Andrew Hinchen v Moonee Valley Racing Club Inc T/A Moonee Valley Racing Club

[2016] FWC 4914

[2016] FWC 4914

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Andrew Hinchen
v
Moonee Valley Racing Club Inc T/A Moonee Valley Racing Club
(U2015/6788)

COMMISSIONER CIRKOVIC MELBOURNE, 21 JULY 2016

Application for relief from unfair dismissal - Remedy.

[1] On 6 April 2016, the Fair Work Commission (Commission), issued a decision 1 pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) finding that the termination of the employment of Mr Andrew Hinchen (Applicant) by Moonee Valley Racing Club Inc T/A Moonee Valley Racing Club (MVRC) (Respondent) was harsh, unjust and unreasonable.

[2] The Commission was not satisfied that it had been provided sufficient evidence to determine the question of remedy. Consequently, on 7 April 2016 the Commission issued directions for the parties to file and serve submissions and further evidence regarding the question of remedy.

[3] On 22 April and 6 May 2016 the Applicant and the Respondent respectively filed submissions. On 20 May 2016 the Applicant filed submissions in reply.

[4] The matter was listed for hearing on 20 May 2016 in Melbourne, in order that the parties could address the Commission on remedy.

Remedy

[5] The object of Part 3-2 of the Act concerning unfair dismissal is set out in s.381 as follows:

“381 Object of this Part

(1) The object of this Part is:

(a) to establish a framework for dealing with unfair dismissal that balances:

(i) the needs of business (including small business); and

(ii) the needs of employees; and

(b) to establish procedures for dealing with unfair dismissal that:

(i) are quick, flexible and informal; and

(ii) address the needs of employers and employees; and

(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.

Note: The expression “fair go all round” was used by Sheldon J in in re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95.”

[6] Section 390 of the Act sets out the circumstances in which I may make an order for reinstatement or compensation:

“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.”

[7] In my decision of 6 April 2016, I dealt with the issues at s.390(1)(a)-(b) above. Accordingly, I am required to determine whether to order the reinstatement of the Applicant or, in circumstances where reinstatement is inappropriate, an order for compensation if I am satisfied such an order is appropriate in all the circumstances.

Reinstatement

[8] The Applicant seeks reinstatement as the primary remedy. Regardless of the remedy sought by the Applicant, s.390 of the Act requires I first determine whether reinstatement is appropriate before I consider an order for compensation.

[9] The Applicant submits reinstatement would be appropriate because:

• There was no valid reason for dismissal relating to the Applicant’s conduct;



• But for the Applicant’s personal illness and the shortage of staff, he would have been able to objectively perform his role and responsibilities as Executive Chef;



• The Applicant has demonstrated a willingness to meet the demands of his role and the performance improvement process;



• The Applicant is willing to return to work alongside his former colleagues;



• The Applicant has every intention of performing in the position of Executive Chef;



• The Respondent is a large corporation with over eighty employees and reinstatement is practical. 2

[10] The Respondent submits that reinstatement would be inappropriate because there has been a loss of trust and confidence in the Applicant. 3 The Respondent submits that reinstatement would be futile, there has been a complete breakdown of the relationship and the relationship is neither viable nor productive.4 The Respondent submits:

• “At no stage has the Applicant ‘demonstrated a willingness to meet the demands of the role and the performance improvement process.” 5



• “The Applicant submits…that his underperformance was caused by ‘personal illness and the shortage of staff.’ This submission is not supported by any evidence and is…inconsistent with the Applicant’s own evidence…this is not the subject of evidence or any findings by the Commission.” 6



• “…in a situation where the Commission had confirmed a valid performance based reason for the dismissal, it could be expected that the Applicant would acknowledge that his performance in those areas required improvement and commit to so improving if reinstated. No such commitment has been provided by the Applicant either during the hearing, in his submissions or in the conduct by the Applicant…the Applicant’s employment, as a consequence of his continued deflection of these legitimate performance concerns, will simply be terminated again for underperformance if he is reinstated.” 7



• “…post the Commission’s decision of 7 April, but before the conclusion of these proceedings, the Applicant publicly revealed an apparent personal illness and criticised the Respondent for terminating his employment in at least three articles…The Applicant chose to reveal his medical condition publicly in a manner which was intended to, and did, carry the implication that his employment had been terminated by the Respondent on the basis of his medical condition. This was never the Applicant’s case before the Commission and seriously misrepresents the factual situation. The Articles also contain a number of imputations which are misleading and defamatory, including the statements that the Respondent ‘harassed’ the Applicant, put him through an ‘intentionally strenuous performance improvement program’, and gave him ‘a number of warnings for trivial reasons’.” 8



• “…these Articles…strike at the heart of why this relationship cannot be found to be either viable or productive.” 9



• “…this media comment demonstrates that the Applicant still does not accept his performance short-comings and instead deflects criticisms away from such short-comings to matters which were simply not part of his own case and in some instances, contrary to the findings of the Commission.” 10



• “…the Respondent’s employees in the catering and events department are not prepared to work with the Applicant or their work is significantly disrupted by the Applicant…By procuring and/or permitting the publication of the Articles, the Applicant has seriously damaged the relationship between the parties beyond the catering and events departments…key management employees, the CEO and the Club are considering their position in respect of legal proceedings against the Applicant in respect of those comments. The potential for this litigation should also be taken into account. The relationship cannot be re-established.” 11

[11] Reinstatement might be inappropriate in a whole range of circumstances. The remedy may be inappropriate if reinstatement would be futile, for example where reinstatement of an employee would almost certainly lead to a further termination of the employee’s employment because the employer has since discovered that the employee engaged in an act of serious misconduct which was only discovered after the employee’s termination. Reinstatement as a remedy may be inappropriate if the employer no longer conducts a business into which an employee may be reappointed. 12 The mere absence of a position in a business into which an employee may be reappointed will rarely found a conclusion that reinstatement in inappropriate.13 However, if reinstatement of an employee would result in the employee being surplus to the employer’s business requirements, this is clearly a factor which goes to the question of the appropriateness of reinstatement.14

[12] Reinstatement may be inappropriate if an employee is incapacitated because of illness or injury in a material way so that further performance of the employee’s contractual obligations would be impossible. 15

[13] The most common basis advanced to support the proposition that reinstatement is inappropriate is that there has been a loss of trust and confidence, or a breakdown in that relationship, so as to make the re-establishment of the employment relationship unviable or unproductive. Here we are concerned with that which is essential to make an employment relationship workable.

[14] A Full Bench examined the relevant principles concerning an alleged loss of trust and confidence in the context of an application for reinstatement in Nguyen and Le v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter (references omitted) 16:

“[27] The following propositions concerning the impact of a loss of trust and confidence on the question of whether reinstatement is appropriate may be distilled from the decided cases:

• Whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate but while it will often be an important consideration it is not the sole criterion or even a necessary one in determining whether or not to order reinstatement.



• Each case must be decided on its own facts, including the nature of the employment concerned. There may be a limited number of circumstances in which any ripple on the surface of the employment relationship will destroy its viability but in most cases the employment relationship is capable of withstanding some friction and doubts.



• An allegation that there has been a loss of trust and confidence must be soundly and rationally based and it is important to carefully scrutinise a claim that reinstatement is inappropriate because of a loss of confidence in the employee. The onus of establishing a loss of trust and confidence rests on the party making the assertion.



• The reluctance of an employer to shift from a view, despite a tribunal’s assessment that the employee was not guilty of serious wrongdoing or misconduct, does not provide a sound basis to conclude that the relationship of trust and confidence is irreparably damaged or destroyed.



• The fact that it may be difficult or embarrassing for an employer to be required to re-employ an employee whom the employer believed to have been guilty of serious wrongdoing or misconduct are not necessarily indicative of a loss of trust and confidence so as to make restoring the employment relationship inappropriate.

[28] Ultimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive. In making this assessment, it is appropriate to consider the rationality of any attitude taken by a party.”

[15] Put another way, it is necessary when assessing the appropriateness of an order for reinstatement to consider whether the Applicant has demonstrated sufficient understanding of those areas of his performance that require improving and the requisite commitment to do so. I am not satisfied that the Applicant has demonstrated either self-awareness as to the failings in his performance or the requisite commitment to make the necessary improvements to his performance. During proceedings before the Commission the Applicant demonstrated a determined deflection of legitimate performance concerns which is indicative of an employee unwilling and unable to meet the demands of the role and the performance appraisal process.

[16] The Respondent submits that the Applicants failure to accept his performance short-comings and to deflect criticisms is further evidenced by his comments in a series of articles published after my decision of 6 April 2016. 17 It is difficult to know precisely, without hearing evidence on this point, what statements could be attributed to the Applicant directly. Rather, the majority of the comments appear to be made by the Applicant’s legal representative. Whilst these comments do little to advance the Applicant’s position, they have not formed part of my reasoning in deciding against making an order for reinstatement. In this case, there is sufficient evidence before me to make a finding that the Applicant has demonstrated an inability to accept his performance shortcomings in any way. Further, the Applicant was the Executive Chef of the Respondent. He was responsible for the management and direction of the Respondent’s catering functions. This is a position to which a significant degree of trust attaches. Confidence that the Applicant will carry out his responsibility of management and direction in the best interests of the Respondent is of critical importance. Based on my observations of the Applicant and the Respondent witnesses during the course of the proceedings, it was clear to me that the relationship between them lacks a sufficient level trust and confidence to make an on-going relationship between the Applicant and the Respondent viable.

[17] In the circumstances I am satisfied that reinstatement is inappropriate.

Compensation

[18] Section 390(3)(b) provides I may only issue an order for compensation to the Applicant if it is appropriate in all the circumstances.

[19] I have found that the Applicant was unfairly dismissed by the Respondent and that reinstatement is not appropriate in all the circumstances. I am satisfied it is appropriate that an order for compensation be made.

[20] Section 392 of the Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered:

“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.

Note: subsection 392(5) indexed to $69, 450 from 1 July 2016

(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.”

[21] I will now consider each of the criteria in s.392 of the Act.

Remuneration that would have been received: s.392(2)(c)

[22] The Applicant’s remuneration with the Respondent was $103,285 per annum, inclusive of superannuation. 18

[23] The Respondent submits the amounts paid to the Applicant after his dismissal took effect ought to be deducted from any compensation it is ordered to pay. It submits this includes the four weeks’ pay the Applicant received in lieu of notice. 19

[24] The Applicant submits his employment would have continued indefinitely but for his dismissal. 20

[25] I think it is more reasonable to assume that, but for the dismissal, the Applicant’s employment would have continued for the period of time it would have taken the Respondent to provide him with an opportunity to respond to the reasons for dismissal and to provide him with a real opportunity to improve his performance or respond in a meaningful way. In determining this period of time I have taken into account my findings that the evidence does not demonstrate that the Applicant took a proactive approach to improving the issues identified by MVRC, that he sought to deflect criticism and did not take sufficient responsibility to make meaningful improvements. 21 I determine this period of time to be 8 weeks. The remuneration he would have received during that period would have been $15,890 gross, inclusive of superannuation.

Remuneration earned: s.392(2)(e)

[26] The Applicant was unemployed for nearly six weeks after the termination of his employment on 13 July 2015. He then gained casual employment. I accept that during the course of the casual employment following his dismissal until the end of the 8 week period, the Applicant earned approximately $1,352.77 gross, inclusive of superannuation. 22

[27] From the figure $15,890 gross, therefore, I deduct $1,352.77 gross being the Applicant’s earnings during the period between his dismissal and the end of the anticipated period of employment. This results in an amount of $14,537.23 gross.

Income reasonably likely to be earned: s.392(2)(f)

[28] Given my decision about the period of time the Applicant would have remained in employment this is not relevant.

Other matters: s.392(2)(g)

[29] There are no other matters that I consider appropriate to consider.

Viability: s.392(2)(a)

[30] There is no evidence that an order for $14,537.23 gross payable to the Applicant by the Respondent would affect the viability of the Respondent’s enterprise. 23

Length of service: section s.392(2)(b)

[31] The Applicant’s 10 years of service with the Respondent is a lengthy period of employment. 24 It provides no basis for further reducing any compensation to him.

Mitigating efforts: s.392(2)(b)

[32] In considering whether the Applicant has taken steps to mitigate the loss suffered as a result of the dismissal I should take into account whether he acted reasonably in the circumstances. 25

[33] I consider the Applicant has made reasonable efforts to mitigate the loss he has suffered because of his dismissal by the Respondent, as demonstrated by his on-going casual employment.

Misconduct: s.392(3)

[34] I have not found any misconduct by the Applicant that contributed to the dismissal.

Shock, Distress: s.392(4)

[35] I note that the amount of compensation calculated does not include a component for shock, humiliation or distress.

Compensation cap: s.392(5)

[36] Since this amount of $14,537.23 is less than the compensation cap in s.392(5) of the Act, I make no further reduction for that reason.

Conclusion

[37] I am satisfied an order for payment of compensation of $14,537.23 gross by the Respondent to the Applicant is appropriate in all the circumstances of the case. This amount is in addition to the four weeks’ pay in lieu of notice which has already been paid, as the entitlement to notice or pay in lieu of notice remains regardless of my findings.

[38] An order 26 giving effect to this decision will be issued with this decision.

COMMISSIONER

Appearances:

Mr R Millar of Counsel, instructed by McDonald Murholme, for Mr Andrew Hinchen

Mr P Barry of Counsel, instructed by Thomson Geer, for Moonee Valley Racing Club

Hearing details:

2016.

Melbourne

May 30

 1   [2016] FWC 2176

 2   Applicant’s Submissions Regarding Remedy (22 April 2016), para 8.

 3   Respondent’s Submissions Regarding Remedy (6 May 2016), para 12.

 4   Respondent’s Submissions Regarding Remedy (6 May 2016), para 3.

 5   Respondent’s Submissions Regarding Remedy (6 May 2016), para 4.

 6   Respondent’s Submissions Regarding Remedy (6 May 2016), para 5.

 7   Respondent’s Submissions Regarding Remedy (6 May 2016), para 6.

 8   Respondent’s Submissions Regarding Remedy (6 May 2016), para 7.

 9   Respondent’s Submissions Regarding Remedy (6 May 2016), para 8.

 10   Respondent’s Submissions Regarding Remedy (6 May 2016), para 9.

 11   Respondent’s Submissions Regarding Remedy (6 May 2016), para 11.

 12   Chelvarajah v Global Protections Pty Ltd (2004) 142 FCR 296

 13   Ibid; See also Smith v Capral Aluminium, 7 October 1999 Print R9808; Fairhall v Smorgon, 22 February 2002, PR913285

 14   Newtronics Pty Ltd v Salenga, AIRC Full Bench 29 April 1999, Print R4305

 15   See for example Smith v Moore Paragon AIRC Full Bench 20 January 2004, PR942856

 16   [2014] FWCFB 7198

 17   ‘Moonee Valley Racing Club blasted for demanding unwell executive chef’s medical records’, the Age Newspaper, 11 April 2016; ‘Employer under fire for sacking worker with cancer’, Human Capital Online, 13 April 2016.

 18   Letter from MVRC to Mr Hinchen dated 6 August 2014 titled “Re: Salary Increase – 2014/2015 Financial Year”.

 19   Respondent’s Submissions Regarding Remedy (6 May 2016), para 15.

 20   Applicant’s Submissions Regarding Remedy (22 April 2016), para 22.

 21   Hinchen v Moonee Valley Racing Club, [2016] FWC 2176, para 72.

 22   Applicant’s payslip 24 August 2015 – 6 September 2015.

 23   D.A. Moore v Highplace Pty Ltd (unreported, AIRCFB, Boulton J, Watson SDP, Whelan C, 18 May 1998) PRQ0851

 24   Exhibit A1, paras. 2-5

 25   Biviano v Suji Kim Collection PR915963 at [34].

 26   PR583162

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