Scott Challinger v JBS Australia Pty Ltd

[2014] FWC 7963

[2014] FWC 7963 [Note: An appeal pursuant to s.604 (C2014/8360) was lodged against this decision - refer to Full Bench decision dated 30 January 2015 [[2015] FWCFB 520] for result of appeal.]

FAIR WORK COMMISSION

DECISION

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

Scott Challinger
v
JBS Australia Pty Ltd
(U2014/5789)

COMMISSIONER HAMPTON ADELAIDE, 15 DECEMBER 2014

Application for relief from unfair dismissal – dismissal found to be harsh – additional evidence – case re-opened – conduct of applicant – whether reinstatement appropriate – balance of considerations – basis of employer’s concerns based in part upon incorrect understanding of the conduct – clear remedial benefit of reinstatement given circumstances of the applicant – reinstatement appropriate – whether discretion to grant lost wages should be exercised – significant deduction made in the circumstances – order issued.

1. Background

[1] This decision concludes consideration of an application by Mr Scott Challinger pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking a remedy for an alleged unfair dismissal. Mr Challinger was dismissed by JBS Australia Pty Ltd (JBS) on a number of grounds including that he had allegedly failed to comply with a safety instruction to wear protective armguards when using a knife in the relevant part of the Bordertown meat works plant and had used inappropriate language towards senior staff, made personal attacks, and his conduct involved abusive and offensive behaviour.

[2] The substance of the application was determined by the Fair Work Commission (the Commission) in a decision issued on 30 September 2014 1 (the September decision). This decision should be read in conjunction with the September decision.

[3] In the September decision, I found:

“[52] Mr Challinger was supplied with an armguard at some stage, however there is no evidence as to the circumstances in which that took place. I note that another employee doing the same function was also not wearing an armguard on 12 February 2014. In any event, I am not satisfied that Mr Challinger was instructed that he had to wear an armguard when undertaking the particular work being performed by him on 12 February 2014, before being told to do so on that day. Mr Challinger did then put on the armguard; albeit under protest.

[53] Mr Challinger would however have already been aware that the requirement to wear the armguard on all work involving a knife on the slaughter floor was one that management had intended to apply when circumstances allowed.”

....

[58] Mr Challinger was not happy with the instruction to wear the armguard and although he put it on, he stated to Mr Ryan words to the effect of, ‘Oh f***, we’ve got to wear these here now, do we” and Mr Ryan indicted to the effect that “they’re the orders”. Mr Challinger then said “I’m sick of these fu**ing rules swapping and changing, there are too many f**heads over in that office” Mr Challinger then also spoke to Mr Phillips and stated that he was “f***ing sick and tired of getting on this f****ing roundabout that they keep putting the workers on” and then referred to the company “breaking the rules about the 8 hour break between shifts” and that “your too busy worrying about this f***ing shit”, in reference to the armguards”. This was said in a loud and aggressive manner and was primarily directed to Mr Phillips and/or Mr Ryan.
...
[76] The particular language adopted in the MoU also confirms to some degree the expectation that the use of profanities, and what might be described as abusive language in itself, may have been part of the culture at JBS. However, threatening language and behaviour and personal attacks were not to be tolerated.

[77] Although entered into by a former plant management team, and the new management apparently have higher standards, which is to be commended, this relatively low bar does set some of the context in which the events of 2014 must be considered.

[78] It is clear to me that the nature of the Mr Challinger’s response to the instruction on 12 February 2014, and more particularly, the language and tone of the exchange was in all of the circumstances beyond the normal and reasonable boundaries within the workplace, including at the JBS facility. It was not threatening as such, however it was unwarranted, abusive and personal.

[79] In terms of the conduct forming a sound reason for dismissal, there have been issues and warnings concerning Mr Challinger’s previous conduct in relation to language and absences from the workplace. These are also relevant to the question of the proportionality of the dismissal, which I will return to shortly. There is little evidence to support the notion of other conduct, beyond the matters dealt with earlier in the decision, leading to a course of conduct as suggested by Mr Schiller in his evidence. However, the implications of the comments made by Mr Challinger during the 12 February 2014 exchange, in the context of certain previous conduct, are not appropriate in terms of promoting safety within the workplace more generally.

[80] In all of the circumstances I am satisfied that the conduct of Mr Challinger on 12 February 2014 represented a valid reason for dismissal.
...
[93] Mr Challinger has for much of his working life been in the meat industry and that industry in South Australia is dominated by a relatively small number of large employers. He was also at the Bordertown plant for almost 10 years. The loss of employment in these circumstances has had a significant impact upon his capacity to secure further work of that nature.

[94] These matters, the nature of his conduct as I have found it to be, the history of previous disciplinary matters and certain potential mitigating and exacerbating circumstances must also be considered in making any assessment as to whether the dismissal might be considered to be harsh. 2

[95] These mitigating factors include the fact that Mr Challinger was, in his role as a delegate, in a position to question why the apparent change in requirements was made. As outlined earlier, this does not excuse the manner, tone and language of the response and that role also brings with it certain responsibilities. Further, the low bar in relation to abusive conduct in this workplace, set as a result of the 2012 MoU, is also a factor to be weighed into the overall assessment of the dismissal.

[96] As an exacerbating factor, I note that Mr Challinger does not appear to fully acknowledge the inappropriateness of his conduct. Further, the history of disciplinary action involving Mr Challinger must also be taken into account.
...
[99] In this case, having regard to the overall circumstances, including the context and the nature of the actual conduct concerned, I find on balance that the dismissal of Mr Challinger by JBS was harsh.

[100] It was therefore unfair within the meaning of the Act.”

[4] In terms of remedy, the September decision concluded as follows:

“[102] Reinstatement would have a remedial benefit in the circumstances of Mr Challinger and it is the primary remedy under the Act. However, there are some issues arising from the conduct of Mr Challinger, the absence of apparent contrition and concerns about the capacity to resume effective employment relationships at the JBS plant.

[103] Subsequent to the hearing, JBS has made application to re-open for the purposes of leading some additional evidence concerning remedy. That evidence concerns an alleged exchange involving a Site IT Coordinator employed by JBS, and potentially other JBS employees.

[104] That exchange is alleged to have occurred in a social setting after the hearing conducted in this matter.

[105] Mr Challinger has opposed the application to re-open the case for this purpose.

[5] On balance, I considered that it would be fair and appropriate in the particular circumstances of this case to re-open the matter to permit the proposed new evidence to be led. In particular, I formed the view that the additional evidence, if convincing would shed some further light on the capacity of the applicant to resume a productive working relationship with JBS and its employees.

[6] The matter resumed on 10 November 2014 during which I heard the additional evidence. The parties subsequently filed written submissions.

2. Statutory Framework

[7] Division 4 of Part 3-2 of the Act provides as follows:

“Division 4—Remedies for unfair dismissal

390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).

(2) the FWC may make the order only if the person has made an application under section 394.

(3) the FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.

391 Remedy—reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(1A) If:

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

Order to maintain continuity
(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.

Order to restore lost pay
(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), FWC must take into account:

(a) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.

392 Remedy—compensation

Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.

Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. Disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.

393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”

[8] The prerequisites of ss.390(1) and (2) have been met in this case.

[9] Section 390 makes it clear that compensation is only to be awarded as a remedy where the Commission is satisfied that reinstatement is inappropriate and that compensation is appropriate in all the circumstances.

3. The additional evidence

[10] The respondent relied on additional evidence from Mr Shane Hayes, Site IT Coordinator at JBS Bordertown plant.

[11] The applicant provided a further witness statement and gave evidence in relation to the additional evidence.

[12] The additional evidence that was submitted to the Commission relates to an incident that occurred at the Bordertown Hotel. There is a dispute about the precise events and the degree to which any remarks made by Mr Challinger were directed to JBS.

[13] I do not consider that Mr Hayes attempted to mislead the Commission and for the most part was credible. However, I did not find his evidence to be convincing on some issues in that he acknowledged that some elements of his statement included words “to the effect of” (not direct quotes) and more importantly, there were assumptions 3 made about some of the applicant’s conduct and comments which Mr Hayes did not actually hear.

[14] For the most part, I found Mr Challinger’s evidence reliable, including that he did not seek to diminish what he said directly to Mr Hayes. He was not however convincing to the degree that he denied making any statements that might be taken to be an indirect reference to JBS.

[15] Based upon the evidence and my view of each of the witnesses, I find as follows.

[16] The events occurred approximately three weeks after the two day hearing of the substantive matter, which was strongly contested by JBS, and prior to the decision of the Commission being finalised.

[17] Mr Challinger did not work directly with Mr Hayes however they saw each other in the workplace and would acknowledge each other socially. Mr Challinger considered that since his termination, Mr Hayes had not been friendly to him however based upon the evidence that is largely a matter of perception and circumstance.

[18] On 8 August 2014, Mr Challinger attended the Bordertown Hotel around 3:30pm to 4:00pm. The applicant had consumed at least half a dozen drinks of beer prior to seeing Mr Hayes and others at the Hotel.

[19] Mr Hayes was attending the Bordertown Hotel with four other people, some of whom were known by Mr Challinger as employees of JBS.

[20] During the course of the evening, Mr Challinger considered that Mr Hayes and the group he was with were pointing at him and talking and laughing. The applicant felt as if they were laughing or ridiculing him. Again, I consider this to be his genuine view but largely a matter of his perception given his dismissal, the unfair dismissal case and his disposition at that time.

[21] Following this, Mr Hayes walked up to the bar to order some drinks. Mr Hayes greeted Mr Challinger by asking him how everything is going. The applicant responded with “F**k off, ya dog c**t”. That element of the exchange was common between the parties.

[22] Following this point, the versions of what occurred are in dispute. It is also in this context that I hold reservations about the evidence led by both parties. I also note that no additional evidence, including from the other JBS employees, and another person (Mr Bagshaw), who were all involved has been provided to the Commission.

[23] Mr Hayes evidence was that as he was walking away from the bar the applicant made derogatory statements with words to the effect of “you’re still working for those bunch of c**ts” and “everyone out there are gutless c**ts”, presumably in reference to the respondents’ employees.

[24] Mr Hayes states that the applicant followed him to a pool table nearby and engaged in a conversation with Mr Lachlan Bagshaw, a former employee of the respondent. Mr Hayes states that the applicant began to make derogatory statements about him and the group he was with, and asked Mr Bagshaw what he thought of them. Mr Bagshaw had words with the applicant to the effect of “move on”. Following this, the applicant returned to the bar where he proceeded to stare in the direction of Mr Hayes and the group he was with, making the group feel quite uncomfortable. The applicant made further derogatory comments to other patrons and the group made a decision to leave early due to the conduct of Mr Challinger.

[25] The applicant denies that the above occurred. Mr Challinger states that he remained at the bar drinking and that he would have looked over at the pool tables but was not staring at anybody. Furthermore, the applicant states that Mr Bagshaw approached the bar and ordered a drink in a close proximity to the applicant. Mr Bagshaw said words to the effect of “Don’t worry about ‘em Chuck, Move on, don’t worry about it”. The applicant then finished his drink and decided to leave the Bordertown Hotel and go home.

[26] I am not satisfied, based upon the evidence before the Commission, that Mr Challinger made all of the remarks claimed or that he “followed” Mr Hayes as claimed. I accept that it is probable that Mr Challinger made some further remarks to Mr Bagshaw about the employees in the context of their association with JBS and this is what led Mr Bagshaw to suggest that the applicant “move on”. It is also probable that Mr Challinger in fact left prior to Mr Hayes’ party leaving the Hotel.

[27] The potential relevance of this evidence goes to the capacity for Mr Challinger to work effectively again with JBS and its employees. Mr Challinger denied that any negative comments made represented his view about JBS. The comments that were made to Mr Hayes were unfortunate and reflect poorly on Mr Challinger. However, given the context and the overall circumstances, in my view it would be wrong to place too much significance on that conduct for present purposes.

4. Mr Challinger’s position

[28] In relation to the above incident the applicant contends as follows:

● There is nothing in the incident that occurred on 8 August 2014 to deter the Commission from making an Order for reinstatement;
● The incident on 8 August 2014 is unlikely to have any ongoing effects on relationships in the workplace as the incident was a single brief occasion and in a social setting; and
● Interaction between Mr Hayes and the applicant would not be significant if the applicant returned to the workplace as they work in different areas of the respondents’ workplace.

[29] The applicant’s contentions more generally are that the appropriate remedy is reinstatement, specifically to his former position:

● the applicant is a long-term employee;
● the applicant has not committed any misconduct that would justify a loss in the trust and confidence between the parties; and
● the applicant is likely to suffer a disadvantage in the labour market due to his age.

[30] Mr Challinger continues to seek reinstatement; albeit on the basis that a final warning would be issued to him. 4

[31] Should the Commission determine that reinstatement is not appropriate, Mr Challinger contends that compensation should be ordered pursuant to s.392 of the Act. He acknowledges that the Commission would need to make a reduction in the amount of compensation under s.392(3) of the Act given the findings in the September decision. The applicant submits that the appropriate reduction should be between 10-15%.

[32] Mr Challinger rejects the suggestion by JBS that he has not taken adequate steps to mitigate his loss of income since the termination of his employment. Mr Challinger states that Bordertown is where he regards his home as and that whilst his family and a girlfriend live in Port Pirie, there is no suggestion of suitable work there. The applicant also contends that he is actively seeking employment with the help from Job Prospects but has been unsuccessful in gaining employment.

5. JBS’s position

[33] JBS contends that reinstatement is not an appropriate remedy as it is likely to impose unacceptable problems including seriously affecting productivity and harmony within the business. The respondent submits that it is therefore inappropriate to order reinstatement. 5

[34] JBS further contends that reinstatement is inappropriate as:

● The conduct of the applicant has broken the necessary trust and confidence between the parties, such that there would be no practical chance of re-establishing an employment contract between the parties;
● Mr Challinger’s previous conduct is beyond the normal and reasonable boundaries within the workplace;
● Mr Challinger has previously received disciplinary action, including a serious incident in 2012;
● The Commission has found there was a valid reason for dismissal;
● The applicant has failed to acknowledge the inappropriate nature of his conduct;
● JBS has genuine concerns and reservations that Mr Challinger would not have the ability to re-establish a viable and productive relationship with the Employer and its employees; and
● The Commission would be unable to conclude that a viable, productive and safe future relationship could be restored between the parties. 6

[35] In relation to the additional evidence, JBS contends that the conduct of the applicant was unwarranted and abusive, and is in much the same manner that led to the dismissal of the applicant. Even if the evidence of Mr Challinger was accepted over the respondent’s witness, the behaviour and conduct of the applicant remains unwarranted and abusive.

[36] The respondent further submits the following:

● That whilst the conduct was not at work, there is a connection to work through the occasional dealings the applicant and Mr Hayes had in the workplace;
● That even though there was an absence of an explicit reference to the Employer, the context and language used is clearly a criticism of the Employer and to those who work for the Employer; and
● The conduct demonstrates the applicant’s views about the company, therefore making reinstatement inappropriate.

[37] JBS submits that compensation is the appropriate remedy for the matter. It contends that the Commission should consider that the employer may have had a further reason to dismiss the applicant in the near future, and that a discount should be applied due to the conduct of the applicant which resulted in his dismissal. JBS contends that the amount of compensation should be limited to 5 weeks and that a discount for misconduct should be in the order of 25-50%. Furthermore, it contends that it is unlikely that the applicant would have been employed long term and therefore, the general contingency in relation to future employment should consider a higher discount in line with 25%.

[38] JBS acknowledges that the applicant has attempted to mitigate his loss however the mitigation has not gone far enough. It contends that Mr Challinger has not adequately sought to mitigate his loss, in that the applicant has connections outside of Bordertown, including family and a girlfriend in Port Pirie, and has not sought to search for jobs in that area.

6. Consideration

[39] It is clear from the terms of s.390(3)(a) that, in circumstances where a remedy is appropriate, compensation must not be ordered unless the Commission is satisfied that reinstatement is inappropriate. As a result, it is proper to firstly consider whether reinstatement is appropriate.

[40] There are two alternative forms of “reinstatement” under the Act. Reinstatement to the former position (s.391(1)(a)) or appointing the employee to another position on terms and conditions no less favourable than those on which they were employed immediately before the dismissal (s.391(1)(b)).

[41] In Australia Meat Holdings Pty Ltd v McLauchlan 7a Full Bench of the AIRC, having considered the language of the Act, which is comparable to the present provision, said:

“In our view a consideration of the appropriateness of reinstatement involves the assessment of a broader range of factors than practicability.

... ...

We accept that the question of whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate. It is one factor to be taken into account, but it is not necessarily conclusive.

In Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 at 191-192, the Full Court of the Industrial Relations Court said:

"... We accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.

At the same time it must be recognised that, where an employer, or a senior officer of an employer, accuses an employee of wrongdoing justifying the summary termination of the employee's employment, the accuser will often be reluctant to shift from the view that such wrongdoing has occurred, irrespective of the Court's finding on that question in the resolution of an application under Division 3 of Part VIA of the Act.

If the Court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the Court carefully scrutinise any claim by an employer that reinstatement is impracticable because of loss of confidence in the employee.

Each case must be decided on its own merits."

While Perkins was decided under the former statutory scheme the above observations remain relevant to the question of whether reinstatement is appropriate in a particular case.”

[42] More recently, a Full Bench of the Commission further considered the statutory scheme surrounding the remedy provisions including the role played by an alleged loss of trust and confidence felt by the employer. In Colson v Barwin Heath, 8 the Full Bench found as follows:

“[26] Section 381(1)(c) of the Act requires an emphasis on reinstatement in providing remedies if a dismissal is found to be unfair, which is one element of the object of Part 3–2. Section 381(2) of the Act requires as part of the object that a “fair go all round” is accorded to both the employer and employee concerned in deciding on and working out remedies under Part 3–2. Section 390(3) of the Act provides that the payment of compensation should not be ordered unless the Commission is satisfied that reinstatement of the person is inappropriate (and an order for compensation is appropriate).

...

[31] The approach of the Deputy President is consistent with that of the Full Bench in Regional Express Holdings Limited trading as REX Airlines v Richards which stated:

“[23] It is clear from the terms of s.390(3)(a) that, in circumstances where a remedy is appropriate, compensation must not be ordered unless the tribunal is satisfied that reinstatement is inappropriate. Seen in the proper context the Commissioner’s statement that reinstatement is the presumptive remedy is not indicative of any error in the decision. The section provides that compensation must not be ordered unless reinstatement has been found to be inappropriate. There is no basis for concluding that the Commissioner interpreted the section differently. Rex’s first submission on remedy must fail.

[24] In relation to remedy, therefore, the first question is whether reinstatement is appropriate.”

[43] The Full Bench further observed that consideration of reinstatement involved a balancing of the relevant considerations based upon evidence, 9 and that the approach outlined in Perkins remains sound and requires consideration of the “rationality” of the basis of the employers concerns.10

[44] In Thinh Nguyen and another v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australian Chapter 11 the Full Bench conveniently summarised the approach required as follows:

“[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.
● 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.
● 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.
● 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.
● 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.

[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.”

[45] The only substantive evidence directly touching upon trust and confidence in the present context was that given by Mr Schiller, the employer’s Plant Manager whose evidence was that he would not be comfortable with Mr Challinger being reinstated. 12 The basis for this position was explored under cross-examination as follows:

“PN2374
You say in your statement you're not comfortable with Mr Challinger being reinstated. Is that right?---Correct.

PN2375
You say you don't have any confidence that Mr Challinger will follow directions from JBS?---Correct.

PN2376
You formed that view on the basis of your understanding, firstly, that Mr Challinger deliberately ignored a safety direction to wear his arm guard?
---Mm'hm.

PN2378
And because of the view you formed, that Mr Challinger embarked upon a deliberate course of conduct to undermine employee cooperation?---Yes.”

[46] There is little direct evidence touching from the other managers and supervisors who would more directly need to supervise and manage Mr Challinger if he was reinstated. This does not mean that their evidence and concerns about the conduct of Mr Challinger in the events leading to the decision are irrelevant, or that some reasonable inferences cannot be drawn from the actual conduct itself.

[47] However, the direct evidence going to the loss of trust and confidence was based upon an incorrect understanding of Mr Challinger’s conduct in not wearing the armguard at the time. I was not satisfied that he had already been instructed to wear the armguard in the circumstances applying at the time and I noted that given his role as a delegate with an earlier role in the trialling of the armguards, it was not inappropriate for him to raise the issue. He also did put the armguard on when instructed to do so. It was the manner and language associated with how he went about that which created the valid reason for dismissal, however he did not deliberately ignore a safety direction.

[48] I have carefully weighed the various considerations relevant to this assessment. These include the applicant’s work history with JBS, including the prior conduct and warnings, as outlined in the September decision, and the absence of apparent contrition. Further, although JBS is a large employer, the JBS facility in Bordertown is based in a relatively small regional location. This means that the assessment of whether a productive, safe and appropriate working relationship could be re-established in this workplace must take account of the relationships between individuals more generally than might otherwise be the case.

[49] I have also considered the circumstances of Mr Challinger including the evident remedial impact of a reinstatement order. Mr Challinger has for much of his working life been in the meat industry and that industry in South Australia is dominated by a relatively small number of large employers. He was also at the Bordertown plant for almost 10 years and was at the time of his dismissal a slaughterman and the senior delegate for the Australasian Meat Industry Employees Union (AMIEU) at the plant. The loss of employment in these circumstances has had, and will have, a significant impact upon his capacity to secure further work of that nature. The capacity to secure other employment in the region also appears to be very limited.

[50] The case presented by the AMIEU for Mr Challinger was that he might be reinstated on the basis of a final warning. Given that he was not on a final warning about these matters at the time of his dismissal, I doubt that a conditional order of that nature can be made under the Act. That is, the concept of reinstatement brings with it the restoration of the terms and conditions of employment in the broadest sense of those terms. 13 Certainly, the issuing of a final warning to Mr Challinger by JBS about the events leading to the dismissal would not, in the event of reinstatement, be inappropriate and I would expect that to occur.

[51] I would also expect that, in light of this decision and the September decision of the Commission, the fact that the employers’ (revised) standards on appropriate conduct are now much clearer in this workplace, Mr Challinger will in the future conduct himself appropriately and raise any issues that he has, including in his role as a delegate if that eventuates, in a constructive manner. A failure to do so would have serious potential consequences given the findings made by the Commission and the previous history.

[52] Despite some reservations, I am not satisfied that reinstatement of Mr Challinger would be inappropriate. Amongst other considerations, JBS has not persuaded me that reinstatement would be problematic on the basis of a loss of trust and confidence. Given those findings, compensation as a remedy is, by virtue of s.390(3) of the Act, not to be considered. I also find, on balance, that reinstatement, subject to what follows, is appropriate given the findings in the September decision, my findings about the new evidence, the prevailing circumstances and the considerations outlined above.

[53] Given that an order is to be made under s.391(1) of the Act, two further considerations arise; namely the maintenance of continuity of service (s.391(2)) and the potential for an order to restore lost pay (s.391(4)).

[54] I consider that it is appropriate to make an order for continuity of service as contemplated by s.391(2) of the Act.

[55] The capacity to make an order for the restoration of lost pay is also a discretion and does not automatically follow a reinstatement order. There has been a period of some nine months since Mr Challinger’s dismissal.

[56] It is evident from the approach of the Commission (and its predecessors) to s.391(3) of the Act (and its earlier equivalent provision) that the exercise of this discretion can include consideration of any misconduct by the employee that has led to the dismissal 14 and that any “deduction” from any order for lost wages can extend to some or all of that amount.15

[57] In making an assessment of an amount, assuming that it is appropriate to do so, the Commission is obliged to take into account the amount of any remuneration earned by the applicant from employment or other work during the period between the dismissal and the making of the order for reinstatement; and the amount of any remuneration reasonably likely to be earned by them during the period between the making of the order for reinstatement and the actual reinstatement (s.391(4)).

[58] The applicant remains unemployed and there is no evidence of any employment related income, or reasonably likely income, in the relevant periods.

[59] In all of the circumstances, I consider that it is appropriate that only a proportion of lost wages form part of any order made by the Commission in this matter. I have determined that payment of an amount of lost wages covering a period of ten weeks is fair and reasonable given the nature of Mr Challinger’s conduct found by the Commission and the circumstances of both parties more generally.

7. Conclusion and Orders

[60] I have found that the dismissal of Mr Challinger was harsh, and therefore unfair within the meaning of the Act.

[61] I have also found, on balance, that reinstatement is appropriate and that an order for continuity of service and part recovery of lost wages should be made.

[62] An order 16 to the that end is being issued in conjunction with this decision.

[63] Should there be a dispute about the value of the lost wages for the 10 week period, liberty is granted to either party to seek a determination of that detail.

Appearances:

L Norris on behalf of Mr Challinger.

B Duggan, with permission, on behalf of JBS Australia Pty Ltd.

Further hearing details:

2014

Adelaide

November 10.

Written submissions:

Applicant:

21 November 2014.

Respondent:

1 December 2014.

 1   Scott Challinger v JBS Australia Pty Ltd [2014] FWC 4874.

 2   See Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 411 t 465 per McHugh and Gummow JJ.

 3   Transcript – PN2696.

 4   Closing submissions on behalf of the applicant - Transcript PN2484.

 5   Cox v South Australian Meat Corporation (1995) 60 IR 293.

 6   Thinh Nguyen and another v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australian Chapter[2014] FWCFB 7198.

 7   AIRC Print Q1625, 5 June 1998, per Ross VP, Polites SDP and Hoffman C.

 8   [2014] FWCFB 1949.

 9   Supra at [49] to [51].

 10 Supra at [60].

 11   [2014] FWCFB 7198.

 12   Exhibit R13.

 13   Blackadder v Ramsay Butchering Services Pty Ltd [2005] HCA 22, see in particular McHugh J at par 14.

 14   Kenley v JB Hi Fi AIRCFB, 22 June 2000) Print S7235 at [36]; Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54 and Lindsay Douglas Lawrence v Coal & Allied Mining Services Pty Ltd T/A Mt Thorley Operations/Warkworth[2010] FWAFB 10089.

 15   Holcim (Australia) Pty Ltd v Mr Raimond Serafini[2011] FWAFB 7794.

 16   Order PR558929.

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