Corin Deane Davoren v Pejr Business Aviation Pty Ltd
[2023] FWC 725
•24 MARCH 2023
| [2023] FWC 725 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Corin Deane Davoren
v
Pejr Business Aviation Pty Ltd
(U2021/10924)
| COMMISSIONER P RYAN | SYDNEY, 24 MARCH 2023 |
Application for an unfair dismissal remedy – Compensation Application for an unfair dismissal remedy
Introduction
On 25 January 2023 I issued a decision[1] in which I found Ms Corin Davoren (Applicant) had been unfairly dismissed from her employment with Pejr Business Aviation Pty Ltd (Respondent). Ms Davoren was employed by the Respondent from on or about 2 May 2019 in the position of flight attendant until her employment was terminated by the Respondent effective from 12 November 2021.
In the Merits Decision, I found:
· that the Respondent’s direction that the Applicant move from the Thompson Hotel to the Dream Hotel while lawful, was not reasonable;[2] and
· that the 12-hour minimum rest period as set out in section 3.8.4.3 of the Respondent’s Flight Operations Manual did not apply to the Applicant.[3]
I concluded that there was no valid reason for the Applicant’s dismissal.[4]
After considering the other factors under s.387 of the Fair Work Act 2009 (FW Act)[5], I found that the Applicant was unfairly dismissed within the meaning of s.385 of the FW Act.[6]
Turning to the issue of remedy, I found that reinstatement was inappropriate as the relationship between the Applicant and Ms Cohrs and Mr Mudaliar had irretrievably broken down.[7]
I then turned to the question of whether an order for payment of compensation is appropriate and having regard to all the circumstances of the case, I determined that an order for compensation is appropriate.[8]
However, given the lack of evidence before me in relation to compensation matters, I listed the matter for mention and directions and provided the parties with the opportunity to file further evidence and submissions on the issue of quantum of compensation.[9]
This decision should be read in conjunction with the Merits Decision.
Compensation – what must be taken into account in determining an amount?
Section 392(2) of the FW Act requires all 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 the order on 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 the Applicant 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.
It should be noted that a compensation remedy is designed to compensate a person found to have been unfairly dismissed from employment in lieu of reinstatement for losses reasonably attributable to the unfair dismissal. A compensation order is not designed to be a form of punitive measure to punish an employer.[10]
I now turn to a consideration of all the circumstances of the case.
s.392(2)(a) – Effect of the order on the viability of the Respondent’s enterprise
The Respondent accepts that there is no amount of compensation that would be likely to have an effect on the viability of its enterprise.[11] Accordingly, I am satisfied that an order for compensation would not have an effect on the viability of the Respondent’s enterprise.
s.392(2)(b) – Length of the Applicant’s service
The Applicant’s length of service was two and a half years. I consider that the Applicant’s length of service does not support reducing or increasing the amount of compensation ordered.
s.392(2)(c) – Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed
As stated by a majority of the Full Court of the Federal Court, “[i]n determining the remuneration that the Applicant 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.”[12]
This estimate of how long the Applicant would have remained in employment is the “anticipated period of employment”.[13]
The Applicant submitted that she should receive compensation equivalent to 26 weeks’ pay and be awarded her legal costs.
The Respondent submitted that taking into consideration the Applicant’s failure to take reasonable steps to obtain alternative employment, an appropriate award of compensation is four weeks’ salary, which is equivalent to $8,461.00.
The Applicant was employed by the Respondent for two and a half years. It is not in dispute that the Applicant was paid an annual salary of $110,000.00 plus superannuation. The Applicant was paid monthly.[14] Therefore, the Applicant would have been likely to have received remuneration of $9,166.67 per month if she had not been dismissed.
Although there was some evidence in the proceedings that the Applicant had been subject to informal counselling on at least one occasion during her employment[15] and that there may have been some tension between Ms Cohrs and the Applicant[16], I do not consider this is a basis to conclude that the Applicant’s employment would not have continued for a significant period of time.
For the purposes of calculating the remuneration that the Applicant would have received or would have been likely to receive if she had not been dismissed, I consider that the employment of the Applicant would have continued until at least 30 June 2022, a period of 7.5 months.
Therefore, the total remuneration that would have been received in the anticipated period of employment of 7.5 months’ following dismissal is $68,750.03 gross.
s.392(2)(d) – Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal
The Applicant must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal.[17] What is reasonable depends on the circumstances of the case.[18]
As part of her materials, and in response to an order issued by the Commission[19], the Applicant provided the following evidence of her attempts to mitigate her loss:
Attempts to obtain work
·On 11 November 2021, the Applicant sought work through an aviation industry contact;
·In the days following her dismissal, the Applicant sought work with ExecuJet;
·On 15 January 2021, the Applicant sought employment with InvestJet;
·During the period of 16 August 2022 to 16 September 2022, the Applicant made eight applications for work within the aviation, mining, hospitality, and functions and events industries.
Training
·The Applicant attended various aviation industry, food safety and first aid training sessions on:
o20 November 2021;
o26 November 2021;
o27 November 2021;
o28 November 2021;
o29 November 2021;
o26 July 2022;
o27 July 2022;
o10 August 2022;
o16 August 2022;
o28 October 2022;
o13 November 2022; and
o14 November 2022.
Work performed
·The Applicant performed the following work during the anticipated period of employment:
o30 November 2021 to 12 December 2021: Aviation;
o4 January 2021: Private Yacht;
o30 June 2022: Aviation.
Applicant’s Submissions
In early March 2022, the Applicant underwent a medical procedure and was unfit for work as a flight attendant for the period from 9 March 2022 to 6 April 2022.[20]
The Applicant submitted that she made immediate attempts to obtain alternative employment and undertook training to ensure she remain qualified and able to secure ongoing employment. However, the Applicant submitted that in late 2021-early 2022, the aviation sector was still recovering from the impact of the COVID-19 Pandemic and opportunities were limited. The Applicant further submitted that the expiry of her ‘wet drill’ qualification deprived her of work opportunities.
The Applicant submitted that she sought alternative employment in other industries such as mining, functions and events and hospitality.
Respondent’s Submissions
The Respondent submits that the evidence discloses a failure by the Applicant to take reasonable steps to mitigate loss suffered because of the dismissal.
The Respondent submitted that the totality of attempts to obtain alternative employment in the nine months following the Applicant’s dismissal were the work performed in December for ExecuJet, the application/attempt with InvestJet, and the work performed on 30 June 2022.
The Respondent submitted that the Applicant’s own evidence was that she had refused work with ExecuJet over the Christmas/New Year and into January 2022 as she was initially on holidays and then had COVID-19.[21]
The Respondent disputed the Applicant’s contention that there were limited opportunities in the aviation sector in early 2022, that the wet drill training qualification was a pre-requisite to obtain alternative employment within the aviation sector, or that the Respondent was responsible for its lapse, as it was not required as part of her employment with the Respondent.
The Respondent submitted that the Applicant failed to make any application for a role within the aviation industry or any other industry until 16 August 2022 and there is an unexplained failure to mitigate any loss suffered by the Applicant.
Consideration - mitigation
I accept the Applicant took immediate steps following her dismissal to seek employment or contracting work within the aviation sector and attended various training sessions, which resulted in the Applicant obtaining work in the first half of December 2021.
However, in the period following mid-December 2021, there was virtually no attempt by the Applicant to obtain alternative employment. I accept the Applicant maintained contact with ExecuJet, but on the Applicant’s own evidence, they informed her that there was limited work available. I also accept that the Applicant was unfit to perform the role of a flight attendant for four weeks in March/April 2022.
Despite the limited available opportunities with ExecuJet and the four-week period where the Applicant was unfit for work as a flight attendant, there was no explanation as to why the Applicant could not pursue employment in other industries earlier than 16 August 2022.
Having regard to the material before me, I am not satisfied that the Applicant took reasonable steps to mitigate her loss. I consider this warrants a reduction of 50%.
s.392(2)(e) – Amount of remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation
Remuneration earned from the date of dismissal to the date of any compensation order is required to be taken into account under s.392(2)(e) of the FW Act. However, in Ellawala v Australian Postal Corporation[22], the Full Bench stated:
“Monies earned after the end of the ”anticipated period of employment” ... are not deducted. This is because the calculation is intended to put the applicant in the financial position he or she would have been in but for the termination of their employment.”
As part of her materials, and in response to an order issued by the Commission[23], the Applicant produced tax invoices evidencing remuneration earned between the date of her dismissal and January 2023. The materials produced by the Applicant identify that for the “anticipated period of employment” she earned $8,100.00.[24]
The Respondent challenged the veracity of one of the tax invoices produced, which related to earnings after the “anticipated period of employment” and submitted that in the absence of the Applicant’s failure to provide other materials such as tax returns and bank statements, the Commission should find that the Applicant has failed to demonstrate any loss.
Notwithstanding that submission, the Respondent elected to have the matter determined on the papers and did not seek to cross examine the Applicant in relation to these matters. In those circumstances, I accept the Applicant’s evidence of remuneration earned during the anticipated period of employment.
Accordingly, I am satisfied that amount of remuneration earned by the Applicant from employment or other work during the anticipated period of employment is $8,100.00.
s.392(2)(f) – Amount of 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
As the anticipated period of employment has already passed this matter is not relevant.
s.392(2)(g) – Other relevant matters
Other relevant matters include whether to discount any amount for contingencies. The discount for contingencies should only be applied in respect to an “anticipated period of employment” that is not actually known, that is a period that is prospective to the date of the decision.
As the anticipated period of employment has already passed, no discount for contingencies will be applied.
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).[25] This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages[26].”[27]
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
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 $68,750.03 on the basis of my finding that the Applicant would likely have remained in employment for a further period of 7.5 months.
Step 2
I have found that the amount of remuneration earned by the Applicant from the date of dismissal was $8,100.00. Only monies earned since termination for the anticipated period of employment are to be deducted.[28] I therefore deduct the sum of $8,100.00 from $68,750.03. This brings the amount to $60,650.03 gross.
I have found that the Applicant did not take reasonable steps to mitigate her loss and that this warrants a reduction of 50%. Applying a 50% reduction in relation to the amount of $60,650.03, brings the amount to $30,325.02 gross.
Step 3
As the anticipated period of employment has passed, I do not make any deduction for contingencies.
Step 4
I have considered the impact of taxation but have elected to settle a gross amount of $30,325.02 and leave taxation for determination.
Having applied the formula in Sprigg, I am satisfied that the level of compensation is appropriate having regard to all the circumstances of the case. In accordance with s.392(4) of the FW Act, the amount of compensation calculated does not include a component for shock, humiliation or distress.
Compensation – is the amount to be reduced on account of misconduct?
I am satisfied that the Applicant did not commit any misconduct. Therefore, this is not relevant to the assessment of compensation and no reduction on account of misconduct has been made.
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 section 392(6); and
(b)half the amount of the high income threshold immediately before the dismissal.
The amount worked out under section 392(6) is the total of the following amounts:
(a)the total amount of the remuneration:
(a) received by the Applicant; or
(ii) to which the Applicant 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 Applicant 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 Applicant for the period of leave in accordance with the regulations.
The amount of $30,325.02 is less than half the amount of the high-income threshold immediately before the dismissal. It is also less than the total amount of remuneration to which the Applicant was entitled in her employment with the Respondent during the 26 weeks immediately before her dismissal. In those circumstances, I am satisfied that there is no basis to reduce the amount of $30,325.02 by reason of s.392(5) of the FW Act.
No application was made by the Respondent for any amount of compensation awarded to be paid in the form of instalments.
Costs
The Applicant submitted that she should be awarded costs in relation to the legal costs incurred by her in preparation for the hearing.
However, in the absence of an application for costs, there is no basis to consider this further.
Conclusion
I will make an order that the Respondent pay $30,325.02 gross less taxation as required by law to the Applicant in lieu of reinstatement within 21 days of the date of this decision.
COMMISSIONER
[1] Corin Deane Davoren v Pejr Business Aviation Pty Ltd[2023] FWC 239 (Merits Decision).
[2] Ibid at [122]-[125].
[3] Ibid at [126]-[136].
[4] Ibid at [137].
[5] Ibid at [138]-[146].
[6] Ibid at [147]-[150].
[7] Ibid at [153]-[156].
[8] Ibid at [157]-[158].
[9] Ibid at [159].
[10] Kable v Bozelle, Michael Keith[2015] FWCFB 3512 at [17].
[11] Transcript at PN3748-PN3750.
[12] He v Lewin [2004] FCAFC 161 at [58].
[13] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000) at [34].
[14] Exhibit A1, Annexure A.
[15] Transcript at PN2749-PN2751.
[16] Transcript at PN544; PN656.
[17] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002) at [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001) at [45].
[18] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002) at [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.
[19] PR750253.
[20] Exhibit A15.
[21] Transcript at PN674-PN680.
[22] Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000).
[23] PR750253.
[24] Applicant’s Tax Invoices: Invoice No 8, 9 and 11.
[25] (1998) 88 IR 21.
[26] [2013] FWCFB 431.
[27] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206 at [16].
[28] Ibid.
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