Brett Steed v Active Crane Hire Pty Ltd
[2023] FWC 533
•3 MARCH 2023
[2023] FWC 533
The attached document replaces the document previously issued with the above code on 3 March 2023.
Paragraph 22 has been updated.
Associate to Deputy President Boyce
Dated 3 March 2023
| [2023] FWC 533 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Brett Steed
v
Active Crane Hire Pty Ltd
(U2022/4290)
| DEPUTY PRESIDENT BOYCE | SYDNEY, 3 MARCH 2023 |
Application for an unfair dismissal remedy — Applicant’s dismissal found to be harsh, unjust, and unreasonable - reinstatement inappropriate – award of compensation appropriate remedy - determination of compensation amount to be awarded.
Introduction
In my decision in Brett Steed v Active Crane Hire Pty Ltd [2023] FWC 15 (25 January 2023) (Liability Decision), I found that the Applicant was unfairly dismissed by the Respondent, and that compensation is an appropriate remedy.[1] This decision concerns the calculation of the amount of compensation to be awarded to the Applicant.
Section 392(2) of the Fair Work Act 2009 (Act) requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement, including:
(a) the effect of any order upon the viability of the Respondent’s enterprise;
(b) the length of the Applicant’s service;
(c) the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;
(d) the efforts of the Applicant (if any) to mitigate the loss suffered by him because of the dismissal;
(e) the amount of any remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation;
(f) the amount of any income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the Commission considers relevant.
I consider all of the circumstances of the case below, noting that the following aspects of the Liability Decision form an inherent part of such circumstances:
a) There was a finding as to existence of a “valid reason” for the Applicant’s dismissal relating to his ‘conduct’ in being asleep on duty on 7 April 2022 (i.e. irrespective that the Respondent may have wrongly characterised such conduct as a ‘performance issue’ at the time of the Applicant’s dismissal);[2]
b) Putting aside that the Applicant was found asleep on duty, the real issue was that the Applicant had no reason to be resting up or escaping from inclement weather (including rain) in the aft of a truck at the Respondent’s depot yard on 7 April 2022. In this regard:
i.the Applicant’s conduct (in purportedly taking shelter in the truck from the rain) is contrary to the Respondent’s inclement weather procedures;
ii.there is always work to do indoors if work in the yard cannot be performed due to bad or unsavoury weather;
iii.there is an undercover table and chairs where employees can rest if they are not working in the yard or taking a break (due to bad or inclement weather or otherwise); and
iv.the Applicant did not notify his supervisor or any other employee working that day that he was removing himself to the aft of a truck.[3]
c) There was a total absence of procedural fairness in effecting the Applicant’s dismissal.[4]
d) Had the Respondent effected the Applicant’s dismissal in a procedurally fair manner, it is unlikely that I would have found his dismissal harsh, unjust or unreasonable (i.e. given the nature of the valid reason for the Applicant’s dismissal).[5]
Viability (s.392(2)(a))
The Respondent is a small to medium sized business. There is no evidence (nor were any submissions made) that an order of compensation in favour of the Applicant would impact upon the viability of the Respondent’s enterprise. I do not vary any compensation amount by reference to s.392(2)(a) of the Act.
Length of service (s.392(2)(b)); Mitigation efforts (s.392(2)(d))
The Applicant had 16 months full time service with the Respondent prior to his dismissal. Despite this being a very short period of employment with the Respondent, I make no adjustment in the amount of compensation on this account.
Whether an employee has acted reasonably to mitigate their loss will depend upon all of the circumstances.[6] The evidence before me is that the Applicant has made reasonable attempts to mitigate his loss. I consider that in all of the circumstances, the Applicant has acted reasonably to mitigate his loss and do not reduce the amount of compensation on the basis of the Applicant’s mitigation efforts.
Remuneration that would have been received, or would have been likely to receive (s.392(2)(c)); Remuneration earned (s.392(2)(e)); Income reasonably likely to be earned (s.392(2)(f))
The Applicant submits that there is nothing to suggest that the Applicant’s employment with the Respondent would not have continued well beyond his dismissal date of 7 April 2022 had he not been unfairly dismissed. In support of this submission, the Applicant identifies that he did not have a history of poor performance or misconduct during the course of his 16 months’ employment with the Respondent, and that he had always complied with the Respondent’s policies and procedures and all reasonable directions to perform work.
In his evidence, the Applicant says that but for his unfair dismissal he had every intention of remaining employed by the Respondent for many more years to come and becoming entitled to long service leave.
The difficulty with the Applicant’s evidence and submissions is that they ignore and wholly fail to recognise that I have found that his dismissal was for a valid reason. My finding as to the dismissal being unfair rests upon the total absence of procedural fairness in effecting his dismissal, not the absence of a valid reason for his dismissal. The Applicant’s evidence at the liability hearing was that he was justified in taking shelter in the aft of a truck during a period of inclement weather. I found that not only was the Applicant asleep on duty, but that he also had various other options to take shelter, and that he had failed to notify anyone else that he was purportedly taking shelter in the aft of a truck during working time (whilst other employees in the same yard continued to work). This is not a case in which the Applicant acknowledged the other options available to him (other than being in aft of a truck), explained his failure to notify other employees of his whereabouts (whilst in the truck), or otherwise expressed any contrition or remorse for his conduct (either in his evidence at the liability hearing, or in his supplementary evidence filed on the question of compensation).
The Applicant has also submitted that his conduct did not warrant dismissal without or with notice, and that the Respondent had other options, such as issuing him with a warning, rather than dismissing him. Whilst the option of a warning was of course available, it is not the role of the Commission to stand in the shoes of an employer and decide what it would have done in the circumstances. Indeed, in this case, the Respondent has been confronted by not only the Applicant sleeping on duty, or engaging in a dereliction of his duties and telling no one about it, but also the Applicant denying that he was asleep on duty (and otherwise seeking to justify that he was doing no wrong by removing himself from work to the aft cabin of a truck). Further, despite having had every opportunity to provide information (or justification) for his conduct throughout these unfair dismissal proceedings, the Applicant’s position has remained that to which he stated at the time of his dismissal (i.e. he was not asleep in the truck, and he was justified in taking shelter in the truck because of inclement weather).
I reject the Applicant’s submissions and evidence as to his likely tenure in the Respondent’s employment post his dismissal for a valid reason (for the reasons set out in paragraph [9] of this decision). To the extent that the Applicant’s likely tenure in the Respondent’s employ is based upon a contention that the Applicant should have been warned instead of dismissed, I equally reject same (for the reasons set out in paragraph [10] of this decision). In my view, but for his unfair dismissal, the Applicant would have likely remained employed for a reasonable period of time in which he would have been afforded procedural fairness. I assess this period (generously) as being no longer than three weeks.
I note that it is agreed between the parties that:
a) the Applicant earnt the gross sum of $52,380.55 with the Respondent in the six-month or 26-week period prior to his dismissal (7 October 2021 to 7 April 2022), including overtime. This represents an average weekly gross sum of $2014.64 per week. For calculation purposes, I find that this is the amount that the Applicant is likely to have earned (or received) before tax each week in the relevant period of six months post his dismissal if he had remained employed by the Respondent[7];
b) the Applicant was paid (received) the amount of $3,544.50 gross from the Respondent upon his dismissal (representing 2 weeks’ notice);[8]
c) since his dismissal on 7 April 2022, the Applicant has been paid (received) income for work performed by him with other employers/entities in the gross amount of $20,654.62 (for the six-month or 26-week period from 7 April 2022 to 7 October 2022);
d) upon his dismissal, and post his dismissal, the Applicant received the gross sum of $24,199.12 ($3,544.50 (notice upon dismissal) + $20,654.62 (earnings post dismissal in the six-month period 7 April 2022 to 7 October 2022); and
e) the Applicant was or would have been entitled to 10 percent superannuation on his ordinary time earnings between 7 April 2022 and 30 June 2022 (around 2.5 months), and 10.5 percent superannuation on his ordinary time earnings between 1 July 2022 and 7 October 2022 (around 3.5 months).[9]
Other matters (s.392(2)(g))
The Respondent has identified that it contributed $2,950 during the course of the Applicant’s employment into a redundancy trust fund/account in the name of the Applicant. As I understand it, an employee may access such funds post the termination of their employment with a contributing employer (i.e. an employee’s dismissal (termination) need not be a redundancy for such funds to be accessed, despite a fund calling itself a redundancy trust). In my view, there is no reason as to why such contributions would not be classified as a deduction from any compensation awarded to an applicant in an unfair dismissal proceeding (i.e. just as any payment of severance or redundancy paid by an employer directly to an employee would be an income received deduction). In other words, income is income, and there is simply no difference between a severance or redundancy amount paid directly to an employee by an employer, and an amount remitted to a redundancy trust fund that is held by that fund on behalf of an employee, or can otherwise be accessed by the employee (at a later time) upon or post their termination of employment with a relevant employer. That said, I have determined not to make a deduction in this case in respect of the $2,950 paid into the Applicant’s redundancy trust fund because I do not consider that I currently have appropriate evidence before me as to the operation of the relevant redundancy trust fund as it applies to the Applicant.
No matters have been brought to my attention that would reduce the amount of compensation to be awarded to the Applicant on the basis of contingencies. I decline to make any reduction to the compensation payable to the Applicant on the basis of contingencies.
Misconduct (s.392(3))
In determining the amount by which it is appropriate to reduce an order for compensation on account of misconduct, the Commission must consider, amongst other things, whether the Applicant engaged in misconduct and, if so, whether that misconduct contributed to the Respondent’s decision to dismiss the person. A Full Bench of this Commission has observed that, “[t]he section seems to require such consideration even if the FWC has found there was no valid reason for the person’s dismissal.”[10] However, the Full Bench goes on to say that, “if there was no valid reason for the dismissal we think that may be relevant to the FWC’s decision as to the ‘appropriate’ amount by which to reduce the amount of compensation the FWC would otherwise order.”[11]
I have found that the Applicant’s dismissal on 7 April 2022 was for a valid reason, being sleeping on duty (or dereliction of duty). I am satisfied that the Applicant engaged in misconduct during his employment with the Respondent (on 7 April 2023), or more relevantly, engaged in misconduct that contributed to the Respondent’s decision to dismiss him. Notwithstanding this, given that I have determined that the Applicant would have only remained employed for a three-week period post his dismissal (see paragraph [11] of this decision), I decline to reduce the amount of compensation payable to the Applicant based upon his misconduct.
Shock, Distress (s.392(4))
The amount of compensation that I award does not include a component for shock, humiliation or distress.
Application of the Sprigg formula
As noted by a Full Bench of this Commission, “[t]he well-established approach to the assessment of compensation under s.392 of the Act… is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).[12] This approach was articulated in the context of the Act in Bowden v Ottrey Homes Cobram and District Retirement Villages.[13]“[14]
The approach in Sprigg is as follows:
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. Workers’ compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation ordered.
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.
Step 1 of the Sprigg formula
I have estimated the remuneration the Applicant would have received, or would have been likely to have received, if the Respondent had not terminated the employment to be $6,043.92 on the basis of my finding that the Applicant would likely have remained in employment for a further period of three weeks ($2,014.64 × 3). This estimate of how long the Applicant would have remained in employment is the “anticipated period of employment”.[15]
Step 2 of the Sprigg formula
I have found that the actual amount of remuneration received or earned by the Applicant for the six-month period post his dismissal was $24,199.12.
Only monies earned since termination for the anticipated period of employment are to be deducted.[16] I therefore deduct the sum of $24,199.12 from $6,043.92, leaving a negative amount.
Step 3 of the Sprigg formula
I have considered the impact of contingencies on the amount earned by the Applicant for the remainder of the anticipated period of employment,[17] and made no deduction.
Step 4 of the Sprigg formula
I have considered the impact of taxation, however, make no adjustment in respect of taxation.
Conclusion in respect of the Sprigg formula
Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all of the circumstances of the case.” I accept that no compensation being paid to the Applicant in respect of his unfair dismissal is inappropriate in all of the circumstances. I have therefore decided to adjust the amount of compensation to be awarded to the Applicant to three weeks’ pay, being the gross amount of $6,043.92, plus 10.5 percent superannuation on this amount. I am satisfied that this amount of compensation takes into account all the circumstances of this case as required by s.392(2) of the Act.
Compensation cap (s.392(5) & (6))
The gross amount of $6,043.92 is less than the compensation cap of 26 weeks’ pay, and less than $52.380.55 (see paragraph [12(a)] of this decision). I do not consider that any further adjustment or reduction of this amount is necessary.
Instalments (s.393)
The Respondent did not apply to pay any award of compensation by instalments. No order will be made to that effect.
Conclusion on remedy
In my view, the compensation figure arrived at in this case does not yield an amount that is clearly excessive or clearly inadequate. I am satisfied that a remedy of compensation in the gross sum of $6,043.92 in favour of the Applicant, along with the payment of 10.5 percent superannuation on that amount, is appropriate in all of the circumstances of this case and consistent with a “fair go all round”.[18] Orders to this effect will be issued contemporaneously with this decision.
I note that the Applicant has appealed my decision not to reinstate him to his former employment with the Respondent. The compensation order that I make in this decision will take effect 14 days post the resolution of that appeal (should it be dismissed), or as otherwise ordered by the Full Bench in that appeal.
DEPUTY PRESIDENT
Hearing:
Sydney, 28 February 2023.
Appearances:
Mr Adam Grumley, Legal Officer, Transport Workers’ Union, appeared on behalf of the Applicant.
Mr Hermann Buchberger, Managing Director, appeared for the Respondent.
[1] Brett Steed v Active Crane Hire Pty Ltd [2023] FWC 15, at [48]-[49].
[2] Ibid, at [13], and [21] to [28]. I note that the Applicant’s submissions accept that the Applicant’s dismissal was a question of his conduct on 7 April 2022, notwithstanding that the Respondent ‘labelled’ such conduct as concerning a performance issue (see Applicant’s written Submissions, dated 13 July 2022). In any event, there is no basis to hold the Respondent to its label for the purposes of assessing valid reason or compensation.
[3] Ibid, at [26].
[4] Ibid, at [43].
[5] Ibid, at [48].
[6] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), at [54].
[7] Act, ss. 392(2)(c) and 392(6).
[8] Hearing held on 28 February 2023.
[9] The monetary sums identified were confirmed by the parties in email correspondence to Chambers post a hearing on 28 February 2023.
[10] Read v Gordon Square Child Care Centre Inc [2013] FWCFB 762, at [83].
[11] Ibid.
[12] (1998) 88 IR 21.
[13] 2013] FWCFB 431.
[14] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, at [16].
[15] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), at [34].
[16] Ibid.
[17] Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), at [39].
[18] Section 381 of the Fair Work Act 2009.
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