By Lauren Townsend (Special Counsel)

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The hard-fought Fair Work Commission (FWC) unfair dismissal dispute between Matthew Gosek and Illawarra Coal Holdings Pty Ltd T/A South32 came to an end last week [1], with the majority of the Full Bench deciding that although Illawarra Coal dismissed Mr Gosek for a valid reason, mitigating factors tipped the balance in favour of a finding that the dismissal was nevertheless ‘harsh’ and that he should be reinstated. 

Employers should take note of this decision because the Full Bench ordered Illawarra Coal to reinstate the employee despite the fact that he had engaged in serious misconduct.  In doing so, the Full Bench drew an inference (unsupported by medical evidence) that a ‘perfect storm’ of depression, depression medication, and intoxication likely caused the misconduct and that it would therefore not occur again.

What happened?

At the time of his dismissal, Mr Gosek was an electrical technician employed by Illawarra Coal.  He was also the CFMEU Lodge President at Illawarra Coal’s Dendrobium Mine (the Mine).  In 2016, Mr Gosek represented a co-worker and friend who had accused a third co-worker of bullying and harassment, in Illawarra Coal’s investigation into the allegations.  The investigation involved Illawarra Coal interviewing several other employees who were witnesses.

Approximately one week after Illawarra Coal informed the complainant that his allegations were not substantiated, Mr Gosek was off duty and at a local pub drinking alcohol.  At the time, Mr Gosek incorrectly held the view that witnesses had given false evidence to the investigators. 

Over a period of 4 to 5 hours, Mr Gosek sent a text message to seven of his colleagues and his supervisor which contained one word: “Dog?” (which he later accepted is, within the trade union movement, a term used to describe people who he believed ‘ratted’ on their mate).  The seven colleagues all responded to the text message by telephoning Mr Gosek and Anderson DP summarised the conversations as follows:

The phone conversations concerned the bullying investigation and varied in length and content.  In each of the calls, Mr Gosek was abusive, insulting and threatening.  Mr Gosek called the persons ‘dogs’, ‘dog c..nts’ and ‘f…king dogs’.  He made threats including a threat to kick a person out of the union (the Lodge), a threat to withdraw union support for a person, a threat to hunt a person down and destroy them, and he challenged another to a physical fight.[2]

Illawarra Coal investigated the incident and terminated Mr Gosek’s employment. 

What did the Full Bench decide?

After reviewing and upholding Illawarra Coal’s appeal against the initial decision of Commissioner Riordan in favour of Mr Gosek, the Full Bench decided it was well placed to re-hear and determine whether the dismissal was ‘harsh, unjust or unreasonable’, and therefore unfair, for the purposes of section 385(b) of the Fair Work Act 2009 (Cth).  In doing so, the Full Bench considered and weighed up the factors in section 387 of the Act which impact a decision about whether a dismissal is ‘harsh, unjust or unreasonable’.  Generally, those factors require consideration of:

  • whether there was a valid reason for the dismissal;
  • whether the employer followed a fair process in effecting the dismissal; and
  • whether there were any other factors that impacted on making the dismissal ‘harsh, unjust or unreasonable’.

All members of the Full Bench agreed that there was a ‘valid’ reason for the dismissal because Mr Gosek had engaged in serious misconduct.  Indeed, Mr Gosek did not challenge the allegations that he had engaged in the conduct.

The Full Bench also generally appeared to consider that the procedure leading up to the dismissal was no so flawed as to render the dismissal ‘harsh, unjust or unreasonable’.

However, the Full Bench split, and the decision ultimately turned, on whether other relevant matters tipped the balance in favour of a finding that notwithstanding the above factors, the dismissal was ‘harsh’ and therefore unfair in all the circumstances.  The majority (Deputy President Gooley and Commissioner Booth) found that there were mitigating factors which, on balance, made the dismissal unfair.  They went on to order Mr Gosek’s reinstatement.  Deputy President Anderson dissented on the basis that he did not agree those mitigating factors tipped the balance in favour of Mr Gosek.

The mitigating factors – why are they interesting?

The reasons Mr Gosek put forward as to why his dismissal was ‘harsh, unjust, or unreasonable’, and the Full Bench majority’s decisions about those reasons, are summarised below (and have been categorised by the author for ease of reference):

Reasons advanced by Mr Gosek

Full Bench majority decision

Category A:  Irrelevant factors

Mr Gosek has not consumed alcohol since the incident, because of the incident.

No relevance to whether the dismissal was ‘harsh’.[4]

Mr Gosek was treated more harshly than other employees accused of bullying at work.

We are not satisfied that the conduct of these employees is in the same league as Mr Gosek’s conduct such as to support a finding that the dismissal was harsh”.[5]

Mr Gosek engaged in the conduct because he believed the employees involved were not supporting a fellow employee who had been bullied.

Mr Gosek’s motives neither justify his conduct nor support a finding that the dismissal was ‘harsh’.[6]

Category B:  Relevant, but not determinative, factors

Mr Gosek was not at work at the time the conduct occurred.

This is relevant, but on its own not determinative, of the dismissal being ‘harsh’.[7]

Mr Gosek was impaired because of his alcohol consumption.

Intoxication is relevant, but on its own not determinative, of the dismissal being ‘harsh’.[8]

Mr Gosek was being treated for severe depression and was taking medication for that at the time of the incident.

Mental health is relevant, but on its own not determinative, of the dismissal being ‘harsh’.[9]

Category C:  Relevant factors

Mr Gosek had an 11-year unblemished employment history with Illawarra Coal.

Based on clear evidence given about Mr Gosek’s character prior to the incident and his unblemished employment record, the incident was ‘out of character’. 

The majority considered this effectively ‘opened the door’ for it to consider “whether the conduct was an aberration and that other factors explain the conduct such as to make the dismissal harsh” – that is, whether there were mitigating factors.[10]

Mr Gosek immediately apologised to the employees involved the next day.

An apology does not excuse or explain his behaviour but it does support a finding that the conduct was an aberration and that the dismissal was harsh”.[11]

The following mitigating factors are relevant:

1.   Mr Gosek’s mental illness had an extremely severe impact on his family and that this had led to excessive drinking on his part.

2.  Mr Gosek was having trouble adjusting to the effects of the increase in his medication.

3.  Mr Gosek was dealing with the loss of a close family member and ‘depression was basically running his life’.

4.  Mr Gosek was feeling run down and exhausted and had not been attentive to his family and was sleeping up to 14 hours a day as a way of being left alone.

5.  Mr Gosek was stressed by his (unsuccessful) involvement in [his colleague’s bullying and harassment] investigation”.

These factors “assist in explaining Mr Gosek’s behaviour”.[12]

The majority of the Full Bench ultimately held as follows:

We are satisfied that the factors relied upon… do assist in explaining Mr Gosek’s behaviour.  We accept that while there is insufficient evidence for us to conclude that the combination of alcohol and depression caused his conduct, we are satisfied that we can draw an inference that the conflagration of factors caused an otherwise reasonable man to behave in a manner that everyone agreed was out of character.  Accordingly, his conduct should be seen in that context.  While we accept that Mr Gosek chose to drink, we consider that his judgment was sufficiently impaired by the combination of factors to allow us to conclude that his conduct was not wilful.[13]

We consider this to be an odd conclusion drawn by the majority of the Full Bench in the absence of expert medical evidence.  This is regardless of whether Mr Gosek’s submissions about his depression impacting (and the interaction between his medication and alcohol causing) the behaviour was challenged or not by Illawarra Coal.

The majority of the Full Bench went on to decide:

We are satisfied that the termination was harsh. The consequences for Mr Gosek for this one off event are significant. He lost a secure job and his reputation amongst his fellow workers and Illawarra Coal. Until this incident, Illawarra Coal had valued him sufficiently and appointed him acting supervisor in Mr Pomana’s absence. Illawarra Coal did not have any concerns until this incident that Mr Gosek would not comply with their policies and procedures and, given his appointment as acting supervisor, he had a responsibility for ensuring that others followed those procedures. Mr Gosek had to deal with a range of matters including the death of a family member, depression and physical exhaustion. As well, he abused alcohol with little regard to the potential impact this may have on his mental health. While none of this excuses his behaviour, we are satisfied that it is sufficient to tip the balance in favour of a finding that the dismissal was harsh.[14]

We note the following matters about Deputy President Anderson dissenting judgment:

  • His Honour highlighted the need for credible investigations into misconduct to flush out issues such as a mental health condition.
  • His Honour disagreed that Mr Gosek’s intoxication was a significant mitigating factor and (sensibly, in our view) pointed out the following:

[120] Mr Gosek also advances the proposition that his intoxication was a significant mitigating factor.  I am not so persuaded.  Firstly, his intoxication occurred over a number of hours.  The intimidating text messages were sent only after he had two or three drinks.  The intimidation commenced when he was angry, not when he was intoxicated.  He was not so intoxicated as to be incapable of dialling phone numbers, returning calls and carrying on conversations.  Secondly, while alcohol consumed loosened his inhibitions, the foul language, false accusations and threats made reflected in part views he held before he started drinking: that employees had lied to an investigation – an accusation that was false.  Thirdly, Mr Gosek chose to drink and drink to excess.  He voluntarily put himself in harm’s way and was the sole contributor to his own intoxication.  Nor am I satisfied that the evidence before the Commission renders it permissible to safely make a finding that his drinking was an act of self harm connected to his mental health.  I do not discount this possibility but it was an assertion not established on the balance of probabilities.

[121] Further, as the Full Bench said in the appeal decision, whilst the consumption of alcohol by Mr Gosek is not irrelevant ‘those who consume alcohol must take responsibility for their actions’.

[125] … Mental illness may explain the misconduct in part, but the consumption of alcohol does not excuse it even if it also partially explains the behaviour.

The Majority of the Full Bench ordered that Illawarra Coal reinstate Mr Gosek – why is that interesting?

Illawarra Coal made submissions about why reinstatement was not an appropriate remedy, some of which were accepted by the majority of the Full Bench and some of which were rejected on the evidence.  On the face of the decision, it does not appear that Illawarra Coal questioned whether Mr Gosek was medically fit to return to his duties such as to ensure a safe working environment for Mr Gosek and his colleagues.  However, Mr Gosek gave evidence that he had given up alcohol and that his mental health had improved ‘significantly’. 

Mr Gosek’s submission (again, unsupported by medical evidence) appears to have been accepted on the question of reinstatement, with the majority of the Full Bench deciding that, on ‘fine’ balance, Mr Gosek should be reinstated because the conduct was caused by a “perfect storm of circumstances” and was unlikely to happen again. [15]

What does this mean for employers faced with a similar situation?

This decision serves as a salient reminder that unfair dismissal decisions turn on discretionary factors. 

Before an employer decides to dismiss an employee with unfair dismissal protection for misconduct or serious misconduct, they should think ahead to whether the dismissal would fail the ‘harsh, unjust or unreasonable’ test (whether on a factual or ‘sniff test’ basis).  Employers must consider the combined effect of all discretionary factors when deciding on an appropriate outcome.  While the area is far from settled, issues such as mental health and length of service should be considered particularly closely.

Conducting a fulsome misconduct investigation where procedural fairness is afforded to the employee under consideration for dismissal is best practice.  When done correctly, the employee is given the opportunity to explain all mitigating circumstances and any other matters the employee wants the employer to consider (in turn, giving the employer an opportunity to further investigate matters and tie up any loose ends, such as the impact of an employee’s mental illness on their behaviour).  If the employer has concerns that a dismissal would not result in a ‘fair go all round’, we recommend seeking legal advice.        


1 Illawarra Coal Holdings Pty Ltd T/A South32 v Matthew Gosek [2018] FWCFB 1829.
2 Ibid at [91].
3 Fair Work Act 2009 (Cth) s 387(a).
4 Above note 1 at [48].
5 Ibid at [50].
6 Ibid at [53].
7 Ibid at [44].
8 Ibid at [45].
9 Ibid at [46].
10 Ibid at [41]-[43].
11 Ibid at [47].
12 Ibid at [54]–[55].
13 Ibid at [55].
14 Ibid at [56].
15 Ibid at [75].