Constantinos (Costa) Telidis v Susorra Pty Ltd t/as Garmex Workwear (No 2)

[2013] FWC 1512

[2013] FWC 1512

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 394 - Application for unfair dismissal remedy

Constantinos (Costa) Telidis
v
Susorra Pty Ltd t/as Garmex Workwear (No 2)
(U2012/14441)

DEPUTY PRESIDENT SAMS SYDNEY, 13 MARCH 2013

Valid reason for dismissal - applicant denied procedural fairness - dismissal unfair - reinstatement inappropriate - further submissions as to remedy - length of service - lack of evidence as to mitigation - lack of evidence as to further remuneration - compensation discounted for misconduct - applicant paid in excess of entitlements - no compensation ordered.

[1] In a decision published on 21 February 2013, in Telidis v Susorra Pty Ltd[2013] FWC 1016 (the ‘primary decision’), I made a number of findings in respect to the dismissal of Mr Constantinos (Costa) Telidis (the ‘applicant’) by Susorra Pty Ltd (the ‘respondent’) on 15 October 2012. Relevantly, these findings were that:

a) there were valid reasons for the applicant’s dismissal (s 387(a) of the Fair Work Act 2009 (the ‘Act’);

b) nevertheless, the applicant’s dismissal was procedurally unfair; and

c) reinstatement of the applicant was inappropriate (s 390 of the Act).

[2] Notwithstanding that the applicant, in the earlier proceedings, sought the maximum amount of compensation (26 weeks) as the remedy for his unfair dismissal, neither he, nor the respondent addressed the matters the Commission is required to take into account under s 392 of the Act when determining an appropriate amount of compensation in a particular case. Accordingly, I invited both parties to put further submissions as to remedy and directed such submissions be filed an served by 7 March 2013. Submissions were received from the applicant and from Harmers Solicitors, now acting for the respondent.

SUBMISSIONS

For the applicant

[3] Despite my directions that the parties focus on the provisions of s 392 of the Act, the bulk of the applicant’s two page submission was directed to commentary on my decision and explanations for his behaviour, prior to his dismissal. I make no further comment on these extraneous submissions.

[4] Nevertheless, the applicant now seeks five months compensation on the grounds that:

a) he has been out of work for five months since his dismissal;

b) he has been finding it difficult to find another sales position, particularly given the fact the respondent failed to provide him with a letter of termination and a reference of his achievements;

c) his income was the main source of income for his family; and

d) over 6 ½ years of employment he had achieved good sales figures.

For the respondent

[5] It was submitted that in light of the Commission’s finding that the respondent had valid reasons for dismissing the applicant, including his hostile, disrespectful and belligerent attitude towards his immediate supervisor, Ms Glick and the Company Director, Mr Skettos, the Commission would make no order of compensation in the applicant’s favour.

[6] In the alternative, if the procedural faults found by the Commission were such as to render the dismissal unfair, then a maximum of one week’s compensation would be appropriate. This is particularly so given the applicant’s employment was unlikely to have survived beyond a few days, and not more than a week.

[7] The respondent addressed each of the matters required to be taken into account under s 392 of the Act, although it made no submission on the effect of any order on the viability of the employer’s enterprise. (s 392(2)(a)). The respondent referred to a decision of Cambridge C in which he ordered two weeks’ pay for procedural unfairness where the employee had 6 years service (s 392(2)(b); See: Zeb Dewson v Boom Logistics (No. 2) [2013] FWC 760.

[8] The respondent relied on the following factors to support its contention that the applicant’s employment was unlikely to have survived beyond a few days (s 392(2)(c)):

i. the applicant’s poor sales performance, which was discussed with him as far back as 30 April 2012;

ii. the applicant refused to accept instructions from his direct supervisors and challenged their authority;

iii. the animosity that existed between the applicant and Mr Skettos;

iv. the applicant’s relentless campaign of hostility towards Ms Glick, Mr Skettos and others in the workplace;

v. the respondent’s first attempt at dismissing the applicant over the telephone on 2 October 2012;

vi. the fact that a meeting had already occurred one week before 15 October 2012, in relation to the applicant’s poor sales performance; and

vii. the heated events of 15 October 2012, including the applicant’s accusations and the grossly offensive comments directed at Mr Skettos, and made in the presence of Ms Glick.

[9] It was submitted that there was no evidence of any steps taken by the applicant to minimise the effect of his dismissal or of any remuneration earned by him since dismissal (ss 392(2)(d) and (e)).

[10] The respondent identified the following payments made to the applicant arising from his dismissal:

i.	annual leave payment totalling:	$9,086.23
ii.	car and petrol allowance, one and a half months’:	$1,602.52
iii.	four weeks’ pay in lieu of notice:	$4,226.16
iv.	one weeks’ additional pay as the applicant is over 45 years of age:	$1,056.54
v.	Commission owing on termination:	$1,149.39
vi.	and six weeks’ pay as a pro rata Long Service Leave payment in circumstances where no such entitlement arises under the Long Service Leave Act 1955 (NSW):	$5,827.87
Total monies paid on termination	$23,668.71

[11] It was noted that the applicant was not entitled to pro rata long service leave and together with the other payments, he had received a ‘generous’ amount of termination payments.

[12] In addition, it was argued that there should be a significant deduction made for the applicant’s misconduct, as permitted by s 392(3). The respondent also proposed that any order of compensation should be paid in instalments (s 393) and, if necessary, it offered to provide further particulars in support of this submission.

[13] Finally, the respondent put that to ensure ‘a fair go all round’ (s 381(2)), it was entirely reasonable to award no compensation at all to the applicant, or alternatively, an amount of one week’s compensation. The applicant has received his ‘just entitlements’ and more and this should be taken into account.

CONSIDERATION

[14] The terms of ss 392 and 393 of the Act require the Commission to take into account the following matters when determining an amount of compensation as the 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.

(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.’

[15] Two recent Full Bench decisions of the Commission have stressed that each of the matters in s 392(2) must be taken into account in the remedy calculation exercise. See: Read v Gordon Square Child Care Centre Inc T/A Gordon Square Child Care Centre[2013] FWCFB 762 and Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge[2013] FWCFB 431. I intend to apply the approach carefully enunciated in the above cases, to the present context. In doing so, I find as follows.

Employer viability (s 392(2)(a))

[16] There was no evidence as to the effect of any order of compensation on the viability of the respondent’s enterprise, although the respondent offered to provide such evidence in respect to its submission that any order of compensation should be paid in instalments as permitted by s 393 of the Act. In view of my later conclusions, it is unnecessary to take this matter any further. It is a neutral factor.

Length of service (s 392(2)(b)) and remuneration that would have been received (s 392(2)(c))

[17] Six and a half years of employment with the respondent is a reasonable period of employment and, all other things being equal, would, in my view, support an order of compensation. In my primary decision, I said at para [46], ‘if dismissal had not occurred on 15 October 2012, I doubt his employment would have lasted very much longer.’ I maintain that view and consider that the applicant would have been unlikely to remain in employment with the respondent for more than a few weeks. I agree with the respondent’s submission that the factors it referred to in supporting this contention (see para [8] above) tell in favour of this conclusion.

Mitigation (s 392(2)(d))

[18] The applicant submitted that he has had difficulty finding alternative employment and has not done so. However, there is a paucity of evidence as to what steps the applicant had actually undertaken to mitigate his losses. In addition, there is no evidence of any income the applicant may have earnt since 15 October 2012 (s 392(2)(e)). Both of these matters militate against an order of compensation. Subsection (f) of s 392(2) is not relevant.

Other matters (s 392(2)(g)

[19] Despite that applicant’s protestations, it appears he has been paid all of his outstanding entitlements and an amount of six weeks pro rata long service leave to which he was otherwise not entitled and five weeks notice, he would not be entitled to, assuming he was dismissed for misconduct. Critical to this case is s 392(3) of the Act which permits the Commission to reduce the amount it would otherwise order on account of the applicant’s misconduct. Given my comments and findings in the primary decision, it is self evident that the applicant misconducted himself. At paras [45]-[46], I said:

‘[45] In addition, the applicant’s acknowledged comment during the heated events of 15 October 2012 in Ms Glick’s presence (see para [4]) would have been sufficient grounds, in my view, for finding that his earlier dismissal was justified. Moreover, his later accusations and offensive comments directed at Mr Skettos, strengthened the respondent’s case that his dismissal was the only possible outcome after a long period of insubordination and unacceptable conduct in the workplace. Whatever may have been the provocation (such as it was), there was simply no place for his relentless campaign of hostility towards Ms Glick, Mr Skettos and others. Nor was there any excuse for his behaviour on 15 October 2012 or subsequently.

[46] Even without the sales performance issue, I am satisfied that the applicant refused to accept the instructions of his direct supervisors, challenged their authority and interfered in the delineation of work responsibilities to the respondent’s detriment. It follows that I would conclude that there were valid reason/s for the applicant’s dismissal. The reasons were not ‘capricious, fanciful, spiteful or prejudiced’. Moreover, if dismissal had not occurred on 15 October 2012, I doubt his employment would have lasted very much longer.’

[20] In my opinion, the extent of the applicant’s misconduct was such as to warrant a significant deduction of any order of compensation. Even giving the applicant the most generous possible starting point - say of four weeks compensation - I would make a deduction for his misconduct of 50%, leaving a two weeks’ outcome.

[21] In addition, as I said earlier, the applicant received a payment for pro rata long service leave of six weeks and five weeks notice. At least in respect to pro rata long service leave, it may be characterised as an ex gratia payment and not an entitlement. Accordingly, I see no reason why these payments should not be taken into account and I think it appropriate to do so. Viewed in this way, I believe the applicant has received more than he was entitled to in the circumstances. Obviously, given this finding, the considerations of subsections (4), (5) and (6) under s 392 and s 393 of the Act fall away and are not relevant to the final outcome in this case.

[22] Taking all relevant matters into account, I am satisfied that those matters militating against a compensation order far outweigh those in favour of an order being made. No further payments should be made in the applicant’s favour. The matter is concluded on that basis.

DEPUTY PRESIDENT

Final written submissions:

Applicant, 7 March 2013

Respondent, 7 March 2013

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