Read the full decision here.

Introduction

When random drug testing in the workplace ensure your policies are known to all employees – including the consequences and that they are consistent. And, as always, the punishment fits the crime. This decision also provides an encyclopaedia of case history in “serious misconduct”.

Background

This decision provides an encyclopaedia of case history in “serious misconduct”, with the subject being a 64-year-old Customer Service Attendant employed in the railways for a period of six years. He was subjected to a random urine drug test that tested three times the acceptable limit after smoking one joint the night before.

He initially returned a positive reading (above 50ug/L) for cannabis metabolites. A secondary test confirmed a THCCOOH level of 78 ug/L in circumstances where the cut-off is 15 ug/L (being five times the “cut-off” limit). He was suspended on pay pending an investigation of his conduct.

The applicant was subsequently provided with a “show cause” letter (ie show cause why you should not be dismissed) due to his possible breaches of the company’s Code of Conduct and Drugs and Alcohol Policy (the ‘Policy’). The applicant was dismissed from his employment.

The Union filed an application on the applicant’s behalf, in which he sought reinstatement and associated orders for his alleged unfair dismissal. The applicant had an otherwise unblemished employment record. In his application, the Union put:

  • The applicant acknowledges he has failed a drug and alcohol test.
  • The applicant has been completely honest through the entire investigation and openly admitted he made a human error.
  • A decision of dismissal is disproportionately harsh for the applicant because:
    • Of his age this being sixty-three (63) years old.
    • The applicant’s ability to gain new employment are significantly limited.
    • Cause great instability by placing the applicant and his family into a precarious financial position. Unable to maintain the family’s mortgage and provide financial support for his family.
    • The applicant has very limited superannuation.

Adding:

  • The respondent is not taking into consideration of their Just Culture Policy – where it’s a culture that recognises normal human error does occur and it’s about moving from a disciplinary system that prohibits human error to one that supports learning from mistakes while maintaining accountability for one’s behavioural choices.
  • The applicant has been extremely remorseful and would be willing to accept any alternative sanction to dismissal.

In reply, the respondent maintained the applicant’s dismissal was not unfair, given it has a “zero tolerance” approach to drugs and alcohol in the workplace. Mitigating factors such as his age, performance and length of service were considered, but they did not outweigh the seriousness of his misconduct and the grounds for his dismissal.

The case

The applicant agreed he was familiar with the company’s Drugs and Alcohol Policy and had undergone random testing on about five separate occasions, without an issue. He accepted the Policy was intended to serve as a deterrent to employees being under the influence of drugs or alcohol at work. The applicant acknowledged having attended number of relevant training sessions, but at no time had it been said by the employer that a positive test finding would result in an automatic dismissal.

As he was the only employee at the railway station at the time of the random testing, the applicant agreed he had a responsibility for communicating information about moving trains, and any safety concerns of passengers. This was a core part of his training. However, he reiterated that he did not consider himself to be impaired in any way on the day. The applicant said that he had reviewed the evidence as to the uniform outcome for employees who tested positive to drugs or alcohol (dismissal), accepted he had not been “singled out” and agreed that the Policy had been consistently applied. Nevertheless, he believed each case depends on its own circumstances.

In other words, he was full and frank in accepting that he had breached the drug and alcohol policy, but (obviously not understanding the meaning of “zero”), acknowledged that the company has a “zero tolerance” approach to drugs and alcohol, but nowhere does it state that dismissal is the automatic outcome..

The company put that the applicant not voluntarily disclose his consumption of cannabis at any time before he was advised of his drug test result, despite having opportunity to do so. Under its policies, the company’s policy was that an employee who self-identified a drug and alcohol problem, was unlikely to face disciplinary action.

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Was the dismissal “harsh, unjust or unreasonable”?

The “test” is explained in the oft-quoted extract from Byrne and Frew of McHugh and Gummow JJ, as follows:

“128. Clause 11(b) is aimed at the situation where the termination of employment brought about by the dismissal, rather than the steps leading up to the dismissal, or lack of them, is harsh, unjust or unreasonable. A dismissal with notice may be harsh, unjust or unreasonable because it is based on a ground defined as such by cl 11(b). This refers to such matters as termination “on the ground of” race, colour, sex and marital status. 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.” (my emphasis)

Was it “serious misconduct”?

As the DP noted:

“…the allegations against the applicant from the ‘Show Cause’ letter which ultimately led to his dismissal for serious misconduct. I note that the reason was not consistently expressed to be serious misconduct, although it seems plain enough from [the company’s] submissions that this was in fact how his conduct was characterised”.

The DP adding:

“Serious misconduct is defined in the Act’s Regulations. Regulation 1.07 sets out a non-exhaustive definition as follows:

‘(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.

(2) For subregulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;

(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or

(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:

(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or

(ii) fraud; or

(iii) assault;

(b) the employee being intoxicated at work;

(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.’ (my emphasis)

“It may be reasonably accepted that the misconduct identified at 3(b) above, ‘being intoxicated at work’, applies with equal force – if not more so – if the misconduct is ‘being under the influence of a prohibited drug’. That being said, [the company’s] submissions used various words and expressions such as ‘deliberate’ (behaviour), conduct ‘inconsistent with [the company’s] ‘zero tolerance’ approach to drugs and alcohol in the workplace’, serious risk to the health and safety of others and conduct which put the employer’s reputation ‘at risk’. In fact, it referred to the Regulation in its written submissions. Thus, it seems unassailable that [the company] relies on sr (2)(a), 2(b)(i) and (ii) and impliedly s (3) of the Regulation. However, reliance on the Regulation is not necessarily determinative. The Regulation and the non-exhaustive examples of serious misconduct, do no more than provide a guide. [Ed: my emphasis] Consistency with one, or more of the examples in the Regulation, does not displace the statutory instruction that a valid reason (such as a finding of serious misconduct), is but one of the relevant matters the Commission is required to take into account under s 387, as to whether a dismissal is ‘harsh, unjust or unreasonable’. To demonstrate this proposition, I refer to what the Full Bench said in Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033 at [33]-[34]:

‘[33] The relevance of the definition of “serious misconduct in reg. 1.07 to the matter is also, with respect, obscure. Section 12 of the Act contains a definition of “serious misconduct” for the purposes of the Act which simply cross-refers to reg. 1.07. Apart from s.12 itself, the expression “serious misconduct” is used in only three places in the Act. In s.123(1)(b), a dismissal for serious misconduct is a circumstance in which the notice and redundancy entitlement provisions of Pt 2-2 Div 11 are not applicable; in s.534(1)(b) a dismissal for serious misconduct is one in relation to which the requirements established by Pt 6-4 Div for notification and consultation do not apply. The expression “serious misconduct” is not used anywhere in Pt 3-2, Unfair Dismissal, of the Act. Section 392(3) requires the Commission, in relation to the award of compensation for an unfair dismissal, to reduce the amount that it would otherwise order by an appropriate amount where it is “satisfied that the misconduct of a person contributed to the employer’s decision to dismiss the person”. However, it is clear that conduct may constitute “misconduct” for the purpose of s.392(3) without necessarily being “serious misconduct”. The expression is used in the Small Business Fair Dismissal Code, but that had no application in this case (and it is at least highly doubtful in any event whether the reg. 1.07 definition applies to the Small Business Fair Dismissal Code). Reg. 1.07 therefore had no work to do in the application of the provisions of Pt 3-2 to the circumstances of this case.

‘[34] It may be accepted that an assessment of the degree of seriousness of misconduct which has been found to constitute a valid reason for dismissal for the purposes of s.387(a) is a relevant matter to be taken into account under s.387(h). In that context, a conclusion that the misconduct was of such a nature as to have justified summary dismissal may also be relevant. Even so, it is unclear that this requires a consideration of whether an employee’s conduct met a postulated standard of “serious misconduct”. In Rankin v Marine Power International Pty Ltd Gillard J stated that “There is no rule of law that defines the degree of misconduct which would justify dismissal without notice” and identified the touchstone as being whether the conduct was of such a grave nature as to be repugnant of the employment relationship. “Serious misconduct” is sometimes used as a rubric for conduct of this nature, but to adopt it as a fixed standard for the consideration of misconduct for the purpose of s.387(h) may be confusing or misleading because the expression, and other expressions of a similar nature, have been considered and applied in a variety of contexts in ways which are influenced by those contexts. In McDonald v Parnell Laboratories (Aust) Pty Ltd, Buchanan J said:

“[48] The terms ‘misconduct’, ‘serious misconduct’ and ‘serious and wilful misconduct’ are often the subject of judicial and administrative attention as applied to the facts of particular cases but there is relatively little judicial discussion about their content and meaning. Naturally enough, when the term ‘serious misconduct’ is under consideration an evaluation of what conduct represents ‘serious misconduct’ is influenced by the (usually statutory) setting in which the phrase must be given meaning and applied. Frequently, for example, the question at issue is whether an employee is disentitled by reason of his or her conduct to a statutory entitlement (eg. In New South Wales, where Ms McDonald was employed, see Long Service Leave Act 1995 (NSW) s 4(2)(a)(iii); Workers Compensation Act 1987 (NSW) s 14(2).”’ .

“In cases of summary dismissal, the onus rests on the employer to prove, to the Commission’s satisfaction, that the misconduct, had in fact occurred. In this case, there can be little doubt that the applicant’s conduct has been proven…

“Even accepting that a finding of serious misconduct or misconduct was open to [the company], such a finding must not be conflated with the statutory language. The statute still requires the Commission to find that there was a valid reason for dismissal (s 387(a)). In Royal Melbourne Institute of Technology v Asher [2010] FWAFB 1200, a Full Bench of Fair Work Australia (FWA, as the Commission then was) held at [16]:

‘[16] In the circumstances of this matter the University purported to terminate Dr Asher’s employment for serious misconduct within the meaning of that term in the University’s enterprise agreement. If it successfully established that Dr Asher had engaged in serious misconduct it would necessarily follow that there was a valid reason for the dismissal. However, the converse is not true. As established by Annetta, the question that needed to be considered was whether there was a “valid reason” in the Selvachandran sense – whether the reason was sound, defensible or well founded. Whether it also amounted to serious misconduct may well be a factor relating to the overall characterisation of the termination, but it was not an essential requirement in the determination of whether a valid reason exists.’

The DP then concluded that the company has proven the conduct of the applicant as alleged [Ed: the applicant admitted the wrongdoing, but doubted it constituted serious misconduct, or a valid reason for the applicant’s dismissal.

Wilfully, recklessly and intentionally

Following what can only be described as the “chapter and verse” on cases explaining “serious misconduct” and “wilful or deliberate behaviour” (I have left these to the end of this report for us IR nerds), the DP found:

“…[T]he use of the word ‘may’ does not connote compulsion or discretion. It is a word of discretion. Further, the reference to the Commission ‘not lightly’ interfering in the employer’s decision to dismiss, does not mean the Commission would never interfere. In my assessment, this is one of those rare cases. That said, in my view, [the applicant’s] conduct…could not be objectively characterised as ‘serious misconduct’ and, at worst, might be said to be a serious error of judgment. However, I accept, and the [company] does not demur, that the applicant’s smoking of one cannabis ‘joint’…was a one-off incident, which later medical evidence confirmed that the applicant was not a habitual cannabis user. Accordingly, I accept [the applicant’s] evidence that he had not smoked cannabis for some 30 years and the incident…was not reckless, deliberate or intentional.

“[The company] sought to paint the applicant as wilfully, recklessly and intentionally attending for work, knowing he may have had traces of the drug in his system. I do not accept this characterisation, nor do I accept that [the applicant’s] deliberately failed to inform the random drug tester, or [the company’s] management, that he had smoked cannabis the night before. [The applicant] (and I think [the company] grudgingly agreed), did not expect the smoking of one ‘joint’ many hours before commencing work, would result in any impairment in his capacity to perform his job safely. Given the current state of technological advancement, I accept it is not possible to identify or quantify impairment, and it is not up to an individual to judge their own impairment (self-assess). However, there was no evidence that the random drug tester, [the company’s] management or any other employee suspected any impairment of [the applicant], either on the day, or on the following two days when he continued to work normally, without incident. I consider it somewhat of an exaggeration to submit that [the applicant] had responsibility for any fault in the boom gates or lights at [the railway] Station. The evidence was that he was to do no more than to report to management of any fault. Further, there was no evidence as to how it could be sensibly suggested that [the applicant] was incapable or incoherent…

“Further, given the inconsistency between the relevant policies…[the applicant] might reasonably have believed that even if he had some residual trace of cannabis, it would not be greater than 50 ug/L. I accept his evidence that had he known the employer’s Policy meant dismissal for any trace of cannabis in an employee’s system, he may have made a different choice when socialising with his friend the night before.

“Zero tolerance’ approach”

The DP noted:

“While [the company’s] Drugs and Alcohol Policy is said to be underpinned by a ‘zero tolerance’ approach to drugs and alcohol in the workplace, the reality is that there is no such thing. This is so because initial urine screening will only record a positive THC result over 50 ug/L. An employee who receives such result will subsequently be in breach of the Policy if a confirmatory test is above 15 ug/L; in [the applicant’s] case, 78 ug/L. In other words, an employee may have a non-detected level of 49 ug/L from an initial screening test – three times above the 15 ug/L cut off – and escape from detection altogether. While I accept this is a consequence of the present screening technology accuracy, it could hardly be said to be consistent with a ‘zero tolerance’ approach”. [Ed: Not sure of the logic here, and more than a bit pedantic].

Consistency in applying the policy

The company was able to demonstrate that it was consistent in the application of the policy, where 31 employees who failed to supply evidence of tampering, refused a random test or recorded a positive reading to an illicit drug, were dismissed or resigned.

However, the DP was not be swayed:

“One of [the company’s] main arguments is that its Drugs and Alcohol Policy has been applied consistently, at least since 2017, and [the applicant] was treated no differently to all the other employees who were dismissed or resigned since that time involving similar incidents. In my opinion, [the company’s] professed consistency is somewhat selective. If [the company] believes it is appropriate to have a Drugs and Alcohol Policy which makes clear that any detected level of alcohol or illicit drugs will (not may) result in dismissal, then that is a matter for [the company’s] management. What it cannot do is have two policies inconsistent with each other and in circumstances where employees are not even told the less draconian policy will never be applied. This must be so because the evidence was that:

(a)          [The company] had not communicated to its employees the true effect of its ‘zero tolerance’ policy since 2017.

(b)          [The company] had not advised employees that anyone who is found to return a positive test for drugs or alcohol, will be dismissed.

(c)           Employees had been unaware that personal and mitigating circumstances would not be considered, if any trace of illicit drug use was detected in their systems.

“It is difficult to establish that an employee is in breach of an employer’s policy which is inconsistent with related disciplinary policies, and the said policy has not been disseminated and advised to all employees. In these circumstances, I am unable to conclude that there was a valid reason for [the applicant’s] dismissal. [The applicant’s] dismissal was ‘unreasonable’ and therefore unfair”.

Harsh

In the DP opinion:

“Given the facts and circumstances of this case, in my opinion, there could hardly be a more meritorious and justified example of the ‘harshness’ component of the expression ‘harsh, unjust and unreasonable’, than the dismissal of [the applicant]. Of particular significance for me in this case, unlike many other cases I have decided, was [the applicant’s] openness, honesty, remorse and contrition, which I accept was genuine, well-intended and expressed from the outset of the investigation of his conduct”.

The outcome

The DP stating:

“Accordingly, I find that [the applicant’s] conduct was not serious misconduct and, at worst, was a serious error of judgement which was both explicable and understandable”.

The DP concluding:

 “In the circumstances of this matter, I have concluded that restoration of full lost remuneration would not be appropriate. I determine that [the applicant] should receive 50% of the amount of lost remuneration he would have otherwise received had he not been dismissed, less any income earnt by him since his dismissal. While [the applicant’s] dismissal was unfair, his conduct was nevertheless a serious lapse of judgment, which he readily acknowledged was a mistake. It will also serve as a timely reminder of the seriousness this Commission regards the health and safety of employees and the public in this inherently dangerous industry, and the obligations on employees to ensure they always conduct themselves consistent with this objective”.

Ordering that:

  1. The applicant be reinstated to his former position.
  2. The applicant’s continuity of service shall not be taken to have been broken by his dismissal.
  3. The company shall pay to the applicant an amount of lost remuneration equivalent to 50% of the average remuneration (including overtime and other penalties) he would have otherwise received from the date of dismissal to reinstatement less any remuneration earnt during this period.

CASE LAW

“Wilful” or “deliberate” behaviour?

As put by the DP:

“The notion of wilful or deliberate behaviour which strikes at the heart of the employment relationship, has been considered in a number of well-known authorities. In North v Television Corporation Ltd (1976) 11 ALR 599, Franki J said at p 616:

‘It is clear that a single act of disobedience may be sufficient to justify dismissal on the ground of misconduct but it was held in Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285, that to justify summary dismissal a single act must be such as to show that the employee was repudiating the contract of service or one of its essential conditions.’

Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 (referred to in the citation above) makes it plain that an act of disobedience or misconduct (justifying dismissal) requires also that the disobedience must be ‘wilful’:

‘… I do, however, think (following the passages which I have already cited) that one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; and for that reason, therefore, I think that one finds in the passages which I have read that the disobedience must at least have the quality that it is “wilful”: it does (in other words) connote a deliberate flouting of the essential contractual conditions (P288).’”

Continuing:

“In Concut Pty Ltd v Worrell (2000) 103 IR 160, His Honour, Kirby J, dealt with the ordinary relationship of the employer and employee at common law and said at [51]:

‘The ordinary relationship of employer and employee at common law is one importing implied duties of loyalty, honesty, confidentiality and mutual trust. At common law:

“conduct which in respect of important matters is incompatible with the fulfilment of an employee’s duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal. …[T]he conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises.”

‘In the present case, the findings at trial went beyond mere uneasiness as to the future. They necessitated, or at least warranted, a conclusion that the “confidence” essential to the relationship of employer and employee had been destroyed. Instead of pursuing the interests of the company and its shareholders, the employee had pursued his own private interests. Not only was the employee in breach of his duty of fidelity and trust owed to the employer, he had remained in breach of that duty to the date of the trial. Until that time he had not accounted for the benefits wrongly appropriated by him. Indeed, he had denied any wrongful appropriation. The issue so tendered at the trial was determined against the employee. He was then subject to the employer’s counter-claim for an order to make a refund. Such order was duly made at trial. It was not contested on appeal. Given his senior status in the company’s service and the nature and extent of the misconduct disclosed in the evidence and accepted by the primary judge, it was open to him to find that the employee had undermined the confidence essential to the ongoing relationship of employment. Prima facie, this had afforded a legal justification for the employee’s summary dismissal.

‘It is, however, only the exceptional circumstances that an ordinary employer is entitled at common law to dismiss an employee summarily. Whatever the position may be in relation to ‘isolated’ acts of negligence, incompetence or unsuitability, it cannot be disputed (statute or express contractual provision aside) that acts of dishonesty or similar conduct destructive of the mutual trust between the employer and employee, once discovered, ordinarily fall within the class of conduct which, without more, authorises summary dismissal. Exceptions to this general position may exist for trivial breaches of the express or implied terms of the contract of employment. Other exceptions may arise where the breaches are ancient in time and where they may have been waived in the past, although known to the employer. Some breaches may be judged irrelevant to the duties of the particular employee and an ongoing relationship with the employer. But these exceptional cases apart, the establishment of important, relevant instances of misconduct, such as dishonesty on the part of an employee like Mr Wells, will normally afford legal justification for summary dismissal. Such a case will be classified as amounting to a relevant repudiation or renunciation by the employee of the employment contract, thus warranting summary dismissal.’

InO’Connor v Palmer (No 1) (1959) 1 FLR 397, the Commonwealth Industrial Court (per Spicer CJ and Dunphy J) held at 401:

‘Without attempting to define exhaustively the word “misconduct” it involves something more than mere negligence, error of judgment or innocent mistake.’

“A more expansive definition can be found in Pillai v Messiter (No 2) (1989) 16 NSWLR 197, where the New South Wales Court of Appeal, under the heading ‘Misconduct’ means more than mere negligence’, said:

‘The words used in the statutory test (“misconduct in a professional respect”) plainly go beyond that negligence which would found a claim against a medial practitioner for damages: Re Anderson, (at 575). On the other hand gross negligence might amount to relevant misconduct, particularly if accompanied by indifference to, or lack of concern for, the welfare of the patient: cf Re Anderson (at 575). Departures from elementary and generally accepted standards, of which a medial practitioner could scarcely be heard to say that he or she was ignorant could amount to such professional misconduct: ibid. But the statutory test is not met by mere professional incompetence or by deficiencies in the practice of the profession. Something more is required. It includes a deliberate departure from accepted standards or such serious negligence as, although not deliberate, to portray indifference and an abuse of the privileges which accompany registration as a medical practitioner: cf Allison (at 760 – 761). These are the approaches which have been taken in our courts. They have been taken in the courts of England where such misconduct is alleged. And they have similarly been taken in the courts of the United states. The entry in Corpus Juris Secundum, vol 58, (1948) at 818, reads:

“Both in law and in ordinary speech the term ‘misconduct’ usually implies an act done wilfully with a wrong intention and conveys the idea of intentional wrongdoing. The term implies fault beyond the error of judgment; a wrongful intention, and not a mere error of judgment; but it does not necessarily imply corruption or criminal intention, and, in the legal idea of misconduct, an evil intention is not a necessary ingredient. The word is sufficiently comprehensive to include misfeasance as well as malfeasance, and as applied to professional people it includes unprofessional acts even though such acts are not inherently wrongful. Whether a particular course of conduct will be regarded as misconduct is to be determined from the nature of the conduct and not from its consequences.”

“Reference to much United States authority is provided to support this passage. In the 1988 supplement to the Corpus, reference is made to Beaunit Mills Inc v Board of Review, Division of Employment security, Department of Labor and Industry 128 A 2d 20 (1956). In that case, the New Jersey Superior Court held that “misconduct” does not mean mere mistakes, errors in judgment or in the exercise of discretion or minor but casual or intentional, carelessness or negligence. It did not mean mere inefficiency, unsatisfactory conduct, failure of performance as a result of inability or incapacity inadvertent in isolated instances or errors of judgment which were not made in bad faith or some other ingredient. Numerous other recent cases are cited to support the proposition that, in the United States, “misconduct” generally means wrongful, improper or unlawful conduct, motivated by premeditated or intentional purpose or by obstinate indifference to the consequences of one’s acts. Similar approaches to the meaning of the word “misconduct” have been taken in Australia, outside the context of professional discipline: see, eg, O’Connor v Palmer (No 1) (1959) 1 FLR 397. The primary dictionary meanings confirm that this is also the way “misconduct” is used in everyday speech.

“In Police Association of New South Wales (on behalf of Kim Gilmour) and Commissioner of Police [2009] NSWIRComm 51, I made some obiter observations based on the above principles when I said at [300]:

‘[300] Mr Howell submitted that the definition of misconduct, in the disciplinary context, cannot mean mere mistakes, errors in judgement, errors in discretion, carelessness, negligence, inefficiency or poor performance. He put that misconduct means ‘wrongful, improper or unlawful conduct motivated by premeditated or intentional purpose or by obstinate indifference to the consequences of one’s acts’. He submitted that none of the allegations against SC Gilmour fell into the definition of misconduct. Strictly speaking, it is unnecessary for the Commission to make findings on these submissions, as I have found that the evidence advanced in these proceedings, on the balance of probabilities, does not permit a finding that any of the allegations have been proven to the requisite standard. The question of whether the conduct was misconduct does not, therefore arise. That said, I consider Mr Howell’s submissions are thoughtfully made and soundly based.

“It may be immediately observed that the above passages might appear to be at odds with my more recent comments and citations in Singh v Sydney Trains [2019] FWC 182 where, after referring to Her Honour Deputy President Asbury’s comments in Macklyn v G&S Engineering Services Pty Ltd [2013] FWC 5303, at [327] I said:

‘[327] In my view, the conduct in question need not necessarily be wilful, deliberate or reckless to constitute a valid reason for dismissal. Conduct which is negligent, accidental, inadvertent or careless, particularly in the rail industry, can have disastrous, life-threatening consequences. Adherence to safe working policies and practices, particularly where persons are specifically trained to be aware of ever present dangers, is a cardinal principle for any workplace, but even more so in the rail industry where the risk to the safety of employees and the public is obviously so much more acute. It involves fast moving trains and potentially dangerous infrastructure. Employees are commonly working in high risk track environments as a daily feature of the working environment. Such conduct need not be repeated behaviour, but may involve a single instance of conduct which threatens the safety of employees or others. I also agree with Asbury DP that the Commission would not lightly interfere in the decision of an employer to dismiss an employee in such circumstances.’ (my emphasis)

Was the applicant’s dismissal ‘harsh, unjust or unreasonable’?

[101] I turn now to consider whether the conduct was a valid reason for dismissal – a significant matter under s 387 of the Act.

[102] The meaning of ‘valid reason’ in s 387(a) is drawn from the judgement of North J in Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 (‘Selvachandran’). This meaning has been considered and applied by members of the Commission and its predecessors for many years. For example, in Rode v Burwood Mitsubishi Print R4471, a Full Bench of the then Australian Industrial Relations Commission (‘AIRC’) discussed the meaning of valid reason in the context of the relevant provisions of the Workplace Relations Act 1996, and by citing Selvachandran. The following is an extract from the Full Bench’s decision at [17]-[19]:

‘[17] In relation to the meaning of “valid reason” the following remarks of Northrop J in Selvachandran v [Peterson] Plastics Pty Ltd are relevant:

“Section 170DE(1) refers to a ‘valid reason, or valid reasons’, but the Act does not give a meaning to those phrases or the adjective ‘valid’. A reference to dictionaries shows that the word ‘valid’ has a number of different meanings depending on the context in which it is used. In The Shorter Oxford Dictionary, the relevant meaning given is: ‘2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.’ In The Macquarie Dictionary the relevant meaning is ‘sound, just or wellfounded; a valid reason’.

In its context in s 170DE(1), the adjective ‘valid’ should be given the meaning of sound, defensible or wellfounded. 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 reason 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, commonsense way to ensure that’ the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd, when considering the construction and application of a s 170DC.”

[18] While Selvachandran was decided under the former statutory scheme the above observations remain relevant in the context of s.170CG(3)(a). A valid reason is one which is sound, defensible or well founded. A reason for termination which is capricious, fanciful, spiteful or prejudiced is not a valid reason for the purpose of s.170CG(3)(a).

[19] We agree with the appellant’s submission that in order to constitute a valid reason within the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.’

See also: Nettleford v Kym Smoker Pty Ltd (1996) 69 IR 370.

[103] In B, C and D v Australian Postal Corporation t/a Australia Post [2013] FWCFB 6191, a majority of the Full Bench (Lawler VP and Cribb C) dealt with breaches by a number of employees of Australia Post’s IT policies, in respect to the sending, receiving and sharing of pornographic material. The majority said at [34]-[36]:

‘[34] In considering whether there was a valid reason for a dismissal under s.387(a), the reason(s) being considered are the employer’s reason(s). In a misconduct case, the Commission is concerned with whether the misconduct in fact occurred, not with whether the employer has reasonable grounds to believe that it occurred (eg. Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201, Sherman v Peabody Coal Ltd (1998) 88 IR 408; Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1).

[35] Subject to that, as indicated by Northrop J in Selvachandran, “valid reason” is assessed from the perspective of the employer and by reference to the acts or omissions that constitute the alleged misconduct on which the employer relied, considered in isolation from the broader context in which they occurred. It is the reason of the employer, assessed from the perspective of the employer, that must be a “valid reason” where “valid” has its ordinary meaning of “sound, defensible or well founded”. As Northrop J noted, the requirement for a valid reason “should not impose a severe barrier to the right of an employer to dismiss an employee”.

[36] A failure to comply with a lawful and reasonable policy is a breach of the fundamental term of the contract of employment that obliges employees to comply with the lawful and reasonable directions of the employer. In this way, a substantial and wilful breach of a policy will often, if not usually, constitute a “valid reason” for dismissal.’

[104] The above authorities, and many more, make clear that a ‘valid’ reason means the reason must be ‘sound, defensible or well founded’ and not ‘capricious, fanciful, spiteful or prejudiced.’

[105] Further, the Full Bench of the Australian Industrial Relations Commission said in Container Terminals Australia Limited v Toby [2000] Print S8434 at [15]:

‘[15] In our view, the consideration of whether there was a valid reason for termination is a separate issue from the determination of whether a termination was harsh, unjust or unreasonable: see generally Department of Justice Hepburn (1999) 93 FCR 508, at 512-513 and cases cited therein. The focus of the consideration is upon the employer and the basis for his decision to terminate rather than upon its consequences for the employee. “What has to be examined is the validity of the reason, and its connection with the employee’s capacity or conduct or its basis in operational requirements of the employer”: see Qantas Airways Ltd v Cornwall (1998) 83 IR 102, at 106. In making such an examination “it is not the court’s function to stand in the shoes of the employer and determine whether or not the decision made by the employer was a decision that would be made by the court but rather it is for the court to assess whether the employer had a valid reason connected with the employee’s capacity or conduct…”; see: Walton v Mermaid (1996) 142 ALR 681, at 685.’

[106] In my view, Sydney Trains’ ‘valid’ reason submissions suffer from two fundamental and self-evident flaws. The first concerns its said ‘zero tolerance’ approach to drugs and alcohol in the workplace and the second, concerns the inconsistency of this approach to Sydney Trains’ disciplinary policies and procedures, which purportedly recognise personal or mitigating circumstances when a decision is made to dismiss an employee for breach/breaches of the Drugs and Alcohol Policy. Let me explain.