Mr Gary McDermott v BHP Coal Pty Limited

[2016] FWC 2706

[2016] FWC 2706

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Gary McDermott
v
BHP Coal Pty Limited
(U2015/16219)

COMMISSIONER SPENCER BRISBANE, 5 MAY 2016

Application for relief from unfair dismissal – interlocutory application and legal representation of the Respondent.

Introduction

[1] This decision relates to an interlocutory application in relation to the application of Mr Gary McDermott (the Applicant) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy, alleging that the termination of his employment from BHP Coal Pty Ltd (the Respondent) was harsh, unjust or unreasonable.

[2] The Construction, Forestry, Mining and Energy Union (the CFMEU) made the application behalf of their member Mr McDermott, seeking reinstatement to his position at the Saraji mine. The interlocutory application by the Respondent sought to exclude the Applicant re-opening the Step 2 warning in the unfair dismissal proceedings.

[3] The Respondent’s representative sought directions pursuant to rule 7 (set out below) of the Fair Work Commission Rules 2013, as follows:

7 Application for directions on procedure

(1) A person who wants to initiate a matter, or take a step in a matter, may apply to the Commission for directions about the procedure to be followed in relation to the matter if:

(a) the procedure is not prescribed by the Act, the Regulations, these Rules or by or under any other Act or regulations; or
(b) the person is in doubt about the proper procedure to follow.

Note: The application must be in the approved form—see subrule 8(2).

(2) Any action taken in accordance with a direction of the Commission made in response to an application under subrule (1) is regular and sufficient.

[4] Both parties filed materials in relation to the interlocutory application and the interlocutory matter was heard on Tuesday 26 April 2016.

[5]  The CFMEU was represented by Mr Rowan Anderson, Legal Officer, CFMEU. The Respondent was represented by Mr Michael Coonan, Partner, Herbert Smith Freehills solicitors. The Respondent’s representative appeared, by consent, at the interlocutory proceedings and as part of these proceedings, the parties also filed submissions in relation to the Respondent’s application for permission to be legally represented at the substantive hearing pursuant to section 596 of the Act. The CFMEU opposed the Respondent’s legal representation for the substantive hearing and this Decision also deals with this issue.

Background

[6] The interlocutory application sought directions that certain paragraphs of the Applicant’s witness statement and other clauses of other witness statements be struck out, insofar as they dealt with the Applicant’s Step 2 warning. This evidence that the Respondent sought to be excluded challenged the Respondent’s decision to issue the Step 2 warning and the appropriateness of the application of that level of warning. The Respondent’s representative set out the background to this application in the application as follows:

“1. The Applicant was dismissed on 6 November 2015 due to his conduct in an incident on 15 October 2015, in breach of BHP Billiton’s Code of Business conduct and Charter Values.

2. At the time of the Applicant’s dismissal, he was the subject of a separate ‘Step 2’ written warning, issued on 15 July 2015 following a breach of an operating procedure on or about 28 June 2015 (safety breach).

3. Regarding the Step 2 written warning, the Applicant:

(a) agreed with the Respondent’s finding that the was a breach and that a ‘Step 2’ was appropriate disciplinary outcome (1); and

(b) at the time did not challenge the ‘Step 2’ written warning either informally, or formally in accordance with the dispute settlement procedure at clause 37 of the BMA Enterprise Agreement 2012.

4. As part of this hearing, the Applicant now seeks to challenge the Respondent’s decision to take disciplinary action in July 2015 and the level of disciplinary outcome (2).

(1) Just Culture Decision Tree, annexure “GM01” to the Applicant’s Statement dated and filed 18 March 2016
(2) Applicant’s Outline of Submissions at [4(g)], [20] and [36]” 1

[7] It was argued on behalf of the Respondent that the attempt to now litigate the Step 2 warning as part of the unfair dismissal proceedings, was an abuse of process and that the appropriate time for undertaking such challenge was within the 14 day period provided, under clause 37 of the BMA Enterprise Agreement 2012 (the Agreement). It was stated that the relevant procedure for dealing with disputes in the Agreement is clause 37.

[8] The Respondent set out the basis for this preliminary application as follows. The Respondent’s representative also provided a set of amended directions, as part of the Application.

“5. It is an abuse of process for the Applicant to use the unfair dismissal application and this forum to challenge a disciplinary outcome over three months prior to the incident leading to the termination subject to these proceedings, particularly in circumstances where:

(a) the disciplinary outcome was not challenged; and

(b) there was ample time for it to have been challenged at the time.

6. The Applicant’s actions will extend the length of the hearing and increase the number of witnesses, creating undue burden on the Respondent due to the cost and resources involved in defending its decision at the hearing. Equally, the Commission will be put to the unnecessary burden of hearing additional evidence.

7. The hearing currently listed for 4 days, can be expedited with issues contained to the key issues in dispute, namely, whether the decision to terminate was harsh, unjust or unreasonable.” 2

The Step 2 warning application

[9] The Respondent submitted that the Applicant was attempting to use this unfair dismissal process to challenge the outcome of a matter that occurred over 3 months before the termination and that this was an abuse of process.

[10] The Respondent referred to several case authorities in respect of “abuse of process” and submitted that what amounts to abuse of process is not susceptible to a formulation comprising closed categories 3.

[11] The Respondent submitted that, although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories, according to the relevant authorities; the court's procedures are invoked for an illegitimate purpose; the use of the court's procedures is unjustifiably oppressive to one of the parties; or the use of the court's procedures would bring the administration of justice into disrepute 4. Further, it was submitted that even a procedural step in the course of proceedings that have been properly instituted is capable of being an abuse of process5.

[12] In summary terms, the Respondent has argued issues of prejudice in having to adduce evidence in relation to this warning, which the Respondent stated, the Applicant had previously accepted. The warning occurred in July 2015, over three months before the Applicant’s employment was terminated on 6 November 2015. The Respondent argued that, given the lapse of time since this warning to the current date, the obligation to pursue relevant witness evidence and for those witnesses to have an accurate recollection of these events will provide difficulty. These matters and procedural fairness issue have been taken into account.

[13] The CFMEU denied that the inclusion of the Step 2 warning material was an abuse of process.

[14] The CFMEU submitted that the while Respondent has alleged an abuse of process, they had not provided authority that what is alleged amounted to an abuse of process.

[15] With respect to the issue of undue delay argued by the Respondent, the CFMEU distinguished the present circumstances, involving a written warning issued three months before the termination, to that in the case relied on by the Respondent, in Batistatos 6, where a claim was taken for negligence 29 years after the incident in question7. The CFMEU submitted that, in that case, the critical issue was whether there was a “burdensome effect upon the defendants of the situation that has arisen by lapse of time”8. The CFMEU submitted that the current circumstances were drastically different.

[16] The CFMEU also submitted that there has been no abuse of process occasioned by the apparently alleged re-litigation of the warning, as the warning has not previously been subject to a relevant final determination. It was submitted that it could not be the case that the employer’s decision to issue the warning in itself was a final determination within the bounds of existing precedent on abuse of process. It was submitted that, in the Decision of Rogers v R 9, relied on by the Respondent, all of the references to a final determination related to determinations made by a judicial officer.

[17] The CFMEU relied on the Full Bench Decision of the Australian Industrial Relations Commission in King v Freshmore (Vic) Pty Ltd¹⁰ and submitted that the Commission must resolve any factual disputes on the evidence that is put before it. The CFMEU further submitted that the fact that the Applicant did not previously pursue or challenge any relevant dispute under the relevant disputes procedure is not a bar to the issue now being ventilated as part of the unfair dismissal proceedings. Mr Anderson of the CFMEU made a general submission that many dispute settlement clauses do not contain an ability to challenge matters arising in the course of employment and there may be various reasons why challenges are not made to warnings issued in the course of employment.

[18] The Applicant’s statement dated 18 March 2016 contains the following passage:

“I did not formally dispute the warning that was issued. I took the issue on board and was very careful to ensure that there was no repeat of the incident in question, and there was not. I did not believe at the time, and still do not believe that a Step 2 Warning was warranted in the circumstances…” 11

[19] It was submitted by the CFMEU that the statement of the Applicant has not been tested in cross-examination. The CFMEU pointed out that it was the Respondent’s submission 12 that the Applicant took the warning itself on board, however, the statement of the Applicant is that he took the issue on board13.

[20] Further, the CFMEU submitted that it cannot be said on the basis of the Just Culture Decision Tree document 14 that the Applicant admitted the alleged breach. It was submitted that the authorship of the relevant document is not yet a matter of evidence and the wording used tends to suggest that the relevant document is to be completed by the disciplinarian rather than the employee.

[21] Mr Anderson of the CFMEU, on behalf of the Applicant, submitted as follows:

“It also cannot be said that the challenge to the written warning has been made for an improper purpose. There simply is no improper purpose. The Applicant is pursuing an application for unfair dismissal where the Respondent has relied, at least to some extent, on the previous written warning as grounds to establish justifiable termination. The written warning was brought into play due to the Respondent’s reliance upon it.” 15

[22] The Step 2 warning forms part of the factual matrix in this case. It was set out on the Show Cause document provided to the employee, profiling the events leading to the consideration of the termination.

[23] It is well known that the Commission is not strictly bound by the rules of evidence and can take into account all relevant matters. Taking this into consideration and the arguments made, it would be premature and a denial of procedural fairness to prevent the Applicant from conducting its case in the terms sought. 

[24] In allowing the Applicant to present their case with reference to the Step 2 warning, they are on notice from the Respondent as to the issues associated with arguing the Step 2 warning, in circumstances where it was not previously challenged. The Respondent has raised a series of issues for consideration in relation to reasonable challenges to the reopening of the Step 2 warning, given that it was not pursued in accordance with the prescribed procedure in the Agreement. These matters will form part of the considerations of this issue at the substantive hearing.

[25] Whilst the application by the Respondent to exclude certain evidence in relation to Step 2 warning is dismissed, it is recognised that procedural fairness should apply to the Respondent in being provided with additional time to respond to this new evidence. Accordingly, to accommodate the Respondent’s need to file the additional evidence, the current Directions will be amended. These amended Directions will be provided separately.

Legal Representation

[26] This Decision is made in respect of the question as to whether the Commission should grant permission for the Respondent to be represented by lawyers or paid agents, pursuant to s.596 of the Act. Both parties filed material in relation to this issue.

[27] The relevant provisions of the Act are set out in s.596(1) and (2):

“596 Representation by lawyers and paid agents

(1) Except as provided by subsection (3) or the procedural rules, a person may be represented in a matter before the FWC (including by making an application or submission to the FWC on behalf of the person) by a lawyer or paid agent only with the permission of the FWC.

(2) The FWC may grant permission for a person to be represented by a lawyer or paid agent in a matter before the FWC only if:

(a) it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or

(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or

(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.

...”

[28] The Federal Court in Warrell v Walton 16 considered the matter of permission to appear, pursuant to s.596 of the Act. Justice Flick stated:

“A decision to grant or refuse “permission” for a party to be represented by “a lawyer” pursuant to s 596 cannot be properly characterised as a mere procedural decision. It is a decision which may fundamentally change the dynamics and manner in which a hearing is conducted. It is apparent from the very terms of s 596 that a party “in a matter before FWA” must normally appear on his own behalf. That normal position may only be departed from where an application for permission has been made and resolved in accordance with law, namely where only one or other of the requirements imposed by s 596(2) have been taken into account and considered. The constraints imposed by s 596(2) upon the discretionary power to grant permission reinforce the legislative intent that the granting of permission is far from a mere “formal” act to be acceded to upon the mere making of a request. Even if a request for representation is made, permission may be granted “only if” one or other of the requirements in s 596(2) is satisfied. Even if one or other of those requirements is satisfied, the satisfaction of any requirement is but the condition precedent to the subsequence exercise of the discretion conferred by s 596(2): i.e., “FWA may grant permission...”. The satisfaction of any of the requirements set forth in s 596(2)(a) to (c) thus need not of itself dictate that the discretion is automatically to be exercised in favour of granting “permission”.

The appearance of lawyers to represent the interests of parties to a hearing runs the very real risk that what was intended by the legislature to be an informal procedure will be burdened by unnecessary formality. The legislative desire for informality and a predisposition to parties not being represented by lawyers emerges, if not from the terms of s 596, from the terms of the Explanatory Memorandum to the Fair Work Bill 2008...” 17

[29] The Explanatory Memorandum to the Fair Work Bill’s introduction in 2008 relevantly reads as follows:

“2291. FWA is intended to operate efficiently and informally and, where appropriate, in a non-adversarial manner. Persons dealing with FWA would generally represent themselves. Individuals and companies can be represented by an officer or employee, or a member, officer or employee of an organisation of which they are a member, or a bargaining representative. Similarly, an organisation can be represented by a member, officer or employee of the organisation. In both cases, a person from a relevant peak body can be a representative.

2292. However, in many cases, legal or other professional representation should not be necessary for matters before FWA. Accordingly, clause 596 provides that a person may be represented by a lawyer or paid agent only where FWA grants permission.

[...]

2296. In granting permission, FWA would have regard to considerations of efficiency and fairness rather than merely the convenience and preference of the parties.”

[30] The application of s.596 of the Act allows the Commission to exercise discretion to grant permission in formal proceedings, however, as set out, this is not automatic. The discretion afforded to the Commission will be exercised on the facts and circumstances of the particular case, against the legislative tests 18.

[31] In considering the grant of legal representation, the Commission is required to establish that the prescribed conditions exist prior to exercising the discretion to grant permission. Accordingly, if the prescribed conditions are considered to be in existence, the discretion to grant permission for a person to be represented by a lawyer or paid agent will be exercised in favour of the person. This assessment of the prescribed conditions is an objective exercise.

[32] The resources and circumstances of the Respondent’s personnel identified by the CFMEU as being able to accommodate the representation at hearing have been considered.

[33] The Respondent submitted that it was not for the CFMEU to determine whether someone can represent the employer in this matter; it is whether the person who represents the employer does so in the interests of efficiency and to assist the Commission. Further, the Respondent referred to the Decision in National Tertiary Education Industry Union v The University of Notre Dame Australia 19(Notre Dame) as authority for the test being not whether someone has the ability or the legal qualifications or the industrial qualifications or can read the Act to represent the relevant party. The Respondent referred to the following passage in Notre Dame:

“The applicant is a registered organisation and as such one of its regular activities, and one in which it specialises, is to appear before this Commission in dispute arbitrations and it employs staff to do just that. Notre Dame in contrast is a University and the evidence is it does not employ staff to regularly appear in arbitrations before the Commission.” 20

[34] This matter also raises questions of the effectiveness of the representation. This issue has been dealt with by Senior Deputy President Richards as follows in the Decision of Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v UGL Resources Pty Limited (Project Aurora) 21:

“[11] That said, some guidance might be found in the definitional context of the adverb “effectively”, which is used in s.596(2)(b) of the Act.

[12] The Macquarie Dictionary (Revised Third Edition) defines “effective” in the following way:

Adjective 1. serving to effect the purpose; producing the intended or expected result: effective measures, effective steps towards peace. 2. actually in effect: the law becomes effective at midnight. 3. producing a striking impression; striking: an effective picture - noun 4. a solider or sailor fit for duty or active service. 5. the effective total of military force. Effectively, adv effectiveness n.

[13] The Australian Concise Oxford Dictionary (Third Edition) defines “effective” as:

adj 1a having a definite or desired effect. b efficient. 2 powerful in effect; impressive. 3a actual; existing in fact rather than officially or theoretically (took effective control in their absence). b actually usable; realisable; equivalent in its effect [...]. 4 coming into operation [...] 5 (of manpower) fit for work or service. [...] effectively adv. effectiveness n. [...]

[14] In the context used in the s.659(2)(b) of the Act, the adverb “effectively” is used to condition the verb “to represent”. Thus, a person must be unable to represent himself, herself or itself effectively in order for the requisite permission to be granted.

[15] It seems sufficiently clear that Parliament did not intend that permission to be represented be granted when a person is unable to be represented “satisfactorily”, “sufficiently” or “adequately” etc. These are not the adverbs that Parliament has put to work in s.596(2)(b) of the Act. Rather, the adverb performing the conditioning work upon the verb “to represent” in s.596(2)(b) of the Act is “effectively”.

[16] It appears, then, that before permission to be represented can be granted, a person must be unable to represent himself, herself or itself effectively, and following the plain language definitions of the Macquarie Dictionary (Revised Third Edition) and the Australian Concise Oxford Dictionary (Third Edition), this means the person must be unable to represent himself, herself or itself in a manner that creates a “striking impression”, or which has an “impressive” effect or which is “powerful in effect”.

[35] The remarks of Senior Deputy President Richards (set out below), in considering permission to appear, are also relevant to this matter, given the addition of this interlocutory proceeding. I agree with his assessment as follows:

“[26] I add that it is not always apparent that a particular issue in dispute is so self-evidently straight-forward so as to be free of any risk of escalation in its degree of complexity. This is particularly so where a conference may be a preliminary step towards an arbitral procedure, or where the conduct of the parties in the course of a conference may lead to arbitration being pressed. All processes being contiguous, in the circumstances observed it may be prudent in aid of the efficiency in the wider prospective conduct of a matter to grant permission to appear to a lawyer at the preliminary stage.(1)

(1) Such considerations as this may also ground an application for permission to appear under s.596(2)(b) of the Act. This much was alluded to in my earlier discussion.”

[36] There is some complexity to the matter, that has arisen, with the Respondent having to respond to a wide range of issues with the substantive matter (now determined) to include the Step 2 warning. This requires the Respondent to include further witness evidence and to cross-examine on this prior event in the substantive application.

[37] With respect to fairness between the parties, the Respondent argued that the Applicant will not be disadvantaged or prejudiced by the permission to appear being granted. It is considered that, given the assessment of the qualifications, skill, ability and frequency of advocacy appearances before the Commission by the Applicant’s representative, there will be minimal unfairness between the parties.

[38] It is considered that, as the issues in this matter have been enlarged and complicated by the addition of further witness evidence on the Step 2 warning, the efficient handling of the additional material and the associated cross-examination provides part of the reasoning that warrants representation of the Respondent by their solicitors.

[39] The addition of this matter regarding the Step 2 warning, has made the application more complex to conduct, in terms of the volume of material and the nature and implication of the material to the Respondent’s on-going operation of the business and the application of the disciplinary procedure. Therefore, the representation as sought to assist with the efficiency and the effectiveness of the conduct of the case and the approach to the Applicant’s and Respondent’s witness evidence on this additional matter.

[40] Taking into consideration sections 596(2)(a) & (b) 22 it is concluded that there would be no unfairness between the representation of the parties as a result of the Respondent being legally represented as sought. This is in circumstances where the CFMEU has an experienced legal officer23 and where the Respondent’s staff are unable to effectively represent the Respondent.

[41] For the reasons as set out, I grant permission pursuant to sections 596(2) (a), (b) & (c) to the Respondent to be legally represented as sought.

[42] I Order accordingly.

COMMISSIONER

Appearances:

Mr R Anderson, legal officer, CFMEU, for the Applicant

Mr M Coonan, Partner, and Ms C Jenkins Herbert Smith Freehills for the Respondent

Hearing details:

2016

Brisbane

26 April

 1   Application for Directions on Procedure filed by the Respondent on 18 April 2016.

 2   Ibid.

 3   Batistatos v Roads and Traffic Authority of New South Wales (2006) 227 ALR 425 at 9.

 4   Rogers v R (1994) 181 CLR 251 at 286; Batistatos v Roads and Traffic Authority of New South Wales (2006) 227 ALR

425 at 15; Haque v Jabella Group Pty Ltd & Anor [2016] FCCA 147 at 60.

 5   Rogers v R (1994) 181 CLR 251 at 286; Batistatos v Roads and Traffic Authority of New South Wales (2006) 227 ALR

425 at 15.

 6   Batistatos v Roads and Traffic Authority of New South Wales (2006) 227 ALR 425.

 7   Batistatos v Roads and Traffic Authority of New South Wales (2006) 227 ALR 425 at 434 and 435.

 8   Batistatos v Roads and Traffic Authority of New South Wales (2006) 227 ALR 425 at 442.

 9   Rogers v R (1994) 181 CLR 251 at 287 to 290.

10 Michael King v Freshmore (Vic) Pty Ltd – 283/00 M Print S4213.

 11 Statement of Gary McDermott dated 19 March 2016, at [25].

 12 Outline of submissions of the Respondent, dated 20 April 2016 at [4].

 13 Statement of Gary McDermott dated 19 March 2016, at [25].

 14   Annexure “CJ-01” to the affidavit of Christie Jenkins sworn and filed 19 April 2016.

 15 Applicant’s Outline of Submissions on Abuse of Process filed 26 April 2016 at [13].

 16   Warrell v Walton [2013] FCA 291.

 17   Ibid at [24]-[25].

 18   Rodgers v Hunter Valley Earthmoving Company Pty Ltd [2009] FWA 572.

 19   National Tertiary Education Industry Union v The University of Notre Dame Australia[2014] FWC 2409.

 20   National Tertiary Education Industry Union v The University of Notre Dame Australia[2014] FWC 2409 at [36].

 21   [2012] FWA 2966.

 22   Analogous to the circumstances in the case of Mr Justin Fisher; Mr James Davis; Mr Robert Shaw v Downer EDI Mining Pty Ltd [2014] FWC 2159.

 23  It was noted by the Respondent that a similar approach was taken in National Tertiary Education Industry Union v The University of Notre Dame Australia [2014] FWC 2409.

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