On 2 October 2018, a Full Bench of the Fair Work Commission, headed by Ross J, partially overturned a decision of Deputy President Colman, regarding the cases of Mr Gelagotis and Mr Hatwell which received media coverage because of the industrial context that the dismissals arose.
The Full Bench stated that there was a valid reason for dismissal but the conduct warranted a disciplinary response that fell short of dismissal.
Esso Full Bench appeal decision
Gelagotis v Esso Australia Pty Ltd T/A Esso; Hatwell v Esso Australia Pty Ltd T/A Esso  FWCFB 6092
On 2 October 2018, a Full Bench of the Fair Work Commission (FWC), headed by Ross J, partially overturned a decision of Deputy President Colman. The Full Bench held:
- the sacking of a union delegate, Mr Hatwell, by Esso Australia Pty Ltd (Esso) for calling an employee of an Esso contractor a “f***ing scab” was harsh and did not warrant dismissal; but
- the reasoning by Deputy President Colman related to the sacking of another union member, Mr Gelagotis, for initiating behaviour that isolated and excluded a different employee of the same Esso contractor was sound.
The cases of Mr Gelagotis and Mr Hatwell received media coverage because of the industrial context that the dismissals arose.
- The Full Bench’s decision forms part of a long and ongoing dispute between Esso and the ETU, AMWU and AWU (Unions) at the Longford gas plant in South Gippsland (Longford). The dispute has resulted in hearings before the FWC and the Federal Court.
- Since 22 June 2017, there has been a picket at Longford to protest a decision by Esso to contract out parts of its maintenance work to MTCT Services Pty Ltd (referred to as UGL) from 25 June 2017.
- Esso had previously contracted the work that is now performed by UGL to a joint venture that was related to UGL (JV).
- The JV’s workforce were dismissed when Esso awarded the maintenance contract to UGL.
- UGL offered employment to a number of maintenance workers that had been employed by the JV.
- UGL employees were covered by a different enterprise agreement to the enterprise agreement that covered the JV’s employees. It has lesser rates of pay and the Unions are not covered by it.
- The Unions do not want offers to be taken up with UGL and on 14 June 2017 communicated to their members that they should ‘not be a sell out because you will never get back what you have agreed to sell off and you will create a precedence (sic) for other workers in the future’.
- Maintenance services at Longford are now provided by a combination of workers. Some workers are directly employed by Esso (like Mr Gelagotis and Mr Hatwell) and others are employees of the new contractor UGL.
- Mr Hatwell was employed by Esso as a control technician and was an elected shop steward.
- Mr Gelagotis was employed by Esso as a maintenance technician and was a member of the AMWU.
- After Esso conducted an investigation, both Mr Hatwell’s and Mr Gelagotis’ employment was summarily terminated by Esso on 30 October 2017 due to their conduct toward UGL employees at Longford.
- The catalyst for the investigation by Esso was UGL making two separate reports to Esso on Monday 7 August 2018.
- UGL reported to Esso that Mr Flens (a UGL employee who worked at Longford) had been abused and called a ‘f***ing scab’ by Mr Hatwell on 31 July 2017 (first report).
- Later the same day UGL reported to Esso that Mr S.P. (another UGL Employee who worked at Longford) had attempted to commit suicide that day and left a note referring to the incitement of hatred and isolating conduct by Mr Hatwell, Mr Gelagotis and other Esso employees toward UGL employees working at Longford (second report).
- After conducting its investigation into the first report and second report, Esso provided termination letters to both Mr Gelagotis and Mr Hatwell on 30 October 2017.
- Mr Gelagotis’ termination letter stated:
- he was ‘involved in conduct designed to ignore, exclude and isolate employees of contractors on site’; and
- he ‘initiated the making of a decision to exclude [Mr S.P.] from the lunch room.’
- Mr Hatwell’s termination letter stated:
- he was ‘involved in conduct designed to ignore, exclude and isolate employees of contracts on site’;
- was ‘involved in the making of a decision to exclude [Mr S.P.] from the lunch room’; and
- ‘on 31 July 2017 you called Travis Flens a ‘f***ing scab’…’.
- Mr Gelagotis and Mr Hatwell made unfair dismissal applications and Deputy President Colman held that the dismissal of both Mr Gelagotis and Mr Hatwell had not been harsh, unjust or unreasonable and did not contravene the unfair dismissal regime in the Fair Work Act.
First instance decision of deputy President Colman
- A meeting of Esso employees in Esso’s lunchroom at Longford on 15 June 2017 was important to Esso reaching its decision to dismiss both Mr Gelagotis and Mr Hatwell (15 June Meeting).
- Mr Hatwell chaired the 15 June Meeting and Mr Gelagotis attended. Mr Gelagotis proposed stopping Mr S.P. from attending the lunch room.
- Although Mr S.P. was not an employee of Esso he regularly ate his lunch in the lunch room and had done for the past 10 years when he was previously an employee of the JV.
- After the 15 June Meeting Mr Gelagotis asked another Esso employee to tell Mr S.P. that he was to be excluded from the lunchroom. The employee that Mr Gelagotis allocated this task to told Mr S.P.
- In its investigation Esso concluded that Mr Gelagotis had instigated the exclusion of Mr S.P. and that Mr Hatwell was directly involved in the decision to exclude Mr S.P. because he chaired the 15 June Meeting.
- In relation to the 15 June Meeting Deputy President Colman held that:
- Mr Gelagotis was motivated to propose excluding Mr S.P. from the lunch room due to his acceptance of a contract with UGL, Esso’s finding to that effect was substantiated and the proposal to exclude Mr S.P. from the Esso lunch room by Mr Gelagotis was a valid reason for his dismissal.
- However, Mr Hatwell did not instigate, organise or encourage the proposed exclusion of Mr S.P. He was not opposed to what had been proposed by Mr Gelagotis and his failure to take any action to stop it from occurring was worthy of a reprimand but it was not substantiated that he was ‘directly involved in a decision to exclude Mr S.P. from the lunchroom’.
- Despite his finding that Mr Hatwell was not directly involved in excluding Mr S.P from the Esso lunch room Deputy President Colman accepted that Mr Hatwell had used intimidating language and called Mr Flens ‘a f***ing scab’ on 31 July 2017.
- Deputy President Colman held this behaviour by Mr Hatwell was a breach of Esso’s harassment policy and in the circumstances was a very serious matter and warranted a valid reason for dismissal in itself.
- Mr Gelagotis permission to appeal was refused by the Full Bench.
- Mr Hatwell was successful on appeal.
- Section 387 of the Fair Work Act prescribes criteria that the FWC must take into account in considering whether it is satisfied that a dismissal is harsh, unjust or unreasonable.
- Section 387(h) is a catch all provision that enables the FWC to take into account any other matters that the FWC considers relevant. A matter that the FWC takes into account under section 387(h) is the proportionality of the response.
- The Full Bench held that that dismissal of Mr Hatwell was manifestly unjust because:
- The valid reason for Mr Hatwell’s dismissal was narrowed to a single contravention of Esso’s harassment policy in calling Mr Flen’s a ‘f***ing scab’.
- The contravention of Esso’s harassment policy occurred in the context of significant tension and a protracted industrial dispute that created a material change in the working environment.
- The HR Manager of Esso had said in her evidence that “If the only thing that I was faced with considering was an isolated example of an employee using the word “scab” once I would not terminate somebody’s employment, no”.
- The HR Manager had given first and final warnings to other employees who had used language like ‘scab’ and ‘grub’ rather than dismissal.
- Mr Hatwell had been employed for 10 years and had a relatively unblemished disciplinary history.
- Several of the other allegations made against Mr Hatwell were unsubstantiated.
- The Full Bench stated that there was a valid reason for dismissal but the conduct substantiated warranted a disciplinary response that fell short of dismissal.
- The Full Bench remitted the matter back to Deputy President Colman to determine whether a remedy should be granted to Mr Hatwell.
If you would like advice or assistance with any of the above issues, please contact a member of our Workplace Relations team.