AREEA examines yet another unfair dismissal case where the Fair Work Commission has reinstated an employee, despite finding a valid reason for termination.

THE FAIR Work Commission has ordered the reinstatement of a rigger on the Western Australian Wheatstone LNG Project, after it found his dismissal by engineering, procurement and construction management (EPCM) company Bechtel was harsh.

This single-member decision will concern resource employers given it is the latest in a string of dismissal-related cases where the employer’s decision has been overturned despite a valid reason for termination being found.

Background – drunken argument leads to hotel damage

The applicant worked as a rigger on the Wheatstone LNG construction project when his employment was terminated last year, following an out-of-hours argument with his girlfriend (also a Wheatstone employee) at a hotel in the nearby town of Onslow.

The couple were staying at an Onslow hotel to celebrate a friend’s birthday when, just prior to midnight, they began arguing loudly for up to 15 minutes.

The argument was ‘long, loud and aggressive’, woke three hotel guests in adjacent rooms, involved banging on the door, and resulted in damage to the room’s shower screen and curtain.

Following a complaint from the hotel’s management and subsequent investigation into the incident, Bechtel advised the employee of his termination in writing on 15 September 2016:

“Your behaviour constituted Serious Misconduct as set out in Wheatstone Community Interface Code of Conduct; Section 2.3 Causing wilful damage to community facilities and amenities and Section 2.2 Drunken behaviour in public that causes a disturbance or a nuisance to others and is the authority relied upon for the Project’s decision to terminate your employment,” Bechtel said.

The employee lodged an unfair dismissal application in the Fair Work Commission, arguing that the alleged serious misconduct had taken place a) behind closed doors, b) in a private motel room, and c) outside of the applicants working hours.

The applicant also argued that Bechtel’s ‘Community Code’ was not a term of his employment contract, although the Commission later found that all employees should be expected to comply with all of the project’s policies for conduct and behaviour.

‘Not unreasonable’ to enforce out-of-hours code of conduct

In his decision, Commissioner Williams noted the importance of Bechtel and project owner Chevron maintaining a strong reputation in Onslow, a regional town with only 500 residents.

With up to 7,500 employees on-site at any given time, the Commissioner found that it ‘was not unreasonable’ for Bechtel to impose its community code of conduct on employees outside of work hours in order to maintain a positive relationship with the community.

“Separately I am satisfied that the content of the codes and rules are not unreasonable in terms of their impost on employees in the particular circumstance of Wheatstone,” he said.

Commissioner Williams found the applicant’s behaviour was ‘noisy, undoubtedly caused a nuisance to others and was a disturbance in the local community’.

The fact that he was offsite and the incident occurred outside of working hours was ‘largely irrelevant’.

The applicant was obliged to comply with the requirements of Bechtel’s Codes of Conduct, but did not do so. This provided a valid reason for his dismissal, the Commissioner found.

Misconduct or serious misconduct?

Having established a valid reason for termination, the Commissioner then turned his attention to whether the applicant’s behaviour constituted ‘misconduct’ or ‘serious misconduct’, as distinct in Bechtel’s employee codes.

Bechtel’s codes provide examples of ‘misconduct’ – including ‘drunken or noisy behaviour’ and ‘causing a nuisance to others’; as well as examples of ‘serious misconduct’, including ‘vandalism (and) wilful damage to property’.

Commissioner Williams ultimately found the applicant’s behaviour, involving drunken behaviours and being a nuisance, constituted ‘misconduct’, but not ‘serious misconduct’.

“Is it correct in this instance to view how (the applicant) damaged the shower screen as causing wilful damage? I think in fairness to (the applicant) that is not a reasonable characterisation of what occurred,” he said.

“The shower screen was damaged initially by accident and then he says he lashed out in frustration and caused further damage. This lashing out was akin to an unthinking reflex action. I do not consider (the applicant) caused damage to the shower screen voluntarily or intentionally. Consequently I do not accept that (his) behaviour constituted serious misconduct as set out in the Community Code.”

In summary, the Commissioner found the incident did not ‘reach a standard of gravity or importance that it could be seen as a rejection of the employment contract’.

He found the decision to terminate the rigger’s employment to be harsh, and ordered his reinstatement.

Commissioner Williams also ordered Bechtel pay the employee his remuneration lost since his dismissal, less eight weeks deducted for his ‘not blameless’ role in the matter.

Implications for employers

The Fair Work Commission’s interpretation and application of the Fair Work Act’s unfair dismissal provisions has been a major area of concern for the business community in recent years.

Specifically, the criteria for determining harshness has become highly problematic for employers as it provides members of the Commission with the discretion to award remedies for unfair dismissal based on their own interpretation of what is ‘harsh’, even after finding a valid reason for termination exists.

In this case, AREEA’s view is that the employer’s decision to terminate the employee should be backed by the FWC given it found:

• Bechtel was not unreasonable to enforce its code of conduct out-of-hours;
• The employee’s actions clearly breached this code, which is in place to protect the reputations of Bechtel and Chevron in a small regional community;
• Was consistent with how it treated other instances of misconduct in the Onslow community, as set out in the decision; and
• The employee was afforded procedural fairness, including being provided with an opportunity to respond and an opportunity to bring a support person into the interviews.

It is concerning that despite the above findings, the FWC can order the employee’s reinstatement and award him damages for wages lost, based on the commissioner ‘splitting hairs’ on ‘misconduct’ compared to ‘serious misconduct’.

These types of unfair dismissal decisions reinforce AREEA’s advocacy for reform of Australia’s termination of service laws.

We believe that a balanced workplace relations system would see applications for unfair dismissal remedies go no further when a valid reason for termination is found, and that ‘harshness’ as determined by individual tribunal members should not be a further consideration.

For more information on this matter or any workplace discipline or dismissal advice, contact your local AREEA office.