Allied Color & Additives Pty Ltd T/A Allied Color & Additives v Mr Richard Birch
[2013] FWCFB 10178
•23 DECEMBER 2013
[2013] FWCFB 10178 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Mr Richard Birch
(C2013/6595)
VICE PRESIDENT CATANZARITI | SYDNEY, 23 DECEMBER 2013 |
Appeal against decision [[2013] FWC 7890] and order PR543051 of Commissioner Wilson at Melbourne on 9 October 2013 in matter number U2013/8460.
[1] This is an appeal by Allied Color & Additives Pty Ltd T/A Allied Color & Additives (Allied Color) against a decision of Commissioner Wilson 1 (Decision) in relation to an application made by Mr Richard Birch under s.394 of the Fair Work Act 2009 (the Act).
[2] Mr Birch’s employment with Allied Colour ended on 28 March 2013. The factual dispute between the parties included the question of whether Mr Birch resigned his employment or whether he was dismissed. Mr Birch filed an application for an unfair dismissal remedy with the Fair Work Commission (the Commission) alleging that he was dismissed by Allied Color.
[3] In the Decision below, the Commissioner found that the termination of Mr Birch’s employment was brought about by Allied Color. Having found that Mr Birch was dismissed, the Commissioner further found that that dismissal was harsh, unjust or unreasonable and ordered Allied Color to pay Mr Birch $11,442.93 in compensation.
[4] The narrow issue on appeal is whether the Commissioner erred in not deducting an ex-gratia payment made to Mr Birch from the total amount of compensation ordered. A stay of order PR543051 made by the Commissioner (Order) was issued by Vice President Catanzariti on 22 November 2013 pending the outcome of this appeal. 2
Background
[5] Given the narrow scope of this appeal, we do not think it is necessary to go over the facts which led up to Mr Birch’s dismissal. We note that a detailed summary was provided by the Commissioner at [3] to [16] of the Decision.
[6] Having considered the appropriate factors as outlined in s.387 of the Act 3, the Commissioner concluded:
“[41] After taking into account the above criteria, I have formed the view that the dismissal of Mr Birch was harsh, unjust or unreasonable.”
[7] In considering the appropriate remedy, the Commissioner concluded at [46]-[47] of the Decision that reinstatement would not be an appropriate remedy but that a payment of compensation is appropriate. Taking into account the criteria set out in s.392 of the Act, the Commissioner concluded that:
“[63] The approach by the FWC in these matters, and which I follow here, is to estimate the remuneration the employee would have received if they had not been dismissed (usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment); deduct any remuneration earned by the employee since their dismissal until the end of the anticipated period of employment; deduct an amount for contingencies; consider the impact of taxation and adjust the figure accordingly; and assess the figure against the compensation cap set by s.392(5) of the Act.
...
[65] Having regard to the considerations established by s.392 of the Act, and the criteria established by the FWC, I find that compensation should comprise a payment by the respondent to the applicant calculated as follows:
Assessment of remuneration lost: 10 weeks projected lost income $10,498.10
at the rate of $1,049.81 per
week
Employer superannuation contribution on 9% $944.83
above
LESS: Monies earned since dismissal $0
LESS: Contingencies $0
TOTAL $11,442.93”
[8] Although the Commissioner noted at [59] of the Decision that he had “...considered all of the circumstances of the case in determining an appropriate remedy”, it is clear that no deduction was made from the compensation amount to account for an “ex-gratia payment” made to Mr Birch on his dismissal.
[9] The exchange between the Commissioner and Anthony (Tony) Sewell, Allied Color’s Managing Director, as recorded in the transcript from the hearing below provides the necessary background: 4
“In the applicant's witness statements Mr Birch says this, and it's item 16: "Alan then stated, 'You have a good package of about 26 to 27,000.' Then he turned to Tony and said, 'How are we going to pay him?' Tony replied, 'I have already got permission to pay ex gratia payment for the next pay period.'" Do you recall an exchange of that nature?---I recall the last sentence, but I have no recollection of the two statements about the package or the statement after that. Certainly I made the statement that I have the authority to make an ex gratia payment. That is correct, but the two statements before that, I do not recall any discussions along those lines. I couldn't possibly know - 27 - I couldn't possibly know that.
You then - I'm sorry, what do you mean by - what did you mean by "pay ex gratia payment"?---Well, I thought that there was a certain level of social responsibility here and that Mr Birch has had a long history with the company. I can't speak for what happened prior to my arrival at the company, but I just thought that was an appropriate thing to do.
Did you talk to - did anyone in the meeting talk to Mr Birch about what the ex gratia payment might be?---I'm not sure about - I'm not sure whether this answers the question. What I recall was I made the statement, "We're there to give you one extra month's wages and salary."
That's what you mean by the ex gratia payment?---Yes.”
[10] The Commissioner refers to the ex-gratia payment in the Decision (at [16]), but does not consider it in calculating the appropriate compensation. It is this which forms the basis of Allied Color’s appeal before this Full Bench.
Submissions
[11] In the appeal, Allied Color submitted that Commissioner erred as he had:
- Not taken into account the fact that the “Appellant has already paid compensation to the Respondent in the amount of $4,549.08”; and
- This amounts to a “the factual error” in the Decision.
[12] Allied Color sought an amendment to the Order issued by the Commissioner on 9 October 2013 such that the compensation payment is reduced to $6,893.85.
[13] In response, Mr Birch submitted that:
- The Commissioner had not made a factual error; and
- The ex-gratia payment was a “loyalty payment” and as such should not impact the amount of compensation payable.
Consideration
[14] In order to grant Allied Color permission to appeal, the Full Bench must be satisfied that it is in the public interest to do so. 5 In GlaxoSmithKline Australia Pty Ltd v Colin Makin6 a Full Bench summarised the concept of public interest in the following terms:
“Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters...”
[15] In this instance, Allied Color claims that it is in the public interest to grant it permission to appeal the Decision below as the Decision was effected by error and clarification is needed from the Full Bench.
[16] Although we accept that there is no established case law as to how ex-gratia payments should be treated by the Commission in calculating appropriate compensation pursuant to s.392 of the Act, we do not consider it in the public interest to grant permission to appeal as the public interest, as outlined in GlaxoSmithKline Australia Pty Ltd v Colin Makin, is not enlivened in this instance.
[17] It was open to the Commissioner not to discount the compensation amount by the amount already paid to Mr Birch on an ex-gratia basis, and we do not consider there to be an appealable error. We note that the Commissioner appropriately applied s.392 of the Act, which states:
“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...”
[18] Ex-gratia payments do not fall within any of the factors expressly listed as those to be considered under s.392(a)-(f) of the Act. We accept that an ex-gratia payment may be seen as a “matter that the FWC considers relevant” under s.392(g) of the Act and indeed, we consider that an ex-gratia payment will in most instances be taken into account as one of the relevant circumstances. However, no error is revealed by a failure, explicitly or implicitly, to discount a compensation payment on the basis that an ex-gratia payment had been previously paid to the employee.
Conclusion
[19] We are not satisfied that it is in the public interest to grant Allied Color permission to appeal the Decision of Commissioner Wilson at first instance. According the stay of the Order is lifted.
VICE PRESIDENT
Appearances:
A R Sewell for Allied Color & Additives Pty Ltd T/A Allied Color & Additives.
R Birch appearing in person.
Hearing details:
2013.
Melbourne:
December 11.
1 [2013] FWC 7890.
2 PR544954.
3 See [21] to [40] of the Decision.
4 See PN567-PN570.
5 Fair Work Act 2009, s.400(1).
6 [2010] FWAFB 5343 at [27].
Printed by authority of the Commonwealth Government Printer
<Price code C, PR546286>
0
1
0