Darko Gmitrovic v Australian Government, Department of Defence

[2014] FWC 4686

[2014] FWC 4686

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Darko Gmitrovic
v
Australian Government, Department of Defence
(U2013/3166)

SENIOR DEPUTY PRESIDENT HAMBERGER SYDNEY, 31 JULY 2014

Application for relief from unfair dismissal.

[1] This decision is made further to my earlier decision issued in this matter on 13 June 2014 1. In that decision the Commission found that the termination of employment of Mr Darko Gmitrovic (the applicant) by the Commonwealth Department of Defence (the respondent), to be harsh, unjust and unreasonable. The issue of remedy was the subject of further hearing held on 10 July 2014.

Reinstatement

[2] Section 390 of the Fair Work Act 2009 (the Act) requires I first determine whether reinstatement is inappropriate.

[3] The applicant is not seeking reinstatement. Reinstatement is also opposed by the respondent. In these circumstances I do not consider that reinstatement would be an appropriate remedy.

Compensation

[4] Having decided reinstatement is not appropriate in this case, I must consider whether an order for payment of compensation is appropriate in all the circumstances of this case.

[5] The respondent submitted that “an award of compensation may be appropriate in the circumstances of the case.”

[6] I am satisfied that an order for compensation is appropriate in all the circumstances of this case.

[7] Section 392 of the Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered.

“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.

Note: subsection 392(5) indexed to $

(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.”

[8] The method for calculating compensation under s.392 of the Act was recently dealt with by a Full Bench of the Commission in Bowden, G v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge 2 (Bowden). In that decision the Full Bench set out the order in which the criteria and other factors should be applied, taking into account authority under the Workplace Relations Act 1996 in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg)3 and Ellawala v Australian Postal Corporation4. I have had regard to the approach utilised in Bowden in determining the amount of a payment of compensation.

[9] The respondent submitted that any compensation awarded should be limited and, at least, a minimum reduction of 50% should be applied having regard to the relevant factors. In particular the respondent submitted that, apart from its length, the applicant’s service was otherwise unremarkable. The respondent also noted that the applicant had been in full time care of his mother since his dismissal, and that, given these caring responsibilities, he may not have remained in employment for much longer than the date upon which his dismissal took effect. Nor was there any evidence that the applicant had taken action to mitigate his loss. The respondent submitted that a deduction should be made from any compensation awarded to applicant on the basis of failure to mitigate the loss of his employment: “Although it is recognised that the Applicant is caring for his ill mother, the Applicant has chosen to do this rather than seek work and the Respondent should not be prejudiced by this.” The respondent also submitted that a further deduction should be made as the applicant had received 5 weeks’ payment in lieu of notice.

[10] In addressing the requirements of s.392 (2) I have considered the submissions of the parties and will now consider each of the criteria in s.392 of the Act.

s.392 (2) (a) - Viability of employer’s enterprise

[11] It is inconceivable that any order would affect the viability of the respondent.

s.392 (2) (b) - Length of service

[12] I find that Mr Gmitrovic’s relatively lengthy period of service with the respondent, being from 3 June 2002 until 2 September 2013 (11 years and 3 months), is a positive factor supporting the amount of compensation to be ordered.

s.392 (2) (c) - Remuneration that would have been received

[13] The Applicant’s remuneration with the respondent was $74,331 per annum or $1,424.88 per week.

[14] I should now determine the period of time the applicant would have remained employed by the respondent, or would have likely remained employed with the Respondent, had he not been dismissed.

[15] It was argued by the respondent that it was open to the Commission to conclude that the applicant would not have continued in employment for much longer than the date upon which his dismissal took effect. The Commission was reminded that the applicant’s mother was quite ill and the applicant was the prime carer.

[16] I find - based on the evidence of the applicant - that he would have continued to be employed by the respondent for at least another 6 months had he not been dismissed. 5 There was no evidence that the applicant was intending to resign, or to resign to care for his mother. The applicant submitted that he would have continued in employment with the respondent to finance his mother’s treatment and “was taking steps and saving some money...” The amount the applicant would have received is therefore $37,165.50.

s.392 (2) (d) - mitigating efforts

[17] The applicant submitted that he “did have intentions, but my mother’s illness did not allow me the time as I had to commit to her as well”. 6

[18] It was argued by the respondent that the applicant had not mitigated his loss by pursuing other employment, although the respondent recognised that the applicant was caring for his ill mother and that a carer’s benefit was paid to him.

[19] While the applicant’s decision not to seek paid work but to look after his sick mother is understandable, I do consider that some deduction should be made for his failure to mitigate his loss. I have decided to deduct an amount equal to five weeks pay ($7124.40). The amount may have been larger if the applicant had not had such a lengthy period of service with the employer.

s.392 (2) (e) and (f) - Remuneration earned or likely to be earned

[20] The applicant did not receive any remuneration from employment or other work, nor is he likely to receive any other income that should be taken into account, during the period from the dismissal to the date of compensation. The social security payments received by the applicant to in the form of the carer’s allowance, should not be taken into account (following the approach in Sprigg).

s.392 (2) (g - Other matters)

[21] I agree with the respondent that the amount of compensation awarded should be discounted by the period of notice that he was served, which was 5 weeks ($7124.40).

Misconduct: s.392(3)

[22] I have not found any misconduct by the applicant that contributed to the dismissal.

Shock, Distress: s.392 (4)

[23] I note that the amount of compensation calculated does not include a component for shock, humiliation or distress.

Compensation cap: s.392 (5)

[24] The amount of compensation I will order does not exceed the compensation cap.

Conclusion

[25] I am satisfied that the Applicant was protected from unfair dismissal, that the dismissal was unfair and a remedy of compensation is appropriate. I award the applicant an amount of compensation equivalent to 16 weeks salary ($22,798.08). An order will be issued with this decision.

SENIOR DEPUTY PRESIDENT

Appearances:

D Gmitrovic on his own behalf

K Richardson solicitor for the Respondent

Hearing details:

2014

Sydney

10 July

 1   [2014] FWC 1637

 2   [2013] FWCFB 431.

 3 (1998) 88 IR 21.

 4   Print S5109.

 5   PN2480

 6   PN2468

Printed by authority of the Commonwealth Government Printer

<Price code C, PR553078>