[2016] FWC 1550

FAIR WORK COMMISSION

DECISION

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

Mr Peter McGlin
v
Bluescope Scope Steel (AIS) Pty Ltd
(U2015/12882)

COMMISSIONER RIORDAN

WOLLONGONG, 21 APRIL2016

Application for relief from unfair dismissal.

[1] This decision relates to an unfair dismissal application lodged by Mr Peter McGlin against BlueScope Steel (AIS) Pty Ltd (BlueScope).

[2] Mr McGlin is a member of the Australian Workers’ Union, Port Kembla Branch (AWU).

[3] Leave was granted to allow Mr C. Parkin (of Counsel) and Mr A. Neilson (Principal Lawyer – Slater and Gordon Lawyers) to appear for Mr McGlin. Leave was granted for Mr A. Dearden from Hall and Wilcox Lawyers to appear for BlueScope.

[4] Mr McGlin commenced work at the Port Kembla Steelworks in 1974. Mr McGlin worked for forty-one continuous years in the department known as the Plate Mill. Mr McGlin was a Level 4 Operator. In April 2015, as a result of a restructuring of the Plate Mill, which was the subject of proceedings before the Fair Work Commission (FWC), Mr McGlin was one of eight Operators that were deemed to be surplus to the future requirements of the Plate Mill.

[5] Mr McGlin was offered the option of immediately taking the BlueScope redundancy package, which in his case was worth approximately $147,000, or access to the transition provisions of the BlueScope Steel Port Kembla Steelworks Agreement 2012 1 (the Agreement). The Agreement allowed Mr McGlin a six month transition period to find another job within BlueScope. If after 6 months Mr McGlin was unable to find a suitable redeployment role, then Mr McGlin would be made compulsorily redundant and collect his redundancy entitlement.

[6] Five months and one week into the transition period, Mr McGlin was dismissed for repeated poor performance.

[7] Witness Statements were attested by Mr McGlin, Mr D. Hancock (Assistant Secretary of the AWU) and Mr P. Bessant (Senior Operator Plate Processing and Despatch Department). BlueScope relied on attested witness statements from Mr D. Otsyula (Plate Processing and Dispatch Manager) and Ms J. Fitzgerald (Manager Employee Relations, Compliance & Systems Manufacturing- Human Resources). Ms Fitzgerald’s statement related to the current financial position of BlueScope and the recent restructuring and cost cutting measures that have been agreed in order to keep the Steelworks operational. Ms Fitzgerald was not cross examined on her evidence.

Background

[8] Mr McGlin has worked at the Plate Mill all of his working life. His role as an Operator required him to operate a variety of cranes within the Mill. This included moving the steel plates from one area to another and placing any pieces of scrap metal in the allocated bin. The cranes that were used for this purpose contained powerful magnets that were capable of carrying a multiple number of plates at any one time.

[9] Mr McGlin was involved in five separate incidents over an 18 month period prior to his termination. BlueScope have described these incidents as “repeated poor performance.”

[10] On 28 January 2014, Mr McGlin removed himself from his crane for 50 minutes to take an unscheduled break to go to the toilet and have something to eat. BlueScope policy requires an Operator to advise their Supervisor when they leave the cabin of the crane. Mr McGlin advised his Senior Operator (formerly known as a Leading Hand) claiming that he could not locate his Supervisor at this time. Mr McGlin received an entry note on his history card as a disciplinary outcome for this breach of procedure. Mr McGlin did not challenge this action.

[11] A similar situation occurred on 13 February 2014, where Mr McGlin once again took a break without informing his Supervisor. Mr McGlin stated that he once again informed his Leading Hand because he could not find his Supervisor. Mr McGlin asserts that the line did not stop during his break. Mr McGlin was given a written warning for poor performance. Mr McGlin did not challenge this warning;

“3^rd March 2014

Mr Peter McGlin

Plate Mill Operator

Plate Mill Department

Dear Peter

WRITTEN WARNING FOR POOR PERFORMANCE

This letter serves as a written warning for poor performance.

On the 13^th February 2014 you stopped operating #4 crane and left the cabin for an extended period of time without notifying your Supervisor. This resulted in a loss of throughput in despatch as well as on the rotary line, and is unacceptable. I cannot tolerate such poor performance.

Peter, this incident comes after your Supervisor warned you on the 29^th January 2014 for also stopping the crane and leaving the cabin without notifying your Supervisor.

I again remind you that the Plate Processing and Despatch Department allows 1 crib break of 30 minutes per shift where production stops, and shorter breaks may be taken on an opportunity basis where they do not impact Processing or Despatch capacities. If for some reason you need to leave the job, you need to let your supervisor know of the situation.

Peter, I urge you to take this warning very seriously and make every effort to improve and correct your behaviour. I cannot tolerate poor performance from any employee and future occurrences from you may result in further disciplinary action up to and including dismissal.

As a consequence of your repeated poor performance I will be placing a copy of this written warning in your personnel file. Your performance at work must change and I want to assist you to achieving this. If there is any further practical assistance you feel would be of benefit to yourself please contact me or your Supervisor.

I also take this opportunity to remind you that a Company sponsored Employee Assistance Programme (EAP) is available to all employees. Through this confidential, no-cost service, you may be referred to community based support services where appropriate. Please call the Employee Assistance Programme (EAP) on 1300 xxx xxx if you wish to take advantage of this offer.

Yours faithfully

David Otsyula

Plate Processing and Despatch Manager” 2

(my emphasis)

[12] On 16 December 2014, Mr McGlin dropped a plate from the crane magnets. Mr McGlin did not have a chaser (groundman) check the number of plates that he had picked up before moving away, which is a breach of the relevant BlueScope policy. Subsequently, a plate dropped. Mr McGlin immediately reported the incident. There was no damage to the plate or to any personnel. Mr McGlin was given a further written warning for his on-going poor performance. Mr McGlin did not challenge this warning;

“17^th December 2014

Mr Peter McGlin

Plate Mill Operator

Plate Mill Department

Dear Peter,

WRITTEN WARNING FOR POOR PERFORMANCE

This letter serves as a written warning for poor performance.

On the 16^th December 2014 whilst driving #4 crane you dropped a plate from the magnets. This was a result of, by your own admission, you picking up one too many plates and not having someone on the ground check the number before you drove the crane away. This is in breach of the crane operating procedure.

Peter, this incident comes after I have spoken to you on several occasions about ensuring that you are aware that you are lifting no more than the maximum number of plates even if this means you having to wait for someone on the ground to check them.

I again remind you that you are expected to follow all Company policies and procedures. Where you are unable to do this please stop what you are doing and call myself or one of the other Supervisors.

I also take this opportunity to remind you that a Company sponsored Employee Assistance Programme (EAP) is available to all employees. Through this confidential, no-cost service, you may also be referred to community based support services where appropriate. Please call the Employee Assistance Programme (EAP) on 1300 xxx xxx if you wish to take advantage of this offer.

Yours faithfully,

Steve Wilkinson

Plate Mill Supervisor” 3

(my emphasis)

[13] BlueScope proposed a restructuring of the Plate Mill in 2014. Following numerous discussions and two proceedings before the FWC, the restructuring was implemented on 7 April 2015. As a result of this restructure, 8 Operator positions were deemed to be surplus to requirements in Plate Processing and Despatch. Following an evaluation process Mr McGlin was one of the Operators declared surplus.

[14] Mr McGlin was officially notified of this outcome on 31 March 2015.

“31^st March 2015

Mr Peter MCGLIN

Plate Mill Port Kembla

Dear Peter

RE: Change to operations at the Plate Mill

Due to adverse market demands, as advised in a communication session to employees on Tuesday 24 March 2015, the Plate Mill will reduce operations from a 3 crew 3 shift by 8 hour roster to a 2 crew 2 shift by 12 hour roster effective from 7 April 2015.

As a consequence I regretfully advise that following a merit selection process your position has been made redundant and is surplus to the needs of the Plate Mill.

Employees in surplus situations are managed in accordance with clause 34.3 (Security for employees affected by workplace change) of the BlueScope Steel Port Kembla Steelworks Agreement 2012 EA). This clause provides the basis on which surplus employees will be managed to leave or be reassigned within BlueScope Steel.

Under this Agreement you need to advise the Company within 14 days from the date of this letter of your decision to either:

(i) Elect to leave the Company with redundancy as soon as agreed is practical to department needs; or

(ii) Seek continuing employment with BlueScope Steel for which a 6 month transition period will be available to facilitate job search for suitable alternate employment where available from the date of this letter.

During this period you will continue to work in the Hot Mills business.

Should you seek to continue your employment with BlueScope then the Company will provide assistance to find suitable alternative employment through vacancies and if available competency based substitutions.

You will be expected to actively and genuinely participate in all related surplus management processes and activities in order to maximise the opportunity to find an alternate position. Surplus employees are not to unreasonable reject an offer of suitable alternative employment. If the employee remains unplaced at the end of the transition period the Company will meet with the employee and their representative to discuss exit arrangements from the Company.

Employees affected by this change will be entitled to retention of rate (EA Clause 11.1.2 Market change) and as applicable retention of earnings effective from the 25 March 2015.

As previously advised the Company sponsored Employee assistance Programme (EAP) is available to all employees and I encourage you and your family to utilise this service if required. Please call the EAP on 1300 xxx xxx if you wish to take advantage of this service.

Yours faithfully

David Otsyula
Plate Processing and Despatch Manager” 4

[15] As stated earlier, Mr McGlin opted for option (ii), ie, the six month transition period.

[16] The relevant provision under the Agreement is clause 34 5;

“34. Termination of Employment Due to Retrenchment or Redundancy

34.1 Retrenchment ·

34.1.1 Application

This subclause 34.1 applies to collective dismissals by way of retrenchment, whether made at the same time or over a period of time and where the dismissals relate to circumstances affecting the Company's enterprise and not to the conduct of the employees. It does not apply to the termination of employment on account of the introduction of mechanisation or technological change.

34.1.2 Informing Unions and Employees Affected

The Company is obliged to inform the union parties to this Agreement, and the
Company's employees who may be affected by any retrenchments, of the facts and circumstances of the proposed retrenchments as soon as the Company becomes aware that the retrenchments arc necessary.

34.1.3 Severance Payments

The Company undertakes to calculate redundancy severance payments, where due, in accordance with the formula contained in the BlueScope Steel Redundancy Policy - Port Kembla as at 14 November 201 2, during the life of this agreement.

34.1.4 Less than Twelve Months Service Not Entitled

Employees retrenched who have less than 12 months continuous service, are not entitled to severance pay under this subclause.

34.1.5 Leave to Seek Alternative Employment - If an employee is required to work out his or her 4 weeks' notice, the employee is entitled to 1 day's leave with pay in each of the 4 weeks to enable him or her to look for alternative employment. If the employee has been allowed paid leave for more than one day during the notice period for the purpose of seeking other employment, the employee shall, at the request of the Company, be required to produce proof of attendance at an interview or the employee shall not receive payment for the time absent.

34.2 Other Matters

34.2.1 Notice to Centrelink

Where a decision has been made to terminate employees, the Company shall notify Centrelink thereof as soon as possible giving relevant information including the number and categories of the employees likely to be affected and the period over which the terminations are intended to be carried out.

34.2.2 Centrelink Separation Certificate

The Company shall, upon receipt of a request from an employee whose employment has been terminated, provide to the employee an "Employment Separation Certificate" in the form required by Centrelink.

34.2.3 Employee leaving during the notice period

If the employment of an employee is terminated (other than for misconduct) before the notice period expires, the employee shall be entitled to the same benefits and payments under this clause had the employee remained with the Company until the expiry of such notice. Provided that in such circumstances the employee shall not be entitled to payment in lieu of notice.

34.2.4 Alternative employment

Subject to an application by the Company and order of the Fair Work Commission the Company may pay a lesser amount (or no amount) of severance pay than that contained in paragraph 34.1.3 above if the Company obtains acceptable alternative employment for an employee.

34.3 Security for employees affected by workplace change

34.3.1 The parties recognise the importance of job security for employees.

34.3.2 While seeking to adhere to this commitment, the parties acknowledge workplace change, new technologies and changes in operations and services will be ongoing and may lead to employees being made surplus. When having to manage any reductions in employee numbers, the Company will seek to ensure that employees have the opportunity for redeployment. In addition, every opportunity will be taken to effect changes through voluntary means and natural attrition.

34.3.3 Nothing in this clause prevents the Company reassigning surplus employees into alternative and available roles where their skills are readily adaptable to these roles. In that case the other provisions of this clause, other than clause 34.3.9 will not apply.

34.3.4 In identifying surplus employees the Company will adopt a selection process that includes the employee's knowledge, skills and performance relevant to the employee's current positions.

34.3.5 Where employees are made surplus, the relevant employees will be given written notice by the Company that such positions are surplus and the options available to employees. The following principles will then apply:

(a) Within 14 days the affected employees are to advise the Company of their decision to either:

(i ) elect to leave the Company; or

(ii) seek continuing employment with the Company.

(b) For employees who elect to leave the Company, their employment will cease as soon as practical to Department needs.

(c) For those affected employees who seek ongoing employment with the Company that opportunity will be available for a transition period of up to six months which will apply from the date of the Company issuing the written notice as provided for in this clause 34.3.5 (Transition Period).

(d) The Transition Period will be used to facilitate a job search within BlueScope Steel for suitable alternate employment where this is available. During the Transition Period the employee will continue to work in their department. The Company shall provide the employee and as necessary their representative, with all relevant job search details.

(e) Whenever a vacancy occurs, all reasonable efforts will be made to communicate this position to surplus employees. The recruitment and selection of surplus employees into alternative positions will be based on merit and directed by Company policies and processes. It is expected that surplus employees will reach the interview stage for vacancies where the employee's skills and experience reasonably match the criteria for the vacancy.

(f) Competency Based Redundancy Substitutions may be available, however will remain at the discretion of the Company.

(g) Surplus employees will be managed within their Department until it is determined that no suitable alternative employment is available within the business. The Company will meet regularly with the employee and their representative to ensure the employee is updated on suitable alternate employment opportunities.

(h) The Company will provide surplus employees with appropriate redeployment assistance as part of the surplus management process. This assistance may include job search and training opportunities, such as assessment centres, interview training, work experience, secondment placements, relief roles, retraining, and outplacement programs.

(i) Surplus employees will be expected to actively and genuinely participate in all related surplus management processes and activities in order to maximise their opportunity to secure suitable alternative employment within the Company.

(j) Surplus employees seeking continuing employment are not to unreasonably reject an offer of suitable alternative employment, being employment that is comparable with the employee's skills and experience. Employees will have a maximum of 5 working days to advise whether or not they accept an offer of suitable alternative employment, or else they will be taken to have rejected the offer. If an employee rejects an offer of suitable alternative employment the surplus employee will, leave the Company with a severance payment in accordance with clause 34.1.3, within 14 days of rejecting that offer.

34.3.6 If an employee remains unplaced at the end of the Transition Period the Company will meet with the employee and their representative to discuss the employee exit arrangements from the Company.

34.3.7 Any difficulties or issues arising out of the procedures described in this clause will be discussed with the involvement of the relevant representative where appropriate, and will be dealt with in accordance with the dispute resolution procedures in clause 35 of this Agreement.

34.3.8 Major closures or significant unexpected events will be treated as special cases and will be discussed separately and arrangements appropriate to those events will be implemented. In these situations, the arrangements provided for in clause 34.3.5, including the Transition Period may not apply (as suitable alternative employment within BlueScope Steel is unlikely to be available).

34.3.9 Changes to work arrangements can result in people having to move to different shifts which provide lower ordinary time earnings. When this happens, employees will be given reasonable notice so that they have time to adjust their financial situation to suit. These arrangements do not apply to roster changes, which are driven by normal market fluctuations.

34.3.10 Nothing in this clause affects the right of the Company to dismiss an employee lawfully for misconduct or other circumstances unrelated to the employee having become surplus.”

(my emphasis)

[17] On 31 July 2015, Mr McGlin dropped a plate from his crane. Mr McGlin failed to report the incident or “freeze the scene” in accordance with BlueScope procedures to allow for an investigation to take place. Mr McGlin was given a final written warning and 3 shift suspension as a result of this incident. Mr McGlin did not challenge the final written warning.

“5^th August 2015

Mr Peter McGlin

Plate Mill Operator

Plate Mill Department

Dear Peter,

FINAL WRITTEN WARNING AND SUSPENSION FOR POOR PERFORMANCE

This letter serves as a final written warning for poor performance.

On the 31^st July 2015 you were operating #1 crane when a plate you were attempting to move, was not adequately adhered to the magnets and dropped off a wagon to the ground. Despite your admission this week that you knew you were required to stop all operations and freeze the scene for your Supervisor to investigate, you continued to operate the crane and even picked up the plate that had been dropped. This meant that a complete investigation could not be carried out and the root cause of the issue was not identified. This is a breach of the Company’s “Dropped Plate Investigation Procedure”. I cannot tolerate such poor performance.

Peter, this incident comes after your Supervisor warned you on the 17^th December 2014 for breaching a different Company procedure.

Peter as a result of your poor performance I am issuing you with this final written warning and suspending you from work without pay for three shifts. I will be placing a copy of this written warning in your personnel file. Your performance at work must change and I want to assist you to achieving this. If there is any further practical assistance you feel would be of benefit to yourself please contact me or your Supervisor.

Peter, I urge you to take this warning very seriously and make every effort to improve and correct your performance. I cannot tolerate poor performance from any employee and future occurrences from you may result in further disciplinary action up to and including dismissal.

I also take this opportunity to remind you that a Company sponsored Employee Assistance Programme (EAP) is available to all employees. Through this confidential, no-cost service, you may also be referred to community based support services where appropriate. Please call the Employee Assistance Programme (EAP) on 1300 xxx xxx if you wish to take advantage of this offer.

Yours faithfully

David Otsyula

Plate Processing and Despatch Manager” 6

(my emphasis)

[18] On 17 August 2015, Mr McGlin dropped a single piece of bent scrap outside of the scrap bin when attempting to place six pieces of scrap in the bin. Mr McGlin “froze the scene” in accordance with BlueScope policy and his most recent warning. Following an investigation Mr McGlin was terminated on 28 August 2015.

“28^th August 2015

Dear Mr McGlin

RE: TERMINATION OF EMPLOYMENT

This is to advise that your employment with BlueScope is terminated with notice effective from close of business Friday 28 August 2015.

The Company will pay you 5 weeks’ wages in lieu of notice in accordance with your entitlements.

This decision follows the investigation of your most recent incident of dropped scrap at the Kress carrier scrap bin on 17 August 2015 while driving No. 6 crane.

After carefully considering all relevant information, including your employment record, the Company concludes that as a result of your continuing poor performance it has lost all confidence in you to work in accordance with the requirements of BlueScope.

People Services, Adelaide, will be advised of your termination and will forward details to finalise any payroll, superannuation or other administrative arrangements.

We offer you counselling services through Mentor Services who can be contacted on 4226 xxxx if you feel this may be of benefit.

Yours faithfully

David Otsyula

Plate Processing & Despatch Manager” 7

[19] Mr McGlin was terminated 3 weeks before the expiration of his transition period at which point in time he would have been paid his $147,000 redundancy.

[20] It is acknowledged by all parties that Mr McGlin wanted to remain employed at the Plate Mill. Mr McGlin accepted under cross examination that this outcome was his hope and desire.

[21] It is important to provide a brief summary of the evidence in this matter.

Evidence and Submissions

Mr Peter McGlin 8

[22] Mr McGlin acknowledged that he did not advise his Supervisor when he took the two breaks in early 2014. He claims that his Supervisor was not on the floor or in their office. It is not in dispute that Mr McGlin told his Leading Hand. The Leading Hand role is now known as a Senior Operator. The role of the Senior Operator is to ensure the on-going operation of the Mill from the ground.

[23] Mr McGlin testified that he was upset and distressed at being identified as being redundant in March 2015. He sought assistance from BlueScope’s Employee Assistance Program (EAP), consulted his GP and was referred to a psychologist.

[24] Mr McGlin advised that at the time of him being declared surplus that he still had a mortgage and that he had hoped to work for at least another 10 years. Mr McGlin expressed his concern that he was unemployable outside of the Plate Mill on the basis that he had only ever worked at the Plate Mill.

[25] During the transition period, Mr McGlin continued to work in the Hot Mills business unit, undertaking a variety of roles of both a skilled and unskilled nature.

[26] Mr McGlin claimed that he started to suffer from panic attacks as his termination drew closer.

[27] Mr McGlin also claimed to be suffering from diabetes, however, no medical evidence of this condition was produced.

[28] Mr McGlin advised that he was only encouraged to apply for 1 position during the transition period. Mr McGlin claims that this was the only redeployment assistance offered by BlueScope and that when he tried to apply for the role, the computer that BlueScope directed him to use did not work.

[29] Mr McGlin is of the view that BlueScope did not provide him with a great deal of assistance in finding another job. He claims that he was gainfully employed every day.

“PN246
What other steps did you take raising with the company that they were preventing you being able to find alternate employment?---All I did was just do me job that they sent me to. I never had time to do anything else.” 9

[30] Mr McGlin has been unemployed since his termination from BlueScope and has been under the constant care of his doctors with continuous doctors certificates covering the period from his termination to a date after the hearing.

[31] Under cross examination, Mr McGlin accepted that he had breached the BlueScope lifting procedure but stated that it was a “standard practice sometimes” 10. Mr McGlin agreed that all crane drivers operate without a chaser on occasions11.

[32] Mr McGlin acknowledged that he accepted all of the warnings that he received and did not seek to formally challenge their existence.

[33] Mr McGlin testified that there are occasions when the scrap is dropped or falls out of the scrap bins.

[34] In response to a question from Mr Dearden, Mr McGlin accepted that he has never had a problem in relation to putting the scrap into the bins;

“PN369
Tell me if I'm wrong, sir, but effectively for 40 years, or decades when you've had your crane ticket, where scrap has been required to be put in the bin you've been able to do it?---Yes.” 12

[35] Mr McGlin advised that his final written warning was given to him by Mr Luton, not Mr Otsyula. He claims that no one from BlueScope gave him any advice that he should leave at that point in time and not put his redundancy pay at risk.

[36] Mr McGlin testified that after he dropped the single piece of scrap on 17 August, he froze the scene and advised his Supervisor of the incident as per his final warning and BlueScope policy. The following conversation took place with his Supervisor, Mr Kimber.

“PN407
Okay. So when you dropped that one piece of scrap, one piece of scrap bounced out of the bin, did you think at the time, "I'm going to get sacked"?---No. I asked - I can't say what I said. I asked Kimber - can I say what I said?

PN408
You can say what you said?---Yes. I said, "That fucks me up then." He said, "No, no.

PN409

Who did you say that to?---Chris Kimber.

PN410

Who's he?---He was the supervisor at the time.

PN411

Right, okay?---He said, "You've reported it so you shouldn’t.”- (this comment was inaudible according to the transcription service but reflects my notes and recollection as well as what I can decipher listening to the audio recording.)

[37] Following the incident, Mr McGlin undertook the mandatory drug and alcohol test – which were both negative. Upon his return to work, Mr McGlin resumed his normal duties back in the crane until the end of his shift.

[38] Mr Dearden cross examined Mr McGlin whether he understood that after he received his final warning that he could be terminated if another incident occurred:

“PN391
Even when you got the final warning, you realised that one more incident could result in the termination of your employment, you were prepared to take that risk?---You don't go to work to bloody do other incidents. You don't think of that.” 13

[39] Mr McGlin accepted that he understood this possible ramification.

Mr Dave Hancock 14

[40] Mr Hancock testified that six Contractors had been engaged to work at the Plate Mill since the restructure (approximately June 2015). Mr Hancock was of the view that these Contractors have been employed simply because BlueScope management made too many employees redundant as a result of the restructure.

[41] Mr Hancock advised the FWC that he had discussed the idea of challenging the final warning with Mr McGlin but that Mr McGlin had rejected the idea because of the possible ramifications of such a move.

“PN760
MR DEARDEN: You've gone far enough, Mr Hancock. I will stop there. Did you at any time advise Mr McGlin that, look, he's on a final warning, you're not challenging it. You're better off just taking the redundancy and running. You might get terminated before if you make a mistake, or - - -?---Yes. There was talks around that. What Mr McGlin really had issues with is that Russell Kilby, who was one of the surplus people, ended up getting a permanent job. Now, there was some discussions around that with Peter and myself, and his concern was that Russell Kilby had less seniority in the plant. Also he never had the same skills as high as what Peter had. And there were some issues around that with Peter, and he didn't want to disturb Russell but he was hoping, well, if Russell got a job, in the next few weeks I could get a job. That's what it was.” 15

[42] Mr Hancock, who is a very experienced official with the AWU, testified that many employees have dropped plates over many years and that no employee has ever been sacked for such an incident.

[43] Mr Hancock recalled a conversation that occurred on 19 August 2015 where Mr Otsyula said:

“There have been a few issues since March, when you were notified that you were surplus. I have concerns that you are stressed. I am standing you down until the investigation is complete.” 16

(my emphasis)

[44] At the show cause meeting on 25 August 2015, Mr Hancock was shocked that BlueScope required Mr McGlin to show cause why he shouldn’t be dismissed;

“You’ve got to be kidding me! You’re going to fire him over this. This is how the Company plans on saving money.” 17

[45] I note that the Managing Director had made his announcement to the ASX about the future of the Port Kembla Steelworks the previous day.

[46] On 26 August 2015, Mr Hancock attended another meeting. Mr Hancock floated the proposition of allowing Mr McGlin to leave BlueScope at that point in time, rather than in three weeks at the termination of Mr McGlin’s transition period.

[47] Mr Hancock argued that, in his view, Mr McGlin’s termination was harsh and morally wrong.

“PN767
THE COMMISSIONER: Yes. Mr Hancock, I think you've made a comment in your statement that you regard this – the dismissal of Mr McGlin as being harsh. Why do you say that?---Well, he gets a final warning for not reporting a job (dropped) scrap. Okay. He accepted that. He should have done it. He only lifted it up a metre, dropped it, carried on. He should have reported it. So if he gets a final warning saying he should have reported it, and then he makes a mistake and drops, like, the scrap. He stops the crane, he reports it and gets terminated for it. I don't see the – it's not morally right the way it was done. He gets a final warning for not reporting. Not for dropping a plate but for not reporting it. Then when he drops the scrap, he stops the crane, does the right thing, goes and reports it, and then they say his performance is no good. That's why I say it's harsh and morally ridiculous.” 18

Mr Paul Bessant 19

[48] Mr Bessant testified that he has worked for BlueScope for 20 years and is currently employed as a Senior Operator in the Plate Processing and Despatch Department.

[49] Mr Bessant advised that the casuals that were engaged in June 2015 were transferred to fixed term employment in November 2015. Mr Bessant confirmed that these employees ceased work on 18 December 2015 but were subsequently re-engaged in early January 2016.

[50] Mr Bessant was very sceptical in relation to the allegedly limited on-going employment of these casual/fixed term employees having previously been advised by BlueScope in mid 2015 that their employment was only for a limited period. Mr Bessant is of the view that the Plate Mill cannot operate without the increased workforce.

[51] Mr Bessant testified that it was not unusual for Operators to perform their work without a Chaser or Loader being present, even though it is a breach of BlueScope policy.

“PN835
… Do you agree that it's the company requirement that someone is there to observe magnets being put in place, that there's not too many plates, et cetera. Is that correct?---I agree that that's what is stated in the procedure. I also find that the limit – the amount of quantities people that we're actually employing in these dispatching areas with the efficiency that the company wants doesn't always equate to that actually occurring.” 20

“PN838

- - - Are you saying that you're fully aware that people depart from that and you're condoning it?--- but with the quantity of people we have employed at a particular time then that – they have to operate with the efficiencies that they're required to do.” 21

“PN848
I put it to you that Mr Otsyula will say the company's expectation is that this procedure is followed and that there are people that are required to observe how many plates are picked up and I would put it to him that he's probably surprised to hear what you have said today in the Commission. What would you say to that?---I would say that he'd be more than likely aware that with the quantity of people that he has and the efficiency that's required, the work gets conducted and done to the best of people's abilities while acting in a safe and workable manner.” 22

“PN850
So moving on from that, you've basically testified that the loading and stacking procedure isn't always followed?---The loading and stacking procedure is followed as best the people possibly can with the quantity of people available they have to work with.

PN851
The company was aware that those are the way that the operators are working?---The company insists that whatever requirement of people that are there, do the job as efficiently and as safe as they possibly can.” 23

(my emphasis)

[52] Mr Bessant provided further clarity in a response to questions from me:

“PN852
So if an operator picked up a load without a chaser being present – because the chaser was off doing something else – that wouldn't be considered unusual?---No, it's not. It's not.

PN853

Are you aware – we heard a claim before about the dropping of plates. Are you aware of any employee previously being disciplined for dropping plates?---Yes.” 24

[53] In relation to the dropping of plates, Mr Bessant provided the following evidence:

“PN854
Are you aware of any employee being dismissed for dropping plates?---No. No, I'm not.

PN855
Is it a regular occurrence?---Yes, it is.

PN856
What would you describe as regular? How would you define that?---I'd nearly go to say once a fortnight, once a month on an average…” 25

[54] Mr Bessant advised the Commission that the bend in the scrap has a detrimental effect on the magnetism of the crane, ie, it is not as secure, when lifted, as the flat pieces of scrap.

[55] Mr Bessant also clarified that it would be appropriate for an Operator to advise the Senior Operator if they were going on a toilet break if the Supervisor could not be easily located.

Mr David Otsyula 26

[56] Mr Otsyula is the Plate Processing and Despatch Manager at the Port Kembla Steelworks. Mr Otsyula made the decision to terminate the employment of Mr McGlin;

“55. I formed the view that Mr McGlin’s employment should be terminated due to his repeated poor performance which created an unacceptable risk to the Plate Mill’s productivity, plant and equipment, and potentially to the safety and welfare of himself and other employees.” 27

[57] Mr Otsyula has known Mr McGlin, as a fellow BlueScope employee, for approximately 20 years.

[58] Mr Otsyula undertook the investigation following Mr McGlin “dropped scrap” incident on 17 August 2015. This investigation included Mr Otsyula “riding” in the crane with another Operator to assess whether there could have been any mitigating factors in relation to the incident, such as whether the sun was possibly shining in Mr McGlin’s eyes.

[59] Mr Otsyula testified that, whilst there was no damage to any finished product on this occasion, hypothetically there could easily have been $5,000 to $10,000 of damage to finished product, which is stored next to the scrap bin.

[60] At the time of signing his witness statement, Mr Otsyula was of the view that the employees that were engaged for the short term work would not be required in 2016. However, these employees have been re-employed in early January and were expected to remain employed until early March.

[61] Even though Mr McGlin has the skills to perform the work being undertaken by the casual/fixed term labour, Mr Otsyula did not consider delaying Mr McGlin’s termination date to allow him to perform this work.

“PN1089
THE COMMISSIONER: Basically, do you think it was fair - wouldn't it have been fair to suggest to Mr McGlin that there was a possibility of some ongoing employment?---I suppose, at that stage, Mr McGlin still had a number of weeks still to work. He was working across the plate mill and I suppose across hot mills in general. He was employed every day. If it had got to the stage that his redundancy was due within a few days, I may have considered that, but we never got to that stage, so I suppose, in answer to your question, I didn't consider it because I never got into that circumstance.” 28

[62] Under cross examination from Mr Parkin, Mr Otsyula accepted that, even though Mr McGlin’s $147,000 redundancy pay is not an allocated cost to his Department, that his supervisors would appreciate the $147,000 cost saving in not having to pay Mr McGlin’s redundancy pay.

[63] Mr Otsyula testified that, in his opinion, Mr McGlin would not openly challenge authority but may do so by his own little protests, such as stopping the crane for an unscheduled break.

[64] Mr Otsyula accepted that his main reason for issuing the final warning letter was that Mr McGlin did not freeze the scene and report the incident after dropping the plate in accordance with the BlueScope policy. Mr Otsyula agreed that Mr McGlin “did the right thing” by freezing the scene and reporting the incident after he dropped the piece of scrap.

[65] Mr Otsyula acknowledged that he did not ask Mr McGlin to assist with the investigation by helping to re-create the event, ie, to show him what happened or how the six scrap pieces of steel were situated on the magnets.

[66] Mr Otsyula acknowledged that Mr McGlin made a mistake, ie, that he did not intentionally drop one piece of scrap out of the scrap bin.

“PN1302
But he has clearly made a mistake?---If you're asking me whether I think he did it intentionally, I don't think he did it intentionally, but at the end of the day the scrap has come out of the bin.

PN1303

Yes. Well, that's a mistake, isn't it?---Yes, Commissioner.” 29

[67] Mr Otsyula accepted that Mr McGlin’s incident was subjected to an additional investigation to what would normally occur because Mr McGlin was on a final warning.

[68] Mr Otsyula accepted that Mr Kimber conducted an investigation and that he had put Mr McGlin back to work after the requisite drug and alcohol test. Mr Otsyula testified that he did not agree with Mr Kimber’s decision.

[69] Mr Otsyula accepted that two employees who had dropped scrap in recent times had only been issued with a performance improvement note, which is the lowest level of disciplinary action at BlueScope.

[70] Mr Otsyula admitted that there are employees at BlueScope who have received more than one final warning in the past.

“PN1403
Would it have been possible to provide Mr McGlin with another final warning?---I suppose a final warning, Commissioner, is a final warning.

PN1404

You're not aware of employees receiving more than one final warning in BlueScope?---I am aware of it, Commissioner.” 30

[71] Mr Otsyula acknowledged that he did not initiate a conversation with Mr McGlin after he received his final warning to provide Mr McGlin with any friendly advice or persuade him to leave immediately rather then put his $147,000 redundancy pay at risk.

[72] Mr Otsyula further accepted that it was possible that not all dropped scrap incidents are reported.

[73] Mr Otsyula testified that he was aware that Mr McGlin wanted to stay at that Plate Mill and that, contrary to the evidence of Mr McGlin, Mr Otsyula had advised Mr McGlin and two other employees of a vacancy. Mr Otsyula stated that in order to save time and money, he simply relied on the merit selection process that had been undertaken during the restructuring of the Department earlier in the year.

[74] Under re-examination, Mr Dearden asked Mr Otsyula the following question:

“PN1519
Mr McGlin missing the bin with the scrap, in your view was it a mistake or was it carelessness?---It was carelessness.” 31

Ms Jacqueline Fitzgerald

[75] Ms Fitzgerald’s witness statement provided a brief summary of the financial position and operating circumstances of BlueScope.

[76] Relevantly, Ms Fitzgerald’s statement contained the 2015 Financial Results Presentation to the Australian Stock Exchange 32 and the FWC Recommendation33 from Vice President Hatcher (which was the mediated outcome which was accepted by both the BlueScope Board and the Unions in order to generate the required savings to keep the Port Kembla Steelworks operational.)

Submissions

[77] Mr Parkin submitted that the incident where Mr McGlin dropped a single piece of scrap, causing no damage to any product or any injury to any employee, was “the straw that broke the camel’s back.”

[78] Mr Parkin argued that because the dropping of the scrap was such an insignificant issue, that the four previous incidents over the previous 18 months must create a sufficiently serious situation of unsatisfactory performance to provide for a valid reason for termination.

[79] Mr Parkin recalled the stress that Mr McGlin was experiencing at this point in time. Mr McGlin only had a few weeks of employment left at BlueScope after forty-one years working in the same Department. Mr McGlin was faced with the real prospect of unemployment after he had made a minor mistake.

[80] Mr Parkin stated that there were 5 reason why Mr McGlin did not challenge the warnings that he had received from BlueScope:

a) Mr McGlin did not make a practice of challenging everything that came up in the workplace;

b) Mr Otsyula said that warnings were rarely challenged;

c) that there were plenty of reasons not to challenge a warning such as not drawing attention to yourself;

d) that in terms of a costs/benefit analysis, whether challenging the warning would have an effect on Mr McGlin’s final payment;

e) that in January, February and December 2014, there was no threat of the plant closing.

[81] Mr Parkin argued that the FWC is entitled to take into account that Mr McGlin was 3 weeks’ away from a substantial redundancy payment after 41 years of service.

[82] Mr Dearden submitted that the application should be dismissed.

[83] Mr Dearden argued that Mr McGlin’s position ceased to exist from 7 April 2015. In the ensuing period, Mr McGlin had been gainfully employed providing cover for on-going employees who were taking annual leave, long service leave and undertaking company provided training.

[84] Mr Dearden submitted that Mr McGlin made a choice, albeit a financially poor one. Mr McGlin could have taken his redundancy pay in April 2015. Mr McGlin could have left at any time during the five months of his transition period. Instead Mr McGlin “rolled the dice”, continued to perform in a poor manner and was appropriately dismissed.

[85] Mr Dearden argued that Mr McGlin knew of his responsibilities as a transitional employee and that BlueScope was not obligated to “nursemaid” him through his transition period to find other jobs.

[86] Mr Dearden stressed that the financial position of the Company is very relevant to the issue of reinstatement.

[87] Mr Dearden argued that Mr McGlin had the right to challenge any of the warnings that he had received from BlueScope and that any challenge could eventually be arbitrated before the FWC. Mr Dearden stressed that Mr McGlin’s Union knew that as well but that Mr McGlin had accepted the warnings because he knew that they had been given appropriately.

[88] Mr Dearden identified how each of the warnings that were given to Mr McGlin referenced the previous warning. Mr Dearden argued that each step of the disciplinary action undertaken by BlueScope was built on the previous warning, culminating in Mr McGlin’s dismissal.

[89] Mr Dearden stressed that the only thing that Mr McGlin had to do on 17 August was put the pieces of scrap into the bin, a task that he had performed for many years, yet on this occasion, Mr McGlin acted carelessly and missed the bin with one piece of scrap.

[90] Mr Dearden also submitted that Mr McGlin, as a transitional employee, must act in accordance with the standards that BlueScope expects from its on-going employees and that Mr McGlin did not have a cloak of immunity to act in a manner which was not acceptable or appropriate.

[91] Mr Dearden argued that on-going poor performance is a valid reason for termination and that in the last 18 months of his employment, Mr McGlin had received numerous warnings for his on-going poor performance.

Statutory Provisions

[92] The relevant provisions of the Act are reproduced below:

381 Object of this Part

(1) The object of this Part is:

(a) to establish a framework for dealing with unfair dismissal that balances:

(i) the needs of business (including small business); and

(ii) the needs of employees; and

(b) to establish procedures for dealing with unfair dismissal that:

(i) are quick, flexible and informal; and

(ii) address the needs of employers and employees; and

(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.

382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(d) the dismissal was not a case of genuine redundancy.

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(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); and

(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 the FWC considers relevant.

[93] There is no dispute between the parties, and I find, that Mr McGlin was a person that was protected from unfair dismissal in accordance with section 382 of the Act.

[94] There is no dispute between the parties, and I find, that Mr McGlin has been dismissed, that his termination was not a case of genuine redundancy and that the Small Business Fair Dismissal Code does not apply to BlueScope.

[95] The criteria of section 387 must be taken into account when assessing whether Mr McGlin’s dismissal was harsh, unjust or unreasonable.

Consideration

s.387 Criteria for considering harshness etc.

(a) Valid Reason

[96] For a termination to be for a valid reason, the reason must be “sound, defensible and well founded.”

[97] In Selvachandran v Peteron Plastics Pty Ltd 34, Northjop J held;

“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, common sense way to ensure that the employer and employee are treated fairly.”

[98] Mr McGlin wanted to continue to work at the Plate Mill. That is not surprising given his length of service, comfort and specialisation at the Plate Mill. Mr McGlin does not come across as a confident man. Mr McGlin was a poor witness on his own behalf. His memory is not as precise as one may have expected. Mr McGlin had no recollection of Mr Hancock advising him to consider the option of leaving BlueScope after he had received his final written warning. Also, Mr McGlin had no recollection of his discussion with Mr Otsyula in relation to the vacant role at the Plate Mill and the process that Mr Otsyula was going to follow in filling this vacancy. I have taken this into account.

[99] Based on the evidence before the FWC, I have sincere doubts as to whether a number of the disciplinary outcomes given to Mr McGlin were appropriate in the circumstances. From my experience, most employees would have objected to the severity of a number of these warnings. I have taken into account Mr Otsyula’s view that Mr McGlin is not the type of person to directly challenge authority. Perhaps this is the reason why he did not challenge the history card entry or first written warning that he received for leaving his crane without telling his Supervisor, when he had in fact advised his Leading Hand (Senior Operator) of his situation.

[100] I note that Mr McGlin gave evidence to say that he knew the warnings were serious and that he did not challenge them. I have taken this into account.

[101] I accept the submission of BlueScope that any employee has the right to challenge the outcome of a disciplinary process. It would be a nonsense and procedurally unfair to suggest that an employee can be terminated as a result of on-going warnings which substantiate the criteria of a valid reason, if the employee is unable to utilise the provisions of the Agreement to challenge the veracity of those warnings. I have taken this into account.

(b) Notified of the Reason

[102] Mr McGlin was notified that the reason for his termination was for repeated poor performance. Mr McGlin was not notified about any reason in relation to a potential safety issue.

(c) Opportunity to Respond

[103] Mr McGlin was only given an opportunity to respond to the poor performance issue.

(d) Support Person

[104] Mr McGlin had a support person present throughout the disciplinary process.

(e) Unsatisfactory Performance

[105] Mr McGlin received a number of written warnings which clearly expressed BlueScope’s concern over his poor performance.

(f) Size of Employer

[106] BlueScope is a large employer and followed its well established disciplinary procedures.

(g) Human Resources Expertise

[107] BlueScope has a large and extremely competent Human Resources team that were actively involved throughout the termination process.

(h) Any other relevant matter

[108] The pre-eminent decision in relation to whether a dismissal was harsh, unjust or unreasonable is the High Court of Australia decision in Byrne v Australian Airlines Ltd, where McHugh & Gummow JJ held:

“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...”³⁵

[109] I have taken into account the extraordinary length of service that Mr McGlin has provided BlueScope. Forty-one years in the same department is an unbelievable tenure of service in this day and age. I accept that Mr McGlin has not been the perfect employee and was the subject of disciplinary action some 20 years ago. To be fair to Mr Dearden and Mr Otsyula they did not rely on any of these old incidents or warnings. Forty-one years continuous service brings with it obvious expertise in the Plate Mill but also the inhibitions and restrictions associated with isolation and specialisation.

[110] There is contested evidence in relation to a meeting on 3 August 2015. Mr Hancock claims that Mr Otsyula said:

“I’m concerned that you are stressed after being made surplus. I’m worried that your mind might not be on the job.” 36

[111] Mr Otsyula claims that Mr Hancock’s recollection is inaccurate and that he said:

“83. In relation to paragraph 14 of the Statement of Dave Hancock, the words that have been attributed to me in that paragraph are not accurate. Whilst I may have said words to the effect of “People under investigation may be stressed”, I did not refer specifically to Mr McGlin.” 37

[112] Mr Otsyula’s recollection does not make sense in relation to this context of this meeting. This meeting was part of the investigation which led to Mr McGlin being issued with a final written warning. I prefer the evidence of Mr Hancock. His recollection and contemporaneous notes fit within the context of the meeting. It clearly identifies that Mr Otsyula had concerns in relation to Mr McGlin’s health and mental state. I have no doubt that Mr Otsyula’s concerns were real and genuine. Mr Otsyula did not follow up on his concerns about Mr McGlin’s health. I have taken this into account.

[113] After twenty years of acquaintance, I am surprised that Mr Otsyula did not offer Mr McGlin any friendly advice in relation to his future. There was no private recommendation that maybe he should retire immediately before another incident occurred. I have taken this into account.

[114] I have also taken into account the evidence of Mr Bessant – whom I found to be a witness of credit. Relevantly, Mr Bessant testified that it was common practice for Operators to drop plates and it was not unusual for an Operator to work without a chaser or groundmen. Mr Bessant also testified that he was not aware of any employee who had been dismissed for dropping plates. Mr Hancock agreed with this proposition.

[115] I have also taken into account the prospects of Mr McGlin securing new employment. It is common knowledge that the unemployment/underemployment rate in the Illawarra Region is higher than the national average. Mr McGlin’s experience and skills would be of value to an employer somewhere, but none that I can think of in the Illawarra. As a prospective employee, Mr McGlin does not present himself with a favourable disposition. He is quietly spoken, unconvincing, lacking in confidence and in poor health. I am of the view that Mr McGlin will struggle to find alternate employment. I have taken this into account.

[116] Whilst I agree with the submission of Mr Dearden that BlueScope did not have to “nursemaid” Mr McGlin throughout the transition period, it did have obligations to Mr McGlin in accordance with clause 34.3 of the Agreement. It is undisputed that BlueScope identified only one suitable role for Mr McGlin and his colleagues (at Lysaghts). I am not confident that this level of activity satisfies clause 34.3.5(d) of the Agreement. I have taken this into account.

[117] Mr Dearden questioned Mr McGlin quite forcefully in relation to his commitment to “actively and genuinely” participate in the surplus and management processes. I accept that Mr McGlin’s commitment to this process could be described as poor based on his focus to stay at the Plate Mill. However, clause 34.3.5(h) places an onus upon BlueScope to provide assistance such as interview training, work experience, secondment, etc. There is no evidence that any of these types of services or training were offered by BlueScope. I have taken this into account.

[118] I acknowledge the submission of Mr Parkin in relation to the lack of an interview process for the job at the Plate Mill that was filled by Mr Russell Kilby. Whilst in a perfect world it would have been appropriate for Mr Otsyula to conduct an interview process for the internal candidates, I am satisfied that Mr Otsyula conducted sufficient enquires with the relevant Supervisors and utilized a recently undertaken merit selection outcome to determine the appropriate candidate for the role. I have taken this in account.

[119] I have taken into account the fact that Mr McGlin only received one final warning, a final warning that was given because Mr McGlin did not “freeze the scene” after dropping a plate. Whilst the term “final warning” could be interpreted as being quite specific, that is not necessarily the case at BlueScope. There are many employees, as admitted by Mr Otsyula, who have received more than one final warning and continued their employment. I am aware from previous proceedings that this is because the reason for the first final warning was different to that of the next incident. This is the scenario in Mr McGlin’s case. Mr Otsyula testified that Mr McGlin did not “freeze the scene” on 31 July 2015. On 17 August 2015, when Mr McGlin dropped the scrap, he froze the scene and reported the incident. His Supervisor, Mr Kimber, acknowledged that his pending redundancy payment was not at risk because he had taken notice of his final warning and acted in accordance with BlueScope policy to freeze the scene. I have taken this into account.

[120] I have taken into account that Mr Otsyula had to be led by Mr Dearden to change his description of the final incident from being a mistake by Mr McGlin to being an act of carelessness.

[121] I have taken into account the first time that safety became a consideration for Mr Otsyula was allegedly after the final incident on 17 August 2015;

[122] There is no mention of “safety” in any of the warning letters or the termination letter. There is no mention of “safety” in the peer review meeting, the show cause meeting or the termination meeting. The concept of safety being an issue only appears in Mr Otsyula’s statement, which was signed four months after the final incident. I am surprised that Mr Otsyula did not raise the safety issue in the termination letter if it was part of his reasoning behind Mr McGlin’s termination. I have taken this into account.

[123] I have also taken into account that dismissal was not the only disciplinary measure available to Mr Otsyula. As discussed above, a second final warning could have been issued in accordance with past practice. Alternatively, Mr Otsyula could have suspended Mr McGlin for three weeks, ie, up to the conclusion of his transition period to ensure that he was not involved in the production process again thereby removing him as an “alleged” safety risk to his colleagues.

[124] I have been dealing with BlueScope in one form or another for 25 years. From my past experience, once an employee has been declared surplus to the needs of a Department and they cannot be found productive or meaningful work in that Department they are moved into what has become colloquially known as the “old man’s home” where employees spend the day searching for employment, undertake training or become proficient in completing the Herald’s crossword.

[125] Mr McGlin could have transferred to the “old man’s home” to allow him to look for work, both internally and externally from BlueScope and undertake appropriate training in accordance with the provisions of the Agreement. It was also open to Mr Otsyula to allow Mr McGlin to leave immediately as advocated by Mr Hancock. I have taken this into account.

[126] I have taken into account that the announcement from the Managing Director of BlueScope to the Australian Stock Exchange on 24 August 2015 advising of the need to cut $200million of costs from the facility at Port Kembla or the Port Kembla Steelworks would be closed. I note that this announcement was made on the same day as the peer review meeting and before the show cause meeting.

[127] I have taken into account that there was no damage to any BlueScope product or injury to any BlueScope employee as a result of Mr McGlin dropping the piece of scrap on 17 August 2015.

[128] I am surprised by the limited scope and detail of the investigation in relation to the incident on 17 August 2015. Using the same logic used by Mr Otsyula as to the reason why he conducted a further investigation as a result of Mr McGlin being on a final warning, this investigation should have also been thorough enough to consider all of the scenario’s associated with the incident due to the possible consequence of termination. I am surprised that Mr Otsyula did not “re-create” the scene. Mr Otsyula did not seek advice from Mr McGlin as to where the pieces of scrap were situated on the magnets or the height from which the scrap was dropped from the magnets. There was no experiment as to whether the curved scrap fell quicker than the pieces of straight scrap on the basis that it may not have been attached to each of the magnets. There was no investigation as to whether the rim of the scrap bin was damaged from the curved piece hitting the rim and “flipping” out. Mr McGlin testified that he did not know how the piece of curved scrap fell out of the bin. Following the investigation, neither does Mr Otsyula. I have taken this into account.

Determination

[129] I have taken into account all of the detailed submissions and evidence that the parties have provided in this matter. The fact that they have not been mentioned in the preceding paragraphs does not mean that they have not been considered.

[130] Mr McGlin received warnings from BlueScope on 29 January 2014, 3 March 2014, 17 December 2014 and 5 August 2015 in relation to his performance.

[131] Mr McGlin and his Union understood that they had the capacity and opportunity to challenge any or all of these warnings but failed to adopt that course of action.

[132] Mr McGlin acknowledged that he understood that these warnings were all part of a disciplinary process that could culminate in his termination.

[133] As a result of these reasons, I find that Mr McGlin’s on-going poor performance provided BlueScope with a “sound, defensible and well founded” reason to terminate his employment.

[134] Having found that Mr McGlin was dismissed for a valid reason, I now must determine whether Mr McGlin’s dismissal was harsh, unjust or unreasonable.

[135] Based on the issues that I have referred to in paragraphs 107 - 127 above, I find that Mr McGlin’s dismissal was harsh and unreasonable.

[136] I do not intent to reproduce those paragraphs again now but have reached my decision on the basis that it was harsh because;

a) Mr McGlin had forty-one years continuous service with BlueScope.

b) Mr McGlin’s conduct appears to have gone off the rails following the announcement of a restructuring of the Plate Mill in 2014.

c) Mr Otsyula was of the opinion (with which I concur) that Mr McGlin was suffering from stress as a result of his pending forced redundancy, but did nothing to assist in either relieving the stress such as taking him off the crane and utilising him in another role, transferring him to the “old man’s home” or in recommending that he leave BlueScope before the end of his transition period.

d) Mr McGlin is the first employee to have been dismissed for dropping a plate or a piece of scrap. I accept the evidence that the dropping of plates or scrap is a common practice in the Plate Mill.

e) the effects of the termination will have a significant and detrimental effect on Mr McGlin’s future. I have sincere doubts that he will gain employment in the future. A prospective employer will not be enthused by Mr McGlin’s current health situation or his lack of self-confidence.

f) BlueScope did not offer the level of retraining or job search assistance required by the Agreement. A few irregular meetings here or there does not constitute compliance with clause 34.3.5. In my view, BlueScope did not want to lose Mr McGlin from the production line. He was providing useful and productive cover allowing the on-going employees at the Plate Mill to use their accumulated leave or undertake training.

g) Mr McGlin complied with his final warning when he dropped the piece of scrap by freezing the scene and reporting the incident. By doing so, Mr McGlin satisfied the principal concern of Mr Otsyula when he issued the final warning.

h) if Mr McGlin was sacked due to potential safety issues (which I doubt), he did not receive any warnings in relation to this possibility. Also, Mr McGlin was not given an opportunity to respond to any allegation in relation to safety.

[137] Mr McGlin’s dismissal was unreasonable because;

a) there are any number of BlueScope employees who have multiple final warnings. If BlueScope wish to revert to a strict interpretation of the term “final warning” then under the principle of procedural fairness they are obligated to advise their employees and the Unions who are signatories to the Agreement of this change in practice.

b) Mr McGlin made a mistake on 17 August 2015 when the bent piece of scrap fell outside of the bin. The investigation that was undertaken was incomplete. There was no re-creation of the incident and no involvement of Mr McGlin.

c) there was no damage to any BlueScope property or product.

d) there were numerous alternative disciplinary options available for Mr Otsyula to impose upon Mr McGlin that were more appropriate to the mistake made by Mr McGlin.

e) Mr McGlin was only three weeks’ aware from being, compulsory made redundant. Mr McGlin’s redundancy package is approximately $147,000.

Remedy

[138] Section 390 of the Act sets out the circumstances in which I may make an order for reinstatement or compensation;

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.

[139] I am satisfied that Mr McGlin was protected from unfair dismissal pursuant to section 382 of the Act and have already found that he had been unfairly dismissed. Therefore, the matter to be determined is whether to order the reinstatement of Mr McGlin or, if reinstatement is deemed to be inappropriate, an order for compensation, taking into account all of the circumstances.

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:

(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.

[140] Mr Parkin submitted that Mr McGlin should be reinstated and sought an order for continuity of service and lost pay.

[141] Mr Parkin argued that BlueScope has not discharged its onus of proof in relation to the loss of trust and confidence. Mr Parkin referred me to the decision of a Full Bench of the FWC in Thinh Nguyen and Thanh Le v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter, 39where the Full Bench provided a useful summary of the relevant issues to be considered;

“[27] The following propositions concerning the impact of a loss of trust and confidence on the question of whether reinstatement is appropriate may be distilled from the decided cases:

Whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate but while it will often be an important consideration it is not the sole criterion or even a necessary one in determining whether or not to order reinstatement. 40

Each case must be decided on its own facts, including the nature of the employment concerned. There may be a limited number of circumstances in which any ripple on the surface of the employment relationship will destroy its viability but in most cases the employment relationship is capable of withstanding some friction and doubts. 41

An allegation that there has been a loss of trust and confidence must be soundly and rationally based and it is important to carefully scrutinise a claim that reinstatement is inappropriate because of a loss of confidence in the employee. The onus of establishing a loss of trust and confidence rests on the party making the assertion. 42

The reluctance of an employer to shift from a view, despite a tribunal’s assessment that the employee was not guilty of serious wrongdoing or misconduct, does not provide a sound basis to conclude that the relationship of trust and confidence is irreparably damaged or destroyed. 43

The fact that it may be difficult or embarrassing for an employer to be required to re-employ an employee whom the employer believed to have been guilty of serious wrongdoing or misconduct are not necessarily indicative of a loss of trust and confidence so as to make restoring the employment relationship inappropriate. 44

[28] Ultimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive. In making this assessment, it is appropriate to consider the rationality of any attitude taken by a party.”

[142] Relevantly, the Full Bench also referred to the decision of the Federal Court of Australia in Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd (O’Connor) where Gray J held;

“. . . It might be more significant, for instance, to know the name of Mr Voss’s immediate supervisor and to know the attitude of that person towards him. If the immediate supervisor had no trust in Mr Voss, it might also be relevant to know whether it would be possible to place Mr Voss in another part of the workplace, under another supervisor, who did have such trust. It would also be relevant to know what effect any lack of trust by any manager or supervisor in a particular employee might have on the conduct of operations in the workplace. There is no evidence as to any of these matters.

[43] Resort to an assertion that trust and confidence in a particular person have been lost cannot be a magic formula for resisting the compulsory reinstatement in employment of the particular person.” 45

[143] Mr Parkin argued that Mr McGlin’s immediate Supervisor, Mr Kimber, had not lost trust and confidence in Mr McGlin’s ability to work as an Operator on the basis that he put him back to work on 17 August immediately after Mr McGlin had returned from his compulsory drug and alcohol test.

[144] Mr Dearden submitted that reinstatement was not an appropriate remedy for the following reasons;

“Reinstatement

85 However, if the Commission is of the view that the Applicant’s dismissal was in some way harsh, unjust or unreasonable. Reinstatement is nto an appropriate remedy for the following reasons…:

(a) the Applicant’s (position) ceased to exist in April 2015;

(b) since termination a further 10 positions have been identified and agreed as surplus;

(c) the pattern and nature of the Applicant’s poor performance over an 18 month period prior to his dismissal was unacceptable;

(d) the inherent hazardous nature of operations within the Plate Mill, and the potential risks of further operational fault and/or inadvertence by the Applicant;

(e) BlueScope has lost confidence in the Applicant to be employed as an Operator in the Plate Mill;

(f) the economic operating conditions BlueScope currently face.”

[145] Mr Dearden stated that BlueScope’s loss of trust and confidence in Mr McGlin is due to Mr McGlin’s perceived incapacity to abide by its expectations and procedural requirements.

[146] Mr Dearden argued that Mr McGlin had been working in a transitioning position for five months during his Transition Period. As a result, there is no permanent position to which Mr McGlin could be reinstated.

[147] Mr Dearden also raised the issue that reinstating Mr McGlin would interfere with the managerial prerogative of BlueScope. Mr Dearden cited any number of authorities in relation to the prerogative of the employer to determine the appropriate manning levels to run its plant – as long as it is not unsafe or unreasonable.

[148] Mr Otsyula submitted that reinstatement was not a viable remedy for the following reasons:

“Reinstatement

92. In the event the Commission considers reinstating Mr McGlin, I confirm my opposition to such an order for the following reasons:

a) Mr McGlin’s former position no longer exists;

b) the Company has, since his dismissal, undergone a further significant restructure resulting in over 400 positions being declared surplus at Port Kembla;

c) even if there was a position for Mr McGlin, he was given several warnings in respect of his performance since at least January 2014 and had ample opportunity to improve his performance since that time. However, he has demonstrated that he could not do so;

d) having Mr McGlin on site constitutes a serious safety risk, not only to himself, but also to fellow colleagues if he is unable or unwilling to follow the Company’s procedures;
e) I have lost confidence in Mr McGlin’s ability to perform his duties in a proper, competent and safe manner.” 46

Consideration re Reinstatement

[149] I have taken into account all of the submissions of the parties in relation to whether reinstatement is the appropriate remedy in this circumstance.

[150] In Smith v Moore Paragon Australia Ltd (2004) 140 IR 446 [15] the Full Bench of the Commission made the following comments:

“It will often, if not typically, be the case that the position occupied by an applicant for relief under s.170CE of the Act will, at the time the application is arbitrated, either no longer exist or no longer be vacant. In our view that bare fact would rarely, on its own, justify a conclusion that an order for reinstatement was not "appropriate". To adopt such an approach would tend to defeat the remedial purpose of the legislation. The unavailability of a job vacancy is simply one factor to be taken into account in deciding whether or not an order for reinstatement is appropriate.” 47

[151] I accept that the permanent full time role of Mr McGlin is no longer available at BlueScope. I agree with Mr Dearden that this role disappeared in April 2015, even though Mr McGlin had been actively involved in the production process throughout his transition period and BlueScope has continued to use supplementary labour in order to meet production requirements.

[152] I acknowledge that a further ten positions in the Plate Mill have been identified as being surplus as a result of the mediation process conducted by Vice President Hatcher.

[153] BlueScope has failed to substantiate its claim that it has lost confidence in Mr McGlin. Mr Otsyula agreed that he never saw Mr McGlin on night shift and only briefly on day shift. Mr Otsyula agreed that Mr McGlin does not report to him directly. Mr McGlin reports to Mr Kimber, who had no hesitation in putting Mr McGlin back to work in the crane to complete his shift after he had dropped the piece of scrap and undertaken the compulsory drug and alcohol tests. The action of Mr Kimber has led me to the conclusion that there is no loss of trust and confidence in Mr McGlin on behalf of his immediate Supervisor. I rely on the obiter of O’Connor (mentioned above) to support this position.

[154] The economic/financial position of BlueScope is a relevant consideration. I note, however, that the decision to cut the Operator workforce at the Plate Mill by eight and subsequently make Mr McGlin redundant was made many months before the announcement to the ASX on 24 August 2015. The restructure of the Plate Mill – and its associated costs – were all part of that restructure which commenced in early 2014. BlueScope was always cognisant of the fact that if these eight employees could not be redeployed within BlueScope then they would all be entitled to a redundancy payment. That situation has not changed.

[155] In Blackadder v Ramsey Butchering Servicves Pty Ltd 48, the interpretation of the predecessor to section 391(1) of the Act was determined. McHugh J held;

“14. To construe the power "to reinstate" as confined to restoring contractual or other legal rights fails to give full effect to the term "reinstate". To reinstate means to put back in place. In this context, it means that the employment situation, as it existed immediately before the termination, must be restored. It requires restoration of the terms and conditions of the employment in the broadest sense of those terms. It empowers the Commission to do more than restore the contract of employment. So far as practicable, the employee is to be given back his "job" at the same place and with the same duties, remuneration and working conditions as existed before the termination.”

(my emphasis)

Kirby J held;

“28. The fact that, for a very long time, Australian statute law has provided for orders of reinstatement in circumstances such as those in this case illustrates the exceptional but settled character of such orders - intruding as they do into the personal relationship of employer and employee. Such intrusion is deliberate and envisaged by the Act.”

“34. I agree with Callinan and Heydon JJ that Moore J in the Full Court of the Federal Court gave the correct analysis of what might happen in the future if the appellant were unable, or unwilling, to perform the work of his former position as a boner in the chilled boning room (or such other work as was later assigned to him). The purpose of a reinstatement order is to ensure that the employee in question is placed in the status quo ante. It is not to anticipate every eventuality that might thereafter arise; nor is it to provide the employee the subject of it with employment for life. What happens in the future, and what follows from what happens, depends on all the circumstances then obtaining.”

[156] Mr McGlin’s unfair dismissal application is not an application to deal with the issue of him being declared surplus in April 2015. In this regard, as stated earlier, I agree with the submissions of Mr Dearden that Mr McGlin’s substantive and permanent role at the Plate Mill ceased to exist in April 2015.

[157] Reinstatement is the primary remedy under the Act. Based on the reasons identified above, I find that reinstatement is the appropriate remedy in this circumstance. BlueScope has failed to discharge its onus in proving that it has lost trust and confidence in Mr McGlin. I do not accept the argument that Mr McGlin provides an inherent safety risk for BlueScope. From the evidence in this matter, safety has never been raised with Mr McGlin as an operational concern.

[158] Relevantly, the obiter in Blackadder requires BlueScope to reinstate Mr McGlin to the job that he had prior to his termination. In this circumstance, that means BlueScope must reinstate Mr McGlin back into his transition period inside the Plate Mill and allow him to continue his transition process. I refer to the comments of Kirkby J as cited above.

“What happens in the future, and what follows from what happens, depends on all the circumstances then obtaining.”

[159] There is unfinished business for Mr McGlin at BlueScope. Mr McGlin may be successful in finding alternate employment internally over the next three weeks. Mr Otsyula may decide that there is a permanent position available as a result of an increase in demand or a desire to downsize the casual/fixed term workforce, if they are still employed. If there is no productive work for Mr McGlin to perform, then he will have the opportunity to undertake the redeployment assistance (Clause 34.3.5(h) of the Agreement) that has been spasmodically provided in the first five months of the transition period.

[160] I hereby Order that Mr McGlin be reinstated to his position as an Operator level 4 within the Plate Mill, participating in a transitional process. Mr McGlin is to be returned to his position in that process. The unexpired portion of this transition period is three weeks.

[161] If Mr McGlin is unable to secure employment within this three week period then the provisions of the Agreement will apply in the same manner as what would have occurred in September 2015, if Mr McGlin had not been unfairly dismissed.

[162] I reject the claim from Mr Parkin for Mr McGlin to be paid his lost time. Such an order would be without justification and cause unnecessary and unwarranted financial burden on BlueScope. I note that Mr McGlin has been on a social security benefit due to his inability to work since his termination whilst also accessing his superannuation.

[163] I note that Mr McGlin was paid five weeks pay in lieu of notice at the time of his dismissal. I doubt that Mr McGlin has the financial resources to repay this amount of money at short notice. This five week payment should be taken into account by BlueScope when calculating any future payments that it may have to make to Mr McGlin in three weeks time.

Conclusion

[164] I am satisfied that Mr McGlin was protected from unfair dismissal, that his dismissal was harsh and unreasonable and that his reinstatement is the appropriate remedy in this circumstance.

[165] An Order will be issued with this decision.

COMMISSIONER

1 [2013] FWCA 5308

2 Exhibit B7 – Witness Statement of David Otsyula DO3

3 Exhibit B7 – Witness Statement of David Otsyula DO4

4 Exhibit B7 – Witness Statement of David Otsyula DO5

5 Clause 34 – [2013] FWCA 5308

6 Exhibit B7 – Witness Statement of David Otsyula DO8

7 Exhibit B7 – Witness Statement of David Otsyula DO12

8 Exhibit A1 Statement & A2 Reply Statement

9 PN246 Transcript – 3 February 2016

10 PN287 Transcript – 3 February 2016

11 PN298 Transcript – 3 February 2016

12 PN369 Transcript – 3 February 2016

13 PN391 Transcript – 3 February 2016

14 Exhibit A4 Witness Statement of Dave Hancock

15 PN760 Transcript – 3 February 2016

16 Exhibit A4 Witness Statement of Dave Hancock PN26

17 Exhibit A4 Witness Statement of Dave Hancock PN29

18 PN767 Transcript – 3 February 2016

19 Exhibit A6 – Witness Statement of Paul Bessant

20 PN835 Transcript – 3 February 2016

21 PN838 Transcript – 3 February 2016

22 PN848 Transcript – 3 February 2016

23 PN850-851 Transcript – 3 February 2016

24 PN852-853 Transcript – 3 February 2016

25 PN854 – 856 Transcript – 3 February 2016

26 Exhibit B7 – Witness Statement of David Otsyula

27 Exhibit B7 – Witness Statement of David Otsyula PN55

28 PN1089 Transcript – 3 February 2016

29 PN1302-1303 Transcript – 3 February 2016

30 PN1403-1404 Transcript – 3 February 2016

31 PN1519 Transcript – 3 February 2016

32 Exhibit JF1

33 Exhibit JF2

34 (1995) 62 IR 371

35 (1995) 185 CLR 410 at 465 - 468

36 Exhibit A4 Witness Statement of Dave Hancock PN14

37 Exhibist B7 Witness Statement of David Otsyula PN83

38 Exhibit B7 Witness Statement of David Otsyula PN55

39 [2014] FWCFB 7198

40 Tenix Defence Pty Ltd v Galea [2003] AIRC (11 March 2003) at [7]-[8]

41 Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 at 191

42 Ibid.

43 Ibid.

44 Ibid.

45 Ibid.

46 Exhibit B7 – Witness Statement of David Otsyula PN92

47 Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [15]

48 [2005] HCA 22

Printed by authority of the Commonwealth Government Printer

Mr Peter McGlin v Bluescope Scope Steel (AIS) Pty Ltd

[2016] FWC 1550

21 April 2016

DECISION