Use of Loss of Trust and Confidence in Terminations of Employment
Harrington v Coates Hire Operations Pty Limited
6 May 2015  FWC 2598
In this case, the Fair Work Commission (“FWC”) considered the termination of the Applicant’s employment for a safety breach (the safety incident). His duties involved collection and delivery of portable toilets. Coates was a contractor to the site managers supporting the constructing and commissioning of the Gold Coast Light Rail project (the project).
The Applicant, a year 12 employee with an unblemished record, was dismissed on 26 March 2014.
The project involved construction and delivery of a light rail network on the Gold Coast, which is now operational. At the time of the safety incident was undergoing operational testing, with trams running on tracks, powered from overhead electrical wires. The track was commissioned progressively for testing, meaning during testing some zones might be “live” (electricity was running through the wires) and other parts “dead” (no power). All 13 kilometres of track went live on 3 March 2014.
During construction and testing, areas that were live were designated as hazard zones, and special requirements were in place to manage works in hazard zones, including various notification requirements such as signage. The safe working distance from live, overhead wires was designated as three metres.
On 19 March 2014, the Applicant was discharging a work order to collect a vandalised portable toilet from a site adjacent to the tracks. In order to discharge his work order, he positioned his truck on the track, there being no traffic controller who might make it safe to work from the roadside rather than trackside.
Lifting the toilet, the Applicant conceded, it required the crane to be manoeuvred closer to the wires than 3m. At some point, a tram approached, and signalled its presence by flashing its lights and sounding its horn. The Applicant, on seeing the tram (he says late in the process), hastened his loading and left the site, stopping once off the tracks to re-secure the load, whereon he had a discussion with a representative the site manager about the site being live, and that his presence had resulted in the zone being isolated from power. The Applicant says this was the first he knew that the area was live and a hazard zone.
The Applicant’s presence on the site with a tram in close proximity on a live site was considered a serious hazard and a breach of Coates’ safety requirements.
The Applicant was required to attend meetings on 21 March regarding the investigation of the safety incident and given a Show Cause notice indicating that Coates was considering “terminating your employment or other disciplinary action”. He provided a response to the show cause letter.
A third meeting was called on 24 March 2014 to inquire of the Applicant about certain discrepancies. It seems the Applicant was asked if he wanted a support person but he declined.
A final meeting took place on 26 March 2014, attended by the Applicant. Coates dismissed him and gave him a written notice of dismissal. Coates’ case was that the Applicant acted in an unsafe manner when he knew or should have known otherwise.
The Applicant’s case was essentially that he discharged his duties properly without any notice or information relevant to specific requirements as to operating in an unmarked hazard zone.
On the balance of probabilities, the Commissioner was satisfied that the Applicant was not aware on entering the site, and while operating his crane, that the site was live.
The Commissioner did not agree that the conduct amounted to “serious misconduct” in all the circumstances, including:
- the lack of explicit advice to the Applicant by Coates or the site managers that the work was in a hazard zone;
- the absence of the indicia his training told him would be present on a live site;
- the fact that he had received no additional training or warning of a change of circumstances between September 2013 and the date of the incident; and
- the apparent safety of his actual conduct.
The statutory definition that affords guidance as to what is “serious misconduct”, Fair Work Regulations 2009 at Regulation 1.07, provides as follows:
Meaning of serious misconduct
(1) For the definition of serious misconduct in s.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 …
The Commissioner went on to comment that:
Mr Harrington’s conduct on my findings cannot have been wilful or a deliberate conduct: he genuinely thought the site was dead and that his undertaking of his duties was completely safe. Objectively, there was a risk to health and safety because the site was live, at least until isolated by McConnell Dowell (just when that happened was not the subject of evidence).
In my view, Mr Harrington’s conduct was not a deliberate, wilful, reckless or even negligent breach of safety requirements. On that basis I conclude it cannot be characterised as serious misconduct.
On the balance of probabilities, in my view, the conduct was not serious misconduct. The safety incident did not amount to a valid reason to dismiss Mr Harrington.
Further I find that the dismissal was harsh, unjust and unreasonable for its effects on Mr Harrington, the defective process used by Coates, and its failure to properly consider his circumstances and response to the show cause notice and the weight to be given to salient facts.
The FWC ordered reinstatement. In coming to that decision it also had to deal with the issue of whether the employer had lost trust and confidence in the employee. The Commissioner noted:
 It will not be appropriate to reinstate a dismissed employee if the employer has lost trust and confidence in the employee such that reinstatement is impractical. Loss of trust and confidence is not necessarily conclusive.
 As the Full Bench noted in Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 (Perkins):
Trust and confidence are concepts of degree. It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether that standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party.
It may be difficult or embarrassing for an employer to be required to re-employ a person the employer believed to have been guilty of wrongdoing. The requirement may cause inconvenience to the employer. But if there is such a requirement, it will be because the employee’s employment was earlier terminated without a valid reason or without extending procedural fairness to the employee. The problems will be of the employer’s own making. If the employer is of even average fair-mindedness, they are likely to prove short-lived. Problems such as this do not necessarily indicate such a loss of confidence as to make the restoration of the employment relationship impracticable.
 To ascertain whether Coates has lost trust and confidence in Mr Harrington, such that reinstatement is inappropriate, the Commission must, in terms of the guidance offered in Perkins, consider whether there is sufficient trust to allow the employment relationship to be viable and productive, and the rationality of the employer’s view that reinstatement is inappropriate because of a loss of confidence and trust. Whether that view is rational is a matter for consideration of the material before the Commission.
 It is clear that Mr Harrington’s conduct on the day was potentially dangerous, but he had no previous record of any safety breach, and his uncontradicted evidence is that he is a safe operator of the equipment with 12 year’s experience. He was not advised by toolbox meeting of any change following McConnell Dowell’s [the site manager] letter of 26 February 2014, and his training to that point was explicit in that live sites would be identified by appropriate notices and markings.
 The changes put in place by Coates from 19 March 2014 reinforce the seriousness with which they viewed the incident. However they also reinforce the submissions on Mr Harrington’s part that the previous advices and procedures were insufficient in the circumstances.
 Mr Harrington struck me as an honest and very willing worker, albeit one who had, in his own words and with hindsight, done the wrong thing, an admission against interest that reinforces my conclusion.
 There was no evidence of any difficulties between Mr Harrington and any other Coates’ officer, otherwise than in relation to the allegations that led to his termination. There is no reason to suspect that, if Mr Harrington were reinstated, he would not perform his duties in a satisfactory manner and in the best interests of Coates. He had served the company for 11 and a half years before his termination and there was no criticism of his work performance.
 Having regard to the whole of the relevant material, I conclude this is not a case where the reinstatement of Mr Harrington to his former employment, or to an equivalent position, should be regarded as impracticable.
 In deciding to order reinstatement, I appreciate that it will be necessary for Mr Harrington and his supervisors, as was said in Perkins, to display some magnanimity towards each other at the recommencement of their working relationship, but there is nothing in the evidence that suggests any of those who provided evidence is incapable of doing this.
 An order will issue for Mr Harrington’s reinstatement.