Industrial Relations Commission of New South Wales CITATION: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, NSW Branch (on behalf of Malfitano) v BlueScope Steel (AIS) Pty Ltd [2007] NSWIRComm 127 APPLICANT: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch (on behalf of its member Anthony Stephen Malfitano) PARTIES: RESPONDENT: BlueScope Steel (AIS) Pty Ltd FILE NUMBER(S): IRC 208 of 2007 CORAM: Walton J Vice-President; Sams DP; Grayson DP Unfair dismissal - Appeal - Leave to appeal - Applicant dismissed for misconduct - Manifestation of misconduct involved allegation of lowering oxygen lance into furnace containing molten steel - Denial of allegation by appellant - Whether respondent entitled to rely on further allegation of failure to detect and discontinue oxygenation process - Whether appellant had notice of further allegation - Whether notice received in closing written submissions -Denial of procedural fairness - Whether finding made at first instance as to lowering of oxygen lance CATCHWORDS: Held - Finding re procedural unfairness - Leave granted - Finding made at first instance as to lowering of oxygen lance by appellant - Finding fatal to appeal - Leave to appeal granted - Appeal dismissed LEGISLATION CITED: Industrial Relations Act 1996 AFMEPKIU (on behalf of Anthony Malfitano) v BlueScope Steel Pty Ltd [2006] NSWIRComm 1129 CASES CITED: D&R Commercial Pty Ltd v Flood (2002) 113 IR 344 Hosemans v Commissioner of Police (No 4) (2005) 150 IR 263 HEARING DATES: 25 May 2007 DATE OF JUDGMENT: 1 June 2007 Mr I Morrison - Senior Industrial Research Officer Australian Manufacturing Workers' Union (AFMEPKIU) NSW Branch with Mr C Drane LEGAL REPRESENTATIVES: Mr M Mead - Senior Advisor Workplace Relations The Australian Industry Group, NSW Branch JUDGMENT: - 11 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: Walton, J Vice - President Sams, DP Grayson, DP 1 June 2007 Matter No IRC 208 of 2007 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch (on behalf of Anthony Stephen Malfitano) and BlueScope Steel (AIS) Pty Ltd Application by Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch (on behalf of its member Anthony Stephen Malfitano) for leave to appeal and appeal against a decision of Commissioner Macdonald given on 30.1.2007 in matter no. IRC 5209 of 2005 DECISION OF THE COMMISSION [2007] NSWIRComm 127 1 The appellant Anthony Malfitano seeks leave to appeal and if leave is granted, appeals from the decision of Macdonald C given on 30 January 2007 in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (on behalf of Anthony Malfitano) v BlueScope Steel Pty Ltd [2006] NSWIRComm 1129. The impugned decision 2 In that decision, the Commissioner declined to intervene in the company's decision to dismiss the appellant having found that the decision was neither harsh nor unjust nor unreasonable. 3 It is plain enough as we would read and understand the Commissioner's reasons for decision that he considered firstly, that allegations of poor work performance had been made out on the evidence and secondly, that the allegations having been made out, were sufficiently serious to warrant termination of employment. 4 At the time of his dismissal, the appellant had been employed as a Process Controller in the Basic Oxygen Steelmaking (BOS) section of the respondent's Port Kembla Steelworks. 5 An overview of the steelmaking process and the appellant's involvement in it is set out by the Commissioner in his decision as follows: [9] (a) Steel is made by "cooking" a mixture of ingredients, mainly iron ore and coke (which is made from coal), in two giant cooking pots called Blast Furnaces, to produce molten iron. (b) This molten iron is taken to the Basic Oxygen Steelmaking plant, where it is poured into another giant cooking pot called a BOS vessel. Here the molten iron is mixed with recycled steel and other elements and heated to approximately 1650° Celsius to make molten steel. (c) The molten steel is then poured off from the BOS vessel and sent to the Continuous Slab Caster, where it is turned into slabs of steel. (d) Many of the slabs are rolled into coils of thin steel at the Hot Strip Mill. This thin steel is used for a wide range of purposes from items like food cans to fences, roofs, cars and washing machines. (e) Other slabs are rolled into large flat sheets of steel at the Plate Mill. This steel plate can be used in the making of ships or cut into strips to make steel beams. [10] The Applicant's involvement is at the (b) and (c) stage above: pouring the molten iron into the BOS vessel - mixing the molten iron with recycled steel and other elements to make molten steel - and pouring off the resultant molten steel. [11] An important aspect of the above process, is the use of oxygen which is blown into the BOS vessel as part of the process of converting the molten iron and other ingredients into the molten (liquid) steel. The oxygen is blown into the BOS vessel, under high pressure, through a water cooled oxygen lance which is introduced into the BOS vessel from above. The lance does not penetrate the molten material but stops its entry into the BOS vessel, just above the surface of the molten material. The high pressure delivered oxygen stirs up the molten mixture as part of the conversion process to molten (liquid) steel. [12] This high pressure delivered oxygen is sustained for some 17 minutes. The molten steel splashes around inside the BOS vessel but with such force, that some of the molten (liquid) steel erupts out of the BOS vessel and flows down the outside of the BOS vessel, like a lava flow - and glowing white hot. The temperature of the molten steel is around 1650°C. [13] The BOS vessel is very large in size and resembles the shape of a rotating concrete drum seen on the back of concrete trucks. In this instance, the open end of the BOS vessel faces skywards. [14] There are other aspects to the molten material conversion to molten steel process, but relevantly speaking, the Commission is now only concerned with the operation of the oxygen lance. [15] After some 17 minutes of operation, the oxygen lance is withdrawn, upwards and out of the BOS vessel. 6 On 28 September 2005, an incident took place which gave rise to the Company's decision to dismiss the appellant. The incident involved the re-insertion of the oxygen lance into the BOS vessel after the normal oxygenation process had been completed. The lance was left unnoticed and discharging oxygen into the molten metal for a period of approximately six minutes causing the temperature of the molten metal to rise well beyond the intended level with potentially catastrophic effects involving damage to the refractory lining of the BOS vessel and a break out of molten metal from the vessel such as that which caused fatal injuries to two steelworks employees in Newcastle a decade or so ago (see [58] of the decision). 7 The operational error was detected not by the appellant but by Mr Moffatt, Process Controller Melter, a more senior person than the appellant with responsibility for general BOS plant operations who was working in reasonably close proximity to the appellant in the control room. Mr Moffatt noticed irregularities in the instrument readings on the appellant's control room panel and alerted the appellant to the fact that oxygen was being discharged into the molten metal. The appellant then moved quickly to press the "stop blow" button thus correcting the error. 8 In reaching his conclusion as to whether the appellant was unfairly dismissed, the Commissioner considered not only the seriousness and the consequences (both potential and actual) of the incident in September 2005 but also the history of five prior incidents between December 2002 and June 2005 in respect of which the appellant was either counselled, warned or suspended including incidents in June 2004 and June 2005 where oxygen was wrongly discharged into the BOS furnace. The latter incident resulted in a four shift suspension without pay and a letter of final warning. 9 The Commissioner came to the view that the five incidents demonstrated a pattern of lack of concentration on the appellant's part which resulted, actually or potentially, in damage to plant and loss of product and which when taken together with the September 2005 incident for which the appellant was dismissed, provided substantial grounds for the company taking the action it did. Leave to appeal 10 The law and practice governing the grant of leave to appeal in this jurisdiction was recently distilled by the Full Bench in Hosemans v Commissioner of Police (No 4) (2005) 150 IR 263, where the Full Bench said: The law and practice governing leave to appeal is well settled and does not require restatement: see Knowles v Anglican Church Property Trust (No. 2) (1999) 95 IR 380. However, two principles warrant particular mention: first, leave will not be lightly or automatically granted (see King v State Bank of New South Wales (No 2) (2002) 126 IR 407 at [52]-[55] and Knowles at 381 - 382) and, subject to the requirements of s188 (2) of the Act , will not, generally, be granted unless the appellant demonstrates that the appeal "raises substantial issues of principle or law or has wider implications for the jurisprudence of this Commission, including whether the decision has widespread practical application" (see Knowles at 382) or raises issues going to the proper administration of justice. Secondly, leave will rarely be granted where an appeal primarily seeks to challenge findings of fact which are otherwise reasonably open on the evidence: Box Valley Pty Ltd v Price (2000) 97 IR 484; Austin v NF Importers Pty Limited [2005] NSWIRComm 353 at [5]. 11 The key feature of the appellant's case on appeal was that the Commissioner decided the matter on the basis of reasons for dismissal which were different from the reasons set out in the letter of termination and which were not a feature of the respondent employer's case in any respect or alternatively not until it filed its closing written submissions. 12 The proposition is best described by reference to the Commissioner's decision as follows: [21] The letter of dismissal advised that the Applicant was being terminated because he had "re-started blow at the end point of a heat ..." (Ex 19 - Annex WS 26) [22] The Respondent's written final submissions put the reason for termination differently. That is, the termination was not for re-starting blow at the end point of a heat, but for not pressing "stop-blow" at the appropriate time. (An alternate submission for supporting the dismissal, going to the consequences of the Applicant's alleged failure to "stop-blow", was also put and will be considered below.) [23] The focus then is on the Respondent's claim that the dismissal was warranted for the Applicant's failure to "stop blow". The meaning of this term needs explaining. 13 Whether that be an accurate summary of the respondent's position is a matter of some controversy and on the material before the Commissioner and now before us, it is somewhat unclear what the grounds were that the respondent ultimately relied upon in justification of the decision to dismiss. 14 For its part, the appellant contends that he was presented with a written notice of termination of employment on or about 14 October 2005 confirming earlier verbal advice to that effect and setting out as grounds for his dismissal, the following proposition: On 28th September 2005 your actions resulted in a serious operational incident, where you re-started blow at the end point of a heat resulting in extremely hot and oxidised bath conditions causing damage to the refractory lining of the BOS furnace. There was also potential to cause a steel breakout with the risk of serious injuries to operations personnel. As a result of your continued poor performance you were advised on 4th October 2005 that your employment with BlueScope Steel would be terminated effective immediately, with 5 weeks employment in lieu of notice. 15 Although on one view of it, the above proposition is capable of a wider construction, the appellant formed and maintained the view throughout the proceedings that he was dismissed for the act of re-inserting the oxygen lance into the BOS furnace as distinct from the consequences of that act. He denied doing so and with the assistance of his union, set about the preparation and presentation of his case within that narrow confine. He did not address the wider ramifications of re-inserting the oxygen lance (such as damage to the refractory lining, the potential for molten metal breakout, failure on his part to pay proper attention to the state of the furnace and so on) because he did not consider those matters to form any part of the grounds relied upon by the respondent in justification of its decision to dismiss him. His argument on appeal was simply that he had not received advice that his application under s 84 of the Act might be decided on that wider basis and in any event, if he did not re-insert the oxygen lance into the furnace and had no knowledge of its re-insertion, then there was no reason for him to monitor furnace bath conditions and he could not therefore be held accountable for his failure to do so. 16 As we have already observed, the matter is attended by a certain degree of obscurity given both the terms of the dismissal letter when read in their wider context and also the body of evidence relied upon by the respondent in the proceedings below including but not limited to matters to which the applicant was taken in cross-examination. That body of evidence clearly postulates failure on the appellant's part to pay proper attention to his duties including failure to notice or remember that the oxygen lance had been lowered into the BOS furnace and failure to notice that oxygen was being discharged into the molten metal. That failure, plainly demonstrated on the evidence, identified culpability on the appellant's part in not ceasing the operation of the oxygen lance and thus allowing the temperature within the furnace to rise dramatically for a period of approximately 6.5 minutes. 17 It is nonetheless the appellant's position strongly urged upon us by his union, that he considered such evidence was adduced by the respondent not for the purpose of relying upon it as grounds for dismissal independent of the act of re-inserting the oxygen lance but rather to bolster their case by demonstrating the gravity of the consequences of the act. 18 The respondent did, however, rely upon the appellant's failure to be and remain attentive to his work in the hazardous environment in which he was employed and did so expressly (and on the appellant's argument for the first time) in written submissions which were received by the Commissioner after evidence had been taken and the case adjourned for the purpose of receiving such submissions (we note that the Commissioner did not entertain any oral submissions). The appellant argued on appeal that by shifting its ground in that way so late in the proceedings, the company unfairly and unjustly deprived him of the opportunity to mount a proper defence. We note in that regard that even though the issue of failure to be and remain attentive was raised in the respondent's written submission, it was not addressed by the union in its reply submissions on behalf of the appellant thus further demonstrating the union's focus as being confined to the narrower question whether the appellant, on the balance of probabilities and notwithstanding his denial, actually caused the oxygen lance to be re-inserted into the BOS vessel. 19 Given that the issues on appeal raise fundamental questions of procedural fairness, we have decided to grant leave to appeal and in so doing, we note the observations of the Full Bench in D&R Commercial Pty Ltd v Flood (2002) 113 IR 344 as follows: A convenient statement of the appropriate general approach is that set out in the judgment of the High Court in Stead v State Government Insurance Commission (1986) 161 CLR 141, where the Court, having referred to the "general principle … well expressed by the English Court of Appeal" in Jones v National Coal Board [1957] 2 QB 55 at 67 that "everyone … is entitled [to] a fair trial at which he can put his case properly", observed at 145 - 146: That general principle is, however, subject to an important qualification which Bollen J plainly had in mind in identifying the practical question as being: Would further information possibly have made any difference? That qualification is that an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial. An order for a new trial in such a case would be a futility. For this reason not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial. … Where, however, the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, especially when the issue is whether the evidence of a particular witness should be accepted, it is more difficult for a court of appeal to conclude that compliance with the requirements of natural justice could have made no difference. True it is that an appeal to the Full Court from a judgment or order of a judge is by way of rehearing and that on hearing such an appeal the Full Court has all the powers and duties of the primary judge, including the power to draw inferences of fact (Supreme Court Rules O.58 rr.6 and 14). However, when the Full Court is invited by a respondent to exercise these powers in order to arrive at a conclusion that a new trial, sought to remedy a denial of natural justice relevant to a finding of fact, could make no difference to the result already reached, it should proceed with caution. It is no easy task for a court of appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact. And this difficulty is magnified when the issue concerns the acceptance or rejection of the testimony of a witness at the trial. (emphasis added) 20 Whilst we are inclined to the view that there is some basis for the appellant's contention that he was denied procedural fairness we do not, however, consider that there is a proper basis to uphold the appeal in this matter. This is because, as was most properly conceded by the union on appeal, if the evidence below was such that a positive finding that the appellant had re-inserted the oxygen lance was reasonably open to the Commissioner and if such a finding was discernible from the reasons for decision, then the appeal must fail on the basis that the reasons for dismissal as set out in the written notice of termination had been made out and the dismissal could not then be properly challenged in the circumstances of the case. As we have reached a conclusion in those terms and both parties expressed the view that, if there was any basis for the Commission intervening in the appeal on procedural fairness grounds, the Full Bench should consider the merits of the matter for itself, we consider that the final orders on the appeal should be that the appeal is dismissed. We will expand upon those reasons. 21 The following extract from his decision reveals that the Commissioner approached the issue of the lance this way: [31] There was no dispute that the oxy-lance had been reinserted. The Applicant denied he had reinserted the oxy-lance, after the initial, say 17 minute oxy-blow. There was no witness to say he had been seen reinserting the oxy-lance. The Respondent claimed that the Applicant had reinserted the oxy-lance and relied upon data surrounding the particular process in question to support that claim. That is, the Respondent argued that the process in question was one that had not obtained the required specifications at the end of its heat (say 17minutes) but required something else to be carried out to obtain the required specifications. That something else was the reinsertion of the oxy-lance and this the Applicant did. Thus, the particular process in question dictated the reinsertion of the oxy-lance and this the Applicant did - as he had done at other times when the correct specifications had not been achieved after the initial, say 17minutes, oxy-blow. [32] Before considering the issue of allegedly failing to "stop-blow", the Commission will determine who or what caused the oxy-lance to be reinserted at the end of the blow, that is, at the end of the initial, say 17 minute oxy-blow. [33] The Applicant denied he had reinserted the oxy-lance and he said there was no witness to say otherwise. An investigation into the reinsertion incident, concluded that the reinsertion was "most likely" due to a person pressing the start blow button for reinsertion. This conclusion was reached after the day shift Electrical Technical Supervisor carried out electrical checks on the start blow button in the No 3 control room and detected no fault. (Ex 19 - paras 188 and 189) There was no evidence brought by the Union to contradict the above conclusion. [34] At the time of the reinsertion, there was only one Process Controller in the No 3 control room - that is, the Applicant. The other person working in that control room with the Applicant, was Mr Terrence Moffatt, Process Controller Melter, with the responsibility for general plant operations. It was not put in final submissions that it was he who had reinserted the oxy-lance. Accordingly, the Commission agrees with the conclusion of the Respondent's investigation that the reinsertion was "most likely" due to the act of a person and that that person was the Applicant. 22 In spite of the union contention that we should read and understand the Commissioner's reasons as having left open the question whether the appellant re-inserted the oxygen lance, we consider it is not only a conclusion reached by the Commissioner but it is also a conclusion which was reasonably open to him on the evidence presented. In that regard, we note by his words at [32] above, that the Commissioner plainly set himself the task of determining "who or what caused the reinsertion of the oxy-lance" and at the end of [34] above set out his finding that it was "most likely" to have been the appellant. 23 To the extent that the words "most likely" are borrowed by the Commissioner from the outcome of the respondent's investigation into the incident (see [33] above), they are nonetheless words which when taken in their context amount to a finding of fact on the balance of probabilities adverse to the appellant which, as we have said, we consider was reasonably open on the evidence presented. We have in mind in that respect the evidence of the physical circumstances in which the work was conducted, the Commissioner's inspection of the workplace as an aid to considering that evidence and the evidence of the appellant and his co-worker Mr Moffatt. Further, we consider, having regard to the history of the appellant's employment and the circumstances leading to his dismissal, that the Commissioner was entitled to conclude that the dismissal was not harsh, unjust or unreasonable and refuse to intervene. 24 For those reasons, the appeal must fail and we will make those orders accordingly. Prior to so doing, however, we observe that the failure at first instance to afford the parties an opportunity for oral submissions in supplementation of their written submissions appears to us, in large measure, to have contributed to the appellant's sense of grievance and dissatisfaction with the outcome. A further listing for the purpose of oral submissions may well have afforded the union an opportunity to better understand and meet the case ultimately propounded by the respondent by bringing into clearer focus the further allegation (arguably related to the primary allegation) of failure to pay attention. This is particularly so given the relatively complex nature of the allegations made against the appellant in this case. 25 We make the following orders: 1. Leave to appeal is granted 2. The appeal is dismissed. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.