FEDERAL COURT OF AUSTRALIA

EMPLOYMENT - termination of employment - summary dismissal - whether conduct constituted ‘serious misconduct’ within meaning of s 170CM(1)(c) Workplace Relations Act 1996 - where employee operated equipment at fertiliser packing plant in contravention of workplace safety procedures, in circumstances where other contraventions by fellow employees of safety procedures were associated with the incident in question - whether onus on employer to prove serious misconduct on part of employee.

Workplace Relations Act 1996 ss 170CP, 170CM(1)(c), 170CR

Workplace Relations Regulations 1989 reg 30CA

Vines v Djordjevitch (1955) 91 CLR 512 applied

McLean v Tedman (1984) 155 CLR 306 cited

Boral Resources Queensland Pty Ltd v Pike [1992] 2 QdR 25 cited

BARRY RONALD KENNELLY v INCITEC LTD

No QG 173 of 1997

SPENDER J

BRISBANE

29 OCTOBER 1998

THE COURT ORDERS:

The application is dismissed.

Note:                Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

This is an application pursuant to s 170CP(2) of the Workplace Relations Act 1996 (‘the Act’).  The applicant seeks an order pursuant to s 170CR(4) of the Act on the basis that the respondent has contravened s 170CM of the Act.  Incitec Ltd (‘Incitec’) terminated Mr Kennelly’s employment at the Gibson Island plant of the respondent on 10 September 1997 because of an incident which occurred at the workplace on 8 September 1997.  The termination was without notice or payment in lieu of notice, the respondent contending that Mr Kennelly was guilty of serious misconduct within the meaning of s 170CM(1)(c) of the Act.

If Mr Kennelly was not guilty of serious misconduct, s 170CM(1) of the Act required that he should receive the notice specified in s 170CM(2) or compensation in lieu thereof.  Incitec admits that it employed Mr Kennelly from 10 January 1981 to 10 September 1997 and that, if Mr Kennelly was not guilty of serious misconduct, it would have been required pursuant to s 170CM(2) to have paid Mr Kennelly the equivalent of five weeks' pay in lieu of notice.  This amounts to a gross figure of $5095.34.

The Act relevantly provides:

“Section 170CP  (1)  Subject to subsection (8), an employer must not terminate an employee’s employment unless:

(a)        the employee has been given the required period of notice (see subsections (2) and (3)); or

(b)        the employee has been paid the required amount of compensation instead of notice (see subsections (4) and (5)); or

(c)        the employee is guilty of serious misconduct, that is, misconduct of such a nature that it would be unreasonable to require the employer to continue the employment of the employee concerned during the required period of notice (see subsection (7)).

(2) The required period of notice is to be worked out as follows:

(a)        first work out the period of notice using the table at the end of this subsection; and

(b)                then increase the period of notice by 1 week if the employee:

(i)                  is over 45 years old; and

(ii)                has completed at least 2 years of continuous service with the employer.

Mr Kennelly was born on 6 February 1950 and his length of service was in excess of five years.

Section 170CM(7) provides:

“Without limiting the generality of the reference to serious misconduct in paragraph (1)(c), the regulations may identify:

(a)           particular conduct; or

(b)           conduct in particular circumstances;

that falls within that reference.

Section 170CP(2) provides:

“Subject to subsection (5), an employee may apply under this section to the Court or to a court of competent jurisdiction as defined in section 177A for an order under section 170CR in respect of an alleged contravention of section 170CM by his or her employer.”

Section 170CR(4) provides:

“Subject to subsection (5), if a court to which an application is made under subsection 170CP(2) or (3) is satisfied that an employer has contravened section 170CM in relation to the termination of the employment of an employee, that court may make an order requiring the employer to pay to the employee an amount of damages equal to the amount which, if it had been paid by the employer to the employee when the employment was terminated, would have resulted in the employer not contravening that section.”

Regulation 30CA of the Workplace Relations Regulations 1989 provides:

“(1)     For paragraph 170CM (1)(c) of the Act, serious misconduct includes:

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

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

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

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

…”

As Mr Kennelly was summarily dismissed, and received neither notice nor compensation, the short question therefore is whether prior to his dismissal Mr Kennelly had been guilty of serious misconduct.

As pleaded, the application also contains a common law action for damages in the accrued jurisdiction.  It is accepted by the applicant that this common law action probably does not add anything to the applicant’s claim, given that at common law the period of notice by which a contract may be terminated without fault is always relevant when assessing damages for wrongful dismissal, and serious misconduct is a basis for dismissal without notice.

The effect of reg 30CA(1)(b)(i) of the Workplace Relations Regulations is that serious misconduct includes, inter alia, conduct that causes imminent and serious risk to the health or safety of a person.

In my opinion, where the employer has terminated an employee’s employment without notice or payment in lieu, it is for the employer to establish that the employee was guilty of serious misconduct.

Section 170CM of the Act lays down a general principle, namely, prohibiting an employer from dismissing an employee, and then provides special grounds of excuse, justification or exculpation, depending on new or additional facts, including, relevantly, proof of serious misconduct.  In such a case, the burden of proving that the case is one which falls within the proviso lies upon the party seeking to take advantage of it, in this case, the employer.

In Vines v Djordjevitch (1955) 91 CLR 512, Dixon CJ, McTiernan, Webb, Fullagar and Kitto JJ said at 519:

“When an enactment is stating the grounds of some liability that it is imposing or the conditions giving rise to some right that it is creating, it is possible that in defining the elements forming the title to the right or the basis of the liability the provision may rely upon qualifications exceptions or provisos and it may employ negative as well as positive expressions.  Yet it may be sufficiently clear that the whole amounts to a statement of the complete factual situation which must be found to exist before anybody obtains a right or incurs a liability under the provision.  In other words it may embody the principle which the legislature seeks to apply generally.  On the other hand it may be the purpose of the enactment to lay down some principle of liability which it means to apply generally and then to provide for some special grounds of excuse, justification or exculpation depending upon new or additional facts.  In the same way where conditions of general application giving rise to a right are laid down, additional facts of a special nature may be made a ground for defeating or excluding the right.  For such a purpose the use of a proviso is natural.  But in whatever form the enactment is cast, if it expresses an exculpation, justification, excuse, ground of defeasance or exclusion which assumes the existence of the general or primary grounds from which the liability or right arises but denies the right or liability in a particular case by reason of additional or special facts, then it is evident that such an enactment supplies considerations of substance for placing the burden of proof on the party seeking to rely upon the additional or special matter: see Morgan v Babcock & Wilcox Ltd (1929) 43 CLR 163; Pye v Metropolitan Coal Co Ltd (1934) 50 CLR 614; (1936) 55 CLR 138; Darling Island Stevedoring & Lighterage Co Ltd v Jacobsen (1945) 70 CLR 635; Barritt v Baker (1948) VLR 491, at p 495; Dowling v Bowie (1952) 86 CLR 136.”

In my opinion, s 170CM is of the kind last mentioned in the passage I have quoted, with the consequence that the employer has the onus of proof of establishing serious misconduct on the part of the employee.

It is necessary to look at the circumstances which led to the termination of Mr Kennelly by Incitec.

While the evidence was extensive, the material differences were few, and I proceed generally on the basis of the version of events given by Mr Kennelly.

Incitec at all relevant times carried on the business as a manufacturer and supplier of chemicals and other products to the agricultural, mining and household markets from, amongst other premises, premises at Paringa Rd, Gibson Island, Murarrie, Brisbane.  The plant despatches approximately 400,000 tonnes of bulk fertiliser per year and employs approximately 70 people, including operators, maintenance and clerical staff.  Mr Kennelly was up to and including 10 September 1997 employed by Incitec as a versatile operator.  Mr Kennelly described this position as “the old leading hand type person or a multi-skilled person that knew all the areas of work down there and led a team of multi-skilled workers”.  In September 1997 Mr Kennelly had five people working under him.  He had been a leading hand or versatile operator for fourteen or fifteen years in the Despatch Department.

The central feature of the impugned conduct of Mr Kennelly on 8 September 1997 was the removal of a “danger tag” on the head roller of a CV498 elevator without ensuring by inspection that it was safe to commence the operation of the elevator.  Mr Kennelly says he was an “authorised person” who had done “hundreds of permits, hundreds of jobs down there over my years as a versatile operator” who had “removed hundreds of tags and replaced plenty of tags”.

The elevator is a machine used to transport fertiliser to the top of a tower approximately five storeys high, where the fertiliser is tipped into a shute and fed into a machine used to bag the fertiliser.  The elevator consists of a large rubber belt with steel buckets attached to it.  The belt is rotated by a drum which is driven by a motor located at the top of the tower.  There is a large metal cover over the head roller.  The top of the elevator is reached by way of a metal staircase.  The top of the elevator is surrounded by a metal mesh platform.  The main control switches for the elevator are located in the main control room on the ground floor of the building which houses the elevator; there is a further “local” switch in the vicinity of the head roller at the top of the tower.

On Monday, 8 September 1997, Mr Kennelly commenced his shift at 5.30 am, his duty for that day having been detailed in a program completed by Mr Paul Goggan, the Plant Programmer.  The first task on the program on 8 September was to run the “number one bag line” of the plant.  The bag line is a fully automated system which does the day to day bagging of industrial products and blends.  Mr Kennelly’s duty on that morning was to set up the line according to which fertiliser product and blend was to be bagged on that particular day.  On commencing work, he first turned the air compressor on.  There was, I find, no reference or message on the daily program indicating that maintenance was to be conducted or completed on that day, nor, I find, were there any messages on the blackboard or whiteboard indicating that work should not proceed on 8 September 1997.  The blackboard and the whiteboard located in the rotator area were frequently used by staff as a means of communication between employees working on the same or on different shifts.

Mr Kennelly says, and I accept, that on the morning of 8 September 1997 the bag magazines were full ready for commencement and that he checked that the dump doors and solenoid on the elevator had been closed after the “wash down” which had been performed on the previous Friday.

Proceeding from the rotator area to the main control room, Mr Kennelly saw that the CV498 elevator was tagged with a “danger tag”.

The danger tag system was part of the safe work permit procedures that were in operation at the fertiliser plant at Gibson Island.  The safety procedure in operation at the Gibson Island plant dealt with steps that must be taken to ensure that maintenance work is performed safely.  The issue of safe work permits is part of that procedure.  A safe work permit is issued by a person authorised by the employer to do so.  Mr Kennelly was so authorised.  A safe work permit authorised specific people to carry out maintenance on a specified piece of equipment.  A safe work permit operated in two ways: it authorised maintenance staff to work on the equipment and prohibited other people from operating the equipment in respect of which the safe work permit was issued.  Maintenance could only be carried out whilst the permit was valid.  The validity of a permit appears from a box on the form of the safe work permit with the words “valid from” and “valid to” printed on it.  The validity can be extended by filling in the “extensions box” on the form.

Further, a safe work permit operated to prohibit non-maintenance personnel from operating the equipment until the permit was surrendered and cancelled.  The surrender and cancellation procedure is contained in the ‘Gibson Island Works - Procedure for use of safe work permits” document.  When work covered by a permit is complete, the permit under the procedures should be surrendered and cancelled, generally by one of the maintenance personnel who have worked on the job and generally will be surrendered to the supervisor who is authorised to issue the permit.  On surrender, it is the responsibility of the person to whom the permit was surrendered to de-isolate and detag the equipment and ensure it is safe to operate.  That person may then cancel the permit by signing the appropriate place on the form.  Safe work permits are issued in duplicate: the yellow original of the permit is carbonised and allows the duplicate to be printed on a white copy.  The yellow copy ought be taken by one of the persons authorised to perform the maintenance and kept with those persons.  When the job was complete, the yellow permit is surrendered and cancelled, the cancellation being recorded on both the yellow and white copies.

A danger tag system is part of the safe work procedures.  The procedures manual provided in respect of danger tags:

“DANGER TAGS

1.              Danger tags are aids in the communications process.  They are attached to equipment to signify that this equipment must not be operated.

2.              There are two types of danger tags in use: The rectangular red tag, which is for general use and the circular yellow and orange tag, used exclusively by the Electrical Group.

3.              Both types of tags have spaces to record the name of the person who placed it, the date, the name or function of the person who m may authorize the removal of the tag and a space to write the reason for the tag being placed.

All this information must be written on the tag.  The following applies in the case of red danger tags:

(a)               If the tag is placed to signify that it would be dangerous to operate the equipment, a work order must be raised and the work order number written on the tag, as well as the reason stated.

(b)               If the tag is placed while preparing the equipment for work by maintenance personnel, the safe work permit number must be written on the tag as well as the reason.

(c)                If the safe work permit is returned, but the repair or other work is incomplete and a new permit issued the following day, the tags on the equipment must be replaced with tags showing the new permit number.  Tags from the first day must remain in place right up to the time that the tags for the second day are installed.

(d)               If during the currency of a safe work permit, a second permit is issued, to another trade for instance, a separate Danger Tag must be attached to the isolation of that equipment.

4.              Removal of any danger tag can only be authorised by the person whose name or function appears on the tag in the column “Removal will be authorised by”.

5.              Equipment must never be operated while danger tags are attached.

Only after the work permit has been handed back and the equipment has been checked out for completeness and the danger tags have been removed by an authorised person, can the equipment be operated.

DANGER TAGS ARE AIDS IN THE PREVENTION OF ACCIDENTS

Only if everybody follows the procedure for use of danger tags all the time, can we expect full benefits.

N.B.     Write clearly on the danger tag.

                        Print your name to prevent confusion.

                        Never alter the writing on a danger tag.

                        Never operate tagged equipment.

                        Don’t remove tags unless you are authorised to do so.

                        Danger tags must be securely fitted.

                        Display danger tags in a visible position.

                        Attach danger tags to local isolator as well as the MCC.

N.B.     Electrical danger tags can only be placed or removed by electrical tradesmen or their supervisors.”

Of particular significance is what appears in paragraph 5 of that description of danger tags, and the notice “Attach danger tags to local isolator as well as the MCC”.  The MCC is the Motor Control Centre.  The emphasis above is in the original.

Mr Kennelly says in his affidavit:

“A danger tag is an express warning not to operate or use the equipment to which it is attached and an explanation is to be provided on the danger tag as to why the equipment was tagged or provide a description of work do [sic] be done on that particular piece of equipment.  These danger tags are utilised for the purpose of warning staff that a particular piece of machinery is under repair.”

Mr Kennelly says that on noticing the danger tag on the elevator he commenced to look for the safe work permit book which contains the safe work permits.  He checked the fitters’ shop to see if the “early start fitter” had arrived, but no one was in attendance.  He searched for the work permit book in the pigeon holes outside the supervisor’s office unsuccessfully; he checked the technical support maintenance office table unsuccessfully; went to the warehouse despatch office and was still unable to locate the safe work permit book; went to the number one line and found the safe work permit book on the top of some empty bags on a work bench.

On inspecting the permit book he found permit numbered 73414 dated 4 September 1997.  Contrary to the promulgated procedure, the original yellow permit remained attached in the work permit book.  The permit had been authorised by Mr David Compton and indicated that it was valid from 1400 on 4.9.97 to 0100 hrs on 5.9.97.  An extension indicated that it was valid from 0700 to 2000 on 5.9.97, signed by Mr Compton.  The work described in the permit was “Repair head roller as req’d”.  The job said: “Permission is given to fitters/riggers”.  In relation to the conditions was included next to “Risks/Precautions to be taken” in printing:

“Work from secure footing

Buckets must be secured from roll-back.”

A number of signatures appears in the block headed “Acceptance”, which also contains the words “Return permit when job complete”.

When Mr Kennelly saw the work permit numbered 73414 there was nothing in the box headed “Cancellation” to indicate that the permit had been surrendered, nor anything to indicate that the job had been completed or was incomplete or that the job had been accepted as complete by anybody, nor had the permit been cancelled.  In a box headed ‘Preparation”, it was indicated that there was in the box next to “Physically Isolated” a tick in the “Yes” box and a tick in the “Yes” box against the statement “Danger tags in position”.  The head roller had not been locally isolated, as it should have been, and no danger tag was in position on the local isolation switch.

Mr Kennelly says in his affidavit:

“Given that the permit number 73414 had expired as at 8.00 pm Friday 5 September 1997 and the permit was in the Work Permit Book and not with the maintenance worker, I applied discretion and concluded that any work that had been done had been completed on the number one line.”

In my opinion, this is a very telling admission.

Mr Kennelly says he then went upstairs, checked the scales, walked outside on to the stairway, and looked up at the head of the elevator.  He said in evidence that he went up some of the steps on the flight of stairs.  He says that he could not see anything to indicate that the work had not been completed.  He did not go to the head roller, which was some flights of stairs higher.  Had he done so, he would have found the cover off the head roller, the belt of the head roller supported and immobilised by chains on each side running to an overhead position, and the belt suspended by the chains a short distance above the head roller, although part of the belt was in contact with the head roller.

From the area at ground level near where the warehouse office was located, a look at the head roller would have shown that the cover was off the head roller and chains were in place securing the belt of the roller on the elevator.  Mr Kennelly says he went downstairs to the main control room, spoke with a cleaner, and then removed the padlock which prevented the head elevator from being operated, and removed the danger tag.  He then put the head elevator in operation and noticed that there were green lights on the mimic panel in the main control room, indicating that the elevator was operating.

On returning to the bagging line one floor above, he found that there was a problem with the Keb clutch on the number one line.  He returned to the maintenance shop, which was still closed.  After speaking to another employee he went to the road despatch office.  En route after checking that the maintenance workshop was still closed, he attempted unsuccessfully to telephone Mr Ray Tunny directly, Mr Tunny being the leading electrician.  Mr Kennelly left a message indicating the problem with the Keb clutch on the number one line.  He returned to the number one line and attempted unsuccessfully to clear the fault with the clutch.  He went downstairs again and ran into Mr Tunny in the company of some fitters.  Mr Tunny advised that he didn’t return the phone call “Because the line would not be starting until lunch as the maintenance workers were working on the elevator”.  Mr Kennelly told Mr Tunny that the permit in relation to the maintenance was still in the permit book and had expired last Friday evening.

Mr Kennelly immediately returned to the main control room, switched off the head elevator, and re-isolated that elevator, attaching a danger tag and padlocking the head elevator.  He then went to the bagging line and put a further extension in the yellow work safe permit until midday on 8 September 1997.  Mr Kennelly says:

“As there was a failure to liaise or advise the incoming versatile operator of any further maintenance work to be done, I believe that I have taken reasonable actions to ensure a safe work environment upon commencing my duties.  I believe that I have applied reasonable discretion in that there was no communication by way of a log book, black board, white board or through the program procedure indicating further maintenance.  Furthermore, I took significant and detailed measures to locate the relevant work permit and noted that it was in the work permit book and in fact had expired as at 8.00 pm 5 September 1997.”

Permit 73414 was cancelled by Dallas Taggart at 0900 on 8 September 1997.

The danger tag is a red card about 150cms x 50cms.  On each side it has at the top the word “Danger” and the words “Do not operate or use this equipment”.  The tag says “Explain reason for tagging or describe work to be done” and the danger tag in the present case has the printed words “Fitter repairing elevator head roller”.  The permit number 73414 appears on it and the words “Removal will be ordered by” and in printing  “V/O D Taggart”.  After the words “Tagged by” Mr Compton’s signature appears and it is dated 4.9.97.  The obverse of the tag has the same word “DANGER” printed at the top as on the face and underneath in printing “DO NOT OPERATE” in large capitals, and then in smaller capitals “or use this equipment”.  Underneath in smaller printing is the following:

“                                              instructions

1.                   This tag must not be altered or reused for another job.

2.                   After removal, dispose of tag according to safety procedures.

3.                   Violation of danger tag rules must result in a penalty up to and including discharge.”

Mr Kennelly’s action in removing the tags and operating the machine was reported by Mr Taggart to Mr Wright, the Despatch Manager of the plant at Gibson Island.  Mr Wright says that he instructed Mr Taggart to withdraw Mr Kennelly’s authority to issue safe work permits until the end of an investigation.  He then inspected the motor and the head roller at the top of the tower.  The cover of the head roller had been removed and was placed on a platform near the motor.  The belt had been lifted by way of a chain block from the drum which drove it.  He said that when he inspected the belt, it was still touching the drum and the rubber belt was still warm.  The rubber belt, he says, had been damaged.  I am not satisfied that the operation of the elevator caused any significant damage to the belt on this occasion.  The fact that six months later the elevator belt broke and had to be replaced at a cost of $72,000, as well as miscellaneous costs of about $7,000 cannot be ascribed with any confidence to any damage the belt may have suffered by its operation on the morning of 8 September 1997.

At about 10 o’clock on 8 September 1997 there was a meeting in the training room with Mr Kennelly, Mr Taggart, Mr Wright and others present.  Mr Kennelly was sent home about midday on 8 September 1997 on full pay pending an investigation.  On Wednesday, 10 September 1997, a meeting was held between the applicant, the Personnel Manager (Mr Mike Jager), Mr B Bliss (a fellow versatile operator) who gave evidence in these proceedings, and Mr B Linden.  On 10 September a copy of a set of notes by Mr Wright of the meeting of 8 September were given to Mr Kennelly.  Mr Kennelly suggested some amendments.  A new document incorporating some changes was made by Mr Jager.  That document contains the statement

 “At approximately 7.30 am after he had gone to the Elevator to start the job Tony Richardson found that the elevator had been started and run while under repair.  There was some obvious damage to the equipment and the Roller Head was hot.  Richardson then approached Dallas Taggart Despatch Superintendent and complained bitterly about the fact the Elevator had been started while under repair.”

In the course of the meeting Mr Kennelly was asked to explain “why he had not followed the procedure and checked to ensure the equipment was safe and ready to go back into service”.  The minutes taken by Mr Jager record that Mr Kennelly commented:

·        There was no communication between Friday day shift and Monday day shift ie he didn’t know the line was down for maintenance on Monday.

·        He was doing a lot of checking after washdown running around.  He perceived pressure on him to get line running due to programme.

·        He said the fact the permit was left in the book indicated the job had been finished although he agreed it had not been signed as cancelled by the Fitter doing the job and therefore had not been completed.

·        He said that in most cases maintenance work was carried out on Friday so that the line was available on Monday to start work first thing.

·        Barry mentioned K Allen current Safety officer in Operations and P Giffin former Supervisor in Despatch had received warnings for permit issue breaches and were not dismissed.

·        Barry said he had checked the Elevator by going out on the platform and he would have seen personnel on the top platform if they had been there.  Mike Jager explained that he personally followed this up to verify this and it was obvious that personnel could not always be seen at the top of the platform from where he had looked because sight was obscured by stairs and steel work.

The minutes then record:

“Mike Jager accepted some of the above circumstances would lead Barry to believe that the Elevator was ready for operation however the fact remained it wasn’t and it was Barry’s responsibility to ensure that the equipment was in a safe working condition and that had he climbed just 3 or 4 flights of steps he would have seen instantly that the job was still in pieces. (Barry at no stage expressed a view that he had stuffed up or made a mistake and was continually looking for excuses as to why he had not checked the Elevator.  It was either the Fitters (sic) fault or a lack of communication on someone else’s part but not his mistake.  Barry was concerned about his fate but not really about what he had done).

Barry was then asked had he seen the General Manager’s Company Notice which said any employee who breached the SWPermit system would be dismissed.  He said he had not heard of or seen the General Manager’s notice.  The notice was tabled.

B Bliss asked about the local isolation rule i.e. why wasn’t the local isolation tagged out and isolated.  Mike Jager agreed the local isolator had not been tagged out by the original permit issuer as it should have but this did not excuse Barry from not checking to make sure the equipment was safe and ready to go back into service.  That was why we had a permit system so that we did not have to rely on all the other things to be correct if we are to protect the safety of employees.

Brian Lyndon pleaded mitigating circumstances i.e. other people did not do the right thing, team hand over not been done etc.  Barry had made an error of judgement.  A list of factors prior to the incident caused the incident as well as Barry’s actions.

Barry was asked if there was anything further to add before the company considered its decision.  Nothing new was tabled.

Meeting adjourned about 1.45pm for management to consider it’s [sic] decision.

Meeting reconvened about 40 minutes later at which point Barry was advised that the company considered his actions in not checking the equipment before removing danger tags and (sic) to be a serious breach of the company’s Safe Work Permit Procedure and under the circumstances had no alternative but to dismiss him without notice.”

It is against these facts that I turn to consider whether Incitec has established serious misconduct on the part of Mr Kennelly.

An employer at common law has a duty to prevent accidents in the workplace.  In McLean v Tedman (1984) 155 CLR 306 at 313 Mason, Wilson, Brennan and Dawson JJ said:

“The employer’s obligation is not merely to provide a safe system of work; it is an obligation to establish, maintain and enforce such a system.  Accident prevention is unquestionably one of the modern responsibilities of an employer: see Fleming, Law of Torts, 6^th ed. (1983), pp 480-481.  And in deciding whether an employer has discharged his common law obligation to his employees the Court must take account of the power of the employer to prescribe, warn, command and enforce obedience to his commands.”

It was submitted by Mr Logan, counsel for the applicant, that it may be accepted as a general proposition that the accident prevention responsibility imposed on an employer “has the consequence that the employer must have an ability to remove, summarily, from its workforce someone who has deliberately and seriously breached policies designed to ensure a safe system of work”.

In this context it is wise to pay heed to the caution made by Denning LJ, as he then was, in Christmas v General Cleaning Contractors Ld and Caledonian Club Trust Ld [1952] 1 KB 141 where he noted at 150:

“You cannot blame the man for not taking every precaution which prudence would suggest.  It is only too easy to be wise after the event.”

I am not satisfied that Mr Kennelly’s conduct was either wilful or deliberate behaviour by an employee inconsistent with the continuation of the contract of employment within reg 30CA(1)(a). “Wilful misconduct is something entirely different from negligence, and far beyond it, whether the negligence be culpable, or gross, or howsoever denominated”: per Cotton LJ in Lewis v Great Western Railway Co [1877] 3 QBD 195 at 213.  In Boral Resources Queensland Pty Ltd v Pike [1992] 2 QdR 25, Ambrose J said at 51:

“’Wilful’ misconduct involves merely the doing of acts in fact amounting to misconduct intentionally, with knowledge that those acts will amount to misconduct.  In this regard I adopt what was said in Lewis v The Great Western Railway Company [1877] 3 QBD 195 at 210 per Brett LJ and Transport Commission (Tasmania) v Neale Edwards Pty Limited (1954) 92 CLR 214 at 223 per Webb J and 227-228 per Kitto J.”    

However, the failure by Mr Kennelly to inspect the head roller of the elevator to ensure that it was safe to remove the danger tag and commence the operation of the elevator was an omission that in the circumstances, in my opinion, amounts to conduct within reg 30CA(1)(b).  If on 8 September 1997 Mr Kennelly had climbed to the top of the elevator some two or three flights further than he in fact went and stood on the platform there, he would have noticed the cover was off the head roller, a frame and lifting chains were in place, the head roller was not locally isolated, and generally the elevator was not in a state to be operated.  I do not agree that this is being wise after the event.  Such an inspection is absolutely crucial to the efficient operation of a danger tag system.

I accept that there were a number of additional measures which, if taken, would have prevented the incident from occurring.  First, local isolation of the head roller and the recording of this on the work permit should have occurred prior to the commencement of Mr Kennelly’s shift.  Local isolation would have prevented the elevator from operating.  Secondly, there was the absence of any meeting of a “handover” or “liaison” kind when Mr Kennelly commenced his shift, dealing with what equipment was under maintenance.  The safe work permit procedures indicate that a specific responsibility of the person issuing the work permit is to liaise with the incoming “versatile operator”.  Thirdly, there was the absence of any warning to the effect that there was equipment under maintenance on the blackboard in the rotapacker area which, it seems, was a means adopted to cover the absence of a system of liaison meetings where shifts were not consecutive. In this context, there had been an earlier practice of using a shift log book to record information, but that use had been discontinued considerably before the events of September 1997.  Fourthly, in this case, the fitter rostered for the shift on the morning of 8 September 1997 was late, and so there was no opportunity for an informal discussion between Mr Kennelly and the fitter prior to Mr Kennelly removing the danger tags and removing the elevator.  Finally, and most importantly, is the series of failures in relation to the operation of the work permit system, including the failure to indicate any local isolation of the head roller, the failure by the maintenance personnel to take the yellow permit from the book, the failure to indicate whether the work had been completed or not, and the failure to follow the surrender and cancellation procedures concerning the operation of the work permit.

These factors, together with the evidence that Mr Kennelly is a longstanding employee with a good record and who in fact received a General Manager’s Excellence Award as a member of the Gibson Island distribution team in 1996 for safety, health and environment matters excite sympathy for the position of Mr Kennelly.  Nevertheless, in my opinion, it remains plain that his failure to ensure that the machinery, which the danger tag indicated had been the subject of fitter repairs, was in a position properly to be started, is an act that involved the risk of very serious injury to any person working on or in the vicinity of the machine at the time of its start up.  The failure to inspect the machine was a serious breach of Mr Kennelly’s obligations in the operation of the systems dealing with safety in the workplace.  Such visual inspection as he performed was wholly insufficient to discharge his responsibilities in the circumstances, and the fact that fortunately no person was injured or killed as a result of the operation of the elevator on that morning cannot affect the conclusion that the start up in the circumstances involved a serious risk of injury.

 ‘Risk’ is defined in the Macquarie Dictionary to include “exposure to the chance of injury or loss”; a hazard or dangerous chance; to expose to the chance of injury or loss, or hazard”.  It is clear on the evidence that Mr Kennelly exposed employees and maintenance workers to the chance of injury or loss in removing the danger tag and operating the elevator without performing the physical inspection of the head roller on the morning of 8 September 1997, and satisfying himself that it was safe to remove the danger tag and operate the elevator.  There was the possibility that such persons might be working on, or in the vicinity of, the head roller, when Mr Kennelly removed the danger tag and commenced the operation of the head roller.

There are a few further matters requiring comment.  Mr Kennelly gave evidence that he had not seen the General Manager Fertiliser Business’ notice dated 20 August 1996 which had been posted on a cork notice board adjacent to the lunch area at the Gibson Island premises.  That memorandum said:

“We recently had an incident at Kooragang Island where an employee operated electrical equipment to carry out a pre-startup test whilst a personal Danger Tag was attached to a switch.  This is a totally unacceptable act and must never be repeated within our company.

A personal Danger Tag attached to a piece of equipment must be regarded as the last line of defence in our safety system.  Personal Danger Tags can be the difference between life and death, and individuals are entitled to believe that they are fully protected when such tags are in place.

In future any person disregarding a Danger Tag, or removing a Danger Tag in a manner which is not in accordance with the site’s safety policies will be instantly dismissed with no consideration for extenuating circumstances.”

This memorandum accurately indicates the importance of danger tags for the safety of workers, but I am not satisfied that this notice came to the attention of Mr Kennelly.  Mr Bliss, a fellow versatile operator, who was an impressive witness and gave evidence in some respects adverse to the interests of his continuing employer, gave evidence that he too had not seen the memorandum prior to Mr Kennelly’s dismissal.

Mr Bliss’s evidence also supported the evidence of Mr Kennelly that the Product Distribution Safe Work Permit Manual, which Mr Wright said was later found in the main control room, was not to his knowledge available either there or in the area of the number one line prior to 8 September 1997.  While the evidence of Mr Kennelly and Mr Bliss on this topic is surprising, I am not prepared to find to the contrary.  However, Mr Bliss had his own instruction book on the issuing of permits, since training given to him by one Eric O’Connell in the early 1990s.  Mr Kennelly was another person who attended that training.  Mr Bliss said that each versatile operator at that time was given an instruction book on the issuing of permits.  This evidence of Mr Bliss was unchallenged.  Moreover, Mr Kennelly had attended a refresher training course in the safe work permit procedures in August 1997, some three weeks prior to the incident of 8 September 1997.  In answer to a question in the assessment paper completed by Mr Kennelly in that course, in answer to the question “What should the issuer of a clearance certificate do when the certificate is returned by the recipient at the completion of the job?”, Mr Kennelly had written “Checks that the job has been completed safely and checks that job is complete”.  This answer has been ticked, with the marker adding the words “Then sign final acceptance including time and date” to the answer that Mr Kennelly had given.  Mr Bliss conceded in cross-examination that an inspection of the work to ensure that the danger tag could safely be removed required the checking out of the top of the elevator, would involve going to the top of the elevator and checking the elevator out.  Having made that concession, he was asked:

“And that’s the only way of ensuring that it’s safe to remove the danger tag; isn’t it?

A.  That would be.

And it’s the only way of ensuring that nobody was going to be injured if you operated the machine; isn’t it?

A.     Yes.”

I am satisfied that the action of Mr Kennelly on the morning of 8 September 1997 amounted to serious misconduct within the meaning of that phrase in s 170CM.  I am further of the view that Mr Kennelly’s conduct was serious misconduct as defined by reg 30CA(1)(b).

Notwithstanding his fine work record, long service, and the existence of other breaches by others of the safety procedures that should have been adopted prior to the removal of the danger tag, the operation of the elevator by Mr Kennelly without his first checking that it was safe to do so justified in the circumstances the summary dismissal by Incitec of Mr Kennelly.  The application is dismissed.

Associate:

Dated:              29 October 1998