Unfair dismissal; valid reason and the Downfall parody

In a hugely important decision, a very senior Full Bench of the Fair Work Commission has unanimously upheld an appeal against a decision of a single member of the Commission in an unfair dismissal case, in which an application for an unfair dismissal remedy was rejected when it was held that there was a valid reason for the dismissal based upon the creation and dissemination of a Downfall parody video mocking the employer’s enterprise bargaining tactics.

The case is considered by many to be an important recognition by the Commission (and therefore the law) of the legitimacy of humour, satire and criticism in the workplace, especially in tense bargaining. Here is an extract from the appeal decision.

“Consideration

[23] Grounds 1-5 of Mr Tracey’s appeal challenge the Deputy President’s conclusion pursuant to s 387(a) of the FW Act that there was a valid reason for his dismissal. It is well established that a reason for dismissal based on the employee’s conduct would be valid if the conduct in fact occurred and justified termination and, conversely, the reason would be found not to be valid if the conduct did not occur or it did occur but did not justify termination. 10 In this case, there was no factual dispute about the content of the video or Mr Tracey’s conduct in posting a link to it on the private Facebook page and showing it to persons at work. There was some issue taken with the extent of Mr Tracey’s role in the making of the video, but the Deputy President found that he was involved to an extensive degree11 and this finding is not challenged in the appeal. Accordingly, the critical issue which the Deputy President had to determine was whether the conduct was of such a nature to justify dismissal. This required the making of an evaluative judgment on her part as to the character of the video’s content.

[24] As is recorded in the decision, BP’s case at first instance was that the video was offensive and inappropriate because it likened BP’s management team with Hitler and Nazis. Its case in this respect reflected its reasons for Mr Tracey’s dismissal as stated in Allegation 1 in the dismissal letter which, we consider, clearly characterised the video as offensive on the basis that it “depicted BP representatives involved in the … negotiations as Nazis”. BP’s attempt in the appeal to resile from this position by parsing the first sentence of Allegation 1 contained in the letter is rejected; to the extent that there could be any doubt about the meaning of that sentence, it is dispelled by the characterisation of the video given by its own witnesses. We also reject BP’s submission that the Deputy President did not find that the video was offensive on the basis that it likened the BP management team to Nazis. The Deputy President’s reasoning in the decision recorded BP’s position, and then proceeded on the basis of a consideration and rejection of Mr Tracey’s submission that it was unreasonable to interpret the video as depicting BP employees as Nazis and it was merely a parody. In doing so, the Deputy President relied upon three decisions which she described as “cases in which an employee has made references, or likened their employer, to Hitler or the Nazi regime”. Two of those cases involved employees calling their employers “Nazis”, and the third involved an employee carving a swastika in the workplace in protest against his working conditions. No other basis for characterising the video as offensive or inappropriate was identified in the decision.

[25] We do not accept that it was reasonably open for the video to be characterised in the way it was by the Deputy President. 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. The position might be different if the clip used from the Downfall film depicted Hitler or Nazis engaging in inhumane and criminal acts (as many other parts of the film do); in such a case a comparison in terms of conduct or behaviour might be inferred and reasonably be regarded as offensive. But it does not. By way of illustration, if it is said that someone is like Napoleon at Waterloo, this is obviously not to be understood as drawing a comparison between the person and the personality, behaviour, deeds or stature of Napoleon Bonaparte; rather, it is a stock way to say that the person is facing a final, career-ending defeat.

[26] 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.

[27] There is no doubt that the clip would be understood by the reasonable viewer as satirising BP’s conduct during the enterprise agreement bargaining process at the Kwinana Refinery. That, by itself, did not make it offensive or inappropriate. Given the industrial circumstances at the refinery as at September 2018, when the heated and protracted bargaining dispute between BP and its employees and their union was approaching its nadir, it is entirely understandable that persons in the opposing camps might between themselves engage in criticism of the other party’s position and conduct. Significant economic interests were at stake both for BP and its employees, and it would be unrealistic to expect that a dispute of this nature could continue to its conclusion without any form of criticism and reproach being expressed at least privately. Members of BP’s negotiating team could not genuinely have been surprised that employees such as Mr Tracey would be strongly critical of BP’s conduct during the course of the bargaining.

[28] It is important in this context to distinguish between criticism of the other party’s position and conduct during an industrial dispute and targeted personal disparagement of an individual in the other camp. The Traceys’ video clip certainly engages in the former activity through the use of satire, but the evidence did not establish that it involves the latter. It may be accepted that the subtitles for the Hitler character may readily be understood as referable to Mr Swayn (although no BP manager is identified by name in the video). However, we do not consider that the fact that the subtitles “send up” the way in which BP conducted the negotiations through the agency of Mr Swayn in his capacity as manager of the Kwinana refinery means that the video was personally denigrative of him. Mr Swayn did not give evidence at first instance, so there is no proper basis on which to conclude that he considered himself targeted by the video or even that he was personally offended by it. The hearsay evidence of Ms Rudderham and Ms Woodford Black to the effect that they thought the words “I can’t afford to get fired from another job again” attributed to the Hitler character referred to the fact that Mr Swayn had been made redundant in a previous job was not confirmed by him. We do not consider that the evidence supports the proposition that any other character in the video can be identified with any particular person in BP’s bargaining or management team, notwithstanding Ms Woodford Black’s evidence that she believed the video might be depicting her and Ms Campbell.

[29] For these reasons, we consider that it was not reasonably open to the Deputy President to find that Allegation 1 in the dismissal letter constituted a valid reason for dismissal. The allegation was premised on the proposition that the video was offensive and inappropriate because it compared BP’s negotiating team to Hitler and Nazis – a proposition which we consider to be unsustainable. The Deputy President’s consideration of whether Allegation 2 also constituted a valid reason for dismissal was infected by her conclusion that the video was offensive and inappropriate on the same basis, and for that reason was also attended by appealable error.

[30] 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 and that his unfair dismissal remedy application should be dismissed. Because the decision was affected by error in this way and manifests an injustice to Mr Tracey, and because the appeal raises issues of general application concerning the capacity of employees to engage in legitimate criticism of management in the conduct of an industrial dispute, we consider that the grant of permission to appeal would be in the public interest. Accordingly, permission to appeal is granted as required by s 604(2) of the FW Act. The appeal is upheld on the basis of grounds 1-5, and the decision is quashed. It is unnecessary in those circumstances to consider any of the other grounds of appeal.

[31] We consider that the appropriate course in light of this conclusion is to re-determine Mr Tracey’s unfair dismissal remedy application ourselves. This can be done on the basis of the evidence that was before the Deputy President except in respect of one issue which is identified below.

Re-determination of Mr Tracey’s unfair dismissal remedy application

[32] In relation to the matters set out in s 396 of the FW Act requiring initial determination, we find as follows:

(a) Mr Tracey’s application was made within the period required by s 394(2);

(b) Mr Tracey was a person protected from unfair dismissal;

(c) BP was not a “small business employer” as defined in s 23 of the FW Act, so that the Small Business Fair Dismissal Code was inapplicable; and

(d) the dismissal was not a case of genuine redundancy.

Whether the dismissal was unfair

[33] It is next necessary for us to determine whether Mr Tracey’s dismissal was harsh, unjust or unreasonable having regard to the matters specified in s 387 of the FW Act. In relation to s 387(a), we find that there was no valid reason for Mr Tracey’s dismissal related to his character or conduct. Allegation 1 specified in the dismissal letter did not constitute a valid reason because, for the reasons explained earlier, we do not consider that the video which he was involved in making and distributing was offensive or inappropriate in the circumstances. We also note that he initially sought to distribute the video only on a private Facebook page accessible by fellow employees covered by the 2014 Agreement. This was purely out-of-work conduct, and the evidence did not demonstrate that it had any relevant adverse effect on the conduct of work at the Kwinana Refinery. 12 As to Allegation 2, it may be accepted that Mr Tracey breached BP’s policy by using a work computer to show the video to another employee during working hours, and to that extent misconducted himself. However this was not sufficiently grave conduct to justify dismissal, taking into account that the video was not itself offensive and inappropriate as alleged, Mr Tracey did not engage in general distribution of the video but only showed it to one employee,13 and he did not intend that the video be seen by any member of BP management.

[34] In relation to s 387(b), (c), (d), (e), (f) and (g), we agree with and adopt the conclusions reached by the Deputy President in relation to these matters. In relation to paragraph 387(h), we regard the following matters as relevant and favouring the conclusion that Mr Tracey’s dismissal was unfair:

  • Mr Tracey’s record of employment over seven years was otherwise unblemished;
  • the conduct which caused his dismissal occurred in the context of a tense and embittered industrial environment;
  • Mr Tracey expressed contrition for his conduct, and took the link down from the Facebook page as soon as he became aware it had come to BP’s attention; and
  • the dismissal caused Mr Tracey financial hardship in the form of unemployment (at least until the date of hearing) and the consequential loss of 75% of his family’s household income, and also caused personal distress to him and his wife.

[35] Taking the above matters into account, we find that Mr Tracey’s dismissal was unjust and unreasonable because there was no valid reason for his dismissal, and harsh because of the mitigating factors identified in the preceding paragraph. Accordingly, he was unfairly dismissed.

Remedy

[36] Reinstatement is the primary remedy provided for in respect of unfair dismissals under the FW Act in the sense that s 390(3)(a) requires that there be a finding that reinstatement is inappropriate before consideration can be given to the award of compensation. 14 Accordingly, in respect of remedy, the primary issue which must be considered is whether it would be appropriate to make an order for Mr Tracey’s reinstatement. In considering whether to exercise its discretion in favour of the making of an order of reinstatement, the Commission will treat as an important consideration whether the necessary trust and confidence for a workable, viable and productive employment relationship can be restored.15

[37] In this case, a number of witnesses for BP expressed the view that the necessary trust and confidence had been destroyed and accordingly that Mr Tracey should not be reinstated. However those views were founded upon a characterisation of the video as having likened members of BP’s negotiating team and management to Nazis. Because we have found that it was not reasonably available to characterise the video in that way, we do not place much weight upon those views. Certainly reinstatement would involve Mr Tracey working under the managers who participated in the enterprise agreement negotiations and who may have perceived themselves to have been the subject of criticism in the video. However the evidence is that his day-to-day interactions with them are limited, and in any event we consider that Mr Tracey’s prior record of employment suggests that he will have no difficulty in re-establishing himself as a productive and cooperative member of the workforce at the Kwinana refinery. Because reinstatement will clearly be the most effective remedy for Mr Tracey’s unfair dismissal, and there is no substantial impediment to the restoration of a workable employment relationship, we will order that BP reinstate Mr Tracey within 14 days from the date of this decision pursuant to s 391(1)(a) of the FW Act. We will also make orders pursuant to s 391(2) to maintain the continuity of Mr Tracey’s employment and the period of his continuous service with BP.

[38] We also consider that an order should be made pursuant to s 391(3) to compensate Mr Tracey for the remuneration he has lost because of his dismissal. However we lack sufficient information to make an order in appropriate terms as part of this decision. We will invite further evidence and submissions about this, including but not limited to the following matters:

(1) any alternative remuneration earned by Mr Tracey since his dismissal up to the date of any compensation order we might make; and

(2) whether any deduction should be made for Mr Tracey’s misconduct in using of a work computer to show the video to another employee during working hours.

[39] We also invite the parties to confer about this issue to explore whether a consent position about the making of such an order may be reached.”

Tracey v BP Refinery (Kwinana) Pty Ltd (2020) delivered 28 February 2020 per Hatcher VP, Catanzariti VP and Booth C