Alan Humphries v A1 Distributions
[2016] FWC 5927
•22 AUGUST 2016
| [2016] FWC 5927 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Alan Humphries
v
A1 Distributions
(U2016/5951)
COMMISSIONER PLATT | ADELAIDE, 22 AUGUST 2016 |
Application for relief from unfair dismissal.
Background
Overview
[1] Mr Humphries has lodged an application pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking a remedy for an alleged unfair dismissal by his former employer, Double N Equipment Hire Pty Ltd T/A A1 Distributions (A1).
[2] Mr Neil Boase is the Managing Director of A1, which provides transport services for clients including Toll.
[3] Mr Humphries was employed with A1 as a linehaul operator and at the time of the dismissal received a wage of $1775 per week.
[4] In the week prior to the dismissal Mr Humphries drove a B Double articulated vehicle between Mt Gambier and Adelaide and return. Mr Humphries driving duties required him to leave Mount Gambier for Adelaide in the late afternoon, travel to the Adelaide depot, detach his trailers, attach another set of trailers and return to Mt Gambier arriving early the next morning.
[5] Upon arrival in Mount Gambier, Mr Humphries would drive to the Toll Priority freight depot and unload freight for that depot. He would then drive the vehicle an additional five kilometres to the Toll Ipec freight depot where the remainder of the freight would be unloaded by others. Mr Humphries would then drive home in his personal vehicle.
[6] On 29 March 2016, Mr Boase dismissed Mr Humphries for the following reasons:
● failing to active the alarm system at the Mt Gambier Toll Priority depot on the morning of 22 March 2016,
● driving the vehicle from the Toll Priority depot to the Toll Ipec Depot on the morning of 23 March 2016 with a carton of dangerous goods on the fuel tank of the truck,
● that his conduct in these two instances had damaged A1’s reputation with Toll and placed their contract with Toll in jeopardy. 1 2
[7] I have found that Mr Humphries:
● is a person who is protected from unfair dismissal pursuant to s.382 of the Act;
● failed to activate the alarm system at Toll Priority depot on 22 March 2016
● did not drive the vehicle between the Toll Priority and Toll Ipec depots on 23 March with a dangerous goods parcel on the fuel tank.
● did not by his conduct damage A1’s reputation with Toll and/or place their contract with Toll in jeopardy
● dismissal was harsh, unjust or unreasonable.
[8] Applying the principles in Sprigg v Paul’s Licensed Festival Supermarket 3 I have determined to award compensation in the amount of $32,305.
[9] My detailed reasons for this decision follow;
Factual matrix
[10] The Applicant commenced working as a linehaul operator for the Respondent in December 2010. 4
[11] In September 2015, Mr Humphries injured his shoulder at work 5 and was absent from work until his return on 21 March 2016.6
[12] On 21 March 2016, Mr Humphries was required to visit a new depot and was inducted as to the operation of that depot by Mr Veers (Toll Priority depot Supervisor). The induction took approximately 5 minutes and covered topics including Emergency Exits, Operating the alarm, Operation in opening doors, No Go zones, Traffic management and Forklift operations. 7 The Applicant signed an attendance sheet. 8 Arming the alarm involved the placement of a magnetic key over a sensor on the alarm panel.
[13] In the week beginning 21 March 2016, the Applicant undertook four trips from Mount Gambier to Adelaide and return.9 On these trips, the Applicant would depart from Mount Gambier at about 3.30pm 10 travel to the Toll depot in Adelaide arriving about 9.30-10.00pm. He would then leave two trailers for unloading in Adelaide, attach two pre-loaded trailers and return to Mount Gambier at about 5.00-5.30am, attending Toll Priority on Ramsay Avenue, Mount Gambier (Toll Priority). He would then conclude the journey at the Toll Ipec Depot in Fairlane Drive, Mt Gambier (Toll Ipec). Mr Humphries would then travel home in his personal vehicle, and repeat the trip that afternoon. 11
[14] At about 4.30-4.45 am on 22 March 2016 Mr Humphries was required to arm the Alarm at Toll Priority for the first time. 12 At about 5.00 am after completing his shift, the Applicant stopped at Toll Priority to check with Mr Veers that everything had been done correctly 13 and was advised he did not engage the alarm system correctly. Mr Humphries said he was sorry and it wouldn’t happen again.14
[15] Mr Humphries attended Toll Priority on several other occasions that week and alarmed the premises correctly each time. 15
[16] Dangerous goods are carried by A1 as part of its service to Toll. Mr Humphries drives an articulated vehicle which has two trailers. The front trailer is the A trailer, the second (and longer) trailer is the B trailer.
[17] Mr Humphries advised that if he was required to transport dangerous good he would be provided with an envelope containing information about the contents information relevant to any emergencies concerning those goods. The envelope was carried in a yellow mail bag which also contains correspondence for the Mount Gambier depot. 16 The mail bag is carried in the driver’s cabin. A photocopy example of a dangerous goods envelope was tendered.17 The front cover of the envelope contains a number of check boxes to described the goods being carried which range (in order of risk) from ‘explosives’ to ‘aerosols.’
[18] Mr Humphries advised that if small dangerous goods were carried they were loaded in the tool box of either the A or B trailer.
[19] On the afternoon of 22 March 2016 Mr Humphries travelled from Mount Gambier to Adelaide and collected return load from Toll Adelaide. He was provided with a load plan that indicated he was carrying some dangerous goods. 18 A Toll Adelaide depot employee nicknamed ‘Phongy’19 advised him that there were three small dangerous goods parcels20 which had been loaded into the tool box on the A trailer. This tool box is located on the passenger side of the front trailer.21 Mr Humphries was told two of the parcels were destined for the Mount Gambier Toll Priority depot and one was destined for Toll Ipec.22 Other than Mr Humphries’ evidence there was no other information before me which describes the nature of the goods carried or their intended destination.
[20] Mr Humphries drove the vehicle to Mount Gambier, attended the Toll Priority depot and unloaded the goods including two of the dangerous items contained in the A trailer toolbox. He then travelled to the Toll Ipec Depot 23. To this point the evidence of Mr Humphries is not disputed.
[21] Mr Humphries asserts that the third dangerous goods parcel remained in the A trailer toolbox until he arrived at Toll Ipec where he removed the parcel and placed it on the fuel tank on the driver’s side of the truck and then left the depot to travel home.
[22] Mr Boase states that at about 4.45am on 23 March 2016 whilst enroute to Keith he observed the truck Mr Humphries was driving as the truck travelled from east to west through the McDonalds Roundabout located at the intersection of the Jubilee Highway and the Penola Road, Mount Gambier. The truck was a new addition to the A1 fleet and Mr Boase was excited to see it on the road. When Mr Boase saw the truck it was already in the intersection, he observed it for 2-3 seconds during which time it travelled about 10-12 metres. The truck was travelling 10-15 kilometres per hour. Mr Boase asserted that he had a clear and uninterrupted view of the top of the truck’s fuel tank, which was on the opposite side of the vehicle from where he was situated. At the time it was dark and Mr Boase was approximately 15 metres away. During this time, as the truck articulated through the McDonalds roundabout, Mr Boase noticed a fawn coloured item about the size of a shoebox on top the driver’s side fuel tank behind the drivers cab. 24
[23] Mr Boase gave evidence that he did not immediately contact his office regarding his observation of the package at the McDonald’s roundabout. Mr Boase contacted Toll Priority about an hour later for a status report and was told by Mr Veers that the alarm at the depot had not been activated by Mr Humphries. 25 Mr Veers was not called to give evidence.
[24] Mr Humphries gave evidence that upon arrival at Toll Ipec he completed his work diary, alighted from the cabin, collected the dangerous good package from the A trailer tool box and placed the package on top of the driver side fuel tank. 26 This process took 60-90 seconds.27 Mr Humphries said that he placed the item on the fuel tank in order to ensure it would be observed by the depot staff upon arrival as this had been his usual practice in the time he had worked at A1 and at previous employers28. Mr Humphries than got into his private vehicle and went home.29 At this time it was still dark.30
[25] Mr Douglas gave evidence that he was unloading another truck at the Toll Ipec depot when the truck driven by Mr Humphries arrived. Upon his arrival next to the truck cabin Mr Douglas saw Mr Humphries alight from the truck and walk away to his personal vehicle. In order to unload the goods Mr Douglas removed the curtains on trailers and whilst removing the A trailer curtains he noticed the dangerous goods parcel on the driver’s side fuel tank.
[26] Mr Douglas believes that the parcel was on the fuel tank when the truck arrived. Mr Humphries states that he placed the item there after getting it from the A trailer tool box. The competing accounts are not mutually exclusive. This was the first week Mr Douglas had worked with Mr Humphries and he was not aware of Mr Humphries practice in placing dangerous goods on the fuel tank and not left in the tool box, so the goods could be seen by depot personnel. 31 Mr Douglas’s evidence varied from conceding that it may have been possible for Mr Humphries to have collected the dangerous goods from the tool box and place them on the fuel tank without him observing it, to then asserting that it did not happen.32 At one point Mr Douglas stated that he first opened the B trailer curtain then the A trailer curtain and later he reversed the order.33
[27] Mr Douglas stated that at about 6.30-7.00am on 23 March 2016, Mr Boase telephoned to see how things were going. Mr Douglas then told him that he had found a dangerous goods parcel on the fuel tank of the truck driven by Mr Humphries.
[28] Mr Boase returned to Mount Gambier from Keith at about 3.10pm the same day and again saw the new truck being driven by Mr Humphries. Mr Boase caused the truck to stop and told Mr Humphries he was leaving the Toll depot (for the Adelaide run) too early. Mr Boase did not discuss his observations of the parcel on the fuel tank early that day, or the information given to him by Mr Veers or Mr Douglas.
[29] At 3.25pm on Thursday 24 March 2016 Mr Butler, PM Operations Manager for Toll Ipec sent Mr Boase and Mr Greene an email with the subject line FW – please investigate:
“Hi Neil
Could you please investigate the following issue
That on Wednesday the 23/03/2016 the following issue arose when the A1 Distribution truck left the Toll Priority site he left it unsecured
Also that the A1 Distribution truck returned to your depot with a container sealed with dangerous goods sitting on the fuel tank.
If this is the case it is totally unacceptable on all parts
Toll has procedures and policies in place that all companies have to abide by and have said so by signing the service agreements
This cannot be tolerated and I need to know if correct and what you as principal owner of A1 Distribution are going to do and then put in place so that this will not happen again
I await your response
Thanks”
[30] I note that the email was forwarded, indicating that there was some preceding correspondence. I also note that the information concerning the location of the dangerous goods parcel at the Toll Ipec depot would not have been within the knowledge of Toll unless communicated by another person. Mr Boase gave evidence that he rang Mr Butler and made him aware of the incidents. 34 Mr Butler was not called to give evidence and the Toll procedures and policies referred to were not put before the Commission.
[31] I have not had the benefit of the detail of the prior communications with Toll in order to better understand the context of the communication by Toll.
[32] At 16.22pm on Thursday 24 March 2016 Mr Boase advised Mr Butler that a full investigation was being conducted and that would include an audit of the induction process. Mr Boase gave an assurance that A1 would do everything possible to prevent a recurrence of the serious issue and committed to advising Toll of the findings by 29 March 2016.
[33] In his statement and in cross examination Mr Boase stated that he contacted the South Australian Road Transport Association (SARTA) late in the afternoon on Thursday 24 March 2016 and discussed the requirements of the Fair Work Act and where A1 stood. After further cross examination Mr Boase later advised that his reference to ‘I sought advice’ was incorrect and that he had instructed Mr Greene to contact SARTA.35 Whilst Mr Greene stated he did not make notes of this conversation36 his notes which were subsequently produced contradict this evidence. Mr Greene’s notes indicate that raised the issue of summary dismissal with SARTA and was told by their representative that on the basis of the information provided the conduct was gross misconduct.
[34] On Monday 27 March 2016 Mr Boase used the camera console to search the recording and review the CCTV footage of Mr Humphries truck entering the Toll Ipec depot. 37 Mr Boase asserts that the footage showed the dangerous goods parcel on the driver’s side fuel tank of the truck Mr Humphries drove into the depot. At this point Mr Boase made a decision to terminate Mr Humphries employment38.
[35] There is no independent evidence before the Commission of CCTV, camera angle, picture definition or what the footage revealed. The CCTV footage was not retained.
Termination Meeting
[36] On 28 March 2016, the Applicant received a text message from Mr Boase asking him to attend a meeting the following day. The Applicant was not advised about the subject matter of the meeting or that his employment was at risk. 39
[37] The meeting on 29 March 2016 was attended by the Mr Humphries, Mr Neil Boase, Managing Director and Anthony Greene, Operations Manager who is also Mr Boase’s son in law. 40
[38] Mr Humphries did not seek to have a support person present prior to the meeting.
[39] Mr Humphries said that Mr Greene opened the meeting. Mr Boase handed Mr Humphries a letter titled “termination without notice” and said “you are entitled to have a representative”, to which the applicant replied, “how am I going to get a representative at this time of day?” 41 Mr Humphries then read the letter and said “this is fucking bullshit” and disputed the allegation that he drove with dangerous goods parcel on the fuel tank. 42 Mr Humphries asked Mr Boase whether he could have another chance as he would lose his home if he was terminated. There was also a conversation about the impact of the termination on Mr Humphries’ Workers Compensation matter.43
[40] The Applicant was summarily dismissed by the Respondent for the alleged conduct which Mr Boase claimed was serious misconduct.
[41] The written notice of termination, stated that the reasons for the dismissal were:
- “ Serious misconduct, when you failed to comply and totally disregard [sic] the site induction at Toll Priority. On departure from the Toll Priority depot, you failed to secure the site on departure, by leaving the alarm disabled
- Secondly, you left a carton sealed, high security, dangerous goods on the fuel tank of your truck, and drove from Toll Priority, Mount Gambier to Toll Ipec Depot, Mount Gambier. In doing this, you endangered not only your own life, but also everyone else’s who was travelling on the same roads.
- Your actions have damaged A1 Distributions reputation with Toll Holdings, and has placed the company’s contract in serious jeopardy.” 44
[42] Mr Humphries was not shown the alleged video footage.
[43] The Applicant was not paid notice. 45
Is the Applicant a person protected from Unfair Dismissal?
[44] Section 382 of the Fair Work Act details persons who are protected from unfair dismissal, stating:
“A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”
[45] The Applicant has completed the minimum employment period, was not a casual employee and earned less than the high income threshold at the time of dismissal. I find that Mr Humphries is a person protected from unfair dismissal.
Evidentiary findings
Alarm Activation
[46] There is no dispute that Mr Humphries failed to activate the alarm at the Toll Priority depot. The instruction given to Mr Humphries regarding operation of the alarm was part of a wide ranging Toll Priority site induction process which included Emergency Exits, Operating the alarm, Operation in opening doors, No Go zones, Traffic management plans and Forklift operations. The induction was cursory in that it took 5 minutes. Mr Humphries failure to activate the alarm occurred on the first occasion he had been required to activate the alarm. No evidence of loss or damage occurring as a result was put to me.
Carriage of dangerous goods on the fuel tank
[47] With respect to the carriage of the dangerous goods parcel on the fuel tank, I prefer the evidence of Mr Humphries that the parcel was placed on the fuel tank after conclusion of his journey at the Toll Ipec depot. Mr Humphries presented as a witness who acknowledged his mistakes and made concessions about matters which was not certain, and his account for how the parcel came to be on the fuel tank is creditable.
[48] The totality of the evidence leads me to doubt that Mr Boase saw a dangerous goods parcel on the fuel tank when the vehicle driven by Mr Humphries traversed the McDonalds Roundabout. The vehicle was travelling in darkness and Mr Boase was admiring his new fleet addition rather than specifically looking for an incorrectly loaded parcel. Mr Boase’s observation did not give him cause to immediately ring the depot on his mobile or to stop the vehicle driven by Mr Humphries. The later phone calls made to Mr Veers at Toll Priority and Mr Douglas at Toll Ipec were part of a routine process of ‘checking in’ to see how things were going, rather than being directed towards an enquiry into a parcel observed on the fuel tank. It was not until Mr Boase received information from Mr Veers that a dangerous goods parcel was not delivered at Toll Priority, and information from Mr Douglas that a dangerous goods parcel was found on the fuel tank at the Toll Ipec depot, that Mr Boase began to form a view that a dangerous goods parcel was carried on the fuel tank. Mr Boase had an opportunity to confront Mr Humphries about his observation later that day but did not do so. Mr Boase was not convinced about what he saw until he viewed the CCTV footage. It could be that Mr Boase has reconstructed what he believed he saw to fit the information he subsequently learned. Mr Boase has not convinced me that he saw a dangerous goods parcel being carried on the fuel tank of the vehicle driven by Mr Humphries.
[49] Prior to viewing the CCTV footage Mr Boase had arranged for advice to be sought from SARTA concerning his ability to dismiss Mr Humphries for serious misconduct. Despite Mr Boase’s view that the incident was serious and may have threatened the reputation and/or viability of his enterprise, Mr Boase did not choose to show Mr Humphries or retain the CCTV footage. There is no evidence before the Commission of CCTV camera angle, field of view or picture definition. The CCTV footage as described by Mr Boase would have independently established the carriage of the dangerous good parcel on the fuel tank by Mr Humphries.
[50] The failure to retain the CCTV footage appears to be inconsistent with Mr Boase use of technology in investigating matters. In an earlier dispute about whether Mr Humphries had damaged a sign with his truck Mr Boase took and retained a photograph of the sign using his mobile phone and used it to show Mr Humphries what he had done.46
[51] In the absence of its production, I am not persuaded that the CCTV footage would have assisted Mr Boase’s contention that he saw the dangerous goods parcel on the fuel tank.
[52] Mr Douglas’ evidence that he located the dangerous goods parcel on the vehicles fuel tank at the Toll Ipec depot is not contested.
[53] I accept Mr Humphries evidence that he placed the parcel on the fuel tank at the conclusion of his journey. I find that this action was not observed by Mr Douglas.
[54] I do not accept that the parcel was present on the fuel tank when the vehicle was driven by Mr Humphries.
Reputational damage to A1 and jeopardy to the Toll Contract
[55] A1 contend that Mr Humphries action caused reputational damage and placed their contract with Toll in jeopardy.
[56] The sole evidence on this point is the email sent by Mr Butler (Toll PM Operations Manager) to Mr Boase dated 24 March 2016. I do not know what authority Mr Butler has in relation to the Toll A1 Contract. I note that the email sent was forwarded and I do not have the full context in which the email was sent. It appears that Mr Butler was not pleased with the events that he had been told had occurred. Mr Butler’s request that the matter be investigated and steps put in place to prevent a repeat is a normal response to such information being provided. There is no evidence of a contract between Toll and A1 before me. There is no evidence before me that the carriage of goods for Toll has reduced as a result of the incidents, or that any action has been taken to cancel or vary any Toll/A1 contract. This evidence could have been given by Mr Boase in his role as Managing Director.
[57] On the evidence before me I am not persuaded that A1’s reputation was damaged or any contract with Toll was placed in jeopardy.
4. What the dismissal harsh unjust or unreasonable?
[58] I now consider if Mr Humphries’ dismissal was harsh, unjust or unreasonable.
[59] Pursuant to s.387 of the FW Act, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
“(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.”
Valid reason - s.387(a)
[60] Notwithstanding its formulation under a different legislative environment, I have adopted the definition of a valid reason set out by Northrop J in Selvachandran v Peteron Plastics Pty Ltd47which requires the reason for termination to be “sound, defensible or well founded.”
[61] A1 relied on three matters to support the dismissal, the failure to activate the Toll Priority alarm, the carriage of the dangerous goods parcel on the fuel tank and the damage to Al’s reputation and placing the [Toll] contract in serious jeopardy.
[62] I have found that Mr Humphries did not travel between Toll Priority and Toll Ipec with a dangerous goods parcel on the fuel tank and that I am not satisfied that A1’s reputation was damaged or their contract with Toll was placed in jeopardy.
[63] As to the failure to alarm the Toll Priority premises I do not accept in these circumstances the Mr Humphries single lapse in not activating an alarm at the unfamiliar premise, with no apparent adverse consequence, constitutes a valid reason for his dismissal.
[64] I find that A1 did not have a valid reason to dismiss Mr Humphries.
Notification of valid reason - s.387(b)
[65] An employee protected from unfair dismissal must be advised of a valid reason for termination prior to the decision being made.48
[66] I find that Mr Humphries was advised of the conduct that A1 sought to rely to dismiss him at the meeting held on 29 March 2016.
Opportunity to respond - s.387(c)
[67] An employee protected from unfair dismissal must be given an opportunity to respond to the reasons for termination prior to a decision to terminate is made. 49 Mr Humphries was not advised of the reason why Mr Boase wanted to speak to him, nor that A1was considering terminating his employment. On the evidence before me it appears that A1 had already determined to dismiss Mr Humphries prior to conducting the meeting.
[68] Whilst I note that Mr Humphries responded to the allegations that were put to him, that was in the context that his employment was terminated for those reasons, not a discussion which would take into account his responses prior to the termination.
Warnings relative to unsatisfactory performance - s.387(e)
[69] Mr Humphries had not received any formal warnings concerning his performance prior to these incidents.
Size of the employer’s enterprise s.387(f) and Absence of dedicated Human resources support - s.387(g)
[70] A1 is not a small business and has access to HR support from Mr Greene and his wife Michelle Greene 50. I have regarded this as a neutral factor.
Other matters considered relevant - s.387(h)
[71] There is no evidence before me which suggests that Mr Humphries conduct could be properly described as serious misconduct as described in Regulation 1.07 of the Fair Work Regulations 2009. Accordingly Mr Humphries was entitled to notice of termination.
[72] Whilst it has been suggested that the termination was motivated by Mr Humphries Workers Compensation claim, the evidence before me does not establish that motive.
5. Conclusion
[73] The Explanatory Memorandum to the Fair Work Act 51 explains the approach of the Commission in considering the elements of section 387:
“FWA must consider all of the above factors in totality. It is intended that FWA will weigh up all the factors in coming to a decision about whether a dismissal was harsh, unjust or unreasonable and no factor alone will necessarily be determinative.”
[74] In Byrne and Frew v Australian Airlines Pty Ltd, 52 the following observations made by McHugh and Gummow JJ are relevant to my conclusion:
“It may be that the termination is harsh but not unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”
[75] Having considered each of the factors detailed in s.387 of the Act, I have concluded that the termination of Mr Humphries employment was harsh, unjust or unreasonable.
6. Remedy
[76] The relevant provisions of Division 4 of Part 3-2 of the Act state:
“Division 4—Remedies for unfair dismissal
390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) the FWC may make the order only if the person has made an application under section 394.
(3) the FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.
…
392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. Disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.
[77] The prerequisites contained in ss.390(1) and (2) have been met in this case.
[78] Mr Humphries did not seek reinstatement and I am satisfied that it is not appropriate in this case.
[79] Section 390 of the Act makes it clear that compensation is only to be awarded as a remedy where the Commission is satisfied that reinstatement is inappropriate and that compensation is appropriate in all the circumstances.
[80] I now turn to whether compensation in lieu of reinstatement is appropriate.
[81] A recent Full Bench in McCulloch v Calvary Health Care Adelaide53 confirmed, in general terms, that the approach to the assessment of compensation as undertaken in cases such as Sprigg v Paul’s Licensed Festival Supermarket54 remains appropriate.
[82] Section 392(2) of the Act requires the Commission to take into account all of the circumstances of the case including the factors that are listed in paragraphs (a) to (g). Without detracting from the overall assessment required by the Act,55 it is convenient to discuss the identified considerations under the various matters raised by each of the provisions.
The effect of the order on the viability of the employer - s.392(a)
[83] There was no evidence before me that any order for compensation would impact the viability of A1.
The length of Mr Humphries service with the employer - s.392(b)
[84] Mr Humphries was employed by A1 for 5 years and three months. The period of service is relevant to my assessment of the remuneration that Mr Humphries would likely have received if not for the dismissal.
The remuneration Mr Humphries would have received, or would have been likely to receive if he had not been dismissed - s.392(c)
[85] Whilst prior to the dismissal Mr Humphries had been verbally counselled in relation to two other minor matters, I do not believe these would have impacted his on-going employment had the dismissal not occurred.
[86] Mr Humphries asserted his financial circumstances required him to work. This does not appear to be in dispute. Mr Humphries stated he had intended to work for another 3 years before retiring.
[87] In the circumstances I believe it is reasonable to assess compensation in this matter on the basis that Mr Humphries would, on the balance of probabilities, have remained in employment for a further period of 2 years, however I discount this by 50% as it is possible that Mr Humphries may have ceased work earlier due to ill heath, capacity, dismissal or other reasons. This arises from the length and nature of Mr Humphries employment, his work performance, age and what I know of his injury.
The efforts of Mr Humphries to mitigate the loss suffered by him because of the dismissal - s.392(d)
[88] As at the time of the hearing Mr Humphries had actively sought alternative employment without success. Mr Humphries considered that his age, injury and circumstances of the dismissal adversely impacted on his prospects. I accept these matters would reduce his risk obtaining work.
Remuneration earned by Mr Humphries during the period between the dismissal and the making of the order for compensation and the amount of any income likely to be earned by Humphries during the period between the making of the order for compensation and the actual compensation - ss.392(e) and (f)
[89] Mr Humphries was in receipt of workers compensation payments at the 100% level for six months prior to his dismissal. In the absence of his return to work Mr Humphries would be entitled to an additional six months payments at 100% of his earnings and then payments at 80% for an additional 12 months. These payments must be considered as income, however it is not guaranteed that they will be received, on that basis I have discounted the workers compensation income by 50%.
Any other matter that the FWC considers relevant and the remaining statutory parameters - s.392(g)
[90] Mr Humphries was not paid notice. I have found that he was entitled to five weeks notice. I have taken this into account in determining the amount of compensation.
[91] In accordance with s.392(4) of the Act, I make no allowance for any shock, distress or humiliation that may have been caused by the dismissal.
[92] The maximum compensation limit in this case would be the lesser of 26 weeks remuneration or half the high income threshold immediately before the dismissal. 56 The amount of compensation awarded is less than this limit.
[93] Taxation is to be paid on the amount determined.
[94] I believe that the compensation confirmed below is appropriate having regard to all of the circumstances of this matter and the considerations specified by the Act.57
[95] I award compensation in the amount of $32,305
[96] An Order 58 reflecting this decision will be issued.
COMMISSIONER
Appearances:
Mr P Botros on behalf of the Mr Humphries.
Mr C Ryan, on behalf of A1.
Hearing details:
2016.
Mount Gambier:
June
26.
1 Letter of Termination, Exhibit H2
2 Statement of Alan Humphries [24].
3 (1998) 88 IR 21.
4 Applicants Submissions [2]; Respondents Submissions [1]
5 Witness Statement of Alan Humphries [5]
6 Applicant’s Submissions [4]
7 Exhibit H3
8 Statement of Alan Humphries [8].
9 Statement of Alan Humphries [7].
10 PN 170-193
11 Statement of Alan Humphries [7].
12 Statement of Alan Humphries [9].
13 Statement of Alan Humphries [10].
14 Statement of Alan Humphries [11].
15 Statement of Alan Humphries [12].
16 PN281
17 Exhibit H6
18 PN215
19 PN246
20 PN373
21 PN326
22 PN255
23 PN789
24 PN986-997, PN1188-1248
25 PN982
26 PN412
27 PN430
28 Statement of Alan Humphries [21].
29 PN382-384
30 PN428
31 PN1654,
32 PN1728
33 PN1679 v PN1752-1755
34 PN1095
35 PN1024, PN1371-1394, PN1841
36 PN1896
37 PN1039-1048,PN1161
38 PN1055
39 PN470
40 Statement of Alan Humphries [24].
41 Statement of Alan Humphries [25].
42 Statement of Alan Humphries [26].
43 Statement of Alan Humphries [27].
44 Statement of Alan Humphries – Exhibit A1.
45 Applicant’s Submissions [12]
46 PN1059-1063
47 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.
48 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137.
49 RMIT v Asher (2010) 194 IR 1 [26]-[30]; Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at [75].
50 PN1864-1868
51 Explanatory Memorandum to the Fair Work Bill 2008.
52Byrne and Frew v Australian Airlines Pty Ltd [1995] HCA 24.
53 [2015] FWCFB 873.
54 (1998) 88 IR 21. See also Bowden v Ottrey Homes Cobram and District Retirement Villages Inc T/A Ottrey Lodge[2013] FWCFB 431.
55 Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446.
56 Section 392(5) of the Act.
57 Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446 at par [32].
58 PR578914.
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