Water Corporation v Antony Batchem
[2017] FWCFB 760
•17 FEBRUARY 2017
| [2017] FWCFB 760 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s604 - Appeal of decisions
v
Antony Batchem
(C2017/205)
VICE PRESIDENT HATCHER | SYDNEY, 17 FEBRUARY 2017 |
Appeal against decision [2016] FWC 9088 of Commissioner Cribb at Melbourne on 21 December 2016 in matter number U2016/3877.
Introduction
[1] Water Corporation (appellant) has applied for permission to appeal and appealed a decision of Commissioner Cribb issued on 21 December 2016 1(Decision). The Decision determined an application filed by Mr Antony Batchem, pursuant to s.394 of the Fair Work Act 2009 (FWAct), in which Mr Batchem sought an unfair dismissal remedy following his summary dismissal on 30 December 2015 for misconduct. Mr Batchem had been employed by the appellant for 10 years. At the time of his dismissal he was employed as a Process Coordinator at the appellant’s Kwinana Wastewater Reclamation Plant (KWRP) in Western Australia.
[2] Shortly stated, the Commissioner found that there was no valid reason for Mr Batchem’s dismissal, his dismissal was “harsh, unreasonable and unjust”, within the meaning of s.387 of the FW Act, in that the appellant had not been able to prove Mr Batchem’s misconduct and he had been denied procedural fairness (which the Commissioner described as “natural justice” issues). The Commissioner was further satisfied that Mr Batchem should be reinstated, with restoration of lost pay and continuity of service. We understand that no final orders have been made in the matter, as the Commissioner required further details as to any remuneration earned by Mr Batchem in the 12 months since his dismissal and pending the outcome of this appeal.
[3] At the hearing of the appeal on 7 February 2017, the appellant was represented by its Employee Relations Manager, Mr B. O’Brien and Mr Batchem was represented by his wife, Ms S. Gray.
Background
[4] We set out the background to this matter as follows. The appellant is a large State owned utility in Western Australia providing water, wastewater and drainage services to hundreds of thousands of homes, businesses and farms in that State. It has assets valued at $15 billion. The KWRP treats waste water for industrial use in the Kwinana area. It is listed on the Critical Asset Register of Western Australia.
[5] When Mr Batchem was rostered on on-call/standby, he was required to remotely monitor the operation of the KWRP, typically from home by logging into the plant’s computer system on his work laptop. If any issues arose which Mr Batchem could not resolve remotely, he would attend the relevant site for which he was paid a “call-out” allowance (at the time amounting to a minimum of $287).
[6] Mr Batchem’s dismissal for misconduct was in relation to the events which occurred on the night of 3 November 2015 when Mr Batchem was at home on standby. Around 7pm that night, the high alarm set points of the chorine analyser for the post contact tank and the reverse osmosis feed tank at the KWRP were altered, using Mr Batchem’s work laptop and his login details. The actual changes were identified as:
(a) at around 7.01pm, the PC high set point was adjusted from 3.0 to 1.9. At that time the level of chlorine in the post contact tank was 1.97, which means this adjustment should have triggered an alarm, it did not;
(b) 24 seconds later, at around 7.01pm, the PC high set point was again adjusted to 1.90;
(c) at around 7.02pm, the PC high set point was further adjusted to 1.900000000 – again, this should have caused an alarm to be triggered but it did not;
(d) at around 7.03pm, the RO high set point was adjusted from 3.0 to 1.5. At that time, the level of chlorine in the reverse osmosis tank was 1.70, which was within the acceptable range;
(e) once the RO high set point was lowered to 1.5, an alarm was triggered and the entire KWRP was automatically shut down; and
(f) approximately 4 minutes late, at around 7.07pm, the RO set point was changed back to 3.0.
[7] Arising from the above computer alterations (described as the “data manipulation issue”) it is not disputed that:
(a) the KWRP shut down as a result of the altered high alarm set points;
(b) the high alarm set points could only have been altered from Mr Batchem’s laptop;
(c) after a time lapse of around four minutes, the alarm setting alteration was reversed and restored;
(d) the post contact tank alarm was not triggered because the alarm system in that tank was not functioning at the time. However, the other tank’s alarm was triggered;
(e) the appellant’s Operations Control Centre contacted Mr Batchem to advise that the plant had shut down; and
(f) there was no damage or adverse safety ramifications caused by the plant’s shut down.
[8] Mr Batchem attended the site to restart the plant and then called his line manager to advise that he was approaching the fatigue management limit (12 working hours in a 24 hour period). At around 3.20am Mr Batchem received another call from the Operations Control Centre advising him that the KWRP had shut down again (unrelated to the first shutdown). Mr Batchem returned to the plant a second time, although the appellant maintained he was expressly not authorised to do so. This was said to be another reason for Mr Batchem’s dismissal, although not the primary reason. It was referred to as the “working hours issue”.
[9] The next day (4 November 2015) Mr Batchem tried to rationalise how his laptop could have been altered, as he believed the alteration was unusual. Mr Batchem then proceeded on long service leave on 4 November 2015 and returned on 30 November 2015. When Mr Batchem returned from leave, he attended a meeting with management where he was handed a letter setting out the allegations against him. He was invited to respond and was suspended on full pay pending an investigation.
[10] Two days later (2 December 2015) he questioned his two young sons as to whether they may have tampered with his laptop on 3 November 2015, when he left the active laptop on the kitchen table, unattended, while he was briefly assisting his injured wife (fractured ankle) to urgently attend her workplace that night. His 10 year old son admitted to “playing around” on the computer that night. Given that he often allowed his children to play on his work computer and let them sit on his lap while he monitored the plant and that his 10 year old son had a photographic memory, this explained what had occurred.
[11] Mr Batchem attended a further meeting on 3 December 2015, at which he read from a prepared three page written response. At both meetings, Mr Batchem was accompanied by his Union representative. The appellant found Mr Batchem’s explanation to be implausible, as it defied belief. Having so determined, the appellant concluded that Mr Batchem was dishonest during the investigation into the incident. The appellant concluded that Mr Batchem had deliberately altered the high alarm set points in order to attend the plant on “call out” and thereby gain a financial benefit (four hour minimum at the rate of time a half for the first two hours and double time thereafter). The appellant further concluded that even if Mr Batchem’s explanation was accepted, his actions of leaving his work laptop active and unattended so that his son could alter the high alarm settings, constituted serious misconduct. Therefore, on Mr Batchem’s own version of events, there was a valid reason for his dismissal.
[12] Mr Batchem was dismissed on 30 December 2015, with notice paid in lieu. We set out the substance of the appellant’s reasons for dismissal as set out in the letter of termination:
- The Water Corporation has outlined to you its concerns in relation to the 3 November shutdown at the Kwinana Wastewater Reclamation plant (KWRP). The Water Corporation’s system shows that your user login unnecessarily altered the alarm set points for the RO feed chlorine tank analyser; this manipulation of the alarm set points caused a shutdown at the KWRP and had the potential to cause damage to the KWRP. The Water Corporation has considered your explanation in relation to this incident and has determined that, given the complexity of the system and the steps required to make the changes, it is implausible that your 10-year-old son could have changed the set points in the way that they were changed. In any event, if the set points were changed in the way you assert they were, this would have been a serious oversight on your part as you are responsible for the security and integrity of your Corporation-issued computer and the data on that machine. The manipulation of the data set points by you is an unacceptable course of conduct on your part that has caused the Water Corporation to lose trust and confidence in you as an employee. I note that this is not the first incidence of fraudulent behaviour by you during your employment at the Water Corporation.”
“ The Water Corporation has outlined to you its concerns in relation to you exceeding the 12 hour limit during your work day on 3 November 2015. The Water Corporation has considered your explanation in relation to this incidence and had determined that you failed to follow the instructions of your line manager in relation to your working hours. Your line manager directed you to perform telemetry calls for the remainder of you shift, and yet you ignored this direction by making an unauthorised visit to the site. This is an unacceptable course of conduct on your part. You have not acted in accordance with the Water Corporation’s values, and you have breached the Aroona Alliance – Working Hours Standard by exceeding the allowable working hours within a 24-hour period without management approval. Furthermore, you have refused to obey lawful and reasonable instruction of your line manager in relation to not visiting the site on 3 November.
The Decision
[13] The Commissioner undertook the conventional exercise of firstly, determining whether Mr Batchem was guilty of the misconduct alleged against him; secondly, whether there was a valid reason for his dismissal; thirdly, took into account and assessed the other provisions in s.387(b)-(h), to determine whether Mr Batchem’s dismissal was “harsh, unjust or unreasonable”; and fourthly, having found Mr Batchem to have been unfairly dismissed, satisfied herself that reinstatement was not inappropriate (s.394); and lastly, made other ancillary orders. It is apparent that in determining each of these matters, the Commissioner found in Mr Batchem’s favour. We set out her conclusions on each of the matters as follows:
[14] As to her primary finding that Mr Batchem did not alter the alarm set points, the Commissioner said at paragraphs 31-32:
“[31] It was common ground that the high alarm set points for the post contact tank and the reverse osmosis feed tank were altered remotely from Mr Batchem’s work laptop on 3 November 2015. Because the alarm was not operational on the post contact tank at the time, this alarm did not trigger but the alarm on the reverse osmosis feed tank triggered and the plant shut down. As indicated earlier, the question for the Commission to determine is whether or not Mr Batchem deliberately altered the high alarm set points on these two tanks. I have carefully considered all of the material before me regarding this issue. I find that Mr Batchem did not alter (deliberately or otherwise) the high alarm set points as alleged by the Respondent. I accept Mr Batchem’s evidence that it was his 10 year old son who changed the high alarm set points. I also accept Mr Batchem’s evidence as to why it was possible for his son to have done so.
[32]In addition, there is no evidence before me that substantiates the Respondent’s contention that Mr Batchem deliberately altered the high alarm set points in order to generate a situation whereby Mr Batchem would be required to attend the plant and receive the additional payment as a result of a call out. In my view, the evidence points against this being the situation. Because Mr Batchem was required to attend the plant after the alarm triggered and the plant shut down, Ms Gray was unable to attend at her workplace that night. Mr Batchem gave evidence that he had received a “blasting/copped a razzing” from his wife because he had to go to the site. This is accepted.”
[15] As to the appellant’s alternative submission, she said at paragraph [33]:
“[33] The Respondent also submitted that Mr Batchem’s actions, in leaving his work computer logged on and accessible to his 10 year old son, constituted serious misconduct. This was because Mr Batchem was responsible for the security of the work computer and the data contained therein. The concerns of the Respondent, in Mr Batchem leaving the work laptop in active mode and unattended, are acknowledged. However, in all of the circumstances of what happened around 7pm on 3 November 2015, I do not consider that Mr Batchem was being negligent in leaving his laptop active and unattended for a short period of time. The reason Mr Batchem left his laptop was that he was required to provide assistance to his wife who had a broken ankle so that she could attend her workplace. Mr Batchem’s actions were unremarkable (although in hindsight- not wise) in that he left his laptop in active mode, on the dining room table in a family situation, for a short period to assist his wife go to work. Mr Batchem’s actions in unwisely leaving his laptop whilst in active mode are not condoned. However, it does not to provide a valid reason for his dismissal.”
[16] The Commissioner then dealt with each of the matters under paragraphs (b)-(h) of s.387 and found in respect to s.387(c) under the heading “opportunity to respond” at paragraphs [73] and [75]:
“[73] With respect to whether Mr Batchem was given an opportunity to respond to the reasons for his dismissal, I have not been persuaded that Mr Batchem was given that opportunity. It would appear from Mr Ross’s evidence that, on 30 November 2015, when he and Mr Brown read to, and then gave the letter to, Mr Batchem which set out the allegations, he had told Mr Batchem that there would be no discussion about the matter at that time. At the meeting on 3 December 2015, Mr Batchem had read from a lengthy prepared written response which he then gave to Mr Ross and Ms Stratford. Following the reading of Mr Batchem’s response by Mr Batchem/Mr Bailey, there appears to have been some questions put to Mr Batchem by Mr Ross. There was a dispute between the parties as to whether the record of the interview prepared by Mr Ross was an accurate reflection of what had been said. On the basis of Mr Bailey’s notes of the meeting, together with Mr Ross’s record of interview with Mr Batchem’s handwritten comments on it, it would appear that there were only a few questions asked by the Respondent. Given that there was a real possibility that Mr Batchem would be dismissed if his explanations were not accepted by the Respondent, it would seem that the opportunity for Mr Batchem to respond could best be described as perfunctory.
[75] However, there are two aspects of the process which are of concern and which have resulted in a flawed process. The first aspect concerns that the fact that Ms Domurad, who was the decision maker, had an informal discussion about the working hours issue with Mr Cooper but did not have a corresponding conversation with Mr Batchem. Ms Domurad’s actions in firstly, having a conversation with Mr Cooper in the first place, and then not having a similar conversation with Mr Batchem, would seem to be contrary to the principles of natural justice. These actions would also suggest a bias by the decision maker, Ms Domurad, against Mr Batchem.”
[17] In dealing with remedy, and after setting out the principles going to an employer’s loss of trust and confidence telling against reinstatement, set out in Thinh Nguyen and Than Le v Vietnamese Ethnic School South Australia Chapter 2, the Commissioner said at paragraphs [102]-[104]:
“[102] As provided for in Thinh, the onus of proof in establishing a loss of trust and confidence rests, in this case, with the Corporation. As was also set out in Thinh, ultimately, the question is whether a sufficient level of trust and confidence can be restored to make the relationship viable and productive. On the basis of the analysis of the evidence before me in paragraphs 96-102 above, on balance, I have not been persuaded that a sufficient level of trust and confidence cannot be restored between Mr Batchem and the Respondent so as to make the relationship viable and productive. The fact that an employee is difficult to manage and is resistant to change does not amount to a loss of trust and confidence by the employer in that employee. Mr Ross’s evidence was that his loss of trust and confidence in Mr Batchem, was due to his finding during the investigation that Mr Batchem had deliberately changed two alarm set points. However, the Commission has now found that Mr Batchem did not deliberately change the alarm set points. In addition, it needs to be noted that one of the alarms concerned (the post contact tank) was not operational at the time and that it remained non-operational for a period of two weeks before it was discovered.
[103]The other two considerations are that the Act provides for reinstatement as the primary remedy. Secondly, the Commission has found that Mr Batchem did not take either of the actions of misconduct as alleged by the Respondent.
[104] Taking all of this into account, I find that I am satisfied that, on balance, reinstatement of Mr Batchem is appropriate. Therefore, I must order the reinstatement of Mr Batchem”
[18] The Commissioner also found in respect to the “working hours” issue, that Mr Batchem did not breach the fatigue management limit, because it was reasonable for him to have understood he had received the requisite authorisation from his Line Manager to attend the second call out.
[19] As the appellant did not challenge this finding in the appeal, it is unnecessary for us, to deal with the working hours” issue for the purposes of determining whether permission to appeal should be granted.
Submissions
[20] The appellant submitted that the Commissioner acted on wrong principles by firstly, applying an incorrect standard of proof when determining that the respondent’s son altered the high alarm set points in the manner required to shut down the KWRP and secondly, when she assessed whether the respondent had been afforded an opportunity to respond to the allegations against him as required by s.387(c) of the FW Act. Both of these matters raise important issues in the Commission’s unfair dismissal jurisdiction, particularly where a member of the Commission had misapplied established principles well settled at the Full Bench level.
[21] The appellant further asserted that the public interest is enlivened by the Commissioner’s decision to reinstate the Mr Batchem in circumstances where the Commissioner’s findings on the “data manipulation issue” are affected by significant errors, warranting Full Bench reconsideration and given that Mr Batchem’s reinstatement would have him being able to access and control a water treatment plant listed on the State’s Critical Asset Register.
[22] Lastly, if the Commissioner’s findings as to the “data manipulation issue” are allowed to stand, a substantial injustice to the appellant would remain uncorrected.
[23] Mr Batchem submitted that the appellant had failed to identify any issues of importance or general application in the Commissioner’s Decision such as to warrant permission to appeal being granted. The Decision is not counter intuitive, does not manifest an injustice, does not display any diversity of decision-making and is harmonious with other decisions of the Commission dealing with similar matters.
[24] Mr Batchem rejected as irrelevant the appellant’s argument as to the public interest being enlivened by his reinstatement, because the Commissioner found he was not guilty of the allegations made against him and which ultimately were found to be not valid reasons for his dismissal. As to significant injustice if the Decision is allowed to stand, it is Mr Batchem who would suffer injustice as:
(a) the appellant had rejected any reasonable opportunity to reach a settlement of the matter and refused to participate in conciliation by the Commission;
(b) it had been 11 months from the date of filing the application until the date of the Commissioner’s Decision.
Consideration
[25] An appeal under s.604 of the FW Act is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker. 3 There is no right to appeal and an appeal may only be made with the permission of the Commission.
[26] This appeal is one to which s.400 of the FW Act applies. Section 400 provides:
(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.
[27] In the Federal Court Full Court decision in Coal & Allied Mining Services Pty Ltd v Lawler and others, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 as “a stringent one”. 4 The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment5. In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
“... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.” 6
[28] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error. 7 However, the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.8
[29] An application for permission to appeal is not a de facto or preliminary hearing of the appeal. In determining whether permission to appeal should be granted, it is unnecessary and inappropriate for the Full Bench to conduct a detailed examination of the grounds of appeal. 9
[30] We consider that it would be in the public interest to grant permission to appeal for the following reasons:
(a) The appellant is a major State owned utility in Western Australia. It provides water, waste water and drainage services to hundreds of thousands of homes, businesses and farms in that State. Kwinana waste treatment plant is listed on the State’s Critical Asset Register;
(b) The appeal raises important issues as to the safe and efficient operation of the appellant’s wastewater treatment plants in order to ensure that the health and safety of its customers, the general public and its employees is not compromised or put at risk;
(c) The findings in the Decision under appeal raises novel and unusual issues as to whether there was a valid reason for Mr Batchem’s dismissal; in particular, the basis of the Commissioner’s conclusion that Mr Batchem did not alter (deliberately or otherwise) the high alarm set points and the Commissioner’s acceptance of his evidence that it was his 10 year old son who did so.10
(d) There are serious personal and reputational implications for senior corporation managers as a result of the Commissioner’s adverse findings against them which require careful examination and thorough justification;
(e) The appellant raised four grounds of appeal which were said to demonstrate that the Commissioner’s Decision was infected by appealable error in that she:
(1) failed to give reasons for crucial findings;
(2) acted on wrong principles in deciding, on the balance of probabilities, that there was no valid reason for Mr Batchem’s dismissal;
(3) failed to take into account material considerations in reaching this conclusion; and
(4) acted on a wrong principle in determining that Mr Batchem was denied procedural fairness.
While we have reached no concluded view as to any of the appellant’s grounds of appeal, we have been persuaded that an arguable case of appealable error has been established.
[31] We order that permission to be appealed be granted.
Further Proceedings
[32] Having granted permission to appeal, it will be necessary for us to proceed to determine the merits of the appeal and, if the appeal is upheld, re-determine Mr Batchem’s unfair dismissal remedy application. Because Mr Batchem’s credibility as a witness is critical in this matter, we do not consider that we will be able to deal with the matter to finality without requiring him to give further evidence before us. Further, it will be necessary for the parties to provide us with more detailed submissions concerning the Confidential Report prepared by Invision dated 29 July 2013 (which appears at p.704 of the appeal book).
[33] Before taking these further steps to finalise the appeal, we consider that this it is appropriate to direct the parties to attend a conciliation conference chaired by a member of the Commission. Arrangements for the conference will be communicated to the parties shortly.
VICE PRESIDENT
Appearances:
B. O’Brien for Water Corporation.
S. Gray for A. Batchem.
Hearing details:
2017.
Sydney:
7 February.
1 [2016] FWC 9088
2 [2014] FWCFB 7198
3 This is so because on appeal the Commission has power to receive further evidence, pursuant to s.607(2); see Coal and Allied v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ
4 (2011) 192 FCR 78 at [43]
5 O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] -[46]
6 [2010] FWAFB 5343, 197 IR 266 at [27]
7 Wan v AIRC (2001) 116 FCR 481 at [30]
8 GlaxoSmithKline Australia Pty Ltd v Makin[2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], 202 IR 388, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28]
9 Trustee for The MTGI Trust v Johnston [2016] FCAFC 140 at [82]
10 Decision at [32]
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