Mr James Martin v El Zorro Transport Pty Ltd (in Liquidation)

[2013] FWC 7114

[2013] FWC 7114

FAIR WORK COMMISSION

DECISION

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

Mr James Martin
v
El Zorro Transport Pty Ltd (in Liquidation)
(U2013/947)

COMMISSIONER STANTON NEWCASTLE, 18 SEPTEMBER 2013

Unfair dismissal application - summary dismissal - respondent in liquidation - s.471B of the Corporations Act 2001 - finding Commission has jurisdiction - drug and alcohol testing - Rail Safety Nation Law - rail safety work - respondent's testing procedures seriously flawed - applicant's conduct not deliberate or wilful - no procedural fairness - dismissal harsh, unjust and unreasonable - reinstatement ordered with an order to maintain continuity and restore lost pay. Application for relief from unfair dismissal.

[1] This matter arises from an application for unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) made by Mr James Martin (the applicant) in relation to his dismissal by El Zorro Transport Pty Ltd (the respondent).

[2] The applicant was summarily dismissed on 14 March 2013 for breach of the El Zorro Transport Drug & Alcohol Policy. The applicant was a locomotive driver and had been employed by the respondent since 25 November 2008. He sought reinstatement.

[3] The matter was set down for hearing on 20 August 2013. On 12 August 2013 my Chambers became aware the respondent’s Melbourne office had closed. A subsequent Australian Securities and Investment Commission search revealed the respondent was subject to external administration by HoskingHurst Pty Ltd (HoskingHurst).

[4] The matter was subsequently set down for Conference/Directions on 15 August 2013 where Mr W Dever, solicitor appeared for the applicant and Mr N Raja of HoskingHurst appeared for the respondent. During the course of that conference Mr Raja explained that HoskingHurst had been appointed Official Liquidators of the respondent. Mr Raja also advised the Commission that HoskingHurst had only become aware of the application on or about 13 August 2013. HoskingHurst advised it did not oppose the application and would not be attending the hearing scheduled on 20 August 2013.

Applicant’s evidence

[5] In a statement filed on 8 July 2013 the applicant deposed he commenced full-time work in Newcastle as a locomotive driver with the respondent on 25 November 2008. During the course of his employment the applicant received no disciplinary warnings from the respondent related to his performance or behaviour.

[6] During February 2013 the respondent suffered a major downturn in work for train crews based in Newcastle due to reduced demand for grain freight services between Cargill and the Port of Newcastle. There was, however, some work available transporting cement. As a consequence of the downturn in work the applicant was stood down with pay for much of February and early March 2013.

[7] It was the applicant’s evidence that he only worked 27.5 hours of his 160 four-week work cycle in February and March 2013. That work was confined to the transport of cement:

15 February	4 hours
23 February	8.5 hours
5 March	10 hours
11 March	5 hours

[8] Whilst he was stood down with pay, the applicant was not required to undertake any alternate duties with the respondent or attend the respondent’s Carrington office.

[9] On or about 12 March 2013, the respondent advised the applicant that there was “very little work time available” in the foreseeable future. There was possible work with the Australian Rail Track Corporation to carry out ballast works on the Victorian Rail Network between Albury and Seymour. The respondent also advised the applicant of an “Expression of Interest” (EOI) meeting on Wednesday, 13 March 2013 at 10:00am at its Carrington office.

[10] A copy of the respondent’s EOI concerning a temporary transfer to North East Victoria dated 7 March 2013 was attached to the applicant’s statement. 1 Attendance at the EOI meeting was not mandatory and the correspondence invited employees “who may wish to take up this offer” to simply contact the respondent’s nominated officers.

[11] The applicant attended the respondent’s Carrington office shortly prior to 10:00am on 13 March 2013. As he walked towards the office where the EOI meeting was to be conducted, the applicant was stopped by Mr Phillip Guest, Assets and Property Manager, to undertake a “pre sign-on random alcohol test.” The applicant maintained that at the time that he was stopped by Mr Guest he was not carrying out rail safety work. Shortly thereafter, Mr Guest informed the applicant that the first test returned a 0.014% Blood Alcohol Concentration (BAC). A second test which was conducted 13 minutes after the first test returned a 0.010% BAC result.

[12] The applicant contended Mr Guest was not authorised to conduct the BAC tests. In that regard, the applicant attached the relevant National Rail Safety Regulatory Notification Form 2 completed by Mr Guest concerning his test and noted the following aspects of the completed document:

(i) The “no” box had been ticked in relation to the question concerning whether the testing officer was “authorised.”

(ii) The random testing (pre-sign on) box had been ticked.

(iii) The “no” box had been ticked in response to the question, “Was the person carrying out rail safety work prior to the test?”

(iv) The “no” box had been ticked in response to the question as to whether at the time of the test had the worker shown any signs that he was under the influence.

[1] On the following day, 14 March 2013, the respondent provided the applicant with a letter of termination 3 summarily dismissing him:

Re: Notice of termination of employment

I refer to a scheduled meeting that took place yesterday, Wednesday 13th March 2013 at 10.00am at the Carrington Office.

At this meeting you participated in a pre sign on random breath test. The breath test was conducted by Phil Guest - Assets & Property Manager and witnessed by Rodney Henderson - NSW Operations Manager. Your first test was conducted at 10.05am with a positive reading of 0.014. Your second test was conducted at 10.18am with another positive reading at 0.010.

Taking this into consideration, El Zorro Transport has made the decision to terminate your employment. Your actions were in breach of the El Zorro Company Drug & Alcohol Policy (EZ-MS-901.9), the El Zorro Drug & Alcohol Management Procedure (EZ-P-091.5) and the Rail Safety National Law.

Given these circumstances, the Company wishes to terminate your employment with immediate effect. Please return all company equipment in your possession including but not limited to your mobile phone, radio and keys.

[2] In further evidence in chief, the applicant stated that ordinarily during the period of the paid stand-down, the respondent would give him a day’s notice of his requirement to attend for work to undertake locomotive driving work. He subsequently explained the “clock on” procedure comprised of a telephone call to the respondent’s Junee, NSW office.

[3] In relation to the EOI meeting conducted on 13 March 2013, the applicant explained he was not called in to “work” that day as there was no locomotive driving work available. In any event, he wore a t-shirt, casual pants and thongs to the meeting rather than the requisite “safety, PPE and boots.” 4

[4] The applicant stated that when approached by Mr Guest to undertake the test, he asked him if he could see his authority card. 5 The applicant also confirmed that he had not “clocked on” prior to the test as there was no suggestion that he would be performing any work related duties that day.6

[5] Shortly after receiving the Notification Form from Mr Guest, the applicant was told he was required to wait while the respondent’s head office in Melbourne considered the matter. Shortly thereafter, the applicant was told the respondent’s Managing Director, Mr Ray Evans had informed Mr Guest to “sack him.” 7

[6] The applicant’s understanding of the respondent’s Drug & Alcohol Policy was that it prescribed a limit of 0.02% BAC in accordance with the Rail Safety Act 2008 (NSW). 8 The applicant was unaware the NSW legislation was repealed from 20 January 2013 and replaced by the Rail Safety (Adoption of National Law) Act 2012 (the Rail Safety National Law) which reduced the prescribed limit to zero BAC. It was the applicant’s evidence that the respondent had provided no advice to employees concerning the change.9

[7] The applicant was unsure whether he had been inducted in the respondent’s Drug & Alcohol Policy:

If I was it would have been back in 2008. I’m not sure. 10

Submissions

[8] Mr Dever submitted he first became aware of the respondent’s insolvency when he, by chance read the decision of Brereton, J dated 8 July 2013 in the matter of El Zorro Transport Pty Ltd 11 who ordered the respondent to be wound up and appointed HoskingHurst the official liquidators.

[9] Mr Dever pressed the application on the grounds that the decision of the Full Bench of the then Australian Industrial Relations Commission in Smith and Ors v Trollope Silverwood and Beck Pty Ltd (in liquidation) 12 should be applied in this matter. Mr Dever also submitted the applicant’s reinstatement would enable him to access the Fair Entitlements Guarantee.

[10] Mr Dever submitted the respondent’s Drug & Alcohol Policy, 13 provided that fitness for duty procedures in respect of alcohol and drug use "are State specific.” A policy announcement dated 20 August 2008 and signed by Mr Evans inferred that the policy is non-punitive, with an emphasis on behavioural correction rather than punishment:

This Policy has been compiled in a manner that is as non-punitive as reasonably possible. Yet it includes measures that have been intended to deter/correct any errant behaviour that might compromise the health and safety of employees, the public and other stakeholders of the organisation. 14

[11] At the time of the test, the applicant’s evidence was that he was not working and had attended the respondent’s offices voluntarily for an EOI meeting. In that regard, Mr Dever sought to rely upon Regulation 6 under the Rail Safety (Adoption of National Law) Regulation 2012 (NSW) (the Rail Safety National Law) which states:

6 Test results may not be used for offence where worker had not commenced work

The results of any breach test, breath analysis, drug screening test, oral fluid analysis or blood or urine test conducted on a rail safety worker who was about to carry out work are not admissible in any proceedings for an offence under section 128 of the Rail Safety National Law (NSW).

[12] Section 218 of the Rail Safety National Law states it is an offence for a rail safety worker to carry out rail safety work while a prescribed concentration of alcohol is present in his or her blood. The applicant was not undertaking such work.

[13] Mr Dever also referred to the respondent’s Code of Behaviour 15 which included the following commitment to employees:

Recognition that you are part of the organisation and fully participate, including the opportunity to review actions that affect you.

[14] Mr Dever submitted the respondent’s decision to dismiss the applicant was a decision that in terms of the Code of Behaviour “affected him.” Moreover, the respondent did not give the applicant an opportunity to review his actions in allegedly breaching the Drug & Alcohol Policy nor was he afforded procedural fairness.

[15] Mr Dever stated the Rail Safety National Law required Mr Guest to be an authorised person pursuant to s.124 of that Act, where it require him as an authorised person to produce his identity card to the applicant when requested immediately prior or during the test conducted on 13 March 2013. It was also clear from the Notification Form related to the applicant’s drug and alcohol test that Mr Guest was not an authorised person pursuant to s.124 to conduct the test. Further, the applicant was not carrying out rail safety work prior to the test nor were there any signs that he was under the influence of alcohol at the time of the test.

Consideration and Finding

[16] Mr Dever urged the Commission adopt the principles enunciated by the Full Bench of the previous Australian Industrial Relations Commission. Smith is the sole Full Bench authority for the proposition that the Commission as it then was has jurisdiction has jurisdiction to hear and consider this application. In Smith, the Full Bench considered the effect of s.471B of the Corporations Act 2001, which provides as follows:

Stay of proceedings and suspension of enforcement process

While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with:

(a) a proceeding in a court against the company or in relation to property of the company; or

(b) enforcement process in relation to such property;

except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.

[17] Shortly stated, the Full Bench in Smith held that s.471B did not apply to the commencement or the continuation of proceedings in the Commission in circumstances where the company is being wound up in insolvency. The Full Bench found that the former Commission was not a court because it was not a body capable of exercising the judicial power of the Commonwealth:

[18] Since the Commission is primarily concerned with what rights there should be rather than with existing rights, the court could not supervise the exercise of the Commission’s jurisdiction in the same way in which it might supervise the exercise of jurisdiction by a court. The Commission is required to take policy considerations into account in deciding what rights should exist whereas a court is not primarily concerned with such questions. If Commission proceedings were subject to the leave requirement, in exercising its discretion on the question of leave in a particular case, the relevant court may have to take into account considerations additional to those which might be relevant if leave were sought in relation to court proceedings. It is a truism that the relevant court could not itself exercise the Commission’s jurisdiction and accordingly the nature of the supervision would be different on that account also. Because supervision of Commission proceedings would differ significantly from supervision of court proceedings, we think some specific indication would be required for an intention to appear that “court”should be given a meaning which differs from its defined meaning and which includes the Commission.

[19] We also think it is significant that the legislature has not included specific reference to the Commission and similar bodies. While one explanation is that the legislature has relied upon the decisions in Helm and Rochford and by implication endorsed those decisions by enacting the 2001 statute with the definition of court in relevantly the same form as it took in the preceding legislation, that explanation is negatived to a significant extent by the fact that the Commission has dealt with many applications involving companies in liquidation without the leave of the relevant court being obtained either for the initiation or the continuation of the applications ...

[20] If the legislature had intended to make proceedings in the Commission subject to the leave requirement it could have done so by express provision. An example of such a provision may be found in s.5 of the Suitors’ Fund Act 1951 (NSW) which defines court in these words:”includes such tribunals or other bodies as are prescribed.”

[18] The Full Bench position in Smith was adopted by O’ Callaghan SDP in Kylie Bruce v Fingal Glen Pty Ltd T/A Comfort Inn Adelaide Riviera. 16 The respondent in that matter was also in liquidation. I also observe that Jones C as she then was also adopted Smith in Jarrod Letizia v Australian Music Group T/A Allans Billy Hyde Music and John Joseph Ryan v AMG Shared Services Pty Ltd, Australia Music Group Pty Ltd, Allan Music Group Australia Pty Ltd, Allans Music & Billy Hyde Pty Ltd Trading as Allans Billy Hyde.17

[19] I find the Commission has jurisdiction to consider this application.

The statutory requirements

[20] Section 385 of the Act relevantly provides that a person has been unfairly dismissed if the Commission is satisfied that the person has been dismissed and the dismissal was harsh, unjust or unreasonable.

Was the Termination of Employment Harsh, Unjust or Unreasonable?

[21] Section 387 requires the Commission to consider the following factors when determining whether a particular applicant’s dismissal was harsh, unjust or unreasonable:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees);

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that FWC considers relevant.

s387(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees).

[22] The applicant’s evidence was that the respondent’s Drug & Alcohol Policy was consistent with the Rail Safety Act limit of 0.02% BAC. The Rail Safety National Law came into force in January this year and reduced the prescribed limit to zero BAC.

[23] The respondent’s position description EZ-PD-602 for Locomotive Driver dated 21 December 2012 and attached to the Form F3 Employer’s Response requires a locomotive driver to:

• Meet the requirements of the relevant State Act, Rules, Rail instructions - as per Rail Safety Act in each respective state as amended from time to time;



• conform to Drug and Alcohol Policies and Legislation; and



• comply with all Rules, Regulations, work site and work practices in accordance with OH&S guidelines within the appropriate State.

[1] There is no evidence before the Commission to suggest that position description EZ-PD-602 was given to the applicant prior to his dismissal. It is also curious as to why a position description dated 21 December 2012 would be generated with references to the Rail Safety Act and State rules when the NSW legislative regime was shortly to be repealed and replaced by the Rail Safety National Law.

[2] The Employer’s Responsestates the applicant’s conduct was in breach of Rail Safety National Law and the following policies:

• El Zorro Drug & Alcohol Policy (EZ-MS-901.1); and



• El Zorro Drug & Alcohol Management Procedure (EZ-P-019.5).

[1] A copy of the Drug & Alcohol Policy titled Fitness for Duty - Drugs and Alcohol New South Wales (EZ-P-019.4) issued 1 July 2006 was attached to the Employer’s Response. That Policy states:

5.0 POLICY

El Zorro is committed to complying with all drug and alcohol laws imposed by the state and federal governments and relevant safety boards. In particular, in New South Wales reference is made to the Rail Safety Act 2002, Rail Safety (Drug and Alcohol Testing) Regulations 2003 and ITSRR’s Guidelines Relating to Drug and Alcohol Programs. (emphasis added)

It is strictly forbidden for any worker engaged in activities affecting safety to be adversely affected by alcohol or other drugs (i.e. prescription or over the counter medications, herbal medicines or illicit drugs) when about to carry out, or whilst carrying out safety related work.

A zero blood alcohol policy is in place for all employees.

...

6.0 Education

Train crews complete a training module in Stage 1 on Fitness for Duty - Drugs and Alcohol. The Fitness for Duty Policy and this procedure are reinforced during continuation training. Managers, supervisors and other employees are informed of the Policy and procedure during induction and continuation training.

Continuation training includes any appropriate educational information issued by the relevant authorities, such as government health departments, regarding drugs and alcohol.

Through its continuation training, El Zorro will provide all employees with awareness of the importance of this Policy and this procedure. (emphasis added)

7.4 - Testing Officers

El Zorro will nominate and train suitable employees (eg the Operations Manager and/or Safety Manager and others from time to time) as testing officers to perform drug and alcohol testing per this procedure.

Training of testing officers will be conducted in accordance with ITSRR guidelines.

Where an employee is believed to be under the influence of a drug or alcohol, a testing officer may, if not immediately available to perform testing, request Police to test the employee on El Zorro’s behalf.

Testing officers must retain and produce on demand their Certificate of Competency Identifier Card indicating that they hold the office of an El Zorro testing officer. (emphasis added)

...

7.8 - Random or targeted testing

El Zorro will perform random or targeted testing of rail safety employees in the following manner.

Testing of 25% or more of rail safety employees will be carried out through a selection process based on identified risks per EZ-P-023 Risk Management. This testing may be random or targeted and is designed to increase safety through the reduction of risks associated with drugs and alcohol.

The testing officer may require any rail safety employee who is or about to perform rail safety work to undergo a breach test and/or a urine test. (emphasis added)

...

Positive results of random or targeted testing

Where an employee has not yet begun rail safety work, a positive result of a random test will be used in disciplinary proceedings against the employee. (emphasis added)

See procedure EZ-P-033 Disciplinary Proceedings and Employee Assistance.

Where a positive result is obtained, the testing officer will ensure the employee immediately ceases or will not begin rail safety work. Pending a formal interview with the General Manager, the employee is not permitted to perform rail safety work until further testing has established the employee is free from alcohol or drugs.

...

The General Manager will interview the employee and the testing officer or person who performed the test to determine the circumstances.

If it is found that the test was performed correctly, the employee is subject to disciplinary proceedings per EZ-P-033 Disciplinary Proceedings and Employee Assistance. (emphasis added)

[2] An undated copy of the respondent’s General Information Induction Kit for Employees and Contractors (ez-MS-906 v2) was also attached to the Employer’s Response. That document states:

Each employee has the responsibility to take reasonable care of their own health and safety and that of fellow workers, and to co-operate with agreed policies to assist El Zorro in fulfilling their responsibilities prescribed by relevant sections of State & Territory OH&S Acts. 18

[3] The Induction Kit sets out the following guideline concerning the drug and alcohol obligations of employees and contractors:

Drug & Alcohol Policy

El Zorro expects that all employees and contractors will carry out the full range of accountabilities associated with their role. This accountability includes upholding the highest possible standard of health and safety in the workplace. All employees go through a briefing session designed to familiarise them with El Zorro’s Drug and Alcohol education program. These “Fitness for Duty (EZ-P-019.2, 3 & 4) procedures are State specific and are to be addressed during the induction program. (emphasis added)

In order to uphold these standards company employees and contractors are required to make judgements regarding any employee or contractor’s capacity to meet these accountabilities. In some cases, an employee’s or contractor’s capacity to do so may be limited as a result of:

● The consumption of alcohol.

● The use of drugs (prescription, pharmaceutical or illicit)

This policy outlines the principles that will be used by El Zorro in determining fitness for duty with respect to alcohol and drug use. The processes that are to be implemented can be found in EZ-P-019 family of procedures, specific to each relevant State. These procedures will assist all personnel including Supervisory Staff and Managers in making those judgements, to correctly implement this strategy and in order to enhance the standard of health and safety in the workplace. 19

[1] The Induction Kit provides a very clear message to employees concerning the importance of compliance with this Policy. The Policy also imposes an equal or higher obligation on the respondent to ensure it also complies with all elements of the Policy and proactively engages when changes to legislation, regulations or standards occur as was the case with the introduction of the Rail Safety National Law in January this year.

Dispute Resolution Procedures

[2] The respondent’s procedures concerning dispute resolution, including specific disciplinary procedures, are set out under Section 4.1 of the Information Kit:

4.1 Disciplinary Procedures - EZ-P-033

These procedures are designed to:

● Encourage good work practices and improve individual performance and conduct where these do not meet El Zorro standards or do not comply with terms and conditions of employment.

● Ensure that all matters relating to employee conduct are investigated thoroughly and are dealt with promptly, fairly and consistently.

● Ensure that every consideration has been given to correcting unsatisfactory performance or conduct prior to disciplinary action being taken.

● Ensure that, other than in cases of serious misconduct, severe disciplinary action is taken only following appropriate counseling after formal warnings and always in consultation with your appropriate Manager and where applicable, the employee’s union representative. 20 (emphasis added)

[1] The Employer’s Response also included a single one page statement headed, Drug & Alcohol Policy authorised by Mr Ray Evans, Managing Director and dated 20 August 2008. That statement included the following paragraphs:

The Director’s of El Zorro have a Zero (.00) tolerance for Alcohol consumption or any adverse effect Drugs.

This Policy outlines the principles that will be used by El Zorro in determining fitness for duty with respect to alcohol and drug use. The processes that are in place can be found in Drug and Alcohol Procedures (States related), which will assist all personnel including Supervisory Staff and Managers in making those judgements, to correctly implement this strategy and in order to enhance the standard of health and safety in the workplace.

This Policy has been compiled in a manner that is as non-punitive as reasonably possible. Yet it includes measures that have been implemented to deter/correct any errant behaviour that might compromise the health and safety of employees, the public and other stakeholders of the organisation. (emphasis added)

[2] On my reading of the above statement, there is a causal link between the Disciplinary Policy and the Drug & Alcohol Policy, with the implied objective of thoroughly investigating the reasons for the breach, giving proper consideration to adopting measures to correct such errant behaviour and, in circumstances other than serious misconduct, consider a regime of formal counselling and warnings.

Rail Safety National Law (NSW)

[3] It is clear on the material before the Commission that the appellant’s conduct in attending the respondent’s offices voluntarily on 13 March 2013 was not “rail safety work” as defined under s.8 of the Rail Safety National Law:

8 Meaning of rail safety work

(1) Subject to subsection (2), any of the following classes of work is rail safety work for the purposes of this Law:

(a) driving or despatching rolling stock or any other activity which is capable of controlling or affecting the movement of rolling stock;

(b) signalling (and signalling operations), receiving or relaying communications or any other activity which is capable of controlling or affecting the movement of rolling stock;

(c) coupling or uncoupling rolling stock;

(d) maintaining, repairing, modifying, monitoring, inspecting or testing:

(i) rolling stock, including checking that the rolling stock is working properly before being used; or

(ii) rail infrastructure;

(e) installation of components in relation to rolling stock;

(f) work on or about rail infrastructure relating to the design, construction, repair, modification, maintenance, monitoring, upgrading, inspection or testing of the rail infrastructure or associated works or equipment, including checking that the rail infrastructure is working properly before being used;

(g) installation or maintenance of—

(i) a telecommunications system relating to rail infrastructure or used in connection with rail infrastructure; or

(ii) the means of supplying electricity directly to rail infrastructure, any rolling stock using rail infrastructure or a telecommunications system;

(h) work involving certification as to the safety of rail infrastructure or rolling stock or any part or component of rail infrastructure or rolling stock;

(i) work involving the decommissioning of rail infrastructure or rolling stock or any part or component of rail infrastructure or rolling stock;

(j) work involving the development, management or monitoring of safe working systems for railways;

(k) work involving the management or monitoring of passenger safety on, in or at any railway;

(l) any other work that is prescribed by the national regulations to be rail safety work.

(2) For the purposes of this Law, rail safety work does not include any work, or any class of work, prescribed by the national regulations not to be rail safety work.

[4] Section 23 of the Rail Safety National Law provides the authority for testing employees for the presence of drugs or alcohol:

23 Testing for presence of drugs or alcohol

A rail safety worker may be required to undertake a test for the presence of a drug or alcohol in accordance with this Law and the application Act.

[5] Sections 124 to 129A concern the appointment of authorised persons to undertake the required breath test, the requirement of such authorised officers to produce his or her identity card issued by the Regulator and certain additional matters related to rail safety workers in New South Wales:

124 Appointment of authorised persons

(1) The Regulator may, by instrument in writing, appoint—

(a) a rail safety officer; or

(b) a person with qualifications or experience considered by the Regulator to be appropriate for the performance of relevant functions under this Law and the application Act, to be an authorised person for a term, and subject to the conditions, specified in the instrument.

125 Identity cards

(1) The Regulator must give each authorised person appointed under section 124 an identity card that states the person’s name and appointment as an authorised person and includes any other matter prescribed by the national regulations.

(2) An authorised person to whom an identity card has been issued must produce his or her identity card for inspection on request to a person required by the authorised person to submit to a test or to do any other thing under this Law or the application Act.

...

126 Authorised person may require preliminary breath test or breath analysis

(1) Subject to this section, an authorised person may at any time require a rail safety worker who —

(a) is about to carry out rail safety work; or

(b) is carrying out rail safety work; or

(c) is attempting to carry out rail safety work; or

(d) is still on railway premises after carrying out rail safety work; or

...

to submit to testing by means of a preliminary breath test or breath analysis (or both).

128 Offence relating to prescribed concentration of alcohol or prescribed drug

(1) A rail safety worker must not carry out, or attempt to carry out, rail safety work—

(a) while there is present in his or her blood the prescribed concentration of alcohol; or

(b) while a prescribed drug is present in his or her oral fluid or blood; or

(c) while so much under the influence of alcohol or a drug as to be incapable of effectively discharging a function or duty of a rail safety worker.

129A Additional NSW matters related to drug and alcohol testing and related offences

(1) For the purposes of sections 126 and 127, a rail safety worker is to be regarded as being about to carry out rail safety work if the worker—

(a) has left home or a temporary residence for work (being rail safety work); and

(b) has not commenced work after having so left home or the temporary residence.

[6] It is clear the Rail Safety National Law required Mr Guest to be an authorised person pursuant to s.124 of the Act which required him, as an authorised person, to produce his identity card to the applicant when requested immediately prior or during the test conducted on 13 March 2013. It was also clear from the Notification Form related to the applicant’s drug and alcohol test that Mr Guest was not an authorised person pursuant to s.124 of the Act to conduct the test. Further, the applicant was not carrying out rail safety work prior to the test nor were there any signs that he was under the influence of alcohol at the time of the test.

[7] At the time of the incident the applicant was stood down with pay. It was the applicant’s evidence that at the time of the incident, he had not clocked on for work nor had he attended the respondent’s offices for the purpose of locomotive work. He explained the ‘normal’ clock-on process involved a telephone call to Junee, NSW. There is no material before the Commission or, for that matter, set out within the Employer’s Response that the meeting set down on 13 March 2013 for the purposes of establishing interest in locomotive driver positions available in Victoria was a lawful direction of the respondent. It would also appear that in the event it was, the respondent has breached the Rail Safety National Law regime by allowing the applicant to attend the respondent’s premises dressed casually rather than the required personal protective equipment.

[8] Zero tolerance under the respondent’s suite of policies does not mean automatic dismissal following a single positive test. Those policies imply that where an employee has returned a positive result to random alcohol testing, he or she is given counselling, and if the circumstances warrant, a first written warning as a means to address unsatisfactory conduct prior to disciplinary action being taken. The applicant’s conduct in the circumstances of this particular case was not serious or wilful.

[9] Had the applicant’s consumption of alcohol resulted in negligent behaviour which exposed him or others persons to an increased level of risk of injury, then the respondent would have been entitled to regard the applicant’s conduct as a serious safety breach that warranted summary dismissal. That course of action would, in the circumstances, have been logically consistent with Mr Evans’ statement concerning the respondent’s Drug & Alcohol Policy dated 20 August 2008 noted above:

This Policy has been compiled in a manner that is as non-punitive as reasonably possible. Yet it includes measures that have been implemented to deter/correct any errant behaviour that might compromise the health and safety of employees, the public and other stakeholders of the organisation.

[10] Ordinarily, an employer is entitled to expect compliance with its express workplace policies and procedures. However, they must be clearly articulated to the workforce. In this particular case, elements of the respondent’s policies concerning what may be described as “fair treatment” following the applicant’s alleged breach of its zero tolerance to alcohol policy were not followed. Nor was he “working at the time of the test or undertaking rail safety work which would ordinarily trigger the interventions set out under the Rail Safety National Law.

[11] Policies cannot be effective unless the employer makes arrangements to provide them to employees in an orderly way and carefully explains both the policy and changes to employees prior to those changes taking place. Employees need to know with certainty how to comply and the implications of non-compliance. All changes made to policies must be clearly and openly communicated to employees. It follows that where changes are not properly communicated to employees, key compliance provisions may be unenforceable.

[12] It is clear on the evidence in these proceedings that the applicant was reasonably familiar with the Drug & Alcohol Policy, but thought the BAC was based on the Rail Safety Act standard of 0.02%. He was completely unaware of the introduction of The Rail Safety National Law zero BAC standard that applied from January this year. There is also no evidence before the Commission, including the Employer’s Response, that suggests the applicant was informed of the new standard or was provided with training in the new policy and procedure. There is also no evidence that the applicant was afforded refresher training subsequent to his appointment in November 2008.

[13] In cases of summary dismissal the conduct alleged by the employer must be such that it constitutes a repudiation of the contract of employment by the applicant. The onus rests with the employer to show such a wilful and deliberate intention on the part of the applicant strikes at the very core of the employment relationship. On the evidence in these proceedings, the applicant’s conduct, when viewed as a whole, did not involve a deliberate or intentional flouting of essential contractual conditions. It was not wilful misconduct nor did the applicant attend the respondent’s premises on 13 March 2013 to undertake “rail safety work” as defined under s.8 of the Rail Safety National Law.

s387(b) Whether the person was notified of that reason;

[14] Notification of a valid reason for termination must be given to an employee in plain and clear terms. The applicant was notified of the reason for his dismissal.

s387(c) Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;

[15] The opportunity to respond is a reference to an opportunity to respond before a decision is taken to terminate the employee’s employment. The applicant was not given the opportunity to give his version of events and to put any further matters to the respondent before it determined what disciplinary action to take. The respondent’s disciplinary policy, which included a formal interview with the General Manager, was not applied. On the material before the Commission, including the Employer’s Response, the decision to summarily dismiss the applicant was made by Mr Evans in direct response to Mr Guest’s advice that the applicant had breached the test.

s387(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal;

[16] The applicant was not afforded a support person and there were no discussions with the respondent concerning his dismissal.

s387(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal;

[17] The applicant’s dismissal was unrelated to his performance with the respondent.

s387(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal;

[18] I do not consider that the size of the business impacted on the procedures followed in effecting the dismissal.

s387(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

[19] No relevant considerations arise. The respondent employed more than 100 persons at the time of the applicant’s dismissal. The relevant Form F3 Employer’s Response was completed by Ms Melanie Claughton, “HR & IR” Manager”.

s387(h) any other matters that FWA considers relevant.

[20] I have had regard to the fact that the applicant had been employed from November 2008 and there was no evidence raised concerning any performance issues. Despite efforts, he had been unable to secure alternative employment since his dismissal. He has a partner and two dependent children.

Conclusion

[21] The Commission is required to determine whether the applicant’s dismissal was harsh, unjust or unreasonable having regard to the matters set out in s 387 (a) to (h) above. In Lawrence v Coal and Allied Mining Services Pty Ltd T/A Mr Thorley Operations/Warkworth 21 at [11] the Full Bench stated, “[t]he leading statement of principle elucidating the meaning of the expression “harsh, unjust or unreasonable” is the statement in the judgment of McHugh and Gummow JJ in Byrne v Australian Airlines Ltd:22

It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.

[22] The applicant presented as a credible witness. He admitted to consuming alcohol during the night prior to the EOI meeting on 13 March 2013 concerning potential work opportunities in Victoria. However, there was not a valid reason given for the termination of the applicant’s employment. His dismissal was unfair given the nature of the EOI meeting and the circumstances concerning his attendance. He was not undertaking rail safety work. He did not present himself at the respondent’s premises correctly attired and ready for work. He was not told to present for work on the day of his dismissal. The circumstances surrounding the applicant’s alcohol test were seriously flawed. The testing officer, Mr Guest was not authorised to conduct the test. The applicant’s dismissal was disproportionate to the gravity of his conduct. Moreover, there is no material before the Commission to suggest that the applicant’s conduct that gave rise to his dismissal can properly be regarded as deliberate or wilful. These factors support a finding that the applicant’s dismissal was ‘harsh, unjust and unreasonable’.

Finding

[23] I have carefully considered all the materials in this matter and determined the termination of applicant’s employment was harsh, unjust and unreasonable.

[24] Reinstatement is the primary remedy. Section 390(1) of the Act provides that where the Commission finds that a dismissal was unfair, reinstatement may be ordered.

[25] Section 391 of the Act sets out the possible orders to be made if reinstatement is to be ordered:

“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 FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA 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 FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA 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), FWA 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.”

Remedy

[26] The applicant has sought reinstatement in his employment, an order to maintain continuity and an order to restore lost pay. I am satisfied that the reinstatement of the applicant with an order to maintain continuity and restore lost pay is appropriate given the circumstances of this case. During proceedings the degree to which he had sought to mitigate his loss was broadly canvassed. Shortly stated, he had been unsuccessful in obtaining work.

[27] In terms of lost pay, I propose to make orders that the applicant be paid an amount equal to the amount he would have earned in the period from his dismissal until the date of this reinstatement, less any monies earned by him in this period and less applicable taxation. Should the parties be unable to reach an agreement on this amount, I will list the matter for determination of the amount to be paid. Orders to that effect will be issued contemporaneously with this decision.

COMMISSIONER

Appearances:

For the applicant, Mr W Dever, Solicitor for MRM Lawyers, 15 and 20 August 2013

For the respondent, Mr N Raja of HoskingHurst Pty Ltd, Liquidator, 15 August 2013.

Hearing details:

2013

Newcastle

August 15 and 20

 1   Exhibit 6, Applicant’s Statement, Attachment ‘A’.

 2   Ibid Attachment ‘B’

 3   Ibid Attachment ‘C’

 4   Transcript at PN 61-65

 5   Ibid PN79

 6   Ibid PN83

 7   Ibid PN119

 8   Ibid PN125 and 137

 9   Ibid PN143

 10   Ibid PN145

 11 [2013] NSWSC 1082

 12 (2006) 142 IR 137

 13   Exhibit 13

 14   Ibid Ex 13 Drug & Alcohol Policy extract

 15   Exhibit 14

 16   [2013] FWC 2704

 17   [2012] FWA 9609

 18   Fitness for Duty - Drugs and Alcohol New South Wales (EZ-P-019.4) at p7

 19   Fitness for Duty - Drugs and Alcohol New South Wales (EZ-P-019.4) at p8

 20   Disciplinary Procedures - EZ-P-033 at p12

 21   [2010] FWAFB 10089

 22 (1995) 185 CLR 410 at p 465-6

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