BP Refinery (Kwinana) Pty Ltd v Tracey [2020] FCAFC 89

22 Jun BP Refinery (Kwinana) Pty Ltd v Tracey [2020] FCAFC 89

The recent decision of BP Refinery (Kwinana) Pty Ltd v Tracey [2020] FCAFC 89 (‘Full Federal Court Decision’) sheds considerable light on the circumstances in which an employee could be  lawfully terminated for breach of employer’s policies on matters that do not directly affect work performance, and also suggests an outbreak of sanity may not be too much to hope in an era quick to take offence.

Mr Tracey worked at the BP Kwinana Refinery in Western Australia. During the course of a robust Enterprise Agreement negotiation, he was involved in the creation of an audio-visual work which:

… it was alleged, depicted BP representatives involved in negotiations of a new enterprise agreement with BP employees as Nazis. The video depicts extracts from the film Downfall in which Hitler acts in a highly agitated and aggressive manner when informed by his Generals that his regime has lost the Second World War.[1]

BP Management were not amused. An initial interview with Mr Tracey was conducted; a “stand down” letter issued to Mr Tracey telling him what was being investigated and the potential consequences and inviting provision of further information. A report was sent to a manager in BP Melbourne to further investigate, and then a “show cause” meeting was held, attended by Mr Tracey and a support person and no fewer than five BP executives. Following the “show cause” meeting, Mr Tracey was given a further opportunity to comment on the proposed findings. Mr Tracey did respond to that, objecting to the investigation process, the substantive findings, and raising mitigating factors.

After a period of about four weeks from the “show cause” meeting, a final meeting was held at which Mr Tracey was dismissed with immediate effect and paid four weeks salary in lieu of notice. The reason for the dismissal was the creation and distribution of:

an offensive and inappropriate video which purportedly depicted BP representatives involved in the current Operations and Laboratory Agreement negotiations as Nazis.[2]

The decision maker was careful to record that she had considered both Mr Tracey’s explanation and his mitigating circumstances (an unblemished seven-year work record).

The process was found to have been adequate to afford Mr Tracey procedural fairness. The fault in the termination, as ultimately decided, was substantive, not procedural.

Pausing here, a bystander may have wondered what any of this had to do with Mr Tracey’s work performance. After all, employees discussing or even, God Forbid, making fun of the foibles of their managers and colleagues, is not exactly unknown.

The allegations which BP relied on were breaches of its Code of Conduct and certain Policies, specifically:

‘We hold ourselves to the highest ethical standards and behave in ways that earn the trust of others. We depend on the relationships we have and respect each other and those we work with’.[3]

‘Treat everyone with respect’ and ‘be respectful of cultural differences’; and states that ‘offensive messages, derogatory remarks and inappropriate jokes are never acceptable’.[4]

 ‘Employees are responsible for treating all colleagues and customers with respect and professionalism without regard to non-relevant, unlawful criteria or distinctions’.[5]

There was also an allegation that the distribution of the video breached BP’s IT equipment policy.

At first instance Deputy President Binet found that it is lawful and reasonable for an employer to require an employee to comply with policies and directions which control the nature of communications over the employer’s electronic communications system and to discipline, and where appropriate, terminate the employment of an employee who is found to have breached those policies.[6]

The Deputy president referred to the decision of the Full Bench of the FWC in Anderson v Thiess Pty Ltd [2015] FWCFB 478, and held that:

“… objectively inappropriate and offensive communications by an employee in the workplace may, depending on the circumstances, constitute a valid reason for dismissal”.[7] (in relation to an employee dismissed for forwarding a religiously intolerant email in breach of the prevailing company policy).

The Deputy President found:

I am satisfied that when viewed in context that a reasonable person would consider the Hitler Video inappropriate and offensive.[8]

And:

I am satisfied that Mr Tracey made available, shared and or distributed the Hitler Video. I find that in doing so he breached BP policies and that his conduct was destructive of the necessary trust and confidence that are an essential element of any employment relationship. I therefore find that there was a valid reason for Mr Tracey’s dismissal.[9]

It is worth noting that neither the Full Bench, nor the Full Federal Court, directly criticised the Deputy President’s finding that a breach of the Policies was capable of founding a valid termination. Had the Hitler Parody video been found to in fact be in breach of the BP Policies, then the termination may have been upheld.

This is of some interest because the wording of the policies is pretty typical of “Corporatese” – the kind of content Lite rhetoric which Don Watson, Author of Death Sentence and Weasel Words, has described as “weasel words”.

While we can all agree that mutual respect is desirable and that ‘offensive messages, derogatory remarks and inappropriate jokes are never acceptable’, those statements of themselves beg the question as to the content of those obligations.

For example, is well founded criticism of work performance a “derogatory remark”. It may well be derogatory and also true and necessary to communicate. The question of what constitutes an “inappropriate” joke is notoriously contentious and is precisely why such language attracts criticism.

The Full Bench of the FWC disagreed and found that the video did not in fact compare BP management to the likes of Goebbels, Himmler, and Hitler. Rather, the video compared the position BP had reached in their Enterprise Agreement negotiation with the position that confronted the German Regime (who were indeed Nazis) in April 1945.

BP then sought a writ of certiorari in the Full Federal Court with the effect of quashing the Full Bench decision[10] (there is no appeal available from decisions of the Full Bench of the FWC and so it necessary to show a complete miscarriage of their discretion justifying the issue of the writ).

Before the Full Federal Court BP argued, first, that the Full Bench had misconstrued its discretion and failed to apply the test in House v King (1936) 55 CLR 499, which essentially requires the original decision to be fundamentally wrong and not reasonably open on the facts, rather than just a decision that the appellate court would itself not have reached on an evaluation of the evidence.

Secondly, BP argued that the question of whether Mr Tracey’s behaviour was so offensive as to breach the applicable BP Code of Conduct was a question of fact and the Full Bench had failed to consider whether there was a significant error of fact.

The Full Federal Court dealt with these arguments in short order. They found that the Full Bench had in fact found that the decision that the video was so offensive so that it breached the Code of Conduct was not reasonably open to the Vice President. Importantly, the Full Court observed that:

Even considered in isolation from its memetic context, it is apparent that the video does not liken BP management to Hitler or Nazis in the sense of stating or suggesting that their conduct or behaviour was in some sense comparable in their inhumanity or criminality. What it does do is to compare, for satirical purposes, the position BP had reached in the enterprise bargaining process as at September 2018 to the situation facing Hitler and the Nazi regime in April 1945.[11]

And:

The position becomes even clearer when one considers the context of the development of the use of the Downfall clip into a meme. That the clip has been used thousands of times over a period of more than a decade for the purpose of creating, in an entirely imitative way, a satirical depiction of contemporary situations has had the result of culturally dissociating it from the import of the historical events portrayed in the film. After this period, any interest which remains in the clip will usually reside in the degree of inventiveness involved in successfully adapting the scene to fit some new situation. Anyone with knowledge of the meme could not seriously consider that the use of the clip was to make some point involving Hitler or Nazis.[12]

The Full Court disposed of the second ground of appeal as follows:

“the finding in [30] that the “Deputy President’s erroneous determination that there was a valid reason for Mr Tracey’s dismissal was fundamental to her decision that his dismissal was not unfair” is, in substance, a finding of a significant error of fact”.[13]

The Full Bench then proceeded to find that the termination was unjust and unreasonable because, absent the video being offensive, there was no valid reason for his dismissal and harsh because his previous unblemished work record and the context of an industrial dispute had not been properly taken into account.[14]

Mr Tracey was reinstated.

Takeaway points include:

• An employee can engage in criticism of his or her employer, especially in a satirical mode, provided it is not unreasonably offensive.
• Breach of a Code of Conduct, even one which is generally worded could potentially be a basis of a valid termination.
• The test for what is offensive is objective – just because a person says they are offended, does not mean they have a valid reason to get an employee sacked.
• In considering whether certain conduct is objectively offensive, regard will be had to the cultural context and, in this regard, satire which avoids personal attack is likely to be safe.

[1] BP Refinery (Kwinana) Pty Ltd v Tracey [2020] FCAFC 89, [2].

[2] Scott Tracey v BP Refinery (Kwinana) Pty Ltd [2019] FWC 4113, [53].

[3] Ibid [109].

[4] Ibid [110].

[5] Ibid [111].

[6] Ibid [135].

[7] Anderson v Thiess Pty Ltd [2015] FWCFB 478, [27].

[8] Tracey v BP Refinery (Kwinana) Pty Ltd [2020] FWCFB 820, [105].

[9] Ibid [124].

[10] BP Refinery (Kwinana) Pty Ltd v Tracey [2020] FCAFC 89, [1].

[11] Tracey v BP Refinery (Kwinana) Pty Ltd [2020] FWCFB 820, [25].

[12] Ibid [26].

[13] BP Refinery (Kwinana Pty Ltd) v Tracey [2020] FCAFC 89, [22].

[14] Tracey v BP Refinery (Kwinana) Pty Ltd [2020] FWCFB 820, [35].