David Keogh v French Par-Bake

[2017] FWC 4393

[2017] FWC 4393

FAIR WORK COMMISSION

FURTHER DECISION IN REGARD

TO REMEDY

Fair Work Act 2009
s.394—Unfair dismissal

David Keogh
v
French Par-Bake
(U2016/11839)

COMMISSIONER CRIBB MELBOURNE, 15 SEPTEMBER 2017

Application for relief from unfair dismissal - compensation in lieu of reinstatement.

[1] This decision concerns the final determination of an amount of compensation, in lieu of reinstatement, to be ordered by the Fair Work Commission (the Commission), pursuant to section 392 of the Fair Work Act 2009 (Cth) (the Act). It follows the decision 1 issued on 26 May 2017 in which the Commission found that Mr David Keogh was unfairly dismissed. In that decision, the Commission was unable to determine an amount of compensation as there was insufficient material before the Commission at that time.2

[2] Accordingly, Mr Keogh was requested to provide details of any remuneration earned between 9 January 2017 and 26 May 2017, together with the relevant payslips. Mr Keogh was also requested to provide an estimate of what he was likely to earn between 26 May 2017 and 6 September 2017 together with the basis for calculating the estimate.

[3] On 8 June 2017, on behalf of Mr Keogh, a letter was provided relating to income earned between 9 January 2017 and 26 May 2017, and likely to have been earned between 26 May 2017 and 6 September 2017. 3

[4] A letter was received from French Par-Bake on 9 June 2017 in response to Mr Keogh’s submissions. 4

[5] Numerous letters were subsequently filled in response by both parties, with further submissions received on Mr Keogh’s behalf on 14 June 2017 and 22 June 2017, 5 and on behalf of French Par-Bake on 15 June 2017 and 19 June 2017.6

Section 392 (2) (e) and (f) – remuneration earned and income likely to be earned

[6] In the previous decision, the Commission found that, based on the payslips currently before the Commission, between 7 September 2016 and 8 January 2017, Mr Keogh earned a total of $9,881.24. 7 This was based on $660 having been earned between 7 September 2016 and 7 November 2016 and then $9,221.24 between 8 November 2016 and 8 January 2017.8

[7] With respect to the period from 9 January 2017 to 4 June 2017, the Commission was provided with payslips which showed Mr Keogh’s earnings from 9 January 2017 until 4 June 2017. 9 The payslips showed that Mr Keogh earned $33,764.42 over this period.

[8] Therefore, it was submitted by Mr Keogh that his remuneration, for the period of 7 September 2016 to 4 June 2017, was $43,645.66.

[9] On the other hand, the Respondent contended that Mr Keogh had earned an amount of $47,401.48 for the period from 7 September 2016 to 4 June 2017. This was said to be based on the earnings year to date figure at the bottom of the 6 June 2017 pay slip of $46,741.48 plus $660 for the period from 7 September 2016 to 8 November 2016. 10

[10] The Commission has before it two competing amounts of remuneration said to have been earned by Mr Keogh between 7 September 2016 and 4 June 2017. Both parties agree that between 7 September 2016 and 8 November 2016, Mr Keogh earned $660. However, the parties are in dispute about how much Mr Keogh earned between 9 November 2016 and 4 June 2017. On the basis of the material before it, the Commission is not in a position to be able reconcile the two different amounts. The Respondent’s figure is guided by the year to date total on the 6 June 2017 pay slip. The Applicant has provided payslips for this period which have formed the basis for the Applicant’s figure.

[11] It is acknowledged that the 6 June 2017 pay slip has a year-to-date total of $46,741.48. However, there was no additional information provided by the Respondent to buttress reliance on the year-to-date total in that payslip. The Applicant has provided all of the payslips for the period from 7 November 2016 to 4 June 2017 and the first payslip provided (for 7 November 2016 to 13 November 2016) shows that, both the gross pay for that period and the year-to-date amount, was the same amount – $1,017.29. As the Commission has at hand all of the payslips for the relevant period, the Commission will proceed with calculating the amount of remuneration earned on the basis of the specific payslips.

[12] Therefore, the Commission finds that the remuneration earned by Mr Keogh between 7 September 2016 and 4 June 2017 was $43,645.66.

[13] With respect to the income reasonably likely to be earned for the period from 5 June 2017 to 6 September 2017, the parties did not agree on how to calculate this amount. On behalf of Mr Keogh, it was submitted that the average of all of Mr Keogh’s earnings prior to 5 June 2017 should not be used to predict his anticipated earnings for the remaining three month period of anticipated employment. This was on the basis that Mr Keogh was employed at the beginning of the busy Christmas period (November to February). It was stated that Mr Keogh’s hours/overtime would be likely to drop during the seasonally less busy period from March to October. It was argued that the average of the income earned from 6 March 2017 to 26 May 2017 ($1,158.26) should be used to estimate the anticipated income for the remaining period of anticipated employment. 11

[14] The Respondent disputed the contention that the transportation industry was seasonably less busy between March and October. This was on the basis that Mr Keogh had earned $23,101.67 ($1,650.12 on average per week) between 1 March 2017 and 4 June 2017. This particular average figure was argued to be the relevant amount to be used in calculating the remaining amount of anticipated income. 12

[15] I have carefully considered the parties’ submissions on this point. It is proposed to calculate a weekly anticipated earnings figure on the basis of an average of the amount that Mr Keogh earned between 8 November 2016 and 4 June 2017. The total amount earned for this period was $42,985.66 over a period of 30 weeks. This results in average weekly earnings of $1,432.86. It may well be that the transportation industry is seasonally less busy between March and October. However, there is insufficient information before the Commission to allow account to be taken of this in calculating the basis of the anticipated remuneration.

[16] Therefore, the anticipated remuneration for the period from 5 June 2017 to 6 September 2017 (3 months) is $18,627.18 ($1,432.86 x 52 divided by 12 x 3).

[17] The total amount to be deducted for remuneration earned, and income likely to be earned, is $62,272.84. This is on the basis of $9,881.24 – 7 September to 8 January 2017 + $33,764.42 – 9 January 2017 to 4 June 2017 + $18,627.18 – 5 June 2017 to 6 September 2017.

[18] In the first decision, it was determined that, on the basis of a 12 month period of anticipated employment, Mr Keogh would have received $54,652 (gross). 13 The Commission is required to deduct from that amount the remuneration earned or likely to be earned over the period of anticipated employment. As the amount to be deducted is greater than what Mr Keogh would have received if he had not been terminated, there has been no loss suffered by Mr Keogh.

Contingencies

[19] In the first decision, it was proposed to make a deduction for contingencies of 10%. 14

However, given that Mr Keogh has not suffered any loss, it is not necessary to make a deduction for contingencies.

Section 392 (5) – compensation cap

[20] Given that Mr Keogh has not suffered any loss, this section is not applicable in this matter.

Further considerations

[21] As indicated in the first decision, 15 the Commission has been guided by the decision in Haigh v Bradken Resources Pty Ltd16 (Haigh) which applied the approach set out in Sprigg v Paul Licensed Festival Supermarket17. The Sprigg formula is the one commonly used in working out the appropriate amount of compensation.

[22] However, it has been found that if, when applied, the Sprigg formula results in an amount which appears either clearly excessive or clearly inadequate then the Commission should reassess the assumptions made in reaching that amount. Compensation should be appropriate having regard to all of the circumstances of the case.

[23] The Full Bench in Smith v Moore Paragon Australia Ltd 18 (Moore Paragon) found the following:

“[32] It seems to us that the amounts arrived at by the application of the guidelines in Sprigg in the present matter are on their face manifestly inadequate for employees with the length of service of the Appellants, the circumstances of their dismissal and their poor prospects for future employment. This causes us to sound a warning in relation to the application of Sprigg. The guidelines laid down in Sprigg and refined in Ellawala v Australian Postal Commission²⁸ are clearly designed to serve the proper and desirable purpose of fostering uniformity and consistency in decision-making by individual members of the Commission when assessing compensation pursuant to s.170CH(6). However, those guidelines are not a substitute for the words of the Act²⁹. By virtue of s.170CH(2), any remedy ordered by the Commission must be a remedy that the Commission considers "appropriate" having regard to all the circumstances of the case including the matters set out in s.170CH(2). Section 170CH(6) confers a general discretion "if the Commission considers it appropriate in all the circumstances of the case" to "make an order requiring the employer to pay the employee an amount ordered by Commission in lieu of reinstatement" subject to the Commission having regard "to all the circumstances of the case including" the matters listed in s.170CH(7) - the same list of matters set out in s.170CH(2) - and subject also to the `cap' provided for in s.170CH(8) and (9). If an application of the guidelines in Sprigg yields an amount which appears either clearly excessive or clearly inadequate, then the member should reassess any assumptions or intermediate conclusions made or reached in applying the guidelines so as to ensure that the level of compensation is in an amount that the member considers appropriate having regard "to all the circumstances of the case" including the matters listed in s.170CH(7) and subject to the `cap' provided for in s.170CH(8) and (9). In this context it should be borne in mind that the result yielded by an application of the Sprigg guidelines may vary greatly depending upon particular findings in relation to the various steps including, in particular, step one, which necessarily involves assessments as to future events that will often be problematic.”

[24] In this matter, I have formed the view that the award of zero compensation in lieu of reinstatement is clearly inadequate having regard to all of the circumstances of this case. This is on the basis of the loss of job security, Mr Keogh’s length of service and the loss of service in relation to long service leave. Mr Keogh’s position with the Respondent was an ongoing role. The alternative position that Mr Keogh has obtained is a casual position. Mr Keogh has therefore lost the job security that he had with French Par-Bake. In addition, Mr Keogh no longer accrues personal leave, annual leave or long service leave and he has lost the service that he had accrued in relation to long service leave. Further, Mr Keogh had between 7 and 8 years’ service with the Respondent. Mr Keogh was therefore not a short serving employee.

[25] For these reasons, the Commission determines that it is appropriate to award Mr Keogh a modest amount of compensation as an award of zero compensation is clearly inadequate. The amount to be ordered is $4,500 (gross).

Section 393 – payment by instalments

[26] As indicated in the first decision 19, the Commission was prepared to make an order that the compensation amount be paid in instalments. The length of time over which the compensation amount is to be ordered was dependent on the final amount of compensation. As the amount of compensation is $4,500 (gross), the Commission considers that it is unnecessary to order that the compensation amount be paid in instalments.

Conclusion

[27] Therefore, it is considered appropriate to make an order that French Par-Bake pay $4,500(gross), less taxation as required by law, in compensation to Mr Keogh in lieu of reinstatement.

[28] An order to this effect will be issued separately.

[29] It is noted that the Applicant seeks to address the Commission on the question of costs. 20 Section 402 of the Act permits an application for an order for costs under s.611 if it is made within 14 days after the Commission determines the matter. The matter will be dealt with accordingly if an application is filed with the Commission.

 1   [2017] FWC 2865

 2   Ibid at paragraphs 106 and 115

 3   Letter on behalf of Applicant, dated 8 June 2017

 4   Letter on behalf of Respondent, dated 9 June 2017

 5   Letter on behalf of Applicant, dated 14 June 2017; Letter on behalf of Applicant, dated 22 June 2017

 6   Letter on behalf of Respondent, 15 June 2017; Letter on behalf of Respondent, dated 19 June 2017

 7   Ibid at paragraphs 104 – 105

 8   Ibid and Applicant’s Further Information relating to Compensation, dated 27 January 2017, with payslips attached

 9   Letter on behalf of Applicant, dated 8 June 2017, with payslips attached

 10   Letter on behalf of the Respondent, dated 19 June 2017

 11   Letter on behalf of the Applicant, dated 8 June 2017; Letter on behalf of the Applicant, dated 14 June 2017 and Letter on behalf of the Applicant, dated 22 June 2017 and Applicant's Further Information relating to Compensation dated 27 February 2017

 12   Letter on behalf of the Respondent, dated 9 June 2017; Letter on behalf of the Respondent, dated 15 June 2017 and Letter on behalf of the Respondent, dated 19 June 2017

 13   [2017] FWC 2865 at paragraph 100

 14   Ibid at paragraph 112

 15   Ibid at 92

 16   [2014] FWCFB 236

 17 (1998) 88 IR 21

 18   [2004] AIRC 57

 19   [2017] FWC 2865 at paragraph 115

 20   Letter on behalf of the Applicant, dated 29 June 2017.

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