Emma Henderson v Parkes Auto Pty Ltd T/A Parkes Nissan and Hyundai

[2014] FWC 8041

[2014] FWC 8041

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Emma Henderson
v
Parkes Auto Pty Ltd T/A Parkes Nissan and Hyundai
(U2014/312)

DEPUTY PRESIDENT LAWRENCE SYDNEY, 17 NOVEMBER 2014

Application for relief from unfair dismissal.

Introduction

[1] An application pursuant to s.394 of the Fair Work Act 2009 (the Act) for a remedy for unfair dismissal was lodged with the Fair Work Commission (the Commission) by Ms Emma Henderson (the Applicant) against her former employer, Parkes Auto Pty Ltd trading as Parkes Nissan and Hyundai (the Respondent) on 5 February 2014.

[2] The Applicant, who was a resident of Parkes, NSW, was employed by the Respondent in May 2012 as General Manager of the dealership. In the F2 form she stated that she was notified of the dismissal and it took effect on 16 January 2014. She said, however, that she had not been given formal notification of her dismissal and not given reasons. The application was lodged, on her behalf, by her solicitor Mr Tancred.

[3] On 21 January 2014, Mr Tancred sent an email to Andrew Broderick, Director, of the Respondent. The email stated that at a meeting of directors on 16 January, Mr Broderick had “indicated..., although not expressly stated, that the employment of Emma Henderson with Parkes Auto and Broderick Motors had been terminated”. Confirmation of the position was requested so that unfair dismissal proceedings could be considered.

[4] Mr Broderick responded, in an undated letter, that he disagreed that the Applicant was terminated during the 16 January meeting. He advised that the Applicant had been dismissed as a director at a meeting on 24 December. The Applicant had communicated her intention to resign through her husband, Craig Henderson, also a director. She was then paid out. Mr Broderick asserted that the Applicant’s position was now redundant. The Applicant is Mr Broderick’s niece. She and her husband moved from Brisbane to Parkes to help run the business. They were given 12.5% shareholding each and invested $50,000. There was a related business Broderick Motors Pty Ltd, which was a Holden dealership, of which both were directors also.

[5] In the F3, lodged by Mr Buckley, the Respondent’s solicitor, Mr Broderick asserts that the Applicant was not dismissed.

[6] The matter was conciliated on 19 March 2014 and not settled.

[7] A proposed jurisdictional hearing scheduled for 21 May in Orange was vacated and the file allocated to me. I conducted a programming teleconference on 22 May.

[8] Directions were amended and the matter set down for hearing on 13 and 14 August in Orange.

[9] The Applicant relied on oral submissions and evidence and:

● Written submissions filed on 22 April 2014.
● Submissions on jurisdiction filed on 15 August 2014.
● Witness Statements of Emma Henderson (Exhibit D1) filed on 22 April 2014 and 28 July 2014 (but undated)(Exhibit D2).
● Witness Statements of Craig Henderson (Exhibit D4) filed on 22 April 2014 and 28 July 2014 (but undated)(Exhibit D5).

[10] The Respondent relied on oral submissions and evidence and:

● Written submissions filed on 23 April 2014.
● Witness Statement of Lindsay Hughes, the Respondent’s Salesman/Administration Officer filed on 23 April 2014.
● Witness Statement of Tracy Basman, the Respondent’s Financial Controller, filed on 23 April 2014 (Exhibit B3).
● Witness Statement of Andrew Broderick filed on 23 April 2014 (Exhibit B2).
● Submissions on jurisdiction filed on 28 August 2014.

[11] The Hearing before me took place in Orange on 13 August 2014.

[12] The Applicant was represented by Mr J Darams of Counsel and the Respondent by its solicitor Mr P Buckley. I granted both permission to appear pursuant to s.596 of the Act.

Protection from Unfair Dismissal

[13] An order for reinstatement or compensation may only be issued where I am satisfied the applicant was protected from unfair dismissal at the time of the dismissal.

[14] Section 382 sets out the circumstances that must exist for the applicant to be protected from unfair dismissal:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

[15] I am satisfied the Applicant has completed the minimum employment period and is below the high income threshold earning $2076.92 per week ($107,999.86 per annum) plus motor vehicle and fuel card at the time of the dismissal. There was a late submission by the Respondent that the Applicant was above the high income threshold. This was based on Exhibit B1 which showed that the Applicant had a fluctuating pay rate. This issue is somewhat confused by the linked pay packages of the Applicant and her husband. Nevertheless, I accept Mr Darams’ submission that the relevant test is the rate of income being earned at the time of dismissal. The motor vehicle and fuel card could not bring the Applicant over the threshold. The figure in the F3 form had not been previously contested. Any other approach would be inconsistent with the plain words of s.382 and impractical to apply given that any employee’s salary varies from time to time during a year. Consequently I am satisfied the Applicant was protected from unfair dismissal.

Was the dismissal unfair?

[16] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Was the Applicant dismissed?

[17] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for purposes of Part 3–2 of the Act. Section 386 of the Act provides that:

“386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

(2) However, a person has not been dismissed if:

(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or

(b) the person was an employee:

(i) to whom a training arrangement applied; and

(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;

and the employment has terminated at the end of the training arrangement; or

(c) the person was demoted in employment but:

(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and

(ii) he or she remains employed with the employer that effected the demotion.

(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.”

[18] S.385 (c) does not apply as the Respondent had 16 employees. I will deal with the Respondent’s submission that the Applicant resigned and that her position was now redundant as part of my overall consideration of the arguments.

Harsh, Unjust or Unreasonable

[19] I must consider whether I am satisfied the dismissal was harsh, unjust or unreasonable. The criteria I must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the Act:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person-whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

Approach of the Commission

[20] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:

“... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”

[21] Vice President Ross, as he then was, in B Rose v Telstra Corporation Limited (1998) Q9292 (Rose) restated the above proposition and also stated:

“In my view whether there has been a `fair go all round’ is a matter which I think is relevant and hence I am to have regard to it determining whether the termination was harsh, unjust or unreasonable. It is not necessarily determinative but it is a factor to be taken into account.”

The Parties’ Main Arguments

[22] The Applicant submits the dismissal was harsh, unjust and unreasonable because:

● The Applicant was also a director of the Respondent which traded as “Parkes Nissan and Hyundai.” Her salaried position was “General Manager/Sales Manager”. She was dismissed as a director at the 24 December 2013 meeting but received no notice of the termination or reasons for it until Mr Broderick’s response to her solicitor’s email of 21 January 2014.

● The Applicant submits that there was no valid reason for the termination and there was no process undertaken that would satisfy s.387 of the Act. She asserts that she did not resign or give any indication of her intention to do so.

● The Applicant’s husband, Craig Henderson, was “Dealer Principal” of the Respondent. It appears that an agreement had been entered into with the Applicant’s uncle, Mr Broderick, for both of them to run the business. Clearly the breakdown of this relationship led directly to the unfair dismissal application. There also appears to have been an inter-twining of the employment packages of the husband and wife.

● Attempts by Craig Henderson to clarify the Applicant’s employment status led to a meeting of 16 January with Mr Broderick. It appeared to the Applicant that she had been terminated and led to her instructing her solicitor to seek clarification of her status.

● Craig Henderson attended the meeting of directors on 24 December 2013. He denied that the Applicant was dismissed or made redundant at that meeting. However, his evidence was that Mr Broderick had told him, on the telephone, on 31 December, that she had been dismissed (Exhibit D4). The minutes of the 24 December meeting which were produced from a recording and not contested, confirm that the Applicant was dismissed “as a Director”. There is also an action item which states: “Emma Henderson termination through payroll”.

● In her second witness statement, Exhibit D2, the Applicant states that she took steps to resign as a Director of Broderick Motors. She continued her role with the Respondent through January 2014 although she does concede that she worked a lot from home. She concedes conflicts “with several staff in the accounting department”.

● Evidence of her ongoing role after the 24 December meeting was tendered.

● A transcription of the meeting of 16 January 2014 was Exhibit D3. There was a lot of personal animosity and debate about financial entitlements/obligations within the companies. They are not relevant to this application. It is tendered as evidence of Mr Broderick’s dismissal of the Applicant.

He said at page 14:

“You’re finishing up full stop as an employee in the company because you’re not needed here because you’re a bad egg.”

“You’re not needed. How do I say it, you’re redundant, you’re not fired, you’re redundant. You’re not needed.”

● Craig Henderson, in Exhibit D5, says that he was the only person with authority to terminate the Applicant’s employment with the Respondent and he didn’t do so.

● The Applicant submits evidence of her unsuccessful attempts to find employment in Parkes after January 2014. By the time of the hearing she had moved back to Brisbane.

[23] The Respondent submits that the Applicant was not dismissed. Mr Broderick relied on the advice of Craig Henderson that the Applicant wanted nothing further to do with the business. The Applicant was not in the office from early December 2013. Mr Broderick assumed she had resigned. Notice from Centrelink received in March 2014, which specified that the Applicant ceased employment on 1 December 2013 was also relied on.

[24] Tracy Basman gave evidence that the Applicant had been paid her entitlements on 24 December 2013.

[25] Mr Broderick, in Exhibit B2 asserts that he advised the Applicant, at the meeting on 16 January 2014, that he regarded her as already resigned. He says that he told Craig Henderson the same thing when he enquired about the payout of the Applicant on 31 December 213.

[26] The Respondent put no submission that if I found that the Applicant had been dismissed, the dismissal was not harsh, unjust or unreasonable. In other words its case depended on my finding that the Applicant had not been dismissed.

Was the Applicant Dismissed Pursuant to s.386?

[27] Cases such as Mohazab v Dick Smith Electronics Pty Ltd (No. 2) (1995) 62 IR 200 (Mohazab) and O’Meara v Stanley Works Pty Ltd[2006] AIRC 496(O’Meara) deal with s.386(1)(a). A termination is at the employer’s initiative when its action “directly and consequentially” results in the termination of employment, and the employee would have still been employed but for that action. An analysis of all the circumstances is required. The Full Bench states in O’Meara:

“[23] In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.” Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.”

[28] Where an Applicant claims they were forced to resign they must show they had no real choice, Mohazab. The onus is on the employee to prove that they did not resign voluntarily and that the employer forced them to do it, Australian Hearing v Peary (2009) 185 IR 359. An employer is generally able to treat a clear and unambiguous resignation as such, Ngo v Link Printing Pty Ltd (1999) 94 IR 375.

[29] Deputy President Wells in Dawes v Presbyterian Care [2014] FWC 4067 provides the following useful summaries of the approach to be taken:

“[4] The Explanatory Memorandum to the Fair Work Bill 2008 (Cth) said in respect of now s.386(1) that:

“Clause 386 – Meaning of dismissed

1528. This clause sets out the circumstances in which a person is taken to be dismissed. A person is dismissed if the person’s employment with his or her employer was terminated on the employer’s initiative. This is intended to capture case law relating to the meaning of ‘termination at the initiative of the employer’ (see, e.g., Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200).

1529. Paragraph 386(1)(b) provides that a person has been dismissed if they resigned from their employment but were forced to do so because of conduct, or a course of conduct, engaged in by their employer. Conduct includes both an act and a failure to act (see the definition in clause 12).

1530. Paragraph 386(1)(b) is intended to reflect the common law concept of constructive dismissal, and allow for a finding that an employee was dismissed in the following situations:

● where the employee is effectively instructed to resign by the employer in the face of a threatened or impending dismissal; or

● where the employee quits their job in response to conduct by the employer which gives them no reasonable choice but to resign.”

. . .

[59] In order for there to be access to a remedy to unfair dismissal, the employee must have been dismissed in accordance with s.386 of the Act. Accordingly, I am required to determine on the evidence whether Ms Dawes was dismissed at the initiative of PCT or whether she was forced to resign due to the conduct engaged in by PCT.

[60] In order to amount to a termination at the initiative of the employer the applicant must have been forced to resign by a course of conduct engaged in by PCT.”

[30] In this case there is no real argument for the Respondent that the Applicant formally resigned her employment. Mr Broderick’s evidence was that he made assumptions based upon what her husband Craig Henderson said. Even these were allegedly broad statements about not being “involved with the companies’. The Applicant says that any such broad statement in September 2013 related to Broderick Motors Pty Ltd. Craig Henderson’s evidence is consistent with this (see PN346). She was undoubtedly dismissed as a director of the Respondent at the meeting on 24 December but this is different to her status as an employee.

[31] The fact that a purported termination payment was made after the 24 December meeting is no proof that a termination of employment took place at that meeting by resignation or dismissal. The evidence was that she and her husband took steps to clarify her status leading to the 16 January meeting. The holiday season intervened. I find that the Applicant acted with reasonable speed in the circumstances.

[32] The evidence on all sides was clearly affected by the breakdown of family relationships and by commercial considerations but I found the Applicant and Craig Henderson credible witnesses. Both denied the Applicant ever expressed any intention to resign as an employee of the Respondent.

[33] I accept that there was documentary evidence of the Applicant continuing to act as an employee past the 24 December meeting when she was dismissed as a Director of the Respondent.

[34] It seems clear that Broderick (Traders), was the “parent company” for the Respondent and that Mr Broderick was, in practice, the decision maker in respect of employment issues (see PN441).

[35] The overall accuracy of the recording of the 16 January meeting was not challenged. Mr Broderick’s words quoted towards the end of paragraph 22 above, are supportive of a conclusion that the Applicant had been terminated at the employer’s initiative.

[36] Mr Broderick’s evidence, under cross-examination, was that he had no communication with the Applicant prior to the 16 January meeting:

“PN522

And just in relation to the verbal, Emma has never informed you that she had resigned from Parkes Auto as an employee?---No, but she never, sorry, tried to argue the matter either until way after the - - -

PN523

We might come to that in a moment. What I want to suggest to you is that in fact your evidence really is that based on some conversation you've had with Craig, you've assumed a whole number of things about Emma's employment with Parkes Auto. That's correct? Would you agree with that?---And so did everyone else in the room that day in the meeting.

PN524

I'm not interested in what everyone else might have assumed. I'm interested in what you've assumed?---Okay. Yes, I assumed.”

[37] He conceded that employment was discussed and came pretty close to conceding that he had dismissed the Applicant.

PN547

Well, Mr Broderick, is that really a round about way of saying, yes, you agree with me that there was a discussion about her employment?---She kept on trying to bring it up, yes.

PN548

Yes?---And I didn't want to talk about it.

PN549

She wanted clarification of what had happened?---It was an ambush.

PN550

Do you disagree with that?---It wasn't clarification. It was an ambush with an agenda.

PN551

And after Emma sought to raise this with you, you responded by saying, "You're finishing up, full stop, as an employee in the company, because you're not needed here because you're a bad egg." You remember saying that?---I remember saying, "You're a bad egg," because of the way they stirred me up that day. As the end part, I said, "You've been finished up. It doesn't matter."

PN552

Well, can I suggest to you that what you did say was that, "You're finishing up, full stop, as an employee"?---Okay.

PN553

Do you remember saying that?---I said that - I had been stirred up that day and I had been ambushed, and I had - she had a tactical letter, you know, tick box, trying to get me to say certain things.”

[38] The word ‘redundant” was used to describe the fact that the Applicant’s position was not replaced. There was no argument mounted that there was a genuine redundancy pursuant to s.385(d).

PN600

Just let me walk you through this redundancy thing that you were referring to. What did you mean by - - -?---Her position is now redundant. We never replaced her. We never replaced her with somebody. We had to - I had to borrow $1.2 million to keep the place afloat. We had to shrink our staff levels to try and stop losing 180 grand a month that we were losing. There was a few people that lost their jobs because of it. We rationalised the whole place to get it profitable again - or break even again.

PN601

When did you make the decision she was redundant?--- Her position was made redundant because she was never at work, anyway. She said she quit - or I was of the understanding I got from her husband that she wanted nothing to do with the place. She never showed up for work any more. She wasn't at work at the time. We didn't - she wasn't doing anything, so the position was redundant. There was nothing to replace. It was the word I used at the time to describe what - - -

PN602

Where did you get that word from?---Well, "redundant" - something that's not needed any more; that you don't use any more.

PN603

I'm just asking you, when did you decide that she was redundant?---I didn't decide she was redundant. I decided - look, she said she was - like, you're trying to put words into my mouth now. She finished up on the - we finished her up on 24 December, when her husband communicated to us that she wanted no further participation in the company any more.

PN604

I'm just asking you about the words you've used, not the words that - - -?

---Whether that was the word or not, the position was then by that period in time redundant.

PN605

I'm asking you why it was redundant?---Because it was not needed. We were trying to save the business.

PN606

What I want to put to you, Mr Broderick, is that Emma was never resigning from her employment with Parkes Auto but she had indicated she wanted nothing more to do with the Broderick Motors Holden business. What do you say about that? ---You can say whatever you want.

PN607

I'm putting these propositions to you - - -

PN608

THE DEPUTY PRESIDENT: Do you agree with that?

PN609

MR DARAMS: Do you agree with the proposition?---No, I don't disagree with that at all.

PN610

You don't disagree with that?---No. I don't - I think she didn't want anything to do with the place any more. It was very obvious to everyone.

PN611

She didn't want anything to do with Broderick Motors Holden. Do you agree with that?---No, I don't believe she wanted anything to do with the place anymore, because the place was going broke at a rapid rate of knots. I think they wanted to run away. This is just a cash grab.”

[39] I find that, on the balance of probabilities, the Applicant did not resign her employment. It is appropriate to conclude that the dismissal took effect at the 16 January 2014 meeting. It was finally clear what had happened on that day.

[40] I find that the Applicant was dismissed pursuant to s.385(a).

Conclusion on s.387

[41] Given the nature of this case little attention was paid to s.387. No argument was put by the Respondent that if I found the Applicant was dismissed, I should find that the factors I need to take into account supported a conclusion that the dismissal was not harsh, unjust or unreasonable.

[42] I find therefore that there was no valid reason for the dismissal. No issue was raised about the Applicant’s capacity to do the job. There were some generalisations about her “disruptiveness” but no specific evidence was led. It is apparent that there was a breakdown in the commercial and personal relationship of the Applicant and Mr Broderick and that this led directly to her dismissal. There is no consideration in relation to sub-section (b) to (h) which would detract from a conclusion that the dismissal was harsh, unjust or unreasonable.

[43] I find that the Applicant’s dismissal was unfair within the terms of s.385.

Compensation

[44] Having found that the dismissal was unfair, I now turn to the appropriate remedy.

[45] Section 390 of the Act sets out the circumstances in which I may make an order for reinstatement or compensation:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.”

[46] The Applicant does not seek reinstatement and it would not be appropriate given the personal/family relationship breakdown that has occurred.

[47] Section 390(3)(b) provides that I may only issue an order for compensation to the Applicant if it is appropriate in all the circumstances.

[48] I have found that the applicant has been unfairly dismissed and that reinstatement is not appropriate in all the circumstances. I am satisfied that an order for compensation should be made.

[49] The Applicant has not been employed since her dismissal in January 2014. She moved with her husband from Brisbane for this position. I accept that she has suffered financial loss.

[50] I was advised that other commercial litigation is underway.I must, however, reach my decision on compensation taking into account factors which relate to the Applicant’s employment.

[51] 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 provides:

“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.”

[52] The method for calculating compensation under s.392 of the Act was 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,[2013] FWCFB 431 (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, (1998) 88 IR 21 and Ellawala v Australian Postal Corporation, Print S5109 (Ellawala). I have adopted the methodology utilised in Bowden in determining the amount of a payment of compensation.

[53] No detailed submissions were made by the parties on the quantum of compensation. Mr Darams submitted that the Applicant should be entitled to an order at the upper level of possible compensation because she had not worked since the dismissal.

[54] I will now consider each of the criteria in s.392 of the Act.

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

[55] The Applicant’s remuneration with the Respondent was approximately $107,999.86 per annum but it did vary during the year.

[56] I 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.

[57] Given the level of commercial and personal/family conflict, it is difficult to imagine that the Applicant’s employment would have continued for very long if she had not been dismissed. I have come to the view that the period of future employment would not have been greater than 4 months. Based on her final salary, the remuneration she would have received is $36,000.

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

[58] The uncontested evidence was that the Applicant had not had employment since the dismissal and therefore there has been no remuneration earned during the period since the dismissal.

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

[59] I consider it unlikely the Applicant will earn income during the period between the period of the order for compensation and the actual compensation.

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

[60] A broad discretion is given to the Commission to consider other matters. The Applicant has suffered considerable expense in moving from Brisbane then returning.

Viability - s.392(2)(a)

[61] There was no evidence about the viability of the business..

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

[62] This was not a factor in this case.

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

[63] In considering whether the Applicant has taken steps to mitigate the loss suffered as a result of the dismissal I should take into account whether the Applicant acted reasonably in the circumstances, (Ellawala).

[64] I find that the Applicant has made efforts to mitigate her loss suffered as a result of the dismissal.

Misconduct: s.392(3)

[65] No adjustment to the compensation is appropriate on this ground.

Shock, Distress: s.392(4)

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

Compensation cap: s.392(5)

[67] 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 half the amount of the high income threshold immediately prior to the dismissal.

[68] The high income threshold component is $66,500.

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

[70] I will order the Respondent to pay to the Applicant an amount of $36,000.

Conclusion

[71] I am satisfied that the Applicant was protected from unfair dismissal, and that the dismissal was unfair and a remedy of compensation is appropriate. In accordance with s.381(2) of the Act, I am further satisfied that each party has been accorded a ‘fair go all round’.

[72] An order (PR 557838) will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

J Darams of counsel for the applicant.

P Buckley, solicitor for the respondent.

Hearing details:

Sydney - Programming teleconference

2014

May 22

Orange

2014

August 13

Final written submissions:

Applicant 15 August 2014

Respondent 28 August 2014

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