Ashley Duddington v Mario and Clara Enterprises Pty Ltd and Morgan Trading Pty Ltd T/A Oscar's Restaurant
[2017] FWC 3544
•5 JULY 2017
| [2017] FWC 3544 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Ashley Duddington
v
Mario and Clara Enterprises Pty Ltd and Morgan Trading Pty Ltd T/A Oscar’s Restaurant
(U2016/15256)
| Deputy President Bull | PERTH, 5 JULY 2017 |
Application for an unfair dismissal remedy - determination of compensation.
On 13 June 2017, in the matter of Ashley Duddington v Mario and Clara Enterprises Pty Ltd and Morgan Trading Pty Ltd, decision [2017] FWC 2958 was issued. It was found that Mr Duddington (the applicant) had been unfairly dismissed from his employment with the respondent. In that decision I indicated that the question of remedy would be dealt with in a subsequent decision and the parties were directed to file submissions addressing ss. 392 and 393 of the Fair Work Act 2009 (Cth) (the Act) by 20 June 2017. Copies of these sections of the Act were provided to the parties.
On 15 June 2017, the applicant provided his submissions and copied in the respondent as directed.
The respondent did not file any material by the close of business on 20 June 2017. My Associate telephoned the respondent’s landline telephone and was advised no one was available to speak and was given Mr Mansour’s mobile telephone number. A voice message regarding the non-filing of submissions on the question of remedy was left as there was no answer when the mobile was called. To date no submissions have been received from the respondent addressing ss. 392 and 393 of the Act.
Mr. Duddington advised in his email of 15 June that he was currently earning $780 a week.[1] Mr. Duddington submitted that he should be awarded a sum of $22,140 calculated as the 4 months he was unemployed at $1,200 a week ($19,200) and 7 weeks at $420 ($2,940) being the difference between his old and new wage up until the decision was issued.
Remedy
Section 390(3) of the Act only allows the Commission to order the payment of compensation where the Commission is satisfied that reinstatement is inappropriate and the payment of compensation is appropriate in all the circumstances.
No party sought reinstatement as a remedy and I accept that reinstatement is not appropriate in this matter. Mr Duddington sought compensation for loss of wages.
Section 392 of the Act relevantly provides as follows:
“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.
…
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.”
The established methodology when making an assessment of compensation in unfair dismissal cases is the approach set out in Sprigg v Paul Licensed Festival Supermarket.[2] This approach was further articulated in the context of the current Act in Bowden v Ottrey Homes Cobram and District Retirement Villages.[3] I have adopted this approach.
The first step to be taken is to consider s.392(2)(c), to determine what the applicant would have received, or would have been likely to receive, if the applicant had not been dismissed. In Bowden, citing Ellawala v Australian Corporation,[4] this was described in the following way:
“[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:
‘... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.’
[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the ‘anticipated period of employment’...”[5]
Once this first step has been undertaken, various adjustments are made in accordance with s.392 including taking account of income earned since dismissal, contingencies, any reduction on account of the employee’s misconduct and the application of the cap of six months’ pay. This approach is subject to the overarching requirement to ensure that the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case.[6]
In this case, the applicant’s evidence was that despite his best efforts, he was unable to obtain alternate employment for a period of four months, after which he obtained casual employment. The respondent did not dispute this evidence. Mr Duddington’s evidence was that he loved his job and that he was not looking at applying for work elsewhere at the time of his dismissal.
Having heard the evidence of both parties and having regard to the vagaries of the restaurant trade I consider, but for his termination, Mr Duddington would have remained in employment for a further period of at least 6 months.
Remuneration that would have been received if the dismissal had not occurred (s.392(2)(c))
At the time of termination as the respondent’s Restaurant Manager, Mr Duddington was earning a wage of $1,200 per week. This salary would have continued to have been received during the anticipated period of employment discussed above, giving a total of $31,200.
Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f)
Mr Duddington advised that, after a 4 month period of unemployment, he has obtained casual employment earning, on average, $780 per week for a 30 hour week. This results in earnings and anticipated earnings of 8 weeks at $780 per week, being a total of $6,240.
Mitigation efforts (s.392(2)(d))
Mr Duddington was able to demonstrate that he actively sought work elsewhere in an effort to mitigate his loss.
Length of service (s.392(2)(b))
Mr Duddington had been employed for approximately one and a half years with the respondent prior to his dismissal. This is a relatively short period of service and is a relevant factor in reducing any awarded amount, which I assess warrants a 25% deduction in any award of compensation.[7]
Viability (s.392(2)(a)) and Instalments (s.393)
As stated above, there was no submission from the respondent regarding incapacity to pay the loss sought by the applicant or that it should be paid in instalments.
Other matters (s.392(2)(g))
Mr Duddington received no notice or payment in lieu of notice. As summary termination was not justified he would have been entitled to two weeks’ notice if terminated for misconduct with notice.
Misconduct (s.392(3))
Where the Commission is satisfied that the misconduct of an employee has contributed to the employer’s decision to dismiss it must reduce the amount it would otherwise have ordered by an appropriate amount on account of the misconduct.
I have found that a valid reason for termination existed for telling the owner of the business, to leave the restaurant on a number of occasions, which was sufficiently disrespectful enough to amount to a valid reason for his dismissal.
I consider that a further deduction of 25% is appropriate in the circumstances.
Compensation cap (s.392(5))
Having assessed Mr Duddington’s immediate loss as six months’ salary, being $31,200, less the $780 per week earned over 8 weeks during this period, being a sum of $6,240 to be deducted from the potential earning of $31,200, this results in a figure of $24,960.
Deducting 25% for the minimal length of service and 25% for Mr Duddington’s contributory misconduct results in a final compensation amount of $12,480.
This amount is under the compensation cap of 26 weeks’ remuneration.[8]
Conclusion
The amount of compensation to be awarded is $12,480 less deduction of any tax as required by law, to be paid within 21 days.
A separate Order giving effect to this conclusion is attached.
DEPUTY PRESIDENT
Final written submissions:
15 June 2017
Applicant’s submissions on compensation
[1] Email of 15 June 2017, although at the hearing it was stated to be an average of $750 per week PN608
[2] Print R0235, (1998) 88 IR 21
[3] [2013] FWCFB 431; 229 IR 6
[4] Ellawala v Australian Postal Corporation, Print 55109
[5] [2013] FWCFB 431 at [24]
[6] Smith v Moore Paragon Australia Ltd PR942856, [2004] AIRC 57; (2004) 130 IR 446 at [32]
[7] Sprigg v Paul’s Licenced Supermarket 88 IR 21 at 33 where it was held that service of 10 years favoured an order for compensation and that there should be no diminution of any amount awarded based on the length of service
[8] S.392(6)
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