allegation 4 (see para [2]). There was no supply to the Mixer Motor and no risk to anyone who went into the reservoir as it could not be operated onsite or by IICats remote control. Neither he nor Mr McGrath had created a hazard. The Mixer Motor could not be operated without reversing the controls which he and Mr McGrath had put in place.
The investigation
[34] Mr Hayward said that on 24 July 2012, he received a letter of investigation signed by Mr Cox (see para [2]). He was stood down from work on full pay and asked to attend a meeting on 26 July. This was subsequently put back to 30 July. This letter was the first occasion the issue had been raised with him.
[35] Mr Hayward deposed that on the morning of 30 July 2012, he spoke to Mr McGrath. He said that somebody had told him that the fuses in the Mixer Starter Panel were not supply fuses - they were control fuses. Approximately one hour later, Mr McGrath rang him back to suggest that they say that they had also disconnected the motor leads at the terminal box on top of the reservoir. Mr McGrath told him that he understood, after a conversation with another person working for Sydney Water, that they had not technically followed the LOTO procedure.
[36] Mr Hayward attended the meeting with Mr Daniel Weizman of the Union, Mr Cox and Ms Claire Saker, an HR representative of Sydney Water. At the meeting the allegations of his alleged failure to work according to Sydney Water policy were read out. He responded by explaining his actions on 16 May 2012 to the best of his ability. He recalled that he said something about disconnecting the motor leads at the top of the reservoir. He also recalled telling Mr Cox that he had removed power from his FRM, as it was interfering with his personal GPS.
[37] Mr Hayward attended another investigation meeting on 20 August 2012 with Mr Weizman, Mr Geoff Mossman and Ms Kim Ching, HR Consultant of Sydney Water. At this meeting, he asked for the minutes of all of the investigation meetings, but they were never supplied. Mr Mossman read out the contents of a letter that addressed the allegations in the letter of 24 July. The findings of the investigation were that, on the balance of probability, all of the allegations were substantiated, except for Allegation 2. Further, Mr Hayward was told that the outcome of the investigation was that Sydney Water had decided to dismiss him. He was given a further opportunity to respond and to meet again on 22 August 2012.
[38] Mr Hayward said that prior to attending the next meeting, he spoke to Mr Filipic at the Daceyville Depot. He asked him if there had been any problems with his GPS locations for 16 May and Mr Filipic replied in the negative. He also asked if anyone had contacted him in relation to the problems on that day. Mr Filipic replied: ‘No, only the guy who was looking after the divers on the day.’ Mr Hayward then went to the meeting and responded to the same allegations. He did not take any notes.
[39] There was a further meeting on 29 August 2012 with Mr Mossman, Ms Ching and Mr Weizman. At this meeting, he responded to specific questions in relation to the supposed work he had done in relation to disconnecting the motor at the top of the reservoir. He told Mr Mossman and Ms Ching that it was Mr McGrath who had placed the tag on the Mixer Starter Panel Box door and that he had disconnected and reconnected the leads on the terminal box.
[40] Mr Hayward conceded that what he had said was ‘obviously’ not true. He realised in hindsight that he should have told the truth. He agreed to Mr McGrath’s proposal to say that they had disconnected the motor leads partly because he did not want Mr McGrath to get in trouble, but also because he was worried about his job as well. He felt he was under a lot of pressure.
[41] A final termination meeting was held on 5 September 2012. Mr Hayward, Mr Weizman, Mr Mossman and Ms Ching were present at this meeting. Mr Mossman read out the letter of termination (see para [4]). Mr Hayward was summarily terminated. He returned the vehicle and all property of Sydney Water and requested that the Union file an unfair dismissal application.
[42] Mr Hayward said that it was obvious that the respondent had ‘cut and pasted’ his name into the same letter given to Mr McGrath. Accordingly, he believed that the findings made against Mr McGrath had been applied to him without a true review of the facts. At no point during the six investigation meetings was he asked as to the actual steps he had taken to ensure ‘isolation’ of the Mixer Motor.
[43] In oral evidence, Mr Hayward said that he had spoken briefly to Mr Cox before the investigation on two occasions for ten or twenty minutes. Once was at the Pymble Depot when he had introduced himself.
[44] Mr Hayward said that he had known Mr Murdoch for 26 years. They had been friends, but they had had a disagreement about Mr Murdoch’s work on an ‘isolation’. On this occasion, Mr Murdoch had worked alone on an ‘isolation’, despite the fact that they were always required to work with two electricians when performing an ‘isolation’. The product of Mr Murdoch’s work was that Mr Hayward and Mr McGrath had had to stay back to repair two cell starters. They had had a ‘fair altercation about him lying to me’. Mr Hayward blamed his failure to get a Field Technician’s job on this altercation with Mr Murdoch. He had had a phone call that he had been successful in getting the job, but was then told by Mr Liam Whelan that he had been ‘pulled off the list’.
[45] Mr Hayward agreed that he had been told ‘You have to follow LOTO procedures’ at toolbox meetings on one or two occasions, but said that this was all that was said. On numerous occasions, they had raised the issue that they could not lock the fuses out. They had never received a response. He had specifically asked what to do in this event, but again had not received a response. He could not recall ever having been in a toolbox meeting with Mr Doug Hobart.
[46] Mr Hayward agreed that his last training in LOTO was probably in August 2006, although he could not recall the details of that training. His understanding was that this procedure should be the subject of refresher training every two years and that proof of capability in these procedures was required. Before the job at Reservoir WS0194 on 16 May 2012, he had never been involved in a job with divers going onto the reservoir in a boat.
[47] Mr Hayward said that he did not understand the possibility put forward by Mr Cox and Mr Hobart as to the contactors of the fuse welding shut. He thought it was ‘pretty much impossible’ and said that he had never seen it happening or heard of it happening. There would have been no way for it to happen while it was de-energised. Mr Hayward ridiculed the suggestion that lightning could weld the ccontactors shut and said if lightning struck the Box it would be destroyed.
[48] In cross examination, Mr Hayward acknowledged the importance of safety on Sydney Water sites. He agreed that the Mixer Starter Panel and the Council Meter Panel boxes were on the same metal pole approximately 20 metres from the fence. He also agreed that you would need a key for the Jackson Lock in order to access the Council Meter Box. This key was one which many people have copies of.
[49] Mr Hayward admitted that he could not physically see Mr McGrath removing the three fuses from the Mixer Starter Panel and he did not see where they were physically placed afterwards. However, Mr McGrath told him that he had done so. He agreed it was possible that Mr McGrath only removed one of the fuses, but it would not have made a difference to ‘isolating’ the Box.
[50] When asked why he had not actually pulled the leads from the motor at the top of the reservoir, as he had originally suggested to Mr Cox and Mr Mossman, Mr Hayward responded:
‘Well, possibly, when you look at the LOTO tag out policy they don’t actually tell you how to do that job. It’s not - I wouldn’t say a preferred method. I was of the assumption at the time the job was done that the three fuses that were pulled were the supply fuses.’
[51] Mr Hayward emphasised that the LOTO procedure does not actually tell you how to do the job. He insisted that he had checked the top of the reservoir for any cathodic protection, but could not find any.
[52] Mr Hayward conceded that he did not actually see Mr McGrath put a tag on the outside of the Box, but he definitely saw it there when they left. In addition, it was physically possible for a tag to have been put inside the Box. However, he would not have tagged the actual fuses.
[53] Mr Hayward explained again why he had lied to Mr Cox and said if it had been anyone other than him and he had done something wrong, he would not have lied. He agreed he did not tell the truth to the decision maker, Mr Mossman, and challenged him to go out and look (which they did). Mr Hayward said that while he was aware that there had been a review which had concluded that the top of the reservoir had not been accessed, he was ‘95% sure’ that he went on top of the reservoir to check for cathodic protection. He now regretted his lies, it was not planned, it just happened in the morning of the interview. He was just trying to get himself and Mr McGrath out of trouble. If he had to do the same job again, he would not do so without consulting his supervisor.
[54] Mr Hayward agreed he was twelve months off being able to retire and to gain access his superannuation, but he did not believe it would last very long and he needed to work until at least 65 years of age.
[55] Mr Hayward explained that he had not called the SOC because the procedure says the SOC or the asset owner should be notified. As Sydney Water was the asset owner, he assumed all the paperwork had been put through.
[56] Mr Hayward said that when he went back to Reservoir WS0194 to re-energise, he looked on the ground and the fence line area for the missing tag. He assumed someone had taken it off. He noted that there had been issues with children climbing fences and causing damage to Sydney Water sites. He agreed that if the tag had been on the inside of the panel, then no children would have been able to access them, but went on to say that the team would not have been able to see them either.
Paul McGrath
[57] Mr McGrath is 60 years old and has been working for Sydney Water since 1969, the year after he left school, when he began work as an apprentice electrical fitter mechanic. At the time of his dismissal, he was employed as a level 4 Controls Technician. Mr McGrath had been a delegate of the Union over the previous twenty years. In his written statement, Mr McGrath said that prior to 2012, he could not recall having ever received a written warning from Sydney Water. While there had been an issue in 2009 regarding Personal Protective Equipment, he believed that this had been resolved without him being issued with a written warning.
The first investigation - Wiley Park
[58] Mr McGrath said that in early 2012, Sydney Water announced that it would be outsourcing the Electrical, Maintenance and Installation part of the business, a move which would directly affect his job. At around this time, Mr Cox began working as an Area Production Manager. Mr McGrath deposed that Sydney Water had made a number of allegations against him in relation to work purchases and the use of Sydney Water resources and facilities at a site in Wiley Park. He maintained that he had merely been working as other employees had. He believed that he may have been targeted for the investigation due to his position as a ‘senior and vocal delegate’ of the Union at Sydney Water.
[59] At the end of the investigation, Mr McGrath was handed a letter, dated 2 May 2012, which set out the allegations against him and the conclusions of Sydney Water following the investigation. It concluded as follows:
‘Considerations
In determining the action to be taken against you, we have taken the following into consideration:
• The nature of the substantiated allegations;
• The honesty displayed in your responses to the allegations;
• Previous documented non-compliance with Sydney Water policy on your Confidential Service File; specifically HSP-071 Protection from UV Radiation;
• You co-operated in the investigation process.
Outcome
This behaviour constitutes a serious breach of Sydney Water’s policies.
It is recommended that you be issued with a written warning for this behaviour.
It is further recommended that you be transferred to Bondi. This move will allow your performance and future compliance with Sydney Water policies to be more closely monitored.
This is your opportunity to put anything to us that should be considered before we make the final determination. We ask that you respond to us by 12pm Monday 7 May 2012, after which time we will consider all information you provide to us.’
[60] Mr McGrath made a written response in which he contended that the conduct he had been found guilty of had been approved by managers and/or was a regular course of conduct for Sydney Water staff. He denied that he had not complied with HSP-071 and said that he had not previously heard of this matter. He believed that the outcome proposed by Sydney Water was ‘harsh, unjust, unreasonable and biased.’
[61] Mr McGrath referred to clause 46 of the Agreement, which allows for an appeal procedure that works its way up four levels of management. Having appealed the decision, it was never finalised and he was never advised of any outcome. He could not recall receiving a copy of a written warning. He was moved to the Bondi Depot on 18 June 2012.
[62] Mr McGrath deposed that the LOTO procedure had been introduced about ten years ago. He could not recall any training being provided on how this procedure was to be applied to unmanned assets such as reservoirs and pumping stations. While the procedure works well on manned sites, like water and sewage treatment plant locations, the nature of the equipment on unmanned assets meant that there was no designated place to put tags, so ‘people would just put it where they thought it was best. Different people had different places.’ These problems had often been raised with supervisors and at toolbox meetings. He recalled doing so himself.
The alleged safety incident
[63] Mr McGrath deposed that he began work on 16 May 2012 at 6:30am. At 6:45am, he received a call from Mr Filipic in which he was asked him to meet Mr Hayward at Reservoir WS0194 in Yagoona. He arrived on site at 7:15am. When he arrived, he was told by Mr Hayward that they were to ‘isolate’ the Mixer to allow workers to enter the reservoir.
[64] Mr McGrath said that Mr Hayward told him that he had entered the risk assessment on his FRM. Mr McGrath agreed with his assessment that there was nothing out of the ordinary with the job. He had performed this type of work for Sydney Water ‘more than 20 times.’ He noted that when Sydney Water staff work in pairs, the job is only issued to one person. He assumed that Mr Hayward would handle the administrative requirements through his FRM. He had worked with Mr Hayward before and he would usually take responsibility for the ‘electrical power side of things’ with Mr Hayward acting in support. Mr McGrath worked on isolating the Mixer and Mr Hayward checked for cathodic protection (see para [16]).
[65] Mr McGrath said that he and Mr Hayward decided to use SWMS E01 and E04. Copies of these were annexed to his statement. Mr McGrath said that he inspected the Mixer Starter Panel and decided to do a control ‘isolation’ instead of a total power ‘isolation’, as it was not possible to do the latter as the power came from the Council Meter Panel. This panel had a universal Jackson lock which was a semi-auto lock. Further, it was not a Sydney Water asset and supplied power to the entire site. Accordingly, he believed the best way to ensure that the Mixer was ‘isolated’ and incapable of interference by third parties, was by isolating the Mixer Starter Panel itself.
[66] He proceeded to unlock the Mixer Control Panel Box door, then remove the screws from the inner control so as to open the panel. He tested for voltage on the contactor with his multimeter. This contactor pulls the three contacts together to connect line (supply) side to the load (Mixer) side. The testing showed that there was power supply to the contactor on the line side, but not on the load side. This meant there was no supply to the Mixer. He then removed the primary supply fuses and placed them at the bottom of the box. This was also normal procedure. He also removed the secondary supply fuse and put it at the bottom of the Box. He placed red insulation tape over the holders for each of the fuses.
[67] Mr McGrath deposed that, having performed the above procedure, he was satisfied that the Mixer was ‘isolated’. He was further satisfied that it could not be operated on site or by remote control, without undoing the steps which he had performed. Ideally, he would have preferred to lock the two switches, but this was not possible as there was no place to attach a lock. Accordingly, he locked the Mixer Starter Panel Box door using the lockable handle. He attached a yellow ‘out of service’ tag to the box. His name and phone number were on the tag, which was tied securely to the handle with string. His thinking was that it would have been of no purpose to attach a tag behind a locked panel door. After this was done, Mr Hayward told him that he was going to check the cathodic protection. He walked away. He and Mr Hayward left the site at approximately 8:00am.
[68] The next day, Mr McGrath was working again with Mr Hayward. He remembered that Mr Hayward received a call from Mr Filipic, who asked about the key to the Mixer Starter Panel. Mr McGrath asked Mr Hayward to inform him that he had used a No.68 electrical key. Mr Filipic should have had one of these keys.
[69] Mr McGrath deposed that at some point during the day, Mr Filipic directed he and Mr Hayward to return to Reservoir WS0194. When they arrived, Mr McGrath observed that the contractors were packing up. He also noticed that the tag he had attached to the door handle on the Mixer starter panel had been removed. He reconnected the power supply to the Mixer and reestablished the fuses in the Mixer Starter Panel. He tested the device and it was working normally. They both left the site shortly thereafter.
Compliance with procedures
[70] Mr McGrath responded in his written statement to each of the allegations put to him by Sydney Water (see para [2]). He disagreed with Allegation 1(a) that he did not take the steps needed to ‘isolate’ the electricity supply and Allegation 1(b) that he failed to ensure the ‘isolations’ were effectively tested. He was not able to ‘isolate’ the Mixer by way of three phase ‘isolation’. This would have required locking off the Council Meter Panel which was not a Sydney Water asset. Accordingly, the only viable option to perform a control ‘isolation’, was to remove the Mixer Starter Panel supply fuses, placing them at the bottom of the box and taping over the fuel sockets. He tested the supply to the Mixer Motor after he did this, by testing the supply line side (which showed a voltage present) and the load side, which did not. He formed the opinion that it was effectively ‘isolated’.
[71] Mr McGrath said that he had been aware of Mr Hayward checking for cathodic protection and finding none. As Mr Filipic was unable to access the Mixer Starter Panel, this supported his assertion that it was appropriately locked and ‘isolated’. He was told that Mr Filipic removed the fuses in the Council Meter Panel, so as to be assured of ‘isolation’, without tagging or locking it and that he had faced no sanction for doing so. As the SOC identified the stopping of the Mixer as a fault, this further proved that there was no power to the Mixer.
[72] Mr McGrath said that the above steps, in conjunction with the fact that there was no other source of energy to the Mixer Motor on site, indicated that there was no basis to Allegation 1(e) - that he failed to ensure that the ‘isolated’ equipment was proven to be ‘isolated’. He referred to Sydney Water Policy - HSP070 - Flow Management and ‘isolation’ of Hydraulic Assets, which was annexed to his statement. This procedure requires that the Asset Owner/Project Manager should be on site to ensure the correct form was filed out. The same person is also responsible for getting the OCR signed and sent to the SOC. As this did not happen on or before 16 May 2012, Sydney Water had not followed its own procedures.
[73] Mr McGrath disagreed with Allegation 1(c) - that he had failed to ensure that all ‘isolations’ had the appropriate tag applied and 1(d) - that those ‘isolations’ were locked out. He had filled out and attached the tag to the outer handle of the box. If he had attached it to the inside, it would have been necessary to open the box to see that the asset had been ‘isolated’. He stressed that there was no point at which a Sydney Water silver electrical lock could be attached and the best way of locking the ‘isolated’ asset was to lock the box using the outer handle. This problem has previously been brought to Sydney Water’s attention. The above facts also supported his denial of Allegation 1(g) - that he had failed to attach a yellow ‘out of service’ tag to the ‘isolation’ and Allegation 1(h) - that he had failed to attach an electrician’s lock to maintain the ‘isolation’.
[74] Mr McGrath denied Allegation 1(f) - that he failed to comply with the requirement that the effect of the ‘isolation’ of the Waste/Wastewater system shall be identified. While it was usual practice to contact the SOC for maintenance purposes, on this occasion, he did not contact SOC as he was called onto the job and he believed that SOC should already have been informed by an OCR. This was a failure of Sydney Water to abide by its own policy (HSP070). It meant that because there was no OCR, the SOC identified the issue as a fault and sent Mr Murdoch to attend the site in order to identify the reason the Mixer was not working. Mr McGrath denied Allegation 1(i) - that he knowingly made false statements in relation to safe work method statements E01 and E02. He was not sure as to what statements he had made which were alleged to be false.
[75] While Mr McGrath acknowledged that Allegation 2 - that he failed to complete the job in a timely manner - was withdrawn, he believed that the fact that the allegation was actually made, was unfair and made for the purpose of ‘padding out’ the investigation to give further scope to terminating his employment.
[76] Mr McGrath disagreed with Allegation 3 - that he had failed to use the FRM in accordance with policy. He had not used his FRM on 16 May 2012 as the job was allocated to Mr Hayward and accordingly was on his FRM.
[77] Finally, Mr McGrath disagreed with Allegation 4, - that he had created a serious hazard, had failed to provide a safe working environment and did not use safe systems of work. He rejected the notion that any risk or hazard had been created by his actions and reiterated that the Mixer Motor was electrically ‘isolated’ and that there was no supply to the motor. As a result, the Mixer was not capable of operation. The facts that the SOC noticed the Mixer had stopped and identified it as a fault supported his argument that there was no hazard, as did Mr Murdoch’s attendance on site and confirmation of the ‘isolation’.
The second investigation
[78] Mr McGrath said that he heard nothing further about the work he and Mr Hayward had performed on Reservoir WS0194 until he was informed on 24 July 2012 that the incident was the subject of an investigation by Sydney Water. At that time, he was working at the Bondi treatment plant. He was handed a letter by two managers, Mr Michael Cox and Mr Matt Duffy. It was in the same terms as the one handed to Mr Hayward (see para [2]). Like Mr Hayward, he was stood down on full pay and told to attend an interview with Sydney Water at a later date. He was very worried about his job and felt that Sydney Water was ‘after’ him.
[79] Mr McGrath deposed that shortly after, he had a conversation with Mr Hayward, in which he said that someone had told him that he had removed the control fuses, and not the three phase supply. The three phase supply was located in the Council Panel. He inferred from Mr Hayward’s comment that he thought that he had made a mistake by not removing the three phase supply. They had a conversation in words to the effect of:
McGrath: | We can just say that we disconnected the cables at the box on the roof of the reservoir. |
Hayward: | Ok. |
McGrath: | But what if we haven’t been on the roof? |
Hayward | Yeah I had access to the roof, I could have done it. |
They agreed to put this version of events to Sydney Water.
[80] Mr McGrath said that he realised, in hindsight, that he and Mr Hayward should not have done this, but he was ‘panicking’ and he ‘felt like Sydney Water were out to get me’. He had not read the LOTO procedure at the time. If he had, he would have known that they had already complied with the procedure and that there was no need to lie about the cables.
[81] Mr McGrath said that about a week later, a meeting was held with himself, Mr Weizman, Mr Cox and Ms Claire Saker from HR in which he was questioned about his work on Reservoir WS0194 on 16 May 2012. He queried what it was that he had not done in accordance with the procedure. This question could not be answered by the two Sydney Water representatives at the meeting. Mr Weizman drew a diagram on the whiteboard in the course of explaining that Mr McGrath and Mr Hayward had complied with the procedure. Mr Cox could not understand this explanation.
[82] Mr McGrath attended a further meeting on 20 August 2012 which included Mr Weizman, Mr Mossman and an HR Manager from Sydney Water. The representatives said that all of the allegations, except Allegation 2, were substantiated. Accordingly, the decision had been made to terminate his employment, despite his generally good employment record and length of service. He was told that he could respond to this outcome at a further meeting on 22 August 2012. He asked for a copy of the investigation and fact finding notes. Sydney Water told him that he would receive a copy of these documents, but he never did.
[83] A meeting was held on 22 August 2012 with himself, Mr Weizman, Mr Mossman and Ms Ching from HR attending. Mr Weizman told Mr Mossman that the investigation and its outcome were a ‘witch hunt’ and told him he should stop the course of action proposed. They walked out of the room and the meeting ended.
[84] A further meeting was held on 29 August 2012, with himself, Mr Weizman, Mr Mossman and an HR representative attending. Mr Mossman and Mr McGrath said, in words to the effect of the following:
Mossman: | We have done the investigations and we have three questions. Who put the lockout tag on the Mixer box? |
McGrath: | I did. |
Mossman: | Who did the ‘isolation’ up top of the reservoir? |
McGrath: | Maitland did. |
Mossman: | Who did the reconnection up top of the reservoir? |
McGrath: | Maitland did. |
[85] Mr McGrath acknowledged that his answers to the second and third questions were not true. They were a continuation of what he and Mr Hayward had agreed to say. He reiterated that he knew he had done the wrong thing and that he was very sorry for having done so.
[86] On 5 September, Mr McGrath attended a further meeting at which he was summarily terminated. He could not recall much of what was said at this meeting, because he was in a state of ‘total despair’.
Post termination
[87] Mr McGrath said that about a month after his termination, Dean Stafford, a former employee of Sydney Water who had left its employment in December 2011, told him that Mr Cox had said words to him to the effect of:
‘I am going to inflict a culture change at Sydney Water by targeting these older blokes. I am gunning for them and will use any means necessary, whether it be phones, safety and GPS or whatever to get rid of them. I don’t care if they know because I want them to know I’m after them.’
Mr McGrath claimed that four other employees of Sydney Water agreed that Mr Stafford had related this conversation to them as well. Mr Stafford forwarded an email to Mr McGrath (which was annexed to his statement) in similar terms.
[88] Mr McGrath noted that Sydney Water had put its maintenance employees on notice that their division will be outsourced from June 2013. As a consequence, should he not accept a job with the new employer, he may have been entitled to 120 weeks pay for redundancy and accumulated leave. He believed that this was a factor in the decision of Sydney Water to terminate his employment.
[89] Mr McGrath said that his dismissal had been a ‘disaster’ as he was 60 years old and had been unable to find a full time job in his field, although he had had some training and casual work in other areas.
[90] In oral evidence in relation to the Wiley Park investigation, Mr McGrath deposed that he had had 51 allegations put to him, while others had only had five or six. He said that senior management were also using the disused site at Wiley Park and that those people had not been subjected to the same disciplinary action as he had. He denied that he was given a First and Final Warning as a result of this investigation and could not recall having been given a copy of that warning. He said that he had asked for the decision to be reviewed and that Mr Cox conducted this review himself, being the ‘final judge and jury’.
[91] In response to allegations that the Sydney Water car he had been using had sustained damage that would cost somewhere between $13,000 and $15,000 to repair, Mr McGrath denied any damage was caused by him. He had arranged for an auditor to go through the car when he returned it. Any damage sustained must have occurred after its return to the depot and arisen from its further use by other employees. He said that he returned the phone, but kept the SIM card to get his phone number off it. He had not phoned out using that SIM card once he had been told to return the phone. He denied saying to Mr Cox, ‘Well, I handed back the phone, but the SIM card isn’t the phone, so I kept the SIM card.’
[92] Mr McGrath said that he could not recall being trained in the LOTO procedure or of any discussion of the procedure at toolbox meetings until after the incident of 16 May 2012. He said that the employees were unable to access safety policies on their FRM until December 2011. However, the screen was a small ten inch screen and reading from it was difficult and cumbersome. Before the policies were made available in this manner, a supervisor was required to hand out relevant documents. Sometimes they would not be received.
[93] Mr McGrath rejected the assertion that the contactors in the control fuse in the Mixer Starter Panel could close and said that there was no such thing as contacts of a control fuse. He said that what was probably meant by Sydney Water’s assertion was the welding together of the contacts of the contactor. Because of the design of the air gap in relation to contactors, there was no way they can weld together without human intervention. He disagreed that contactors ‘have a habit’ of welding together, calling this statement a ‘furphy’. Moreover, a lightning strike could not weld the contactors together. Rather, a lightning strike would simply destroy the box. He could not recall this matter being put to him in the investigation process.
[94] Mr McGrath denied that the Council Meter Box could have been locked by removing the Jackson lock, placing it in the bottom of the box and then locking it with a silver lock. The only way to lock the Council Meter Box would have been to get a special lockable device from the Council.
[95] In cross examination, Mr McGrath agreed that the principle behind the LOTO procedure was that the lock out prevents other people from accessing dangerous electrical equipment and, similarly, the tag out is performed to advise people that something has been done to a particular piece of equipment. He also agreed that while he could not recall having been trained in LOTO, it did not necessarily follow that he was not trained. He said that he knew of the procedure’s existence in May 2012, but ‘didn’t dot the i’s in knowing exactly but fundamentally knew what was needed in a Lock Out/Tag Out procedure.’ He had always complied with the procedure prior to May 2012.
[96] Nevertheless, Mr McGrath believed that he had complied with the LOTO procedure on 16 May 2012. Specifically, he said that he had complied with the requirement that ‘All energy sources into or within a device must be ‘isolated’ prior to work commencing’ in that he had ‘isolated’ every possible source that was capable of being locked. The Council Meter Panel was not capable of being locked off as someone had mistakenly put a Jackson lock on it. Locking off a device with a Jackson lock would not have complied with the procedure as it was not sufficiently secure. He agreed that he would physically have been able to access that Box.
[97] Mr McGrath agreed that if he did not turn off the power at the Council Meter Panel, then there would be an energy source leading into the Mixer Starter Panel. He agreed that the Mixer Starter Panel itself was not ‘isolated’. He had pulled out the fuses in the Mixer Starter panel and put red tape across the three sockets - this was a known electrical ‘isolation’ process. He denied that he had only removed one fuse, but could not remember which fuse he removed first. He then tested the Mixer Starter Panel to test the ‘isolation’, but did not change the position of the switches in the Box. However, this was irrelevant as there was no power to the contactor. He left them in the ‘on’ position. He was satisfied that no power could move to the Mixer at all.
[98] Mr McGrath agreed that the LOTO procedure required him to affix a yellow tag to the ‘isolation’ point. In this context, he understood the ‘isolation’ point to mean the Meter Starter Panel box as a whole. He contended that he had tied the tag securely to the external lockable handle. He did not accept that it would have been possible for the tag to have blown off.
[99] Mr McGrath said that after he had completed the ‘isolation’, he was not sure where Mr Hayward had gone. However, Mr Hayward saw him filling in the tag. Mr Hayward would have said something about it if they had left the site without putting the tag on.
[100] Mr McGrath agreed that there was a requirement to let the SOC know of the work being performed, but said that this was dependent on a HSP070 being filled out correctly and the asset owner notifying the SOC through a HSG045601 of the exact nature of the ‘isolation’. He could not recall seeing the FRM order from Mr Hayward and could not recall whether he had his own FRM with him that day. However, he remembered that Mr Hayward had been having trouble with his FRM.
[101] Mr McGrath said that when he returned to Reservoir WS0194 on 17 May 2012, he replaced the fuses in the Meter Starter Panel and also the supply fuses in the Council Meter Panel box. He had been told by Mr Filipic that somebody had removed the Council Meter Panel fuses. He noticed that Mr Murdoch had turned the ‘isolation’ switch off and had put a post-it note on the inside of the Mixer Starter Panel Box to this effect.
[102] Mr McGrath agreed that he received the letter dated 24 July (see para [2]) by hand on that date, but said that, although the letter referred to the LOTO procedure, he did not immediately refamiliarise himself with this procedure. This was because he did not have the procedure ‘just sitting around’. He could not remember exactly when he first refreshed his memory of the procedure, but it was in the first period when he and Mr Hayward had been stood down. He did not read it before being interviewed by Mr Mossman or Mr Cox. He said he generally struggled with reading and that he preferred to be physically trained on something.
[103] Mr McGrath acknowledged that he lied about having pulled the ‘tails’ at the top of the reservoir because his knowledge of the LOTO procedure was lacking at the time. Even so, he was confident that he had ‘isolated’ the supply to the Mixer. The pulling of the ‘tails’ would have had no technical effect in addition to what he had already done. He had lied because Mr Hobart inferred to him that in order to comply with HS049, he should have pulled the tails. This was inferred through Mr Hobart’s use of the words ‘totally ‘isolate’’. He admitted he had not previously mentioned this conversation with Mr Hobart. He had lied, not because he thought that the job had been performed poorly or dangerously, but because he had been given the impression that he had not complied with the procedure. He now knew this to be false.
[104] Mr McGrath agreed that he physically could have performed the ‘isolation’ on the Council Meter Panel, but he would have been unable to lock that Box with his own lock as this would have been contrary to the requirements of the electricity provider.
[105] In respect to the Wiley Park matter, Mr McGrath said that he recalled being hand-delivered a letter dated 28 February 2012, requiring him to attend a meeting with Mr Cox and a HR representative in relation to the allegations made against him (see paras [58] - [61]). He could also remember receiving a letter dated 2 May 2012 (see para [59]) setting out the investigation’s finding and recommending that a written warning be issued. However, he could not remember being handed a letter dated 16 May 2012, which was expressed as constituting a written warning issued after the investigation in early 2012, although he could not say for sure that he had not received it. He acknowledged being told that he was to be based at the Bondi depot and he did so.
Mr Stevce Stanojevic
[106] Mr Stanojevic has been employed by Sydney Water since January 1993 and is currently employed as an acting Facility Technician. He has an Electrical Trade Certificate, an Electrical Supervisor’s Certificate, an Associate Diploma in Electrical Engineering and an Electrical Contractor’s Licence. He is been a delegate of the Union for six years and is the current co-convenor. He also sits on the Occupational Health and Safety Committee.
[107] Mr Stanojevic deposed in his written statement that he had never worked directly with either applicant, but he knew Mr McGrath through his work as a Delegate. He regarded both applicants as honest and trustworthy.
[108] Mr Stanojevic said that he was often required to perform electrical ‘isolation’ on Sydney Water sites according to Sydney Water Policy. This included the use of the LOTO procedure. He has performed these duties at sewerage treatment sites, as well as water and waste water network sites. He had also encountered difficulties with the LOTO procedure, in that it does not, in itself, set out the steps which are to be carried out in order to ‘isolate’ particular assets.
[109] Mr Stanojevic drew particular attention to an example where the Main Switch attached to the starter cell circuit breaker at the Shellharbour Sewage Treatment Plant which, he said, had been broken due to the use of cheap plastic parts. Even if an ‘isolation’ lock were attached in this instance, it would still be possible to turn the switch on. He reported this issue in 2006 and was involved in the replacement of 10-12 switches in 2005-2006. However, Sydney Water continues to use these parts.
[110] Mr Stanojevic said that his own experience with Mixer Starter Panels at reservoir sites was that the lack of ability to put a lock through the main switch was an inherent problem. He annexed three photographs of a Mixer Starter Panel at Kiama which illustrated this point in that there was no hole in the switch. He said that this issue had been raised many times during toolbox meetings. He put both this problem and the problem with the Main Switch at the Shellharbour site down to poor tender specifications written up by Sydney Water. He believed this was an ongoing problem which Sydney Water did not want to spend money on to remedy.
[111] Mr Stanojevic said that after the applicants had been stood down, there was a toolbox meeting held at the Prestons Depot, convened by Mr Robert Barna (Supervisor) and Ms Jackie Carr (Northern Area Manager) on 26 July 2012, in which Mr Doug Hobart, the OH&S Representative gave a presentation on the LOTO procedure. During this meeting, Mr Stanojevic, Mr Glen Clapham, Mr Terry Brindley and Mr Ewen Young put their views that the many types of main switches and circuit breakers were problematic. Mr Brindley said words to the effect of:
‘There is no provision to lock out the main switch on the Mixer panels like of other sites can. In these circumstances I remove the control fuse and/or remove the motor leads.’
Mr Hobart responded that they should try to follow the LOTO procedure as best they could. Mr Stanojevic annexed a photocopy of a diary note that purported to record, amongst other things, the presentation by Mr Hobart and fact that he spoke to ‘Terry, Kinno, Barna and Nick’ in the carpark about ‘lock/tagout, FRM, same procedures etc.’
[112] Mr Stanojevic said that another toolbox meeting for Facility Technicians was held on 16 August 2012 at the Preston Depot. A number of employees raised the same concerns that had been raised by Mr Brindley. Ms Carr said words to the effect of: ‘Continue doing LOTO the same way you have for the last twenty years.’ A further diary note annexed to Mr Stanojevic’s statement records this comment. Mr Hobart was also present at this toolbox meeting.
[113] Mr Stanojevic deposed that he had not performed an asset ‘isolation’ on a Mixer Starter Panel before, but he had performed asset ‘isolations’. He said that his normal approach in this instance would be as follows:
a. Test my multimeter is working on a known power source.
b. Turn off the main switch.
c. Test to make sure the voltage is removed from the load side of the switch with my multimeter.
d. Remove the starter circuit fuse.
e. Test there is no voltage in the starter circuit with my multimeter. At this stage the asset is proven ‘isolated’.
f. Attach an Out of Service tag to the main switch only because these main switches have no provision for a lock.
g. Lock the panel with a key and attach an ‘Out of Service’ tag to the switch or outside the box (if the box was closed and there is somewhere to attach it.’
[114] Mr Stanojevic said that he would also test the motor leads and tape them together, although he did not think that this was mandated by the LOTO procedure.
[115] In oral evidence, Mr Stanojevic said that the initial training in the LOTO procedure tools took place about ten years ago. The next refresher training occurred in July 2012, after the applicants were stood down. He could not recall being trained in the procedure in 2006. He said that the safety policies were not easily searchable on Sydney Water’s intranet.
[116] Mr Stanojevic deposed that he had never performed an ‘isolation’ at a Council Meter Panel. It is preferable to perform the ‘isolation’ on the relevant Starter Control Panel. He would attach an ‘out of service’ tag to the outside of the Box, as it would not be visible if placed inside. In relation to the removal of the motor leads, he said that he would do this as a precautionary measure due to failures he had observed in the front of Starter Control Panels that cause the main isolator switch to turn even while locked. If it was possible to lock out the main isolator this should not be necessary.
[117] Mr Stanojevic further deposed that if he had arrived on a site and found one fuse removed and taped over in a Starter Control Panel, he would have turned it off and tagged it so as to allow him to determine what work had been done. He would not have considered removing the tape and reinstating the fuse as the tape was a sign that some work had been performed.
[118] Mr Stanojevic disagreed with the assertion that it was possible for contactors inside a fuse to weld together, and that statement may refer to contacts in a contactor. He doubted that it was possible for lightning to result in contactors welding together, as it was likely that all of the equipment inside the box would be destroyed. Otherwise, the air break between contactors can only be closed if something is physically inserted between them.
[119] In the course of his oral evidence Mr Stanojevic was shown a bundle of documents (Exhibit 6) that were said to relate to the approval of work on Reservoir WS0194. He observed that some of these documents were incomplete in that there were no signatures which indicated the assignation of responsibility. He noted that a document with a table dealing with Risk Assessment indicated that the hazard of a live electric Mixer should be dealt with by way of a site-specific plan implementing the LOTO procedure. Such a plan should have been communicated by the Project Manager to the supervisors and tradespersons who were intended to perform the work. On the form in question, this person was listed as a ‘J. Pilling’, but that person’s responsibility was not indicated. The form did not indicate that there was no suggestion that SOC had been notified of any asset going off line. A further document showed that the person in charge of the job did not see the need for a meeting to be held with ‘key players’ in relation to the site specific plan.
[120] In cross examination, Mr Stanojevic agreed that he would not view the type of paperwork referred to above in his day to day work performing maintenance or repairs. He was basing his assessment on his experience on the Occupation Health and Safety Committee.
[121] Mr Stanojevic said that the fundamental principles behind the LOTO procedure were proving the ‘isolation’ and the notification of the ‘isolation’ itself, usually by way of an ‘out of service’ or ‘Danger’ tag. The lock out is to occur wherever possible as there are some facilities where it is not possible to place a lock on a piece of equipment. A note of this should be placed on the tag. He agreed that a failure to attach a tag to show that an asset was dangerous or out of service would be a fundamental failure to comply with the LOTO procedure. He said that where it was not possible to attach a lock, a tradesperson would probably make a note on the tag that a lock cannot be attached. Generally a tag should be attached to the outside of a box so that it can be seen. If it was placed inside, a person without a key to the panel would not have been able to see that the asset was out of service.
[122] Mr Stanojevic said that on arrival to a site, the first place he would go to check was the Mixer Starter Panel to establish if it had supply, if any control fuses had been blown and then he would work methodically back from that. When asked why he would not remove power from the Mixer Starter Panel by working on the Council Meter Panel, Mr Stanojevic replied:
‘Like I said, we don’t do an ‘isolation’ - we don’t go back to taking the whole thing off. You would do it again at the ‘isolation’ - we don’t go back to taking the whole thing off. You would do it again at the isolator. It is where you ‘isolate’ your three phase supply. That is what it - on the board it says is a main isolator and that’s where you affix all your locks and your tags. That’s what the LOTO procedure refers to. ... You ‘isolate’ the load side of the main isolator. We don’t ‘isolate’ the line side of a main isolator, otherwise you’d be taking a lot of equipment offline. We don’t go back to, like, a main switchboard that has, you know, 20 or 30 panels on it to ‘isolate’ that particular one; so you will find that on the line side you have power still, on the load side is what you are taking all sources of energy off.’
[123] On being shown a photograph of the Mixer Starter Panel with three fuses, Mr Stanojevic said that in ‘isolating’ the asset, he would ‘probably’ pull all three out, although you could probably just pull the 24 volt control fuse. Having taken out the fuses, he also would probably have turned off the main ‘isolator’ switch.
[124] In re-examination, Mr Stanojevic said that if the ‘isolator’ switch iss left on but the control fuse is removed, the equipment would be safe unless somebody went into the panel to force the equipment. There was not much risk of the electricity getting to the Mixer Motor. This was because the three phase isolator only supplies the line side voltage, while the control circuit is what engages all the mechanisms, relays and switches through the circuit. On being shown a photograph of the Mixer Starter Panel, Mr Stanojevic said that he would put a tag around the lockable handle using a cable tie.
Mr Ewen Young
[125] Mr Young is 66 years old and has been employed by Sydney Water for 37 years. He is a Level 4 Electrician. While he understood that he was a Controls Technician, he noted that Sydney Water does not appear to use that term anymore. His work is comprised entirely of field work at different sites, on sewage pumping stations, water pumping stations, water reservoirs and valve chambers.
[126] In his written statement, Mr Young said that he had known both applicants for over twenty years and that he had worked with them directly on a number of occasions. He said that he had a good rapport with Mr McGrath and regarded him as someone who is honest, as possessing a great work ethic and as someone who would follow safety procedures. He also regarded Mr Hayward as honest and as being ‘one of the safest employees I have ever worked with at Sydney Water.’ His opinion was that there would be no problems at work if the applicants were reinstated. Mr Young deposed that although he was not directly aware as to why Mr Hayward and Mr McGrath had been terminated, he understood that their terminations flowed from work on a Mixer at a reservoir in Yagoona, New South Wales.
[127] Mr Young recalled that he had been trained in the LOTO procedure in or around 2000, but could not remember the details of that training and he had not been trained again since then. A few years later, staff were issued with personalised locks. He could not recall being given a copy of the LOTO procedure and had not read it, in full, until early 2012 when a problem had occurred in its application. On reading it, he noticed that it required that he be retrained in the procedure every two years.
[128] Mr Young explained that the above problem had arisen at a pumping station in Drummoyne, New South Wales when, in the course of a job, he crossed out the name of another person on a tag and wrote his own name on it. Mr Cox had explained to him that he should have used his own tag and offered him further training in the LOTO procedure. This training had not occurred. Mr Young was not told that he could be terminated for a breach of the LOTO procedure at this time, or any other time. He was not aware of any other employees being warned for not following the LOTO procedure.
[129] Mr Young said that many of the assets which Sydney Water staff worked on and which would be subject to the LOTO procedure, were incapable of having tags or locks attached to them. This issue had been brought up at a number of toolbox meetings. He remembered a specific toolbox meeting held at the Prestons depot after the applicants had been stood down at which a number of employees drew attention to these issues. At this meeting was Ms Jackie Carr (Team Manager) and Mr Barna (Supervisor), along with a number of Sydney Water employees. Mr Hobart, as Safety Officer, may have been at this meeting, but he was not sure. The employees were told by the managers that they should lock out ‘where they could’. He also recalled one of them saying that they should continue doing what they had been doing.
[130] Mr Young noted that he had performed an ‘isolation’ on a Mixer on a number of occasions. He said that the LOTO procedure did not prescribe the exact steps to be taken by the person performing the ‘isolation’ - this is left to the interpretation of that person. He had never been trained on the specific steps to be taken under the LOTO procedure. It does not mandate as to whether the Council Meter Panel or the Mixer Starter Panel is to be ‘isolated’. He was aware that different employees take different approaches. He noted that the Council Meter Panel could not be satisfactorily locked out as it can be accessed by non-Sydney Water personnel.
[131] Mr Young described his own procedure in ‘isolating’ a Mixer Motor as follows:
‘I would normally ‘isolate’ both the fuses at the distribution board and the control fuses at the Mixer Starter Panel. However I can understand an employee working under our LOTO procedure only ‘isolating’ the control fuses in the Mixer Starter Panel. If the control fuses are removed then power cannot be switched to the Mixer.’
[132] In oral evidence, Mr Young said that the last time he had undergone training in the LOTO procedure was ‘quite a while ago’ and he could not recall it being as recent as August 2006. However, it could have been. He could not recall what was said at this training. As a field worker, he did not really have access to computers to be able to examine procedure, unless at a depot, and he often forgot to do so. He could not recall being given a copy of the procedure prior to May 2012. Mr Young said that the LOTO procedure does not tell an electrician where to make an ‘isolation’, as every site is different.
[133] Mr Young deposed that he had been to work at Reservoir WS0194 himself two or three times, but not to perform work similar to the applicants. He disagreed with an assertion that in order to ‘isolate’ the Mixer, three fuses should be pulled from the Council Meter Panel. This was because he could not put a lock on it, as the energy supplier needed to have access. This meant it could not be locked out.
[134] In relation to the Mixer Starter Panel, Mr Young said that in order to ‘isolate’ the Mixer, you could pull out all three fuses, or you could pull the 24 volt fuse which is the supply to the contactor. This would be sufficient. Mr Young said that he could not attach a lock to the Mixer Starter Panel box. The LOTO procedure provided that the ‘isolation’ lock should be attached ‘if possible’. It was not necessary to take the motor leads (‘tails’) out, as he had proven that there was no voltage moving through the contactor. Mr Young deposed that he would not replace a fuse in a situation where he had arrived on site to find an untagged Mixer Starter Panel with the control fuse removed, until he had determined what work had been performed and what the situation was.
[135] Mr Young did not understand what was meant by an assertion that ‘contactors inside the fuses’ could weld together. A contactor was a device in itself that was entirely separate to a fuse. There was no risk of a contactor welding together if the fuses had been removed. If lightning had hit the Box, the Box would have been destroyed. He had seen this happen. There was no part of an ‘isolation’ procedure that could protect against lightning anyway.
[136] Mr Young recalled that he had been interviewed about the decommissioned Wiley Park site. The interview focused on why he used the site and why he had left a vehicle report book there. At the end, he was told that there was no case to answer, but something would still go on his record.
[137] In cross-examination, Mr Young said that he had come across contactors that had welded together, but only in circumstances where the contact is already made, in a closed position. It was not possible for the contactors to weld closed where the fuses were removed.
[138] Mr Young agreed that it was physically possible to pull the fuses out of the Council Meter Panel. However, he would not do this because he would not have been able to lock it to his satisfaction and therefore he would deem this to be unsafe. He was not aware of the processes that the energy authorities undertake to access their facilities on site.
[139] Mr Young disputed that working on the Mixer Starter Panel while energy was flowing into it, violated the LOTO procedure which says that energy sources should be ‘isolated’ prior to commencing work on a device. Electricians are aware of what circuits and wires are ‘live’. He agreed that pulling the motor leads from the Mixer at the top of the reservoir would have completely eliminated the risk. While the overriding purpose of the LOTO procedure may have been the total elimination, rather than control of risk, the LOTO procedure merely states that all energy to the device, in this case the Mixer, must be isolated’. He added that if the job in question had been done by way of pulling the 24 volt control fuse, taping over the fuse socket, placing the fuse at the bottom of the Panel Box and left with no tags, he would not describe that as a job done properly.
[140] Mr Young agreed that the LOTO procedure normally required the worker to ring the SOC prior to starting the job and to call them after it was completed. This was normal procedure. This was something that an experienced Sydney Water electrician should know.
[141] Mr Young said that he was not aware that the applicants had lied during the course of the investigation and was surprised to learn that this was the case.
[142] In re-examination, Mr Young said that he understood the word ‘work’ in relation to the LOTO procedure requirement that no work should occur on a ‘live’ device, referred to work of the person fixing the Mixer.
[143] Mr Young said that normally contact with the SOC occurred in the context of arriving on site to fix a breakdown. On an ‘isolation’ job, an electrician should have been given an OCR. This is generated by the person or manager wanting the job done. Normally, SOC would be aware of the job prior to the person requesting to perform an ‘isolation’ arrived to start work.
[425] William C, in Thompson v John Holland [2012] FWA 10363, after referring to the above Full Bench decision, said at para [151]:
‘[151] I find then that the applicant’s refusal to answer direct questions as to whether he had recorded other private workplace conversations was a failure to be open and honest and cooperative when the respondent was asking reasonable, pertinent questions and consequently this was also a valid reason for his dismissal.’
[426] Two further matters require comment. Firstly, as to the claim of Mr Hayward that his FRM was faulty on 16 May 2012, Mr Cox believed he was being dishonest to cover up his failed reporting of the job. FRM entries earlier in the day disclosed no fault. Mr Hayward reported the fault to Mr Filipic (who confirmed he had raised the complaint) later in the morning of 16 May 2012. While not much turns on this matter, it seems plain that Mr Hayward would not have known about Mr Murdoch’s visit to the site the next day or that he would be later accused of breaching the LOTO procedure. In other words, there was absolutely no reason why Mr Hayward would have concocted a story about a faulty FRM so soon after the incident itself and with no knowledge of its consequences.
[427] Secondly, as to the warning given to Mr McGrath in May 2012 over the Wiley Park incident, I do not consider that it is relevant in the context of the decision to dismiss him for an alleged serious safety breach. Let me explain. There were some very curious features of the Wiley Park incident. First and foremost, what on earth was Management doing (more correctly, not doing)in being unaware its employees were attending and purchasing stores and equipment for a supposedly decommissioned site? While I accept some Supervisors were disciplined, the procurement of certain items by Mr McGrath were in fact approved by them. Secondly, it is a very odd coincidence that on the same day as the substantive incident, 16 May 2012, the letter giving Mr McGrath a warning was said to have been given to him (which he denies). This was almost three months after he was informed of the Wiley Park investigation.
[428] Moreover, in my view Mr McGrath has a legitimate complaint that the initial recommendation was for a written warning (2 May 2012), but somehow, after a long interregnum, Mr Cox, who signed the disciplinary letter believed it was a first and final warning (16 May 2012). Mr Cox agreed his understanding was wrong and a warning was a less severe action than a first and final warning. While I have difficulty in accepting that Mr McGrath did not know the outcome of this investigation, because he actually attended Bondi and returned Sydney Water property, the fact is the disciplinary action remains outstanding because Mr McGrath had appealed the decision and understandably, there has been no outcome. Presumably, if he is reinstated, his appeal remains a ‘live’ issue for determination. In that context, it cannot be relevant to the decision to dismiss him.
Future Redundancies
[429] This brings me to consider the underlying theme of this case as speculated by the applicants and pressed by Mr Kennedy - that Sydney Water had targeted two long serving employees for dismissal in order to avoid future redundancy payments. A number of things must be said about this submission. While the present uncertainty (and indeed, this very issue is the subject of dispute proceedings before another member of the Commission) might have raised legitimate concerns in the applicants’ minds, in reality, their concerns are predicated on a number of hypothetical assumptions. These are:
a) as Sydney Water made clear, there is no guarantee, undertaking or expectation that all employees affected by the outsourcing will be able to volunteer for redundancy. Indeed, this is the opposite of what is intended;
b) it was put that Thiess is intending to reengage all of the affected employees with ongoing employment and a guarantee of redundancy for 12 months;
c) the affected employees seem to be under the impression that they will be able to access genuine redundancy entitlements when the work is outsourced, even if they are re-engaged by Thiess.
[430] I find it deeply troubling that employees, when faced with an outsourcing proposal, see it as an opportunity for a cash windfall, rather than accept comparable alternative employment; even more so where there is a preservation of entitlements, continuity of service and, in some cases, cash incentives to transfer. Redundancy is viewed with enthusiasm, even relish. Generous redundancy packages often prove to be a ‘double edged sword’ in so far as preserving jobs and employment are concerned. Like sick leave, I do not see redundancy benefits as entitlements. Redundancy should never be seen as a means of securing a financial windfall, when a positively acceptable and comparable job is the available alternative. This is my very strong philosophical view, underpinned by the beneficial and historic purpose of redundancy pay, which is that employees, who do not accept comparable alternative employment, have no claim to redundancy entitlements. This view is reinforced by s 120 of the Act, which permits an employer to apply for a reduction in an obligation to pay the National Employment Standards (NES) of redundancy pay (or pay nothing at all) if ‘the employer obtains other acceptable employment for the employee’ (s 120(1)(b)(i)). I accept, of course, that the argument of what is ‘comparable’ employment will often be in contest.
[431] Obviously the redundancy amounts for the individuals are substantial. However, they are inconsequential for a large public authority with a recent history of making large redundancy payments to genuinely redundant employees. To my mind, the theory that this was all about saving money for Sydney Water is fanciful. It is unhelpful to the applicants’ case because it directs attention away from establishing the real reason for the applicants’ dismissals.
[432] In addition, it stretches credulity to suggest that Sydney Water would have either planned a conspiracy of entrapment or availed itself of the convenient opportunity to construct a set of circumstances, on and after 16 May 2012, to ‘set up’ the applicants for their downfall. The incident prompting the allegations might have simply gone unnoticed had it not been for a fault alarm being activated and Mr Murdoch being called out to investigate what was then thought to be a fault. To suggest that this was all part of a foreseen plot or some form of capitalisation on an unforeseen opportunity is, to my mind, quite implausible and without any sound evidentiary base.
[433] Mr Kennedy further asserted that Mr Murdoch had a double motive to assist Sydney Water’s case against the applicants; firstly, that he had had a falling out with Mr Hayward after a long friendship and, secondly, he was seeking to be selected for a new Field Technician’s position. While there may be some superficial attraction to this assertion, I think it is to draw a long bow to suggest that Mr Murdoch wanted to cause harm to Mr Hayward. I say this because, firstly, it was mere coincidence that Mr Murdoch was called to the site to investigate a fault. At that time, he could not possibly have known that the applicants had performed the job. Secondly, there was some emphasis given to Mr Barna’s evidence that he may have told Mr Murdoch it was the applicants who had performed the job. Mr Murdoch has no recollection of being told at that point. Be that as it may, Mr Murdoch could not possibly have foreseen that disciplinary action and dismissal was going to be the end result. Nevertheless, while I find it unnecessary to make findings as to the credit of Mr Murdoch, I am bound to observe that I did not find him a particularly persuasive or confident witness. His evidence was unduly defensive and self-serving.
REMEDY
[434] The applicants seek reinstatement to their former positions without loss of continuity and payment of lost wages. Reinstatement is hotly opposed by Sydney Water, based in part on the applicants’ admitted dishonesty during the investigation. Determining a remedy for unfair dismissal is governed by the provisions of Ch 3, Part 3-2, Div 4 of the Act, which is as follows:
‘Division 4—Remedies for unfair dismissal
390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
391 Remedy—reinstatement etc.
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
Order to maintain continuity
(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:
(a) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.
392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.
393 Monetary orders may be in instalments
To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.’
[435] It will be immediately apparent that determining a remedy for an unfairly dismissed employee essentially involves a preliminary finding by the Commission that it is satisfied that reinstatement is inappropriate. It is only then can the Commission move on to consider compensation as the alternative to reinstatement; See: Holcim (Australia) Pty Ltd v Serafini [2011] FWAFB 7794.
[436] There is little doubt from the legislative scheme, that the primary remedy for unfair dismissal is reinstatement. This arises from both the requirement on the Commission to positively find that reinstatement is inappropriate and from the express objects of Part 3-2 of the Act (s 381(1)(c)) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.
[437] The well known authority dealing with the practicality of reinstatement is that found in Perkin v Grace Worldwide 72 IR 186, where a Full Bench of the Industrial Relations Court of Australia said at pages 191-192:
‘If the Court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the Court carefully scrutinise any claim by an employer that reinstatement is impracticable because of a loss of confidence in the employee.
Each case must be decided on its own merits. There may be cases where any ripple on the surface of the employment relationship will destroy its viability. For example the life of the employer, or some other person or persons, might depend on the reliability of the terminated employee, and the employer has a reasonable doubt about that reliability. There may be a case where there is a question about the discretion of an employee who is required to handle highly confidential information. But those are relatively uncommon situations. In most cases, the employment relationship is capable of withstanding some friction and doubts. Trust and confidence are concepts of degree. It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether that standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party.
It may be difficult or embarrassing for an employer to be required to re-employ a person the employer believed to have been guilty of wrongdoing. The requirement may cause inconvenience to the employer. But if there is such a requirement, it will be because the employee's employment was earlier terminated without a valid reason or without extending procedural fairness to the employee. The problems will be of the employer's own making. If the employer is of even average fair-mindedness, they are likely to prove short-lived. Problems such as this do not necessarily indicate such a loss of confidence as to make the restoration of the employment relationship impracticable.’
[438] Mr Brus submitted that the nature of the safety breach and the applicants’ dishonesty to the investigators, was such as to render reinstatement inappropriate, because Sydney Water had lost trust and confidence in the applicants. However, I note that there was little supporting evidence from Sydney Waters’ witnesses that corroborated this submission. In any event, the views of management are not the only matters which are relevant in this context. In this respect, I refer to Regional Express Holdings Limited t/a REX Airlines v Richards [2010] FWAFB 8753, where the Full Bench said at para [26]:
‘[26] Whenever an employer dismisses an employee for misconduct, assuming the employer is acting honestly, there is an implied loss of trust and confidence in the employee. If it is subsequently found that the termination was harsh, unjust or unreasonable, it is appropriate to consider whether the relationship can be restored if the employee is reinstated. That question cannot be answered solely by reference to the views of management witnesses. All of the circumstances should be taken into account. In this case there is a number of relevant matters. They include the fact that not all of the conduct alleged against the respondent has been proven, the respondent’s apparently unblemished record in the performance of his flying duties over a period of 14 years, the fact that the misconduct is not directly related to the performance of the respondent’s professional duties as a first officer and Rex’s failure to pursue any substantial disciplinary action against another pilot who, it is alleged, has been guilty of misconduct at least as serious as that of which the respondent was accused. The significance of the last consideration is that the pilot in question is still carrying out the full range of his duties, despite allegations of conduct of a kind which, in the respondent’s case, is said to have led to an irrevocable loss of trust and confidence. Assuming a positive approach on both sides we find there is a reasonable chance that the employment relationship can be restored with the necessary level of mutual trust [my emphasis].’
[439] I consider the following factors militate in favour of a finding that reinstatement of the applicants would not be inappropriate:
• the alleged misconduct was not proven;
• the applicants have long and unblemished safety records;
• Sydney Water is a relatively large employer with over 4,700 employees;
• the applicants’ fellow workers, who might be said to be more closely interested in not working with an employee who is derelict in terms of safety, all gave evidence that they would have no difficulty working alongside either of the applicants;
• the incident involved a single job on 16 May 2012;
• the paucity of compelling evidence as to a loss of trust and confidence in the applicants;
• there was no evidence to demonstrate that the applicants would not comply with all of Sydney Water’s policies in the future; and
• there is unlikely to be a very long employment relationship between the applicants and Sydney Water when Thiess takes over the electrical/mechanical work in the near future.
[440] Against this, I have given earnest deliberation as to whether the applicant’s dishonesty effectively nullified all of the above matters and, accordingly, reinstatement would be inappropriate. As I said earlier, their dishonesty constituted, of itself, misconduct. However, I accept that:
• the applicants were ‘panicked’ by what appeared to be happening to them;
• they were contrite and very much regretted their dishonesty;
• there was no evidence of their dishonesty in any other respect. The lie can be genuinely viewed as a ‘one-off’;
• it takes some courage to admit in a public Court that one has lied to their employer and brought their reputation into disrepute.
[441] That said, this issue cannot be ignored. However, I propose to deal with it in another way. I have in mind the approach adopted by the majority in Lawrence where it was said:
‘[44] We think it appropriate that there be a deduction from the amount ordered pursuant to s.391(3) to reflect a material sanction for Mr Lawrence’s misconduct. We have decided that there should be a deduction equivalent to three months’ salary (an amount in the order of $30,000) from the amount ultimately ordered. 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. It ought be unnecessary to say that this is a case that, in terms of outcome, turns on its own particular facts.’
See also: Nguyen v IGA Distribution (Vic) Pty Ltd [2011] FWA 3354.
[442] In balancing all the relevant factors in this case, I find that reinstatement of both applicants is not inappropriate. The applicants were dismissed over seven months ago. I am unaware of any specific remuneration they have earnt since then. In any event, pursuant to s 391(2) of the Act, I propose to make an order for lost remuneration of three months pay only. This will send a strong message to the workforce that employees must not only cooperate with disciplinary investigations, but be open, frank and honest during such investigations.
[443] Further, I propose to make orders pursuant to s 391(2) of the Act to maintain the continuity of the applicants’ employment, as if their dismissals had not occurred on 5 September 2012. Orders giving effect to my conclusions will be issued contemporaneously with this decision.
[444] Finally, reinstatement of the applicants shall be effected within 14 days of today or such earlier time as may be agreed by the parties. The parties are to agree on the precise dollar terms of my limited orders for lost remuneration. Any disagreement may be referred back to the Commission for final determination.
DEPUTY PRESIDENT
Appearances:
Mr J Kennedy, Solicitor, with Mr D Weizman, for the applicants.
Ms E Brus, Counsel, instructed by Mr A Doughman, Solicitor, for the respondent.
Hearing details:
2013.
Sydney:
4 February, 5 February, 6 February, 6 March
Printed by authority of the Commonwealth Government Printer
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