A former BHP Billiton worker has been awarded more than $45,000 in compensation after winning his unfair dismissal case before the Fair Work Commission.
Jason Schmidt, who worked at BHP Coal at the Saraji mine in Queensland for about 13 years, was fired for misconduct in May last year following a safety incident involving a leaking fuel tank on a mine truck.
Fair Work ruled in May Schmidt was fired because he failed to report the incident properly after sending a text message to his supervisor’s old phone number, which was never received.
BHP provided evidence to the commission to suggest Schmidt had received warnings about his conduct in the past and this was the final incident.
However, Schmidt argued the earlier warnings were unjustified and not appropriate to justify terminating his employment.
Commissioner Susan Booth found BHP did have a valid reason for dismissing Schmidt, however, she ruled Schmidt’s dismissal was harsh because the employer failed to follow correct procedures.
“While I have found there was a valid reason to dismiss Mr Schmidt, the other factors indicate the dismissal to be harsh, unjust or unreasonable in all the circumstances,” Booth said.
In a ruling this month, Booth awarded Schmidt $45,705.36 in compensation, the equivalent of about 20 weeks’ pay minus an amount for misconduct. Booth had previously said reinstatement would be inappropriate.
Will Snow, senior associate at Finlaysons, told SmartCompany this morning the case demonstrates the bar is pretty high for large corporates to demonstrate they’ve gone through fair termination process.
“A smaller company… may have been looked at differently by the commission,” Snow says.
Snow says while it did confirm a strengthening line of cases coming from Fair Work where misconduct or slips in performance when it came to safety risks did justify disciplinary action, the employer essentially “fell down” because of the process it took in dismissing the worker.
Snow says the commission essentially found the leaking fuel tank and subsequent failings to notify the employer was a valid reason for termination.
“(The commissioner) did find the fuel leak (was valid reason for termination) but didn’t find all the necessary steps were taken,” he says.
Snow says he believes it is a good outcome for the business that the worker wasn’t reinstated.
“If he had of been reinstated that might have undermined safety message,” he says.
Snow says the amount of compensation awarded to Schmidt reflects the lengthy period of time he had worked for BHP.
“It’s almost the highest amount he could have been awarded,” he says.
“It’s a significant amount of money. They’re the sorts of decisions you see when you do have a long-service history.”
Snow says the commission also considered how existing warnings about Schmidt’s performance were treated by BHP.
“The case demonstrates you need to think about these issues very carefully when considering termination, extremely carefully,” he says.
“Is it a similar issue? How recent was it?”
“The employer here was criticised because the previous issue, while on face looked similar, was in fact different from the final issue which resulted in his termination.”
“Employers need to be careful when relying on previous warning to terminate employment. Here, because it’s the employer it is [BHP], they almost needed to execute a completely perfect process.”
Snow says the main lesson for other businesses is “the bigger you are the higher the bar is set for procedural fairness”.
“Secondly, be careful when relying on older warnings because it needs to be similar sorts of issues and recent issues if you want to fairly dismiss them,” he says.
Snow says safety related and performance issues need to be taken seriously by employers.
“Here you’ve got a tank that’s leaking fuel, which creates lots of risks and issues,” he says.
“The commissioner essentially found a valid reason to terminate employment but that company relied on old warnings.”
SmartCompany contacted BHP Billiton but did not get a response prior to publication.