Bryan Nicholas Hartley v CPS NSW Pty Ltd
[2024] FWC 3227
•22 NOVEMBER 2024
| [2024] FWC 3227 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Bryan Nicholas Hartley
v
CPS NSW Pty Ltd
(U2024/8648)
| COMMISSIONER CRAWFORD | SYDNEY, 22 NOVEMBER 2024 |
Application for relief from unfair dismissal – whether genuine redundancy – whether dismissal consistent with Small Business Fair Dismissal Code - dismissal unfair – compensation ordered.
BACKGROUND
CPS NSW Pty Ltd (CPS) operates a plumbing business. Bryan Hartley commenced employment with CPS on around 15 March 2021 as a plumber. Mr Hartley was dismissed by CPS on 8 July 2024. The reason for dismissal is in dispute. CPS says Mr Hartley’s position was made redundant. Mr Hartley alleges he was dismissed because he had raised underpayment issues. Mr Hartley filed an unfair dismissal application on 26 July 2024, which was within 21 days of his dismissal taking effect. Mr Hartley seeks compensation for what he says was an unfair dismissal. CPS submits Mr Hartley’s dismissal was a case of genuine redundancy. CPS also submits it had only 14 employees when Mr Hartley was dismissed, and that the dismissal was consistent with the Small Business Fair Dismissal Code (SBFDC). CPS otherwise submits the Mr Hartley’s dismissal was not unfair and that no compensation should be awarded.
I issued directions for the filing of material and listed a determinative conference/hearing on 13 November 2024 in person. I granted permission for Mr Hartley to be represented by Daniel Garan from Berrigan Doube Lawyers on the basis that would enable the matter to be dealt with more efficiently. This was not opposed by CPS. CPS was represented by Alexandra Gray (Director) and her husband, Christopher Gray (Operations Manager). I heard from the parties about whether the proceeding should be conducted as a hearing or a determinative conference. I decided it was appropriate to conduct a hearing.
EVIDENCE
Mr Hartley
Mr Hartley provided a witness statement dated 27 September 2024 containing his evidence about the relevant events.
Mr Hartley states he had no performance issues during his employment with CPS and had not been advised that his role was at risk of being made redundant prior to 8 July 2024. Mr Hartley states he was working on a worksite in North Sydney prior to his dismissal and that the job had not been completed when he was dismissed on 8 July 2024. Mr Hartley was assigned to work at various residential and commercial worksites during his employment with CPS.
Mr Hartley says he started raising concerns about superannuation contributions with Noah Wright (Supervisor) in March 2024. Mr Hartley states Mr Wright attended the North Sydney worksite on about 20 June 2024 and took the four CPS staff members for a coffee. Mr Wright enquired about whether CPS had been making superannuation contributions and the employees indicated contributions had not been made. Mr Wright stated he would get back to the employees.
Mr Hartley attended a Plumbers’ Union meeting in Alexandria on 1 July 2024. During the meeting the workers in attendance voted in support of a new enterprise agreement and elected Mr Wright as their delegate. The employees also raised underpayment concerns and were provided with a form to complete and submit back to the union. After the meeting Mr Hartley says he stated to other workers on the street that he thinks he is owed around $20,000 and that all employees should submit their claims to the union.
Mr Hartley states he missed a phone call from Mr Gray on 3 July 2024 while he was working. Mr Hartley says he called Mr Gray back and Mr Gray indicated he would give Mr Hartley cash if he was in financial hardship. Mr Hartley says he indicated he would not accept a cash payment and that it had to go “through the right channels.” Mr Hartley states Mr Gray did not specifically refer to his alleged underpayment claims during the call, but he suspected that was why Mr Gray made contact.
Mr Hartley says he spoke with Mr Wright about the phone call during his lunch break and that when he explained what had been said Mr Wright stated Mr Gray “is just not getting it.”
Mr Hartley says Mr Wright sent a text message to the CPS employees on 3 July 2024 inviting employees who had attended the union meeting on 1 July 2024 to submit their underpayment form to him. Mr Hartley sent a form via text message to Mr Wright on 4 July 2024 which claimed he was owed a total of around $24,000 for superannuation, travel allowance, and redundancy contributions to IncoLink. Mr Hartley provided screenshots of the relevant text messages and screenshots of the form that he submitted to Mr Wright.
Mr Hartley states he attended the North Sydney worksite on 8 July 2024 and started working. Jack Pritchard (Leading Hand) then approached him and stated: “both our names are not on the board” and indicated he would call Mr Gray to discuss why. Around 15 minutes later, Mr Pritchard told Mr Hartley that he had been made redundant. After hearing this from Mr Pritchard, Mr Hartley immediately sent a text message to Mr Gray asking if he was in the same situation as Mr Pritchard. Mr Hartley provided a screenshot of this text message. Mr Gray subsequently called Mr Hartley. Mr Hartley asked if he was in the same situation as Mr Pritchard and alleges that Mr Gray stated: “It’s best to pull the pin.” Mr Hartley asked if his last day of work is today, and Mr Gray stated: “yes.”
Mr Hartley states he understood CPS had employees working on at least nine different projects at the time of his dismissal.
Mr Hartley provided evidence about challenging personal and financial circumstances. Mr Hartley also provided evidence that he was suffering from an infected ingrown toenail from 13 July 2024 to 2 August 2024 and provided a medical certificate to confirm the condition. Mr Hartley states he was actively looking for work on employment websites after being dismissed and commenced employment with Jennings Plumbing Services on 2 September 2024. Mr Hartley’s rate of pay in the new employment is the same as that he received from CPS.
I marked Mr Hartley’s statement Exhibit A1. Mr Hartley’s evidence was not challenged in cross-examination by CPS.
CPS
Ms Gray provided a submission containing evidence about CPS’ version of events dated 18 October 2024.
Ms Gray states CPS currently employs 12 staff including herself and her husband. Ms Gray states Mr Hartley was dismissed due to no work being available and that he was informed work was running low prior to being dismissed. Ms Gray states Mr Hartley was informed that he was a daily hire employee when he commenced employment with CPS in March 2021.
Ms Gray states she and her husband met with employees onsite on 25 June 2024 and advised employees that things were “tight.” An impending new enterprise agreement was discussed. Ms Gray raised concerns about union fees under the new agreement.
Ms Gray states a union meeting was held on 1 July 2024 and the employees unanimously endorsed the new enterprise agreement. Ms Gray met with an accountant and financial advisor on 4 July 2024 to discuss the financial impacts of the new agreement and states a decision was made to let some employees go. The workers picked were those working on a project at North Sydney because that job was coming to an end, with only rectifications remaining.
Ms Gray states Mr Hartley contacted Mr Wright on 5 July 2024 to advise that he would not be attending work on that date.
Ms Gray states Mr Hartley attended work on 8 July 2024 without notifying supervisors or management that he was returning to work. Ms Gray states Mr Hartley was then informed during a phone call that unfortunately there was no longer work available and he would be given until the end of the day to pack up his tools. Mr Hartley’s final pay and leave entitlements were processed on 8 July 2024.
Ms Gray gives evidence about the intermittent nature of work in the construction industry and that CPS has not employed anyone since Mr Hartley was dismissed. Ms Gray refers to Mr Hartley being able to access redundancy payments through IncoLink.
I marked the document provided by Ms Gray as Exhibit R1. Ms Gray was cross-examined during the hearing on 13 November 2024.
Mr Hartley
Mr Hartley provided a reply witness statement dated 24 October 2024.
Mr Hartley disputed Ms Gray’s evidence about the number of employees engaged by CPS and states there were 17 employees when he was dismissed. Mr Hartley denies being told work was “running low” and denies being informed he was a daily hire employee. Mr Hartley denies Ms Gray told employees: “things were tight” when she attended the worksite but accepted a meeting was held where CPS’ concerns about the union fees in the new agreement were raised.
Mr Hartley states he advised Mr Wright that he could not attend work on 5 July 2024 because his daughter was unwell but stated he gave no indication that he would not be working the following week.
Mr Hartley denies he has been paid all outstanding entitlements by CPS and states he is still owed superannuation, redundancy pay, and travel allowance.
I marked Mr Hartley’s reply statement Exhibit A2. Mr Hartley’s reply evidence was not challenged in cross-examination by CPS.
CONSIDERATION – INITIAL MATTERS
Dismissal and eligibility to make the application
I am satisfied that Mr Hartley was dismissed at the initiative of CPS on 8 July 2024.
I am satisfied Mr Hartley was a person protected from unfair dismissal because:
· Mr Hartley had completed more than three years of service at the time of his dismissal; and
· The CPS NSW Pty Ltd & CEPU Plumbing Division – NSW Branch Mechanical Enterprise Agreement 2019 – 2023 (2019 Agreement) covered and applied to Mr Hartley’s employment with CPS until his dismissal on 8 July 2024. The CPS NSW Pty Ltd and CPEU Plumbing Division NSW Branch Mechanical (HVAC) Enterprise Agreement 2023 – 2027 (2023 Agreement) was not approved by the Commission until 18 July 2024 and it commenced operating on 25 July 2024. The 2023 Agreement never covered or applied to Mr Hartley because he was dismissed before it commenced operating.
I am required to consider CPS’ argument that Mr Hartley’s dismissal was a case of genuine redundancy before I assess the merits of Mr Hartley’s application. If I do not find Mr Hartley’s dismissal was a case of genuine redundancy I am required to then consider whether Mr Hartley’s dismissal was consistent with the SBFDC, if I determine that CPS had less than 15 employees when Mr Hartley was dismissed. If the SBFDC applied and Mr Hartley’s dismissal was not consistent with the SBFDC, I can then assess the merits of Mr Hartley’s application.[1]
Genuine redundancy
There are three matters that need to be considered to determine whether the definition of a “genuine redundancy” is satisfied in relation to a dismissal.[2]
Firstly, it must be established that CPS no longer required Mr Hartley’s job to be performed by anyone because of changes to its operational requirements. I am prepared to accept on the limited evidence provided by CPS that this element has been satisfied. Ms Gray provided evidence that CPS had 12 employees when she signed CPS’ submissions on 18 October 2024. The evidence of Mr Hartley and Ms Gray indicates CPS had a higher number of employees remaining after Mr Hartley and Mr Pritchard were dismissed. That suggests Mr Hartley has not been replaced and that CPS no longer required as many plumbers as it had employed prior to Mr Hartley’s dismissal.
Secondly, it must be established that CPS complied with the consultation obligations in clause 43 of the 2019 Agreement. I consider it is clear this element has not been satisfied. Ms Gray’s evidence suggests that the increased costs arising from the imminent operation of the 2023 Agreement was the reason for CPS’ decision to reduce the number of plumbers it employed. That is clearly a change to the organisation or structure of CPS and falls within clause 43.1 of the 2019 Agreement. The change clearly had a significant effect on the employees within the meaning of clause 43.9 of the 2019 Agreement because it resulted in the dismissal of Mr Hartley and Mr Pritchard. That means the consultation obligations in clauses 43.2, 43.3, 43.5, and 43.7 of the 2019 Agreement were triggered. I do not consider CPS complied with any of these obligations. The uncontested evidence is that Mr Hartley’s name was removed from a board listing people working on 8 July 2024, followed by Mr Gray telling Mr Hartley in a phone call that “it’s best to pull the pin” and that it was Mr Hartley’s last day. That is not the consultation process required under clause 43 of the 2019 Agreement. This finding means Mr Hartley’s dismissal does not meet the definition of a “genuine redundancy.”
For completeness, I would also not conclude on the evidence that it was not reasonable for Mr Hartley to be redeployed. Mr Hartley was not cross-examined on his evidence that CPS had employees working on at least nine projects at the time of his dismissal. Ms Gray disputed this during her cross-examination but did not provide clear and definitive evidence about the number of projects. It is also conceivable that if a proper process had been followed, other plumbers may have been prepared to take a voluntary redundancy allowing Mr Hartley to remain employed. There is insufficient evidence to properly determine if it would have reasonable for Mr Hartley to be redeployed.
Small Business Fair Dismissal Code
I am marginally satisfied on the evidence that CPS had less than 15 employees when Mr Hartley was dismissed. Ms Gray has maintained this and she presented as a credible witness during the hearing. I do not consider the list of names provided in Mr Hartley’s witness statement to be sufficient evidence to conclude that CPS had 15 or more employees. My finding means I must consider whether the dismissal was consistent with the SBFDC.
Mr Hartley submitted CPS failed to comply “with question 3 of the Code.” However, that appears to be a reference to a checklist produced to assist parties, rather than the actual SBFDC.[3]
In any event, the SBFDC states: “in discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist.” I take this to mean that the SBFDC requires discussions to occur with an employee prior to the final dismissal decision being made and the employee can have a person present to assist in the discussions. CPS did not have any discussions with Mr Hartley prior to his name being removed from the “board” identifying its employees. Mr Hartley had to actively contact Mr Gray to find out what had happened. There were no discussions and the opportunity to have a person present to assist did not arise.
I find that Mr Hartley’s dismissal was not consistent with the SBFDC because of the severely defective procedure CPS followed when terminating Mr Hartley’s employment.
CONSIDERATION - HARSH, UNJUST, OR UNREASONABLE
I have found that Mr Hartley’s dismissal was not a case of “genuine redundancy” and that the dismissal was not consistent with the SBFDC. That means I must proceed to determine whether Mr Hartley’s dismissal was harsh, unjust, or unreasonable taking into account the factors listed in s.387 of the FW Act. Each factor is dealt with below.
Valid reason
In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”[4] and should not be “capricious, fanciful, spiteful or prejudiced.”[5] However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[6]
Although CPS provided minimal evidence regarding why Mr Hartley was dismissed, I accept on balance that there was a valid reason for his dismissal. I accept Ms Gray’s evidence that the increased costs that would arise from the 2023 Agreement triggered the decision to reduce the headcount of employees. I consider that was a valid reason for the dismissal.
Notification of the reason for dismissal
Proper consideration of s.387(b) requires a finding to be made as to whether Mr Hartley “was notified of that reason.” Contextually, the reference to “that reason” is the valid reason found to exist under s.387(a).[7]
Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment,[8] and in explicit[9] and plain and clear terms.[10]
I consider it is clear CPS did not notify Mr Hartley of the reason for his dismissal prior to making the decision to terminate his employment. Mr Hartley’s name was simply removed from a board listing CPS’ employees. Mr Hartley had to contact Mr Gray to find out what had occurred. Mr Hartley was not afforded any degree of procedural fairness.
Opportunity to respond
An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment.[11]
The opportunity to respond does not require formality and this factor is to be applied in a common-sense way to ensure the employee is treated fairly.[12] Where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements.[13]
I consider it is clear CPS did not provide Mr Hartley with an opportunity to respond to the reason for his dismissal prior to making the decision to terminate his employment. Mr Hartley’s name was simply removed from a board listing CPS’ employees. Mr Hartley had to contact Mr Gray to find out what had occurred. Mr Hartley was not afforded any degree of procedural fairness.
Unreasonable refusal to have a support person present to assist at discussions
Given there were no discussions between CPS and Mr Hartley about the dismissal, I consider this is a neutral factor.
Warnings about unsatisfactory performance
This factor is not relevant to the present circumstances because Mr Hartley was not dismissed for unsatisfactory performance.
To what degree would the size of CPS’ enterprise be likely to impact on the procedures followed
I accept CPS is a very small business and that this had an impact on the defective procedures followed in effecting the dismissal.
To what degree would the absence of dedicated human resource management specialists or expertise in CPS’ enterprise be likely to impact on the procedures followed
I find that a lack of dedicated human resource management specialists contributed to a significant degree to the defects in the procedures followed by CPS in effecting the dismissal.
Other relevant matters
I consider there are other relevant matters of importance in this case.
Mr Hartley’s evidence that Mr Gray had offered to make a cash payment to satisfy his underpayment issues was not contested by CPS. I say that because Mr Hartley was not cross-examined on his evidence and Mr Gray did not provide a witness statement disputing that the conversion occurred. That suggests that Mr Hartley’s underpayment claim may have been a factor in why he was selected as one of the plumbers to be made redundant. I consider this is a matter that weighs in favour of finding Mr Hartley’s dismissal was unfair.
I also consider it is relevant that Mr Hartley was dismissed on Monday, 8 July 2024 after being absent on Friday, 5 July 2024 to care for his unwell daughter. Mr Hartley’s evidence about this absence was not contested by CPS via cross-examination. I find Ms Gray’s criticism in her submission of Mr Hartley attending the North Sydney site on Monday, 8 July 2024 “without notifying supervisors or management” to be completely unfounded. Although Mr Hartley was a daily hire employee under the 2019 Agreement, he had been working on a full-time basis for over three years. There was no basis for CPS to assume Mr Hartley would not be attending work on Monday, 8 July 2024 simply because his daughter was unwell on Friday, 5 July 2024. To the contrary, CPS should have assumed Mr Hartley would be attending work on the Monday, 8 July 2024 unless Mr Hartley contacted them again to say that his absence would extend beyond Friday, 5 July 2024. I consider this is a matter that weighs in favour of finding Mr Hartley’s dismissal was unfair.
I have considered Mr Hartley’s evidence about his personal circumstances and accept he is dealing with some challenging issues. However, I do not consider these challenges are quite to the extent where they should be taken into account as an “other relevant matter.”
CONCLUSION - HARSH, UNJUST OR UNREASONABLE
I have made findings in relation to each matter specified in s.387. I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable.[14]
Having considered each of the matters specified in s.387 of the FW Act, I am satisfied that the dismissal of Mr Hartley was harsh, unjust, and unreasonable. Although I have found there was a valid reason for Mr Hartley’s dismissal associated with CPS needing to reduce its employment costs, Mr Hartley was denied any semblance of procedural fairness. The other relevant matters I have identified above also trouble me, and I consider it is highly likely CPS would have handled the matter differently if Mr Hartley had not raised underpayment issues. This weighs strongly in favour of finding that Mr Hartley was unfairly dismissed. I acknowledge CPS is a small business without human resource specialists and ordinarily that would mitigate the severity of the procedural fairness issues I have identified. However, given my findings above, I conclude that the main reason for the procedural fairness deficiencies was not the size of CPS or its lack of human resource specialists. I consider Mr Hartley’s underpayment claim was the main contributing factor.
I am satisfied that Mr Hartley was unfairly dismissed within the meaning of s.385 of the FW Act.
REMEDY
Is reinstatement of Mr Hartley inappropriate?
Mr Hartley does not seek reinstatement on the basis that the employment relationship has been irreparably damaged. I agree with this position and find that reinstatement is inappropriate.
Is an order for payment of compensation appropriate in all the circumstances of the case?
Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, “[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…”[15]
Where an applicant has suffered financial loss as a result of the dismissal, this may be a relevant consideration in the exercise of this discretion.[16]
Mr Hartley has suffered financial loss in circumstances where I have found he was unfairly dismissed. In all the circumstances, I consider that an order for payment of compensation is appropriate.
Consideration – compensation
Effect of the order on the viability of CPS’ enterprise
I accept Ms Gray’s evidence that CPS is struggling to meet its financial obligations. Ms Gray confirmed that CPS is three months behind in payments to IncoLink and that it recently fell behind in making superannuation contributions. I consider this factor weighs in favour of a lower compensation order.
Length of service
Mr Hartley was what I would call a “mid-term employee” with around three years and four months of service with CPS. I consider this is a neutral factor.
Remuneration that would have been received, or would have been likely to be received
As stated by a majority of the Full Court of the Federal Court, “[i]n determining the remuneration that the employee would have received, or would have been likely to receive… [the Commission must] address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.”[17] This is referred to as the “anticipated period of employment.”
I have found it difficult in this case to assess how long Mr Hartley would have remained employed by CPS if he was not unfairly dismissed on 8 July 2024. I consider the following factors are relevant:
· Although Mr Hartley worked full-time hours continuously since 2021, the 2019 Agreement states any employee not specifically identified as a casual employee will be a daily hire employee. I consider Mr Hartley was engaged as a daily hire employee, even if this was never made clear to him by CPS. That means Mr Hartley had less employment security than a permanent employee.
· I have accepted CPS is facing financial difficulties and that this was the reason it wanted to reduce its employee headcount. This increases the risk of an employee being made redundant by CPS.
· There is no evidence of performance or conduct issues in relation to Mr Hartley’s employment.
· There is no evidence Mr Hartley intended to resign from his employment with CPS in the near future.
I find that the “anticipated period of employment” is six months, or until 8 January 2024. I consider this period strikes an appropriate balance based on the various factors identified above. Based on his salary rate of $101,256.00 with CPS, Mr Hartley would have earned $50,628.00 gross plus superannuation if he remained employed with CPS from 8 July 2024 to 8 January 2024.
Efforts to mitigate loss
Mr Hartley must provide evidence that he has taken reasonable steps to minimise the impact of the dismissal.[18] What is reasonable depends on the circumstances of the case.[19]
Mr Hartley provided unchallenged evidence that he searched for work after being dismissed and that an injured toe made this more difficult than usual. Mr Hartley commenced employment with Jennings Plumbing Services on 2 September 2024. That was around two months after his dismissal.
I am satisfied Mr Hartley has made considerable efforts to mitigate his loss. I do not consider any deduction should be made for failure to mitigate loss.
Amounts earned from employment or other work during the anticipated period of employment
Mr Hartley’s annual salary rate with Jennings Plumbing Services is $101,256.48 or $8,438.04 per month.
There is no evidence to suggest that Mr Hartley is likely to cease working for Jennings Plumbing Services prior to the anticipated period of employment ending on 8 January 2024.
I find the total amount Mr Hartley has earned and is likely to earn during the anticipated period of employment is $33,752.16 gross plus superannuation.
Amount of income reasonably likely to be earned between the making of the order for compensation and the actual compensation
Mr Hartley is reasonably likely to continue earning around $1,947.24 per week plus superannuation through his employment with Jennings Plumbing Services during the period between the making of the compensation order and the compensation being paid.
Other relevant matters
Neither party submitted that there were any other relevant matters.
Compensation – how is the amount to be calculated?
As noted by the Full Bench, “[t]he well-established approach to the assessment of compensation under s.392 of the FW 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).[20] This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages[21].”[22]
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 to mitigate 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
I have estimated that Mr Hartley would have earned $50,628.00 gross plus superannuation between his dismissal on 8 July 2024 and the end of the anticipated period of employment with CPS on 8 January 2024.
Step 2
Only monies earned since termination for the anticipated period of employment are to be deducted.[23]
I have calculated Mr Hartley has earned and is likely to earn a total of $33,752.16 gross plus superannuation during the anticipated period of employment.
An amount of $16,875.84 gross plus superannuation remains after the earnings and expected earnings are deducted.
For the reasons outlined above, I have not applied a deduction because Mr Hartley has taken significant steps to mitigate his loss.
I consider it is appropriate to make a deduction of 20% to the compensation amount because of my concerns about the impact of an order of $16,875.84 plus superannuation on the viability of CPS. That leaves an amount of $13,500.67 plus superannuation.
Step 3
I now need to consider the impact of contingencies on the amounts likely to be earned by Mr Hartley for the remainder of the anticipated period of employment.[24] It appears Mr Hartley has been working full-time hours in his employment with Jennings Plumbing Services from 2 September 2024 until when the application was heard on 13 November 2024. Given the stability in Mr Hartley’s earnings, I do not consider it is necessary to make a deduction for contingencies.
Step 4
I have considered the impact of taxation but have elected to settle a gross amount of $13,500.67 plus superannuation of $1,552.57 and leave taxation for determination.
Compensation – is the amount to be reduced on account of misconduct?
Mr Hartley was not dismissed for misconduct and no deduction for misconduct is appropriate.
Compensation – how does the compensation cap apply?
Section 392(5) of the FW Act provides that the amount of compensation ordered by the Commission must not exceed the lesser of:
(a) the amount worked out under s.392(6); and
(b)half the amount of the high income threshold immediately before the dismissal.
Section 392(6) of the FW Act provides:
(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…
Given Mr Hartley’s annual salary of $101,256.00 a compensation cap of $50,628.00 plus superannuation applies in accordance with s.392(6) of the FW Act.
Conclusion – compensation
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 the circumstances of the case.”[25]
The application of the Sprigg formula and the 20% deduction due to my concerns about the viability of CPS has resulted in an outcome where Mr Hartley would be awarded compensation of $13,500.67 plus superannuation of $1,552.57.
I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the FW Act.
Compensation order
Given my findings above, I will make an order that CPS must pay Mr Hartley $13,500.67 less taxation as required by law, plus superannuation of $1,552.57 to be paid into Mr Hartley’s nominated fund, with both payments to be made within 28 days of the date of this decision.
COMMISSIONER
Appearances:
Mr Garan representing Mr Hartley.
Ms Gray and Mr Gray on behalf of CPS.
Hearing details:
2024.
Sydney.
13 November.
[1] Fair Work Act 2009 (Cth), s 396.
[2] Ibid, s 389.
[3] Federal Register of Legislation - Fair Work Act 2009 - Declaration under subsection 388(1) - Small Business Fair Dismissal Code.
[4] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
[5] See ibid.
[6] Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.
[7] Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].
[8] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
[9] Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).
[10] See ibid.
[11] Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].
[12] RMIT v Asher (2010) 194 IR 1, 14-15.
[13] Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.
[14] ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7].
[15] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].
[16] Vennix v Mayfield Childcare Ltd [2020] FWCFB 550, [20]; Jeffrey v IBM Australia Ltd [2015] FWCFB 4171, [5]-[7].
[17] He v Lewin [2004] FCAFC 161, [58].
[18] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].
[19] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.
[20] (1998) 88 IR 21.
[21] [2013] FWCFB 431.
[22] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [16].
[23] See ibid.
[24] Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].
[25] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].
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