A three-member Fair Work Commission Full Bench in Farstad Shipping (Indian Pacific) Pty Ltd T/A Farstad v Mr Jurgen Rust; Mr Jurgen Rust v Farstad Shipping (Indian Pacific) Pty Ltd T/A Farstad [2017] FWCFB 4738 has quashed Commissioner Bissett’s decision  (Jurgen Rust v Farstad Shipping (Indian Pacific) Pty Ltd T/A Farstad [2017] FWC 3426) that Captain Jurgen Rust was unfairly dismissed for breaching Farstad’s drug and alcohol policy when he failed a random blood alcohol test.   The matter has been remitted to a rehearing before Deputy President Clancy.

Events leading up to dismissal

Captain Rust was summarily dismissed on serious misconduct grounds for breaching Farstad’s zero-tolerance alcohol policy when he registered a blood alcohol concentration of 0.044.

The day before Captain Rust was due to board the vessel, he had a chance encounter with one of the participants of an unresolved 2014 workplace incident.  According to the Captain’s evidence this triggered anxiety and led to him drinking 10 beers the night before he was due to report for work.

The next morning around 6.00am Captain Rust arrived at the hotel restaurant for breakfast and was met by a contractor for a random drug and alcohol screening.  The test was performed at 6.15am and Captain Rust registered a BAC of 0.047.  The test was repeated 15 minutes later and he registered a BAC of 0.044.

An investigation was carried out regarding Captain Rust’s BAC reading. The Human Resources Director of Farstad conducted an investigation to confirm whether Farstad’s applicable policies had been breached, ultimately finding that they had.

The Australian Maritime Officers’ Union, representing the Captain, argued that there was no justification for disciplinary action as Captain Rust did not intend to breach the policy and there were mitigating circumstances, including the 2014 incident and its resulting stress and anxiety.

In 2014 an external investigation was conducted regarding an incident on board a vessel following Captain Rust introducing a new system.  Captain Rust was suspended during the investigation. However, the investigation was never effectively resolved and the incident was not properly closed off by Farstad, which caused Captain Rust to experience material stress and anxiety.

Captain Rust was subsequently terminated and then brought an unfair dismissal application in the Fair Work Commission which was successful at first instance. Farstad then appealed the decision.

Commissioner Bisset’s initial finding

Commissioner Bisset found that Captain Rust was tested in accordance with Farstad’s policies and that his BAC was in excess of the limits prescribed by Farstad and clearly set out in its policies, and so was in breach of the policy.

Looking at whether Captain Rust’s dismissal was unfair, Commissioner Bissett was satisfied that:

• Captain Rust’s conduct provided a valid reason for dismissal;
• He was provided with the reason for dismissal prior to the decision being made;
• He was given an opportunity to respond;
• He was not unreasonably denied access to a support person;
• He was not terminated for unsatisfactory performance and so no warnings were required; and
• There were no matters adversely impacting on the procedures followed in effecting the dismissal.

However, she held that the decision to dismiss an experienced captain for breaching the zero-tolerance alcohol policy was harsh and thus unfair, as Farstad failed to properly close off the 2014 incident and so was in part responsible for the chain of events that led him to breach the policy.  She held that Farstad could have imposed a less punitive sanction.

As reinstatement was not considered an appropriate remedy by Farstad, the Commissioner ordered compensation be paid to Captain Rust.

The Full Bench’s findings

Farstad argued on appeal that the Commissioner erred in failing to take into account (or given sufficient weight to) a relevant consideration, namely that Captain Rust decided not to self-report in line with the drug and alcohol policy and presented as fit for work in circumstance where he knew, or ought of known, he was not fit for work.

They also argued that Captain Rust failed to report his use of prescription medication to manage his anxiety between 2014 and 2016, which was also a breach of Farstad’s drug and alcohol policy.

The Full Bench held that Captain Rust’s failure to self-report was a relevant consideration that should have been weighed by the Commissioner in the balance in assessing whether the dismissal of Captain Rust was unfair, particularly given he was employed in a senior position and was responsible for ensuring Farstad’s policies, value and procedures were promoted and implemented.

The failure to take a relevant consideration into account is an appellable error, which should have been taken into account.

How does this decision affect my business?

The main things that can be learnt from this case for employers are:

• Properly close out investigations and communicate the findings to all employees involved – if you don’t, the failure to appropriately finalise investigations can cause difficulties in prospectively managing the employees concerned;
• Imposing an obligation on ’self-reporting’ within your drug and alcohol policies is very important. Where an employee knowingly has a responsibility to advise their employer if they believe they may be in breach of the drugs and alcohol policy and fail to do so, this can be a basis for termination of employment;
• If your company plans to dismiss an employee, take all surrounding circumstances into consideration; and
• Consider whether dismissal or other disciplinary action is the right remedy for a breach of policy.

Do you require further advice?

For information or assistance relating to unfair dismissal, please contact the Ai Group Workplace Advice Service on 1300 55 66 77.

Additionally, it is important that all employers are aware of the recent Full Bench Decision in Fitzgerald v Woolworths Limited [2017] FWCFB 2797 and the ramifications of that decision in relation to proceedings before the Fair Work Commission (FWC) including unfair dismissal applications. As a result of the decision in Fitzgerald employers will require “permission” from the Commission where they are using a lawyer or paid agent (i.e. a consultant) to assist them in any aspect of an unfair dismissal claim (not just where they are seeking the lawyer or agent to undertake advocacy in the matter).

As a registered organisation however Ai Group has automatic rights to appear on behalf of its members in any proceeding before the FWC without the need to seek permission. We believe there is a strong benefit of using Ai Group to represent you in these matters given that we have a range of exceptionally skilled and legally qualified practitioners and we can assist without the risk that those practitioners will be prevented from representing your business.

Alternatively, if you would like assistance in understanding how to terminate your employees and protect yourself from unfair dismissal claims please contact your local Ai Group Workplace lawyer in Sydney, Newcastle, Wollongong, Melbourne, or Brisbane.

AiGWL email address: info@aigroupworkplacelawyers.com.au