Daniel Howard v Eliana Construction and Development Pty Ltd T/A Eliana Group

[2015] FWC 4925

[2015] FWC 4925

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Daniel Howard
v
Eliana Construction and Development Pty Ltd T/A Eliana Group
(U2015/3049)

COMMISSIONER RYAN MELBOURNE, 29 JULY 2015

Application for relief from unfair dismissal – remedy – reinstatement inappropriate - compensation.

[1] On 29 June 2015 I gave an ex tempore decision on the merits of Mr Daniel Howard’s unfair dismissal application and found that his dismissal was harsh, unjust or unreasonable.

[2] Following the issuing of that decision the parties, in conference, reached a consent position that reinstatement in not an appropriate remedy. I expressed a view that reinstatement in this particular matter is inappropriate, but that I had not yet formed a view on whether compensation is or is not an appropriate remedy. At the conclusion of the hearing on 29 June 2015 the Commission specifically drew the attention of both parties to the need to address s.392 in relation to compensation and to the resources available to the parties on the Commission website:

“To the extent that no one at the Bar table is experienced in industrial relations, I would urge both parties to read and consider using the Unfair Dismissals Bench Book, which is a resource that is available on the Fair Work Commission website.  The first issue that has to be considered is whether or not reinstatement is an appropriate remedy.  If there is a consent position by the parties that reinstatement is not an appropriate remedy, then you might want to put that to me immediately but I will stand it down - I am not going to make you jump up to your feet, I will stand the matter down to allow you to have a discussion as to whether or not anyone is - whether the applicant is even seeking reinstatement.

If the issue is that reinstatement is off the table, then it does mean that both parties then need to concentrate on whether or not I grant compensation as a remedy, and if I am going to grant compensation as a remedy, both parties need to address section 392 of the Act because it has the criteria which I am obliged to take into account in calculating compensation. Again, the Unfair Dismissal's Bench Book will give both sides ample material to look at and consider so that you can make submissions on remedy.” 1 

[3] I directed the parties to file written submissions as to an appropriate remedy in this matter. The Applicant was given to 8 July 2015 and the Respondent to 15 July 2015. I also asked parties to advise me whether this is a matter which I could determine on the papers.

[4] Both the applicant and the respondent filed material in accordance with these directions and advised that they wished the matter of remedy determined on the papers.

[5] The Applicant contends that the appropriate remedy to be granted is an order for compensation in the amount of $22,937.00. The Applicant says he relied on the Sprigg formula in reaching this figure, however he doesn’t provide any breakdown on the calculation of that figure.

[6] The Applicant further submitted that the Commission should make an order against the respondent’s director, Magdy Sowiha. This submission was made on the basis of the Applicant’s belief that the respondent company could go into liquidation in the near future and that this is clear and substantial evidence that would allow the Commission to make such an order.

[7] The Respondent’s contention is that no remedy should be granted to the Applicant given the following:

“(a) the Applicant was employed for just over six months;

(b) the Applicant had a history of work performance issues which affected his
prospect of ongoing employment;

(c) the Applicant has not demonstrated any actions he took to mitigate his loss;

(d) the Applicant admitted to having found employment since his dismissal yet has not declared to the Commission when that occurred or the remuneration he currently enjoys;

(e) the Applicant was paid one week's pay in lieu of notice at the time of dismissal;

(f) the Applicant is requesting compensation which is vexatious and beyond
the scope of what the FWC can award.” 2

[8] The Commission is of the view that the remedy of compensation is appropriate in all the circumstances of the present matter. In calculating an appropriate amount of compensation the Commission is required to apply s.392 of the Act which provides as follows:

“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.”

[9] I now address the relevant criteria in s.392(2).

The effect of the order on the viability of the employer’s enterprise – s.392(2)(a)

[10] The Respondent does not contend that any order for the payment of compensation would have an effect on the viability of the Respondent’s business. The highest that the Respondent puts is that “any compensation amount ordered will place hardship on the Respondent”.

The length of the person’s service with the employer – s.392(2)(b)

[11] The Applicant was employed by the Respondent for 6 months and 1 week which is a relatively short period of time. In the present circumstances this factor weighs against any substantial amount of compensation being found to be warranted.

The remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed – s.392(2)(c)

[12] This criteria requires the Commission to make an assessment as to how long the Applicant would have remained in employment if the Applicant had not been dismissed when he was. It is clear that if the Applicant had not been dismissed and if the Respondent had made reasonable attempts to deal with the quality of work and with the training of the Applicant there is still no certainty that the Applicant would have been employed by the Respondent for any significant period of time. It is generous to assume that the Applicant would have remained in employment for another six months if he had not been dismissed in January 2015.

The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal – s.392(2)(d)

[13] The Applicant put nothing before the Commission to show that he has made any effort to mitigate the loss suffered him because of the dismissal. The absence of any material which shows what efforts the Applicant has made to mitigate his loss then this factor must weigh against the Applicant’s case.

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 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 – s.392(2)(e) and (f)

[14] The Applicant has put nothing to the Commission which discloses any remuneration earned by him since the dismissal or likely to be earned by him until any compensation is paid to him. The absence of any material from the Applicant which addresses this criteria must weigh against the Applicant’s case.

Any other matter that the FWC considers relevant – s.392(2)(g).

[15] Nothing arises under this criteria.

[16] The criteria listed at s.392(2)(a) to (g) must be taken into account, if relevant, but are not the only things that need to be taken into account. The opening words of s.392(2) requires that the Commission take into account all the circumstances of the case including matters which may not fit within the criteria in paragraphs (a) to (g). I have taken into account all of the circumstances of this matter including having regard to all of the material provided to the Commission by both the Applicant and the Respondent.

[17] The amount of compensation ordered by the Commission does not contain any component which is prohibited by s.392(4). The amount of compensation has been reduced because the Commission is satisfied that the Applicant did engage in misconduct which contributed to the employer’s decision to dismiss the Applicant. The Commission does not consider that the Applicant’s refusal to work on weekends was misconduct when nothing had been put to the Commission by the Respondent which would allow a conclusion to be drawn that the Applicant’s refusal to work additional hours was unreasonable. In all other respects the misconduct of the Applicant that appears to have contributed to the Respondent’s decision to dismiss the Applicant is minor. Therefore the reduction required by s.392(3) is also minor.

[18] The Commission has taken into account all of the circumstances of the case including each of the relevant criteria listed in s.392(2) of the Act and having regard to s.392(3) and (4) has determined that the appropriate amount of compensation is $3,000.00 to be taxed at the appropriate rate, to be paid within 14 days of this decision.

[19] An order giving effect to this decision will be issued separately.

[20] The order will be issued against the Respondent. The Commission is not satisfied that anything in this matter would warrant or justify making an order against Mr Sowiha.

COMMISSIONER

 1   Transcript at para 59 – 60.

 2   Respondent’s submissions as to remedy¸16 July 2015.

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