Desanka Nestorovska v Ngarluma & Yindjibarndi Foundation T/A NYFL

[2018] FWC 7342

[2018] FWC 7342

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Desanka Nestorovska
v
Ngarluma & Yindjibarndi Foundation T/A NYFL
(U2018/2945)

DEPUTY PRESIDENT BINET PERTH, 30 NOVEMBER 2018

Application for an unfair dismissal remedy – application granted – remedy not determined at first instance – compensation awarded.

[1] On 21 March 2018, Mrs Desanka Nestorovska (Mrs Nestorovska) filed an application (Application) pursuant to section 394 of the Fair Work Act 2009 (Cth) (FW Act) with the Fair Work Commission (FWC) alleging she was unfairly dismissed from her position as a cleaner by Ngarluma & Yindjibarndi Foundation Limited (Administrators Appointed) trading as NYFL (Foundation).

[2] The Foundation was founded in 2000 to facilitate an arrangement between the North West Shelf Joint Venturers (JV) and the Ngarluma and Yindjibarndi people which amongst other things provides for a semi-annual payment to be made to the Foundation by the JV in order to support the Ngarluma and Yindjibarndi people. 1

[3] On 29 March 2018, Cor Cordis Chartered Accountants (Cor Cordis), informed the FWC that as at 12 March 2018, the Foundation had been placed into voluntary administration and Mr Jeremy Nipps and Mr Cliff Rocke of Cor Cordis appointed Administrators of the Foundation (Administrators).

[4] The Determinative Conference to determine both the Administrator’s jurisdictional objection and the merits of the Application was held on 19 July 2018 in Karratha (Determinative Conference).

[5] In my decision at [2018] FWC 4302 (Decision) I determined that Mrs Nestorovska was protected from unfair dismissal, that the dismissal was unfair, and that a remedy of compensation was appropriate.

[6] Mrs Nestorovska had been dismissed from her employment in the course of a restructure of the Foundation (after the Foundation was placed in Administration) following a period of leave without pay. During her absence her duties cleaning at Rio Tinto’s Dampier Salt site had been performed by casual cleaners engaged by a related entity of the Foundation called NYFL Nursery Pty Ltd trading as NYFL Catering and NYFL Facility Management (Nursery).

[7] In my Decision, I found that the Foundation failed to comply with the consultation obligations in the relevant enterprise agreement and that if they had done so it would have reasonable for Mrs Nestorovska to be redeployed by the Nursery as a cleaner employed on a casual basis cleaning at the Dampier Salt Site. 2

[8] Neither party adequately dealt with the issue of remedy in their written or oral submissions. On 28 August 2018, directions (Remedy Directions) were issued for the filing of materials addressing this issue and providing the opportunity for the parties to make oral submissions with respect to the quantum of any compensation order arising from my decision.

[9] On 6 September 2018 the Administrators filed their submissions. On 12 September 2018 Mrs Nestorovska filed her submissions. Mrs Nestorovska and the Administrators confirmed that they did not wish to make any oral submissions with respect to remedy on 8 October 2018 and 9 October 2018 respectively, The submissions and evidence filed by the parties were insufficient for me to calculate compensation in the manner required by the statutory regime and the parties were required to file additional evidence. Further submissions were filed by Mrs Nestorovska on 8 October 2018.

[10] On 15 October 2018 the Administrators informed Chambers that the information which they were directed to file was in the custody and control of the Nursery and that they had requested that the Nursery produce the relevant records. After prompting from Chambers, the Administrators repeated their request to the Nursery on 24 October 2018. The records were not forthcoming and on 2 November 2018 I issued an Order to Produce to compel the Nursery to produce the following records:

•  Evidence with respect to the number of hours of cleaning work that was performed by cleaners employed by NYFL Nursery Pty Ltd at Dampier Salt between 15 February 2018 and 15 September 2018;

•  Evidence as to whom the work was performed by on each occasion that it was performed. Relevant evidence may include copies of rosters, completed timesheets and/or pay records; and

•  Evidence as to the applicable rate of pay for cleaners performing this work.

[11] On 5 November 2018 the Nursery produced Payroll Advices for the period from 15 February 2018 to 15 September 2018 and timesheets dated from the pay week ending 20 February 2018 to the pay week ending 18 September 2018. The records were incomplete and inconsistent in parts, therefore to ensure that my conclusions with respect to the remuneration Mrs Nestorovska would have received but for her dismissal were accurate, my assumptions and conclusions were provided to the parties in draft before I finalised my decision. Neither party indicated any disagreement with my assumptions or conclusions nor availed themselves of the invitation to make any further submissions.

Relevant Statutory Provision

[12] Section 392 of the FW Act sets out the factors 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. Section 392 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.”

[13] The method for calculating compensation under section 392 of the FW Act was dealt with by a Full Bench of the FWC in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge 3 (Bowden). In Bowden, the Full Bench set out the order in which the criteria and other factors should be applied, taking into account the decisions in Sprigg v Paul’s Licensed Festival Supermarket4 and Ellawala v Australian Postal Corporation.5 I have adopted the methodology utilised in Bowden in determining the amount of compensation.

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

[14] In my Decision, I found it would have been reasonable for Mrs Nestorovska to be redeployed by the Nursery as a cleaner employed on a casual basis cleaning at the Dampier Salt Site. 6

[15] It is submitted on Mrs Nestorovska’s behalf that if she had been redeployed as a casual cleaner she would have remained employed for a further 18 months before she retired.

[16] The Administrators submit that Mrs Nestorovska would not have been offered any shifts as a casual cleaner because the Nursery had sufficient casual cleaners performing the cleaning work. 7

[17] A review of the timesheets and payroll records produced by the Nursery appear to indicate that at the date Mrs Nestorovska’s position was declared redundant, the Nursery employed six cleaners performing cleaning duties at locations which included the Dampier Salt site at which Ms Nestorovska had performed her duties (Ms Kalezic, Ms Davey, Ms Holden, Ms Beresi, Ms Mullen and Ms Bianchi). With the exception of Ms Kalezic, it appears that these cleaners were engaged on a casual basis being paid a casual rate of pay of $30 per hour and performing variable hours of work each week.

[18] In reviewing the timesheet and payroll records produced by the Nursery, I noted the following:

•  On or around 10 April 2018, Ms Davey ceased performing cleaning work and her hours of work were absorbed by the other cleaners.

•  On or around 8 May 2018, Ms Holden ceased performing cleaning duties and her hours of work were absorbed by the other cleaners.

•  On or around 16 May 2018, Ms Beresi commenced regularly performing cleaning duties.

•  Between 16 May 2018 and 5 June 2018 Ms Beresi performed 107 hours of cleaning duties. Ms Beresi did not work between the pay week commencing 6 May 2018 and pay week ending 17 July 2018. However, Ms Mullen commenced performing cleaning duties on or around 4 July 2018.

•  An additional cleaner, Ms Bianchi, commenced performing cleaning duties on or around 18 July 2018.

[19] It would appear therefore that at least from on or around 16 May 2018, there was sufficient cleaning work to require the services of one or more additional casual cleaners. Determining what shifts Mrs Nestorovska might have been offered and might have been accepted is by its nature an imprecise art. Given there is no evidence of concerns with respect to Mrs Nestorovska’s performance prior to her dismissal by the Foundation it could be presumed that she would have been offered the average number of hours of cleaning work offered by the Nursery to casual cleaners who commenced performing cleaning duties on or after 16 May 2018 (namely Ms Beresi, Ms Mullen and Ms Bianchi).

Pay Period	Average Hours worked per week by casual cleaners who began performing cleaning on or after 16 May 2018
16/5/18–22/5/18	21
23/5/18–29/5/18	44.5
30/5/18–5/6/18	41.5
6/6/18–12/6/18	0
13/6/18–19/6/18	0
20/6/18–26/6/18	0
27/6/18–3/7/18	0
4/7/18–10/7/18	0
11/7/18–17/3/18	40.5
18/7/18–24/7/18	16
25/7/18–31/7/18	30
1/8/18–7/8/18	24.5
8/8/18–14/8/18	43
15/8/18–21/8/18	40
22/8/18–28/8/18	15
29/8/18–4/9/18	0
5/9/18–11/9/18	17
12/9/18–18/9/18	23
TOTAL AVERAGE HOURS	356

[20] Having considered the material filed by the Nursery, I find that had Mrs Nestorovska been redeployed to the Nursery to perform casual cleaning duties she would have continued in her employment for a period of at least six months and performed the average number of hours per week of work performed by cleaners engaged by the Nursery after the date of her redundancy. At the casual rate of pay of $30 per hour this would equate to a total of 356 hours x $30 = $10,680.00 gross.

Remuneration earned: s.392(2)(e)

[21] At the Determinative Conference, Mrs Nestorovska’s son, Michael Nestoroski (Mr Nestoroski), who was assisting his mother at the Determinative Conference, was transcribed as stating in relation to the possibility of reinstatement:

“We discussed it before we come in and it's been a couple of weeks, she's in a job with my brother and she's told him she doesn't feel comfortable going back to this organisation to work.  There's constantly lies, lies, trying to get hold of people.” 8

[22] On 6 September 2018, the Administrators sought Orders for Production of any documents showing or relating to income earned by Mrs Nestorovska since 15 March 2018.

[23] Later on the same day Mr Nestoroski sent an email to the parties and Chambers asserting that:

“There appears to be mistake in the transcript of proceedings section pn344 she’s in a job with my brother this is not correct  Desanka has not worked since 15 March 2018.”

[24] On 10 September 2018, my Chambers advised the parties that if Mrs Nestorovska had not in fact obtained any form of further employment or received other income since the time of her dismissal, she should file and serve a statutory declaration to that effect.

[25] On 12 September 2018, Mrs Nestorovska signed a statutory declaration stating that she has not obtained alternative employment since her dismissal and has not earned any income since her dismissal. 9

[26] The Administrators were invited to request an oral hearing at which Mrs Nestorovska could have been cross-examined with respect to her evidence. The Administrators elected not to request a hearing.

[27] I have therefore accepted Mrs Nestorovska’s evidence that she has not obtained alternative employment since her dismissal and find that she has earned nil remuneration for employment or other work during the period since the dismissal and as such make no deduction from the compensation to be ordered.

Income likely to be earned: s.392(2)(f)

[28] Mrs Nestorovska says that she has not earned any income since her dismissal. It is submitted on her behalf that, given her age and location in a regional community, she is unlikely to obtain alternative employment in order to earn any income before the compensation is paid. 10

[29] Given Mrs Nestorovska’s age and her location in a regional area of Western Australia adversely affected by the end of the resources boom I am satisfied that the opportunity for Mrs Nestorovska to secure alternative employment is likely to be poor.

[30] I find Mrs Nestorovska is unlikely to earn any income during the period between the making of the order for compensation and the payment of compensation.

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

[31] The next step is to take into account the possibility of the occurrence of contingencies which might have brought about some change in Mrs Nestorovska’s earning capacity or earnings. Assessing the impact of contingencies requires the exercise of a broad general discretion. 11

[32] Given Mrs Nestorovska’s advancing age, that she was working in employment which involved manual labour and that other casual cleaners may have been offered more of the available hours of work some allowance should be made for the contingency that Mrs Nestorovska may not have performed all the shifts which I have presumed would have been allocated to her. I will therefore adopt a 15% discount for contingencies reducing the quantum of compensation as follows:

$10,680.00 gross less contingency of 15% ($1602.00) = $9,078.00 gross

[33] I have considered the impact of taxation but have elected to settle a gross amount and leave taxation for determination.

[34] There are no other matters which I consider are relevant to determining the amount of compensation to be awarded other than those dealt with below.

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

[35] The Administrators did not present any evidence or argument as to the financial situation of the Foundation in the submissions with respect to remedy filed on their behalf on 6 September 2018. Merely it was indicated that the Administrators will satisfy an order for compensation from the income of the Foundation as a cost in the administration of the Foundation. 12

[36] Viability is therefore not a matter which warrants adjustment of the compensation awarded.

Length of service: section (s.392(2)(b))

[37] Mrs Nestorovska was employed by the Foundation from 9 December 2016 13 to 15 March 2018,14 being a period of 1 year, 3 months and 7 days.

[38] I find that Mrs Nestorovska’s period of service with the Respondent while supporting an order for payment of compensation should not affect the amount of compensation to be ordered.

Mitigating efforts: s.392(2)(d)

[39] I am required to take into account the efforts of Mrs Nestorovska to mitigate the loss she has suffered because of her dismissal. In considering whether Mrs Nestorovska has taken steps to mitigate the loss she has suffered as a result of her dismissal, I am required to take into account whether she acted reasonably in the circumstances. 15 What is reasonable depends on the circumstances of the case.16

[40] Mrs Nestorovska has not filed any evidence to demonstrate that she had taken reasonable steps to minimise the impact of her dismissal.

[41] I am not satisfied that Mrs Nestorovska has made efforts to mitigate the loss she has suffered as a result of the dismissal.

[42] I will reduce the amount of compensation by $1000 to take into account that Mrs Nestorovska has not demonstrated that she has made reasonable efforts to mitigate her loss because of the dismissal as follows:

$9,078.00 gross less $1,000.00 = $8,078.00 gross

Misconduct: s.392(3)

[43] I have not found any misconduct by Mrs Nestorovska that contributed to her dismissal.

Shock, Distress: s.392(4)

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

Compensation cap: s.392(5)

[45] I must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the Applicant, or to which the Applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or the high income threshold immediately prior to the dismissal.

[46] In this case the compensation cap is half of Mrs Nestorovska’s annual wage being $28,128.36 (inclusive of superannuation) that amount comprising $25,688.00 (salary) and $2,440.36 (superannuation). 17

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

Payment by instalments: s.393

[48] The Administrators have not sought the opportunity to make the payments by way of instalments. I do not consider payment by way of instalment is appropriate in the circumstances given the uncertain future of the Foundation.

Conclusion

[49] I will order the Foundation pay to Mrs Nestorovska an amount of $8078.00 gross less taxation required by law as compensation in lieu of reinstatement within 14 days of the date of this decision.

[50] An order to this effect will be issued with this decision.

DEPUTY PRESIDENT

Final written submissions:

Applicant, 8 October 2018.

Respondent, 9 October 2018.

Printed by authority of the Commonwealth Government Printer

<PR702797>

 1   Exhibit R5.

 2   Desanka Nestorovska v Ngarluma & Yindjibarndi Founation Limited (Administrators Appointed) t/a NYFL[2018] FWC 4302 at [108].

 3   [2013] FWCFB 431.

 4 (1998) 88 IR 21.

 5   (2000) (Unreported, AIRC(FB), Print S5109).

 6   Ibid.

 7   Respondents Submissions filed 6 September 2018.

 8   Transcript at PN344.

 9   Statutory Declaration of Mrs Nestorovska filed 12 September 2018.

 10   Statutory Declaration of Mrs Nestorovska filed 12 September 2018; Applicant’s submissions filed 12 September 2018.

 11   Ellawala v Australian Postal Corporation (2000) (Unreported, AIRC(FB), Print S5109) at [39]

 12   Respondent’s Remedy Submissions filed 6 September 2018.

 13   Desanka Nestorovska v Ngarluma & Yindjibardndi Founation Limited (Administrators Appointed) t/a NYFL[2018] FWC 4302 at [15].

 14   Ibid at [26]].

 15   Biviano v Suji Kim Collection (unreported AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002) Print 15963 at [34].

 16   Ibid.

 17 Respondent’s Remedy Submissions filed 6 September 2018 at [18].