Clinton Purdie v Goodview Stud Pty Ltd T/A a List Stud
[2024] FWC 2683
•30 SEPTEMBER 2024
| [2024] FWC 2683 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Clinton Purdie
v
Goodview Stud Pty Ltd T/A A List Stud
(U2024/3990)
| DEPUTY PRESIDENT MILLHOUSE | MELBOURNE, 30 SEPTEMBER 2024 |
Application for an unfair dismissal remedy –reinstatement inappropriate – compensation ordered.
On 8 August 2024, I issued a decision (liability decision)[1] which determined that Mr Clinton Purdie had been unfairly dismissed from his employment with the respondent, Goodview Stud Pty Ltd trading as A List Stud.
Being satisfied that Mr Purdie (a) made an application for an order granting a remedy under s 394 of the Fair Work Act 2009 (Cth) (Act), (b) was a person protected from unfair dismissal, and (c) was unfairly dismissed within the meaning of s 385 of the Act, the Commission may order Mr Purdie’s reinstatement, or the payment of compensation to Mr Purdie pursuant to s 390(1).
This decision determines the issue of remedy.
Procedural matters
The Commission is in receipt of an order issued by the Supreme Court of Queensland dated 6 August 2024 (Order). The Order states that Goodview Stud Pty Ltd be wound up by the court in insolvency pursuant to s 459A of the Corporations Act 2001. The Order was made following an originating application filed with the court on 31 May 2024.
The Order appoints Lee Crosthwaite as the liquidator for the purpose of the winding up.
Having provided Mr Purdie and the liquidator with an opportunity to express a view, I am satisfied that the Commission can continue dealing with Mr Purdie’s application for an unfair dismissal remedy without the leave of the court. This is because s 471B of the Corporations Act 2001, which deals with a compulsory winding up in insolvency or by the court, applies to court proceedings. The Commission is not a court.[2] Sections 440D and 500(2) of the Corporations Act 2001 are not relevant to these proceedings as the respondent has not been placed in administration, nor is it the subject of a creditors voluntary winding up as contemplated by those provisions.
Mr Purdie’s application proceeded to a remedy hearing on 26 September 2024. Mr Purdie appeared for himself. There was no appearance for the liquidator, it having advised in advance that the liquidation is unfunded and accordingly, it was not in a position to appear before the Commission. The liquidator filed written submissions in this matter, which I have taken into consideration.[3] Nor was there any appearance by the respondent’s Director or Chief Executive Officer, Mr Siu Yee (Chris) Lee, who appeared on the respondent’s behalf at the liability hearing.
Statutory framework
Division 4 of Part 3-2 of the Act deals with remedies for unfair dismissal. Section 390 provides as follows:
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.
The Commission may order a remedy for unfair dismissal when a person has been unfairly dismissed and that person was protected from unfair dismissal. Section 381(1)(c) of the Act emphasises that reinstatement is the primary remedy to be considered under Part 3-2 of the Act. As specified by s 390(3), the Commission may order compensation only if it is satisfied that reinstatement of the person is inappropriate and that an order for the payment of compensation is appropriate in all the circumstances of the case.
Consideration
For the reasons that follow, I am satisfied for the purposes of s 390(3)(a) of the Act that the reinstatement of Mr Purdie to his role is inappropriate. First, Mr Purdie does not seek reinstatement. Second, I am not satisfied that there is a role to which Mr Purdie could be reinstated in circumstances where there is a court order that the respondent be wound up in insolvency. This position is supported by the liquidator, which submits that the respondent is “no longer employing” in circumstances where it “is in liquidation.” Accordingly, I decline to make an order for reinstatement.
Being satisfied that the reinstatement of Mr Purdie is inappropriate, I turn to the issue of whether an order should be made for the payment of compensation to Mr Purdie. Under
s 390(3)(b) of the Act, the Commission is not permitted to order the payment of compensation unless it is appropriate in all the circumstances. Accordingly, the question of whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one.[4]
In assessing compensation, the Commission is required, by s 392(2) of the Act, to take into account all of the circumstances of the case, including the specific matters identified in paragraphs (a)-(g) as follows:
(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.
I consider all of the circumstances of the case below, and in undertaking this task apply the long-established methodology for assessing compensation in unfair dismissal cases as outlined by the Full Bench in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).[5]
The approach in Sprigg is as follows:[6]
Step 1:Estimate the remuneration the applicant 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.
Remuneration that the person would have received, or been likely to receive, if not dismissed (s 392(2)(c))
The consideration commences with an assessment of the remuneration that Mr Purdie would have received, or would have been likely to receive, had he not been dismissed. This requires an estimation of Mr Purdie’s anticipated period of employment;[7] that is, how long Mr Purdie would have remained in employment but for the dismissal, and the remuneration he would have received, or been likely to receive, during that period.[8] There is an element of speculation in this counterfactual task as it involves an assessment of what would have been likely to happen in the future had Mr Purdie not been dismissed.
Mr Purdie contends that he would still be employed by the respondent but for his dismissal, because he loved the role and misses the work. However, Mr Purdie acknowledges that the Order winding the respondent up in liquidation has a bearing upon his capacity to have remained employed by the respondent on an ongoing basis. In the assessment of Mr Purdie’s anticipated period of employment, I take into consideration the following evidence before the Commission:[9]
(a)Mr Purdie was directed, by way of a letter dated 28 March 2024, to vacate and remove all of his personal belongings from the Stud.
(b)Any personal belongings of Mr Purdie left behind at the Stud would be regarded as “unwanted waste.”
(c)Effective from 28 March 2024, a security team would be stationed at the Stud and all of the door locks and pad locks to the entrance gates would be changed.
(d)Mr Purdie was directed to return to the respondent the keys to the vehicle, all horse ID cards and the respondent’s debit card.
Further, I take into consideration Mr Purdie’s evidence that:[10]
(a)he departed the Stud on 31 March 2024 and moved to his parents’ home in Geelong (four hours travelling time from the Stud) as he was unsure that the respondent would cover the cost of hotel accommodation nearby; and
(b)he did not have access to any equipment to enable the performance of his employment duties after 31 March 2024.
Having regard to the above matters, I estimate that had Mr Purdie not been dismissed on 3 April 2024, he would have continued to be employed by the respondent for a further period of 1.5 weeks, to 13 April 2024 (inclusive).[11] I have reached this view having regard to the strong likelihood of the respondent taking steps to terminate Mr Purdie’s employment in circumstances where he had been directed to vacate the Stud and return the equipment necessary for the performance of his role by 31 March 2024. Further, from 31 March 2024, Mr Purdie was located four hours away from the Stud at his parents’ home. These matters weigh strongly against a conclusion that Mr Purdie would have remained in employment for any further period. The subsequent application to the Supreme Court of Queensland for winding up the respondent in insolvency supports this conclusion. While this application was filed with the court on 31 May 2024, I do not consider it to be credible that Mr Purdie would have remained in employment with the respondent until this date, for the reasons set out above.
The evidence before the Commission demonstrates that Mr Purdie was paid weekly by the respondent at a gross amount of $961.54 per week. Accordingly, for the 1.5 weeks between Mr Purdie’s dismissal on 3 April 2024 and 13 April 2024, I find that Mr Purdie would have been paid $1,442.31 gross ($961.54 gross x 1.5 weeks) plus 11% superannuation ($158.65).[12]
Accordingly, for the purposes of step 1 in Sprigg, the remuneration Mr Purdie would have received, or have been likely to have received, if the respondent had not terminated his employment is $1,442.31 gross plus $158.65 superannuation. This is the starting point.
Remuneration earned (s 392(2)(e)) and income reasonably likely to be earned (s 392(2)(f))
Mr Purdie gave evidence that he commenced new employment on 15 April 2024. In this role he earns $2,384.62 gross per fortnight, or $1,192.31 gross per week. This is more than Mr Purdie earned in his employment with the respondent.
In circumstances where I have determined that Mr Purdie’s employment with the respondent would not have continued beyond 13 April 2024, I do not need to make any deductions to account for the remuneration earned by Mr Purdie in his new employment; Mr Purdie’s new employment did not commence until 15 April 2024 and monies earned after the end of the 1.5-week anticipated period of employment are not deducted. This is because the calculation is intended to put Mr Purdie in the financial position that he would have been in but for the unfair dismissal.[13] It follows that there is no remuneration earned or likely to be earned to be taken into account for the purpose of ss 392(e) and 392(f) of the Act, noting that the 1.5-week anticipated period of employment has now passed.
Accordingly, for the purposes of step 2 in Sprigg, I make no deductions to the provisional compensation sum at [20] above in respect of monies earned by Mr Purdie since his dismissal.
Length of service (s 392(2)(b)) and any other matters (s 392(2)(g))
The length of Mr Purdie’s employment with the respondent was approximately four years. He was dismissed without notice nor payment in lieu of notice, which pursuant to his contract of employment would otherwise have been a period of one month.[14] It is appropriate to consider and take this matter into account under s 392(2)(b), and/or it is a relevant matter under s 392(2)(g) in the manner discussed by the Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries.[15] I consider that Mr Purdie should be compensated for this loss, which he suffered because of his unfair dismissal. As Mr Purdie was dismissed on 3 April 2024, the period of one month (to 3 May 2024) equates to 4.5 weeks. It follows that the relevant amount for one month’s pay ($961.54 gross x 4.5 weeks) yields a total of $4,326.93 gross.
To the provisional compensation sum of $1,442.31 gross, I add the figure of $4,326.93 gross, representing one month’s notice. This results in provisional compensation of $5,769.24 gross (plus $158.65 superannuation, which remains unchanged from [20] above).
I have considered whether any discount should be made for contingencies, consistent with step 3 in Sprigg.[16] A discount for contingencies is a means of taking into account the various probabilities that might otherwise affect earning capacity.[17] However, in circumstances where the 1.5-week anticipated period of employment has entirely passed, I do not consider that in the circumstances of this case,[18] a deduction should be made for contingencies. This is because there is no relevant uncertainty that needs to be accounted for in that 1.5-week period.
Further, with respect to step four in Sprigg, I have considered the impact of taxation. Compensation will be determined as a gross amount, and it will be left to the respondent to deduct any amount of taxation required by law. There are no other matters that are relevant in determining an amount of compensation apart from those to which I now turn.
Effect of the order on the viability of the respondent’s enterprise (s 392(2)(a))
While the respondent is in liquidation, there was no evidence or submissions made that would warrant an adjustment to the provisional compensation sum.
Mitigation efforts (s 392(2)(d))
Mr Purdie must provide evidence that he has taken reasonable steps to minimise the impact of the dismissal. What is reasonable depends on the circumstances of the case. I consider it evident that Mr Purdie made a reasonable effort to mitigate his loss by taking steps to apply for and commence a new role within a period of two weeks from dismissal. I am satisfied that no discount to the provisional compensation sum ought to be applied.
Misconduct (s 392(3))
There being no findings of misconduct by Mr Purdie, I am not required by s 392(3) of the Act to reduce the amount of compensation I would otherwise order by an appropriate amount on account of any misconduct. Accordingly, I make no reduction of this kind.
Instalments (s 393)
There was no submission that any amount of compensation should be subject to payment by instalments. No order will be made to that effect.
Shock, distress (s 392(4))
The provisional compensation sum does not include a component for shock, humiliation or distress.
Compensation cap (s 392(5))
The amount of compensation which is derived from the above considerations is $5,769.24 gross plus $158.65 superannuation, which is less than the compensation cap in
s 392(5) of the Act in relation to Mr Purdie.
Conclusion
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.[19] I am satisfied that the above analysis takes into account the matters set out in s 392(2) of the Act, and the compensation that I have determined is, appropriately, neither excessive nor inadequate having regard to all the circumstances of the application.
I consider it appropriate to make an order that the respondent pay Mr Purdie the sum of $5,769.24 gross, less taxation as required by law, plus $158.65 superannuation to Mr Purdie’s last known nominated superannuation fund, within seven days of this decision.
I further note the liquidator’s submissions as to Mr Purdie’s status as a creditor in the liquidation. The liquidator notes that:
(a)Mr Purdie may be eligible for the Fair Entitlements Guarantee (FEG) scheme, providing him with financial assistance for up to 13 weeks of unpaid wages and annual leave entitlements.
(b)The Australian Taxation Office will lodge a claim on behalf of Mr Purdie for any outstanding superannuation entitlements owed to him.
(c)In the event that Mr Purdie is not eligible for FEG assistance, Mr Purdie may lodge a proof of debt in the liquidation.
These matters are separate to the Commission’s assessment of compensation as a remedy for Mr Purdie’s unfair dismissal.
Disposition
An order[20] for the payment of compensation by the respondent to Mr Purdie of $5,769.24 gross, less taxation as required by law, plus $158.65 superannuation to Mr Purdie’s last known nominated superannuation fund, will be issued with this decision.
DEPUTY PRESIDENT
Appearances:
C Purdie, for himself.
Hearing details:
2024.
Melbourne (by video):
September 26.
[1] [2024] FWC 2111
[2] Corporations Act 2001, s 58AA; Smith and Ors v Trollope Silverwood and Beck Pty Ltd (in liquidation) (2003) 142 IR 137 at [9], [15], [17]-[21]
[3] Written submissions dated 19 September 2024
[4] Thinh Nguyen and Anor v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australian Chapter[2014] FWCFB 7198 at [9]
[5] Print R0235; (1998) 88 IR 21. This approach was articulated in the context of the Fair Work Act 2009 (Cth) in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc T/A Ottrey Lodge[2013] FWCFB 431; 229 IR 6 and Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206 at [16] (Double N Equipment Hire)
[6] Print R0235; (1998) 88 IR 21
[7] See Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000) (Ellawala) at [34]
[8] He v Lewin [2004] FCAFC 161 at [58]
[9] Liability decision at [14] and [24]
[10] Liability decision at [26] and [27]
[11] Mr Purdie was employed to work ordinary hours between 7:00 am to 7:00 pm Monday to Friday and 7:00 am to 12:30 pm Saturday; Digital Court Book (liability hearing) 21 at 2.2(c)
[12] Calculated by reference to the 2023-2024 financial year
[13] Ellawala at [35]; Bowden v Ottrey Homes Cobram and District Retirement Villages Inc T/A Ottrey Lodge[2013] FWCFB 431, 229 IR 6 at [24]
[14] See Digital Court Book (liability hearing) 27 at [11.1]
[15] [2016] FWCFB 7206 at [34]
[16] Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001) at [39]
[17] Wynn v NSW Insurance Ministerial Corporation [1995] HCA 53, 184 CLR 485; Ellawalla at [43]
[18] Bowden v Ottrey Homes Cobram and District Retirement Villages Inc T/A Ottrey Lodge[2013] FWCFB 431, 229 IR 6 at [53]
[19] Double N Equipment Hire at [17]; Smith v Moore Paragon Australia Ltd PR942856, [2004] AIRC 57, (2004) 130 IR 446 at [32]
[20] PR779690
Printed by authority of the Commonwealth Government Printer
<PR779689>
0
7
0