Blake O'Keeffe v The Trustee for Dunshea Family Trust
[2022] FWC 298
| [2022] FWC 298 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Blake O’Keeffe
v
The Trustee for Dunshea Family Trust
(U2021/7725)
| Deputy President Lake | BRISBANE, 14 FEBRUARY 2022 |
Application for an unfair dismissal remedy – where there was no valid reason for the Applicant’s dismissal – where the Applicant was not afforded any procedural fairness – where remedy sought and awarded
On 18 January 2022, I decided that Blake O’Keeffe (the Applicant) had been unfairly dismissed from his employment with The Trustee for Dunshea Family Trust (the Respondent) within the meaning s.394 of the Fair Work Act 2009 (the Act).[1] In short, there was no valid reason for dismissal and no procedural fairness was afforded to him. I then issued directions requiring that the parties file any material on which they sought to rely regarding what appropriate remedy should be ordered.
Section 390(3)(b) of the Act provides that the Commission may only issue an order for compensation if it is appropriate in all the circumstances. Compensation as a remedy is designed to compensate an unfairly dismissed employee, in lieu of reinstatement, for losses reasonably attributable to the unfair dismissal, within the bounds of the applicable statutory cap on compensation.[2]
Having regard to the circumstances of this case, I agree that reinstatement is no longer possible given the way the Applicant was dismissed. The death of the family pet and the comments by the Respondent that the Applicant is “someone who he despises, someone who does not care about others” resulted in a significant and permanent fracturing of the working relationship. Given I found that there was neither a valid reason nor a proper process followed by the Respondent, it is necessary for me to consider what order for payment of compensation to the Applicant is appropriate, having regard to the criteria under s.392(2) of the Act.
The established approach to assessing compensation in unfair dismissal cases was set out in Sprigg v Paul Licensed Festival Supermarket,[3] but has been applied and developed by Full Benches of the Commission in the context of the current Act.[4] In short, the authorities indicate that assessing compensation involves a four step process:
“Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).
Step 2: Deduct monies earned since termination.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.” [5]
In Bowden v Ottrey Homes Cobram and District Retirement Villages, the Full Bench noted that in relation to the fourth step, the usual practice is to settle a gross amount and leave taxation for determination.[6]
Applicant’s submissions
The Applicant submits an appropriate amount of compensation in this matter would be an amount of 26 weeks’ wage calculated using the Applicant’s gross weekly earnings at the time of dismissal the Applicant being approximately $701.25. The Applicant submits that, had he not been dismissed, he would have reasonably remained employed for a period of 26 weeks, being a gross amount of $18,232.50.
In urging me to apply s.392 of the Act and the Sprigg formula to reach such a figure, the Applicant points to the Full Court’s decision in He v Lewin, where an employee with approximately 8 years’ service was summarily dismissed after making complaints and failing to follow a direction.[7] There Full Court awarded the employee an additional 13 weeks’ wage on appeal (for a total of 26 weeks).[8] In Greenland v Bacchus Marsh Coaches Pty Ltd T/A Bacchus Marsh Coaches, a bus driver with 7 years’ service was summarily dismissed for alleged serious misconduct.[9] After the employee’s dismissal was held harsh, unjust, and unreasonable because the employer’s reasons for dismissal were not sound, defensible, or well founded, Wilson C relevantly held that, had the employee not been dismissed, they would have received, or would have been likely to have received, 17 weeks’ wage.
Here, the Applicant contends that given his close relationship with Mr Dunshea, having worked for his different enterprises, it is likely that he would have continued to be employed by him for a significant period. Given that like in the authorities referred to, he too had a lengthy period of employment, was summarily dismissed, and his dismissal found harsh, unjust and unreasonable, the Applicant asserts he should be awarded 26 weeks’ pay.
Following his dismissal, the Applicant obtained alternative employment, albeit in a lower paying role, commencing on 23 September 2021. Within the period between his dismissal and the filing of these submissions, the Applicant earned a gross amount of $7,872.78.
As to contingencies, the Applicant does not think any deduction should be made for contingencies given he has entered into a lower paying role. As the conduct in question was accidental in nature and without any malice or intent, the Applicant submits no deduction should be made for misconduct.
Respondent’s submissions
The Respondent submits that an award of 26 weeks compensation, even if reduced by the Applicant's post dismissal earnings, is excessive and surpasses the overarching objectives of the Act. The Respondent asserts that a remedy of four weeks ordinary pay would be more appropriate given that the Respondent is a small business and Mr Dunshea attempted to comply with the Small Business Dismissal Code in a time of great personal stress. His failure to comply with the Act was not a blatant disregard for the law or the Applicant. Further, the Respondent does not have many employees or a dedicated human resources advisor, turns a low profit. Consequently, as would be apparent to any reasonable person, any amount of compensation will have a significant impact on the viability of the business.
Additionally, the Respondent notes that the Applicant did not disclose why he is earning less in his current role, or any further attempts taken to mitigate his last. The Respondent also submits that the Applicant was not an employee earning a high income nor was he required to hold any skill set and so would likely have been able to find alternative work without much difficulty.
Consideration of the factors in s.392
I turn now to the factors I must consider under s.392(2) of the Act.
Viability (s392(2)(a))
The Respondent contends that the making of a significant compensation order in favour of the Applicant will adversely impact on the viability of its business enterprise. The business is a small fencing business located in a regional area. This factor weighs against ordering a substantial award of compensation.
Length of service (s392(2)(b))
The Applicant had worked for the Respondent for approximately seven years, initially casually and then in a full time capacity since leaving school in 2016. There had been no substantial issues with his performance or conduct until the incident with Crackers. This factor is in favour of a substantial award of compensation.
Remuneration the Applicant would have received, or would likely have received, if they had
not been dismissed (s 392(2)(c))
As I found in my decision on the merits, the Respondent did not have a valid reason to dismiss the Applicant and also failed to follow any proper disciplinary procedure. Mr Dunshea had described the Applicant as “part of the family” and no warnings had ever been issued in respect of the Applicant’s conduct. It is thus entirely feasible that, had the Applicant not been dismissed following the Crackers incident, he would have remained employed by the Respondent for a significant period. Of course, s.392(2)(c) requires me to contemplate this hypothetical scenario when considering how long the Applicant would have been employed by the Respondent had he not been unfairly dismissed. It is a matter of conjecture, however, given the Applicant’s length of service and the lack of any previous disciplinary dealings, I consider that he would likely have continued to be employed by the Respondent for at least another 26 weeks. This suggests that a substantial award of compensation would be appropriate.
Mitigation efforts and remuneration earned (s 392(2)(d) and (e))
The Applicant has taken steps to mitigate his loss. Though he was unemployed for approximately seven and a half weeks following his dismissal, he has been able to secure alternative work. He commenced new employment on 23 September 2021, though that work has a lower daily rate. He has earned a total of $7,872.00 since being terminated on the 9 August 2021.
I note the Respondent’s comments about the Applicant not being formally qualified or a high-income earner and therefore easily employable. However, equally the fact that the Applicant had no other qualifications which may have limited his ability to secure alternative employment.
Any other relevant matter (s 392(2)(g))
Section 392 goes on to provide that misconduct by the Applicant reduces the amount of compensation payable to them.[10] Given my findings above, this factor is irrelevant. It must also be noted that I cannot award any compensation for shock, distress or humiliation, or other analogous hurt, caused to the Applicant by their dismissal.[11] I also note that given the Applicant earned below the high income threshold and therefore the compensation cap is 26 weeks’ compensation. I make no deduction for tax.
Contingencies
Pursuant to the Spriggs formula, I must consider whether to discount the amount of compensation for contingencies. This step is a means of accounting for the possibility of the occurrence of contingencies to which the Applicant was subject, which might have brought about some change in earning capacity or earnings. While a 25% discount was applied in Sprigg, this amount was decided based on the facts of the case rather than a statement of what is generally appropriate. In assessing the impact of contingencies, the Commission must exercise its broad discretion and consider both favourable and unfavourable contingencies. It is important to note that contingencies only apply to the anticipated period of employment.
I have applied a 20% discount to account for the vicissitudes of life, given the Applicant was a young employee who may have decided to pursue another role or career path. Similarly, given the unpredictability of the pandemic, it may be that the business could have suffered and make his ongoing employment untenable.
Conclusion
Given the Applicant’s seven year service, unblemished disciplinary record and no evidence of other economic or personal matters that might have disturbed this engagement, I imagine that the Applicant could have been employed for at least another six months. That is where I begin my consideration of an appropriate remedy.
Since his termination, the Applicant had secured alternative employment and had earned a total of $7,872.78. No evidence was provided regarding the type of work and why it was at a lower rate. I note that the Applicant had not been pursuing any vocational training since leaving school and so had only the skills he had learnt on the job with the Respondent. This, coupled with the fact that the circumstances of his termination would have meant he had no statement of service or reference, may have meant his options were limited in respect of finding work.
Taking into account each of the factors in s.392(2) of the Act and applying the Spriggs formula, I am satisfied that the compensation awarded to the Applicant should be as follows.
Had the Applicant been employed for the next 26 weeks, and continued to earn $701.25 per week, he would have earnt $18,232.50 over the course of that period. From that, it is appropriate in this case to discount the income earned by the Applicant during the intervening period ($7872.78), which brings the amount to $10,359.72. It is appropriate to discount that figure by a further 20% for contingencies, which brings the total to $8287.78.
While I accept this amount may be felt sharply by a small regional fence-building business, I am also conscious of the fact that not only did the Respondent have no valid reason for dismissing the Applicant, no process was followed in bringing about the termination. Clearly Crackers was a well-loved member of Mr Dunshea’s family and Mr Dunshea was upset by his death. However, that does not excuse Mr Dunshea’s behaviour. On Friday afternoon, he had told the shocked and remorseful Applicant not to worry about the accidental death of Crackers. By Monday morning, he had turned on the Applicant – a young man who had worked for him since he was a teenager – declaring that the Applicant had turned into someone he despised and dismissed him without warning and without an opportunity to respond. However, taking into account the present circumstances, I consider an order requiring the Respondent pay to the Applicant $8287.78 to be an appropriate and fair outcome between the parties.
No application has been made by the Respondent for any amount of compensation awarded to be paid in the form of instalments.
Accordingly, I order that the Respondent pay to the Applicant $8287.78.
DEPUTY PRESIDENT
[1] [2022] FWC 74.
[2] Deborah Kable v Bozelle, Michael Keith T/A Matilda Greenbank[2015] FWCFB 3512 [17].
[3] Sprigg v Paul Licensed Festival Supermarket (1998) 88 IR 21.
[4] Bowden v Ottrey Homes Cobram and District Retirement Villages [2013] FWCFB 431; Alison Thurston v Bunbury Medical Imaging [2021] FWCFB 280 [32].
[5] Sprigg v Paul Licensed Festival Supermarket (1998) 88 IR 21; see also Ellawala v Australian Postal Corporation PRS5109.
[6] Bowden v Ottrey Homes Cobram and District Retirement Villages [2013] FWCFB 431 [45].
[7] He v Lewin [2004] FCAFC 161 [56] and [59].
[8] He v Lewin [2004] FCAFC 161 [56] and [59].
[9] Greenland v Bacchus Marsh Coaches Pty Ltd T/A Bacchus Marsh Coaches[2013] FWC 7716.
[10] Fair Work Act 2009 (Cth) s.392(3).
[11] Fair Work Act 2009 (Cth) s.392(4).
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