This is an appeal to the Full Bench of the Fair Work Commission from a decision of a Commissioner.
Background facts on the unfair dismissal application
Employment and role
A shift feeder worked at a potato processing plant in Tasmania. The feeder was also an AMWU delegate and a health and safety representative who has worked for the processing plant for 23.5 years when he was dismissed on 2 November 2020.
One of the responsibilities of shift feeders was to complete a bunker drain on each 12-hour shift. A bunker drain means running the potatoes off the conveyor belt and performing a flume flush. The drain need not be done completely. The feeder only needs to drain as much water to see that there are no spoiled or old potatoes at the bottom of the bunker before bringing in new potatoes.
However, at each shift, there are two or more shift feeders and only one of them needs to perform the bunker drain once per shift. There is no set time when during the 12-hour shift the feeder needs to perform the drain. And there is not one feeder assigned to perform the drain or to report it.
Allegations of misconduct and falsification
The processing plant alleged that the feeder reported to the Control Room that he had competed a bunker drain even when he had not completed it. The processing plant also alleged that the feeder falsified the Shift Feeder Log Sheet indicating he had drained the bunker drain even when he had not completed it.
The feeder said that he had reported to the Control Room that he was going to start the bunker drain, as was common practice. However, just as he was about to start the drain, another feeder on the same shift told him that he had performed the bunker drain. The feeder did not question his colleague. The feeder believed his colleague when he claimed to have already performed a drain. The feeder did not perform the drain even after he had reported to the Control Room that he was going to start the drain.
The feeder also said that it was his colleague who had recorded on the Shift Feeder Log Sheet, not him, as it was his colleague who had said that he performed the drain. When he and his colleague were confronted by their supervisor, the feeder said he had called the bunker drain through, relying on the statement of his colleague that he had performed the drain.
Decision of the Commissioner
The Fair Work Commission found that the reasons relied upon by the processing plant for dismissal of the feeder were unsubstantiated, and thus, the dismissal was found to be harsh, unjust and unreasonable. In his decision, the Commissioner who heard and decided the unfair dismissal application found that an order for reinstatement was inappropriate and the Commissioner instead ordered the processing plant to pay the feeder the sum of $9,199.01.
The feeder filed this appeal to the Full Bench of the Fair Work Commission seeking that he be reinstated to his former role.
Why reinstatement was not awarded by the Commissioner
The Commissioner did not award reinstatement to the feeder even when he found that his dismissal was harsh, unfair, and unreasonable. The Commissioner reasoned that the dismissal would have ongoing effects on the relationship between the feeder and the processing plant. The Commissioner felt that the processing plant had lost trust in the feeder. The loss of trust, when considered alongside the feeder’s prior work history will make it harder for the parties to re-establish a healthy working relationship. The processing plant may overly scrutinise the work of the feeder as the processing plant did not trust the feeder’s ability to work unsupervised.
The gist of the feeder’s appeal
The feeder alleged that the Commissioner erred in refusing to grant him reinstatement as the Commissioner did not have any proper basis in fact or law in denying him reinstatement. There was no sufficient or substantial proof that the processing plant had lost trust and confidence in the feeder. Further, the feeder felt that the Commissioner erred in thinking that the feeder would not want to be closely supervised. Any close supervision of the feeder by the processing plant after he is reinstated is proof that that the work relationship can still be healed, thus, the denial of reinstatement was inappropriate.
How and when to make an appeal to the full bench of the FWC
Under s604 of the Fair Work Act 2009 (the Act), an appeal to the full bench from a decision rendered by a member of the FWC can only be made with the permission of the Commission.
In order for the appeal to be permitted, the appellant must show that an appealable error had been committed. Under s400 of the Act, an appeal can only be permitted when the decision of the member involved a significant error of fact or when it is in the public interest to permit the appeal.
There is public interest when the matters raised are of importance and of general application; or when there is a diversity of decisions that guidance from the appellate court is needed; or where the decision works an injustice or the result is counter intuitive or the legal principals applied appear disharmonious when compared with other recent decisions dealing with similar matters.
Should the Full Bench allow the feeder’s appeal?
The Full Bench reasoned that s 390(1) of the Act gives it a broad discretion to order reinstatement when it found that the worker had been unfairly dismissed. Under s 390(3), the FWC must not order payment of compensation unless it is “satisfied” that reinstatement is inappropriate. The word “satisfied” confers on the Commissioner a very wide discretion. And in order to grant an appeal, the feeder must show that the Commissioner erred in exercising this wide discretion given to her under the statute.
What the appeal is asking the Full Bench to do
The feeder’s appeal is asking the Full Bench to apply the so-called “discretionary test” and review evaluative conclusions reached by the Commissioner when the law gives the Commissioner a latitude of choice or margin of appreciation of facts and circumstances in reaching a conclusion. Further, the appeal asks the Full Bench to apply the “correctness test” and substitute its own conclusion where it disagrees with the conclusion arrived at by the Commissioner after the Full Bench finds that the Commissioner erred in her application of legal principles in evaluating the factual circumstances or in failing to observe judicial restraint in making discretionary decisions.
Reinstatement is inappropriate when it is futile
Reinstatement is inappropriate when it is futile, such as when the reinstatement will certainly lead to a further termination of the employment. This may happen when the employer discovered that the employee engaged in other acts of serious misconduct after the employee had already been terminated. Reinstatement is also futile when the employer is no longer engaged in a business where the employee may be reappointed or when the employer has already filled the position previously occupied by the dismissed employee.
The unfairly dismissed employee cannot be reinstated to his or her former role if the employee had already been incapacitated by illness or injury. In this scenario, the employee is no longer fit to render the work he had been doing prior to being incapacitated.
Reinstatement is inappropriate when there has been loss of trust and confidence
While it is true that loss of trust and confidence is one criterion in determining whether reinstatement is appropriate, it is not the only criterion. Each case must be decided on its own facts. The nature of the employment must also be considered. Employment relationships are often capable of withstanding some friction and doubt.
Thus, any allegation of loss of trust and confidence must be soundly and rationally based. It is important to carefully scrutinise a claim of loss of trust and confidence if it is made the basis of denying reinstatement. The burden of establishing that trust and confidence has been lost rests on the party asserting that it had been lost.
When an employer refuses to shift its view of the employee despite a ruling of the FWC that the employee was not guilty of misconduct or wrongdoing is not a sound basis to conclude that the relationship of trust and confidence has been irreparably damaged or destroyed.
If the employer finds it difficult or embarrassing to reinstate an employee it had believed to have been guilty of misconduct is not an indication of loss of trust and confidence that will render reinstatement inappropriate. Thus, the rationality of the parties must also be considered. That is, the FWC must consider whether the employer is open or willing to reinstate the employee it had previously and erroneously accused of wrongdoing.
Factual bases for the feeder’s dismissal were “unresolved”
The issue of whether the feeder did or did not drain the bunker on 20 October 2020 is still an unresolved fact and cannot then be a sound or rational basis for the employer to lose trust and confidence in the feeder.
It was not the feeder who had recorded the times of the bunker drains on the log sheet so he cannot be blamed for that mistake. The witness of the processing plant can no longer recall who it was who had informed him that the bunker had indeed been drained and so, there is no basis for the employer to think that the feeder gave a false or incorrect information. The processing plant may have suspicions about the feeder’s actions but suspicions are not sound or rational enough bases to find that there has been a loss of trust and confidence.
No evidence to support a finding of loss of trust and confidence
The finding by the Commissioner that if reinstated, the processing plant would more closely scrutinise the feeder and his work is not supported by any evidence. None of the witnesses called to give evidence for the processing plant gave evidence that they had lost trust and confidence in the feeder as an employee or as a colleague or that they suspect that he will continue providing false or incorrect information as he had been erroneously accused. There is no evidence given by them that should lead the Commissioner to believe that if reinstated, the processing plant or the supervisor or manager of the feeder will more closely scrutinise the feeder’s work.
No evidence of other wrongdoing
In this case, the processing plant did not discover other acts of misconduct committed by the feeder after the feeder was dismissed. Because of this, the Commissioner had no sound basis in believing that the feeder’s reinstatement would be futile as he would only be terminated again.
The feeder seeks to be reinstated
The feeder confessed that he had no problems working again at the processing plant. He likes and misses his colleagues and holds no grudges against his supervisor or his manager. He is prepared to put the matter behind him and move forward. The feeder even stated that he would not react poorly to being more closely supervised after he is reinstated.
While it is true that in his employment history, the feeder had been issued a first and a second warning, the processing plant had not decided to discipline or dismiss the feeder further on those issues. Thus, it is error to deny reinstatement on the reasoning that the feeder’s past employment history had caused the processing plant to lose trust in the feeder.
Ruling of the Full Bench
The FWC considered that the appeal raised questions of general importance to the appellate standard to be applied in an appeal from a decision on a question of reinstatement. The Full Bench identified appealable error in the two reasons advanced by the Commissioner in support of her determination that the reinstatement was inappropriate. The appeal is in the public interest and permission to appeal is granted. The Full Bench ordered the processing plant to reinstate the feeder to his former position.
Source: Moszko v Simplot Australia Pty Ltd [2021] FWCFB 6046 (10 November 2021)
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