Ben Zygmant v Braaap Pty Ltd T/A Braaap Motorcycles

[2015] FWC 7942

[2015] FWC 7942

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Ben Zygmant
v
Braaap Pty Ltd T/A Braaap Motorcycles
(U2015/2511)

COMMISSIONER LEE MELBOURNE, 24 NOVEMBER 2015

Application for relief from unfair dismissal - determined dismissal harsh, unjust or unreasonable - subsequent decision on remedy - compensation ordered.

[1] In a Decision issued on 15 September 2015 I determined that the Applicant in this matter, Mr. Zygmant had been unfairly dismissed. I did not have sufficient information at the time of the hearing to determine remedy and I invited the parties to make further written submissions on that question.

[2] The parties have filed written submissions on the question of remedy in accordance with the directions. Neither party has sought a hearing.

[3] The relevant provisions of the Act pertaining to remedy are contained in s.390 of the Act:

“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.”

[4] It is also necessary to consider the Objects of Part 3-2 of the Act especially s.381(c) of the Act which provides that an object of that Part of the Act is to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

[5] The presumption in the legislation is that, should a dismissal be found to be unfair, that reinstatement is the primary remedy and that compensation is a secondary consideration if reinstatement is not appropriate.

[6] In this matter, the Applicant does not seek reinstatement. The Applicant submitted that reinstatement was not sought as the conduct of the Respondent during proceedings had severely tainted the relationship. The Applicant further submitted that given the low level of supervision received while he was employed, that he would not be able to adequately learn the skills required of a qualified mechanic in a safe environment and that he had now gained employment as a Tyre Fitter. The Respondent also objects to reinstatement on the grounds that trust and confidence has broken down. In all of the circumstances I consider that reinstatement is not an appropriate remedy.

[7] Having determined that reinstatement is not appropriate I must consider what compensation, if any, is payable, in lieu of reinstatement.

[8] The Act provides for compensation as a remedy for unfair dismissal.

“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 $66,500 from 1 July 2014

(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.”

“393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”

[9] Both parties have made submissions as to the amount of compensation to be ordered. The Applicants’ submission is that the amount of compensation that should be ordered, taking into account the various considerations is in the amount of $4,376.01. The Respondent submits that after a consideration of the relevant factors that minimal, if any, compensation should be awarded but that if compensation is deemed appropriate, the amount should not exceed $4,072.78.

[10] In determining the amount of compensation to be awarded, if any, I must have regard to all the circumstances of the case including each of the paragraphs in s.392(2) of the Act as set out above. No one matter is paramount but regard must still be had to each of them. 1

[11] The general approach to the calculation of compensation was well set out by the Full Bench in Tabro Meat Pty Ltd v Kevin Heffernan 2  and I will follow that approach in determining this matter.

Section 392(2)(c) - the remuneration that the person would have received or would have been likely to receive, if the person had not been dismissed.

[12] The Applicant’s annual remuneration at the time he was dismissed was $33,592.00 plus 9.5% superannuation. 3 Prior to his dismissal, the Applicant was within days of completing his first year apprenticeship. As a second year apprentice, the Applicant would have been entitled to an increase in wages to $656.90 per week or $34,158.80 per annum plus 9.5% superannuation. I will use this amount as the basis for calculating the amount of compensation to be awarded in this case.

[13] The Respondent submits that the Applicant would not have continued in employment for an extended period of time and specifically, not beyond a further 6 months. I have had regard to the evidence that the Applicant was keen to complete his apprenticeship and performing well at TAFE. However, the evidence also suggests that the employment relationship was likely to come to an end within a short period of time, particularly as a result of the Respondent failing to take the necessary steps to put in place proper supervision over the Applicant in his apprenticeship. There was clear evidence that the employment relationship was under significant stress. I think it likely that the Applicant would have continued in employment had he not been dismissed for a further 3 months.

[14] I think it is reasonable to assume that, but for the dismissal, that in all of the circumstances the employment relationship would have continued for a further period of 3 months.

[15] Accordingly, I calculate the remuneration that the Applicant would have received or would have been likely to receive, if his employment had not been terminated, at $8,539.70 plus 9. 5% superannuation.

Section 392(2)(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 s.392(2)(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

[16] In the circumstances of this matter, subsections 392(2)(e) and 392(2)(f) can be dealt with together. The Applicant gave evidence that he secured employment as a Tyre Fitter on 4 March 2015. He works approximately 40 hours per week on average and is engaged as a casual employee. The Applicant is earning approximately $800.00 per week as a Tyre Fitter.

[17] At the time he was dismissed, the Applicant was paid two weeks in lieu of notice in the amount of $1,292.00.

[18] In Ellawalla v Australian Postal Corporation 4 , with respect to a precursor provision, the Full Bench stated that “[o]nly monies earned during the period from termination until the end of the anticipated period of employment are deducted.”

[19] The anticipated period of employment was 3 months or until 5 April 2015. The monies earned during that period are the $3,520.00 earned during that period as a Tyre Fitter 5 and the $1,292.00 paid in lieu of notice. This is a total amount of remuneration earned of $4,812.00. Deducting this amount from the provisional amount of compensation of $8,539.70 leaves an amount of $3,727.70 plus 9.5% superannuation less tax.

Section 392(2)(g) - any other matter that FWA considers relevant

[20] Ordinarily a deduction for contingencies is appropriate. 6 However, contingencies only apply to the anticipated period of employment.7 The anticipated period of employment had concluded prior to the hearing taking place in this matter. A deduction for contingencies is not appropriate.

[21] The Applicant submits that the accrual of leave for the Applicant during the anticipated period of leave should be considered. I agree that in the circumstances of this case, where the deduction of remuneration earned includes a casual loading which is to compensate for, among other things, annual leave, that the leave that would have been accrued (one week) should be considered. I will therefore add the amount of one week’s leave, being in the amount of $656.90. This leads to a provisional amount of compensation of $4,384.60. There are no other matters that are relevant to the determination of compensation other than ss.392(2)(a),(b) and (d), 392(3) and 392(5) of the Act. I will turn to those factors now.

Section 392(2)(a) - the effect of the order on the viability of the employer’s enterprise

[22] Evidence should be produced in order for the Commission to properly consider this issue. 8

[23] The Respondent did make submissions that any compensation amount ordered will place hardship on the Respondent. However, a mere submission that difficulties for the business will occur is not sufficient. 9

[24] I am not satisfied that the order will have an effect on the viability of the Respondent’s enterprise and I make no deduction on that basis.

Section 392(2)(b) - the length of the persons service with the employer

[25] The Applicant was employed by the Respondent for approximately one year. This is not a particularly long period of service and needs to be considered when determining the amount of compensation ordered. I think that the relatively short period of service should lead to a deduction of some amount.  10 I think it is appropriate to deduct a further amount of 10%. This leads to a deduction of $438.48 from the amount of $4,384.80. This leaves a provisional amount of compensation of $3,946.32

Section 392(2)(d) - the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[26] Evidence was provided by the Applicant as to the efforts he went to in the period after the dismissal to secure alternative employment. His evidence was that he made extensive efforts to secure employment. That evidence was canvassed in the supplementary witness statement tendered and is not contested. I am satisfied that the Applicant made substantial efforts to mitigate the loss and there is no basis for a further deduction for this reason.

Misconduct (s.392(3))

[27] I have found that the Applicant was not dismissed for a valid reason and that no misconduct was in evidence. Therefore there is no basis to make a further deduction for misconduct.

Compensation Cap (s.392(5))

[28] The compensation cap is set in section 392(5) of the Act. The amount ordered to be paid by the Commission must not exceed the lesser of:

• the total amount of remuneration either received by the person, or to which the person is entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, and



• half the amount of the high income threshold immediately before the dismissal.

[29] The amount of compensation under consideration is considerably less than the relevant compensation cap in this case, being the amount of remuneration to which the person is entitled for the 26 weeks before the dismissal.

Conclusion and order as to remedy

[30] I find that reinstatement is not an appropriate remedy in this case.

[31] I find that an order for compensation is appropriate.

[32] I am satisfied that an order for payment of compensation by the Respondent of $3,946.32 plus 9.5% superannuation less tax as required by law, to the Applicant in lieu of reinstatement is appropriate in all the circumstances of the case. It accords a fair go all round to both the Respondent and the Applicant.

[33] The compensation payment, less any required deduction in taxation, is to be made within 14 days of this decision. An order 11  will be issued concurrently with this decision.

COMMISSIONER

Final written submissions:

Applicant, 28 September 2015

Respondent, 13 October 2015

 1   Tempo Services Limited v T.M. Klooger and Others, PR953337, [22]

 2   [2011] FWAFB 1080.

 3   Witness Statement of Jahangir Fazady dated 9 June 2015, annexure JF6.

 4   Print S5109.

 5   Four weeks and two days as Tyre Fitter at $800.00 per week equates to $3,200.00 for four weeks added to 0.4 of $800.00 which is $320.00 leading to a total amount of $3,520.00.

 6   Slifka v J W Sanders Pty Limited (1995) 67 IR 316 at 328.

 7   Enhance Systems Pty Ltd v Cox (unreported, AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001) PR910779 [39]; citing Ellawala v Australian Postal Coproration (unreported AIRC, Ross VP, Williams SDP, Gay C, 17 April 2000) Print S5109 [43]

 8   D.A. Moore v Highpace Pty Ltd (unreported, AIRCFB, Boulton J, Watson SDP, Whelan C, 18 May 1998) Print Q0871

 9   K Beames v BDRP Falconer Pty Ltd (unreported, AIRC, Hamitlon DP, 28 March 2002) PR916075

 10   Samaka Sophia Ndege v World Gym Sunshine Pty Ltd, [2014] FWC 451, [32]

 11   PR574271

Printed by authority of the Commonwealth Government Printer

<Price code C, PR574083>