Eszter Konya v Transit Australia Pty Ltd T/A Marlin Coast Sunbus
[2015] FWC 7250
•4 NOVEMBER 2015
[2015] FWC 7250
The attached document replaces the document previously issued with the above code on 4 November 2015.
Endnote 45 has been amended.
Amelia Richardson-Dear
Associate to COMMISSIONER SPENCER
Dated 5 November 2015.
| [2015] FWC 7250 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Eszter Konya
v
Transit Australia Pty Ltd T/A Marlin Coast Sunbus
(U2015/4121)
COMMISSIONER SPENCER | BRISBANE, 4 NOVEMBER 2015 |
Application for relief from unfair dismissal – remedy – compensation
Introduction
[1] A Decision was issued in this matter on 2 October 2015 1 in which the Commission as presently constituted found that the termination of the employment of Mrs Eszter Konya (the Applicant) from Transit Australia Pty Ltd T/A Marlin Coast Sunbus (the Respondent) was unfair. The Applicant commenced employment for the Respondent on 9 October 2006 and was dismissed from her employment on 3 March 2015. It was found that the Applicant’s conduct did not constitute serious misconduct, and taking into account a range of other matters the termination, based on all the circumstances of this matter, was harsh, unjust and unreasonable.
[2] At the conclusion of that decision, Directions were issued for the parties to file further material in relation to the remedy of compensation and s.392 of the Fair Work Act 2009 (Cth) (the Act) in order that the Commission may appropriately consider the quantum of any award of compensation in the matter. The Applicant’s submissions and further Affidavit of the Applicant were filed by the Applicant’s representative, Ms Vicki Toong of Wettenhall Silva Solicitors. Mr Ian McDonald, National IR Manager of the Australian Public Transport Industrial Association, filed submissions on behalf of the Respondent, and after the issue of further Directions, also filed supplementary submissions.
Legislation
“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.”
[3] Section 43 of the Industrial Relations Act 1999 (Qld), relating to Long Service Leave, is extracted as follows:
“43 Entitlement
(1) This section applies to all employees, other than seasonal employees.
(2) An employee is entitled to long service leave on full pay of—
(a) for the first 10 years continuous service—8.6667 weeks; and
(b) if the employee has completed at least a further 5 years continuous service—another period that bears to 8.6667 weeks the proportion that the employee’s further period of continuous service bears to 10 years.
(3) An employee who has completed at least 7 years continuous service is entitled to a proportionate payment for long service leave on the termination of the employee’s service.
(4) However, if the employee’s service is terminated before the employee has completed 10 years continuous service, the employee is entitled to a proportionate payment only if—
(a) the employee’s service is terminated because of the employee’s death; or
(b) the employee terminates the service because of—
(i) the employee’s illness or incapacity; or
(ii) a domestic or other pressing necessity; or
(c) the termination is because the employer—
(i) dismisses the employee for a reason other than the employee’s conduct, capacity or performance; or
(ii) unfairly dismisses the employee; or
(d) the termination is because of the effluxion of time and—
(i) the employee had a reasonable expectation that the employment with the employer would continue until the employee had completed at least 10 years continuous service; and
(ii) the employee was prepared to continue the employment with the employer.
…
(9) In this section—
proportionate payment means a payment equal to the employee’s full pay for a period that bears to 8.6667 weeks the proportion that the employee’s period of continuous service (stated in years, and a fraction of a year if necessary) bears to 10 years.”
Submissions and Consideration
[4] Further to my comments at [108] – [119] of the s.394 Decision 2, in summary, it is noted that the Applicant had claimed compensation rather than reinstatement. The Applicant had stated that as a result of the dismissal she had lost trust and confidence in returning to employment with the Respondent. The Respondent had also submitted that reinstatement in terms of their view of the incident, they had lost trust and confidence in the Applicant and reinstatement was not applicable.
[5] In considering the remedy of compensation, the criteria below in section 392(2) of the Act must be addressed, for deciding the amounts of compensation.
(a) the effect of the order on the viability of the employer’s enterprise; and
[6] The Applicant submitted that an order for compensation would not impact upon the viability of the Respondent’s enterprise, given that the Respondent stated that at the time of dismissal, the Respondent had 142 employees and amongst its staff, the Respondent had a dedicated Human Resources department and a Safety and Risk department. The Applicant also submitted that the evidence given by Mr Matthew Campbell, the Respondent’s General Manager for Safety and Risk, was that the Respondent provided bus services along Queensland’s eastern seaboard and that it was clear that the Respondent is a substantial employer with significant resources.
[7] The Respondent conceded that the effect of the order on the viability of the employer’s enterprise would be minimal.
(b) the length of the person’s service with the employer; and
[8] The Applicant was employed by the Respondent for 8 years, 4 months and 23 days. The Applicant’s representative submitted that this was a significant length of employment and that, during this period, the Applicant had an unblemished work record.
[9] The Respondent submitted that the Applicant’s length of service, whilst some eight years, was primarily as a cleaner and that the Applicant did not have a license to drive a passenger service vehicle on a dedicated route or school service. The Applicant held a licence to drive a bus and her services were used to move the buses for cleaning and associated movement of these vehicles. It is unclear why the Respondent raised this in terms of remedy; the issue of the Applicant performing broader or different duties was not argued as a reason related to the dismissal or reasoned in relation to the award of compensation.
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
[10] The Decision at first instance in this matter referred to the Full Bench Decision in James Jones T/A The Pet Cemetery & Crematorium v Ms Raquel Ciuzelis 3 (Pet Cemetery) and sought further submissions from the parties, specifically in relation to the length of the predicted on-going employment relationship, as well as the other criteria in s.392 of the Act4.
[11] The Applicant stated in her Affidavit that, if she had not been dismissed, her employment would likely have continued until 9 October 2016, when she would have completed 10 years of service with the Respondent and would have accrued a full entitlement to long service leave. At the time of dismissal the Applicant was entitled to pro rata long service leave. This has been confirmed on the basis that the reason for dismissal was found not to be serious misconduct and that the dismissal was unfair.
[12] It was submitted for the Applicant that the length of the Applicant’s employment and her unblemished work record favour a generous award of compensation, and there was no evidence that the Applicant had any intention of leaving prior to her dismissal. It was submitted by the Applicant that no weight should be attached to the contingency that she may have left her employment prior to this of her own volition.
[13] Therefore, it was submitted, as at 9 October 2016, based on the Applicant’s remuneration at the time of dismissal and her estimated continuing period of employment, the Applicant would have received $96,848.81 if she had not been dismissed and the following calculations were provided:
3 March 2015 to 9 October 2016 = 1 year 31 weeks 3 days
1 year 31 weeks 3 days = 83.4285 weeks
$1,160.86 X 83.4285 = $96,848.81
[14] The Applicant was summarily dismissed and was not paid an amount of wages in lieu of notice.
[15] With respect to the remuneration the Applicant would have received, the Respondent was asked to provide further submissions in regards to the length of the predicted on-going employment relationship, as per the Full Bench Decision in James Jones T/A The Pet Cemetery & Crematorium v Ms Raquel Ciuzelis 5.
[16] The Respondent submitted that they did not have any knowledge of the Applicant’s employment intentions and that the Respondent, but for the serious incident of 31 January 2015, did not have any immediate plans to terminate the employment of the Applicant.
[17] The Respondent, however, submitted that they relied upon the other criteria set out in s.392(2)(a) to (g) and contingencies which the Commission may take into account when considering the employment relationship and the payment of compensation. The Respondent submitted the following contingencies should be taken into account when considering matters pertaining to s.392(2)(c) (the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed):
“(i) The Applicant did not seek reinstatement because, on her evidence, she had lost trust and confidence and trust in her on-going employment and as such both parties agreed that the employment relationship had broken down (refer paragraph 117 of the Decision).
(ii) The Commission also took the view that reinstatement was not the appropriate recourse and therefore it is the Respondent’s submission that the likelihood would have been that the Applicant would not have continued to work for any period of time in excess of two to three months.
(iii) The Applicant, because she had been employed for more than 7 years was entitled to pro rata long service leave and therefore would not have been penalised if she had left her employment inside the ten year period up to October 2016.
(iv) The Applicant was terminated on 3 March 2015 and immediately found work as a cleaner. On 10 July 2015 the Applicant fractured her wrist and has been unable to work. As this was not a work injury the Applicant would not have been entitled to workers compensation with the Respondent had she continued to work with the Respondent” 6
[18] It must be noted the Applicant’s lack of trust and confidence in the relationship arose from the Respondent terminating her employment. The further employment was casual and for a very short period.
[19] The Respondent relied upon the Full Bench Decision of McCulloch v Calvary Health Care Adelaide 7(McCulloch) in which issues of compensation were considered. The Full Bench observed the following in relation to contingencies:
“[20] There has been some variation in cases as to when contingencies should be considered in determining an amount of compensation. For example in Sprigg v Pauls Licensed Festival Supermarket (Sprigg) 8 and Ellawala v Australian Postal Corporation (Ellawala)9 contingencies were considered after both the remuneration the dismissed person would have received, or would have been likely to receive, if they had not been dismissed and the monies earned by them since termination had been considered. However, in Lockwood Security Products Pty Limited v Sulocki and Others10 a Full Bench of the AIRC, in consideration of the particular facts in the case, applied a contingency discount directly to the amount they estimated the dismissed person would have earned but for their dismissal, before making any other deductions.11 Of course, any discount for contingencies depends upon the circumstances of each particular case.12
[21] It is important to appreciate that a deduction for contingencies is applied to prospective losses, that is loss occasioned after the date of the hearing. As the Full Bench observed in Ellawala,: 13
“... A discount for contingencies is a means of taking account of the various probabilities that might otherwise affect earning capacity. At the time of hearing any such impact on an applicant’s earning capacity between the date of termination and the hearing will be known. It will not be a matter of assessing prospective probabilities but of making a finding on the basis of whether the applicant’s earning capacity has in fact been affected during the relevant period.” ”
(underline added)
[20] The Applicant was dismissed on 3 March 2015. The Respondent submitted that the Applicant was unlikely to continue in her employment in excess of 2-3 months because the employment relationship had broken down as a result of the incident. However, contrary to the Respondent’s submission, it is considered that, had the Applicant not been dismissed, it is unlikely that a proper consideration of the incident itself would have affected the trust and confidence between the parties, or caused the end of the employment relationship or for it to break down.
[21] According to the Full Bench in McCulloch 14, any contingency calculation would only have relevance for the period between the date of the decision (2 October 2015) and the end of the anticipated period of employment (9 October 2016) as “a contingency discount necessarily only applies to future circumstances”15.
[22] The Respondent submitted that the fact that the employment relationship had broken down, the Applicant’s entitlement to pro rata long service leave and her wrist injury, should all be considered as contingency factors. As stated above, it is considered that if the Applicant had not been dismissed, the employment relationship would not have broken down. With respect to long service leave, this submission advanced by the Respondent is that the Applicant may have left because she, having worked for over 7 years, was entitled to pro rata long service leave and therefore would not have been penalised if she had left employment before 10 years. Under the relevant legislation, the Applicant would have been entitled to the pro rata amount of long service leave if she terminated her employment due to an illness or incapacity or a domestic or other pressing necessity (s.43(4)(b)(i) or (ii) Industrial Relations Act 1999 (Qld)) but, her employment being cut short, she would not have received the full long service leave entitlement as if she had continued working until 10 years. The Applicant would also have been entitled to pro rata long service leave in circumstances (as is currently the case) where she was unfairly dismissed (s.43(4)(c)(i)).
[23] The Applicant’s evidence was that she had suffered a fractured right wrist and was unable to work from 10 July 2015, and as at 6 October 2015, the Applicant was covered by a Medical Certificate stating that the Applicant was unfit for work until 10 October 2015. The Applicant stated (on 6 October 2015) that she was uncertain whether she would be fit to work by 23 October 2015, as she still experienced pain in her wrist.
[24] The Applicant submitted that no discount for contingencies was appropriate. The Respondent did not make specific submissions on an amount or percentage discount for contingencies.
[25] However, the Respondent submitted that the Applicant only had 144.5 hours of sick leave available to her at the time of dismissal and if she had taken a period of protracted leave (as a result of the fractured wrist), the Applicant would have to be required to take the hours out of annual leave or without pay. The Respondent submitted that they should not have to compensate the Applicant where compensation would not have been paid as envisaged by s.392(2)(c). The Applicant did not injure herself at work; the date of the injury was 10 July 2015, and the Applicant had not worked since 1 May 2015.
[26] On a consideration of the future employment relationship only, given the Applicant’s unblemished work record and length of service, and in particular the length of time until her full long service leave entitlement was realised, it is accepted, as submitted by the Applicant, that the remuneration that the Applicant would have received if she had not been dismissed, is $96,848.81 (gross).
[27] With respect to contingencies, it is clear that the Applicant’s earning capacity has been affected by the injury, since 10 July 2015, and may continue to be affected by her wrist injury. The Applicant is continuing to receive medical attention in this regard. The Applicant’s sick leave entitlement would have expired in mid-August 2015. After her accrued annual leave expired, as the injury was not sustained at work (and therefore no workers compensation entitlement would be payable), it is entirely possible that the Applicant would have terminated her employment and sought to access her pro rata entitlement to long service leave for reasons of illness or incapacity.
[28] Accordingly, it is considered appropriate to apply a 30% discount for contingencies, to bring the amount to $67,794.167.
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
[29] It was submitted that the Applicant took steps to mitigate the loss suffered as a result of her dismissal. The Applicant deposed in her affidavit of 10 June 2015, that she registered with NEATO Employment Services on or about 12 March 2015, in an attempt to find work. It was also stated that, on 19 March 2015, she commenced casual employment as a cleaner but unfortunately, she was dismissed on 1 May 2015.
[30] As at 6 October 2015, the Applicant was still registered with NEATO Employment Services but has been unsuccessful in obtaining further employment, however, since 10 July 2015, the Applicant has been unable to work due to having sustained a fracture to her wrist.
[31] The Respondent submitted that the fact that the Applicant found herself another cleaning job immediately after her termination indicated that the Applicant did have ready access to further employment.
[32] It must also be taken into account that the employment was casual and short lived and that the Applicant’s age and the regional employment market must be considered.
[33] It is accepted that the Applicant has attempted to mitigate her loss and no deductions should be made in this regard.
(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
[34] The Applicant gave evidence by way of affidavit that she earned a gross total of $4,807.15 from her casual employment as a cleaner and that she has not earned any further remuneration from employment since 1 May 2015.
[35] The Respondent submitted that, to mitigate her loss of employment, the Applicant found employment and was thereafter in receipt of “sickness benefits” during her period of recuperation from a fractured wrist.
[36] The Applicant’s evidence does not refer to any payments for sickness benefits, only Centrelink benefits, received while the Applicant was looking for work. However, the Applicant submitted that, for the purpose of determining the amount of compensation that should be awarded, the amount of benefits received from Centrelink is not a relevant consideration, and that whether the Applicant will be required to repay to Centrelink amounts received by way of welfare benefits, is a matter between her and Centrelink. The Applicant referred to the Decision of Commissioner Cloghan in Jarvis v Crystal Picture Pty Ltd 16 in this regard. This issue is discussed further below.
[37] It is accepted that the remuneration earned by the Applicant from employment or other work during the period between 3 March 2015 and the making of this Order for compensation is $4,807.15. It has been taken into account that the Applicant’s submissions as to the amount of remuneration received are dated 6 October 2015, however, I do not consider that it is likely that any further remuneration has been received given the Applicant’s medical condition, as further reasoned below.
(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
[38] The Applicant submitted that, due to the injury to her wrist, the Applicant has been medically certified as unfit to work until 10 October 2015. The Applicant stated in her affidavit on 6 October 2015, that she is still experiencing pain in her wrist and requires a doctor’s assessment of her fitness for work.
[39] The Applicant submitted that it was unlikely that the Applicant will earn any income during the period between the making of the order for compensation and receipt of the actual compensation. Further, it was submitted that any amounts of income earned during this period would not affect the final amount of compensation, because the amount of lost remuneration less any income that she will earn during this period will nonetheless exceed the legislative cap.
[40] It is accepted on the material that the Applicant will not earn any income between the making of the Order for compensation and receipt of the actual compensation.
(g) any other matter that the FWC considers relevant.
[41] The Applicant submitted that the Commission may take into account the following relevant factors in determining the appropriate award:
“(a) The Applicant had an unblemished work record for more than 8 years prior to dismissal;
(b) There was no serious misconduct, or misconduct, by the Applicant which led to her dismissal;
(c) The Applicant is 64 years old and has limited opportunities for alternative employment in the Cairns area 17; and
(d) The Applicant has sustained an injury to her wrist that will render her unable to seek alternative employment until at least 10 October 2015” 18
[42] The Respondent submitted that other matters which should be taken into account when considering compensation include the Applicant’s injury, the issue of fault, long service leave entitlements, and other wages and sickness benefits.
[43] It was accepted in the Decision of 2 October 2015 19 that the dismissal would have a significant impact on the Applicant’s circumstances, given her age and the limited opportunities for alternative employment in the Cairns area.
Long Service Leave and Centrelink benefits
[44] The Respondent relied upon the principles enunciated in Noel Cannan and Kevin Fuller v Nystar Hobart Pty Ltd 20, which was subject to an appeal in Nystar Hobart Pty Ltd v. N Cannan and J Fuller21. The Respondent submitted that the Full Bench held that that Deputy President Wells had erred in not offsetting notice against lost earnings and in not dealing with payment of accrued entitlements in the context of her Decision22.
[45] The Respondent therefore submitted that when consideration is given to compensation the Nystar Decisions support the submission that accrued entitlements such as long service leave should be taken into account along with social welfare payments.
[46] The Nystar Decisions do not deal specifically with long service leave or social welfare payments. The accrued entitlements in the Decisions relate to accrued entitlements already paid on termination, and involve a situation where the Order was made in relation to reinstatement and to restore lost pay. The Applicant in this matter was not paid in lieu of notice upon her dismissal 23 and therefore no deduction is required for this purpose. The Applicant, according to the F3 Employer’s Response, was paid an amount for annual leave entitlements upon termination. This Decision, unlike the Nystar Decision, does not involve reinstatement, and therefore consideration of a deduction for annual leave in the assessment of compensation is not relevant.
[47] The submission of the Applicant of 6 October 2015 seeks to exclude a previously claimed amount for long service leave entitlements of $8,444.66. This was on the basis that, despite having previously made submissions as to the payment of the Applicant’s long service leave, the Applicant submitted that, upon a closer examination of s.392 of the Act, long service leave is distinguishable from compensation payments under the Act as it arises from a separate legal obligation on an employer under s.43(3) of the Industrial Relations Act 1999 (Qld). Section 43 is extracted as follows:
“43 Entitlement
(1) This section applies to all employees, other than seasonal employees.
(2) An employee is entitled to long service leave on full pay of—
(a) for the first 10 years continuous service—8.6667 weeks; and
(b) if the employee has completed at least a further 5 years continuous service—another period that bears to 8.6667 weeks the proportion that the employee’s further period of continuous service bears to 10 years.
(3) An employee who has completed at least 7 years continuous service is entitled to a proportionate payment for long service leave on the termination of the employee’s service.
(4) However, if the employee’s service is terminated before the employee has completed 10 years continuous service, the employee is entitled to a proportionate payment only if—
(a) the employee’s service is terminated because of the employee’s death; or
(b) the employee terminates the service because of—
(i) the employee’s illness or incapacity; or
(ii) a domestic or other pressing necessity; or
(c) the termination is because the employer—
(i) dismisses the employee for a reason other than the employee’s conduct, capacity or performance; or
(ii) unfairly dismisses the employee; or
(d) the termination is because of the effluxion of time and—
(i) the employee had a reasonable expectation that the employment with the employer would continue until the employee had completed at least 10 years continuous service; and
(ii) the employee was prepared to continue the employment with the employer.
…
(9) In this section—
proportionate payment means a payment equal to the employee’s full pay for a period that bears to 8.6667 weeks the proportion that the employee’s period of continuous service (stated in years, and a fraction of a year if necessary) bears to 10 years.”
(underline added)
[48] By virtue of s. 43(4) of the Industrial Relations Act 1999 (Qld) the Applicant was entitled to be paid her accrued long service leave entitlements on termination of employment if she had completed at least seven years continuous service and her employment was terminated before she completed ten years continuous service, if she resigned because of illness or a domestic or other pressing necessity; or was dismissed for reasons other than her conduct, capacity or performance, or was unfairly dismissed.
[49] The Applicant submitted that, under s.43(4)(c)(ii) of the Industrial Relations Act 1999 (Qld), the legal obligation to pay to the Applicant her entitlement to pro rata long service leave arises upon the determination by the Commission that she was unfairly dismissed.
[50] It was therefore submitted by the Applicant that the Commission should not include the amount of long service leave entitlements in its calculation of the amount of compensation as a remedy for the Applicant’s unfair dismissal and that this amount is payable separately as a matter of law by the Respondent to the Applicant.
[51] However, as an issue of fairness, Long Service Leave has been a consideration where the Applicant’s later receipt of full Long Service Leave in time was lost by the dismissal. In Shorten and Others v Australian Meat Holdings Pty Ltd 24, (then) Vice President Ross, in considering remuneration received or likely received if employment had not been terminated, and specifically long service leave, held as follows:
“In circumstances where the Court or Commission forms the view that the employee would have stayed in his or her former job for a number of years then remuneration that would have been received over that period is calculated. This may include long service leave and potential bonuses: Slifka v J W Sanders Pty Ltd.”
[52] In Slifka v J W Sanders Pty Ltd 25, Justice North of the Industrial Relations Court of Australia included in his calculation of compensation, an amount of long service leave where an applicant would have had to remain in employment for a further 4 years to have become entitled to the leave. Jusitce North stated that the termination of employment had deprived the application of the long service leave benefit. The amount was discounted for contingencies by 25%.
[53] However, Deputy President Gooley, in Ian Holliday v Coca-Cola Amatil (Aust) Pty Ltd 26 held as follows:
“It was submitted that I should have regard to the fact that if Mr Holliday had remained in employment he would have qualified for long service leave in August or July 2014. However section 43 of the Long Service Leave Act 1999 (Qld) (the LSL Act) provides that an employee terminated unfairly after seven years is entitled to pro rata long service leave. As such, it is not necessary for me to have regard to any failure to pay the long serve leave as Mr Holliday may now seek the payment of any entitlement under the LSL Act.” 27
[54] Accordingly, where, as in this case under the Industrial Relations Act 1999 (Qld), there arises an entitlement to payment of pro rata long service leave upon determination that an employee was unfairly dismissed, it is considered that the Applicant has a separate entitlement for pro rata long service leave, that should be met by the Respondent. It is not considered appropriate, in this case, where the Applicant is still able to gain the benefit of the (pro rata) entitlement, to include long service leave in the amount of compensation, or to reduce the compensation. It is considered that the pro rata long service leave payment should be separately paid to the Applicant by the Respondent within a similar timeframe as the payment from the Order arising from this Decision (particularly given the lapse of time since the unfair dismissal).
[55] The Respondent also submitted that the Commission should deal with the issue of benefits paid to the Applicant. The Applicant has submitted that whether the Applicant will be required to repay any welfare benefits is a matter for her and Centrelink.
[56] The Full Bench in McCulloch 28 also considered social security payments as follows:
“[32] The FWC, and its predecessors, have not deducted social security payments in the manner proposed by the respondent on the basis that such payments do not constitute ‘remuneration earned ... from employment or other work’ for the purposes of s.392(2)(d).
This issue was specifically addressed in Kennedy and Cumnock No.1 Colliery Pty Ltd 29 where the Full Bench said:
“We note that allowance is generally not made for social security payments in assessing an amount to be ordered in lieu of reinstatement pursuant to s.170CH(6): Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21; Australian Postal Commission v Ellawalla 17 April 2000, [Print S5109]. The relevant part of the decision in each of these cases was influenced to some extent by the decision in Shorten v Australian Meat Holdings Pty Ltd (1996) 70 IR 360.” 30
[33] The Full Bench then went on to say at [11]:
“It is not our intention that the remuneration lost should be discounted for social security payments which the applicant is required to repay. Equally we think it would be inequitable to permit recovery of lost remuneration from the employer when social security payments referable to loss of income could be retained.” 31
[34] The most recent consideration of this issue appears to have been in Kim Lee Jarvis v Crystal Pictures Pty Ltd 32 in which Cloghan C declined to make any deduction on account of the receipt of Centrelink payments, for the following reasons:
“[74] I should note for the benefit of both parties that Ms Jarvis advised that during between her termination of employment and 15 April 2010, she received Centrelink payments. Ms Jarvis did not disclose the amount received. For my purposes under s.392(e) of the Act, I do not consider Centrelink payments as “…remuneration earned by [Ms Jarvis] from employment or work during the period between the dismissal and the making of the order for compensation”. Further, I do not consider it “relevant” for the purposes of s.392(g) of the Act, as it would be inappropriate for Australian taxpayers to effectively subsidise compensation (foregone wages) payable to an employee, where the employer has instantly dismissed that employee unfairly.
[75] Having said that, if the Centrelink payments received by Ms Jarvis have to be repaid or there is discretion for repayment, that is a matter between Ms Jarvis and the relevant Commonwealth officers.” 33
[35] Given the limited argument advanced in respect of this issue we do not propose to depart from previous authority and accordingly we will not make the deduction sought by the respondent. We have also proceeded on the assumption that the order we propose to make may mean that a proportion of the pension payments received by Mr McCulloch since his dismissal will have to be repaid to the Commonwealth.”
[57] Considering the authority above, it is not considered appropriate to deduct any amount for social security benefits and any repayment of such benefits is a matter between the Applicant and the appropriate authority.
s.392(3): Misconduct reduces amount
[58] The Applicant submitted that the Commission had found on 2 October 2015 that there was no serious misconduct by the Applicant 34. Further, the Applicant submitted that it was clear that the finding by the Commission that “the Applicant was driving with due care and attention”35 and that “the Applicant attempted to stop the vehicle using the footbrake, but was not able to stop the bus despite her attempts”36 was a determination that there was no misconduct on the part of the Applicant that contributed to her dismissal. The Applicant submitted that there was no misconduct which could apply to reduce the amount of compensation to the Applicant pursuant to s.392(3) of the Act.
[59] The Respondent referred to the finding that “On the balance of probabilities it could not be concluded that the only contributing cause was that the Applicant’s conduct was the cause of this risk.” 37 The Respondent submitted that there was an implication that the Applicant did contribute to the incident and given that there was, in the Respondent’s submission, significant evidence that the process of moving the buses had undertaken many times by the Applicant, without incident or without any notification of any work health and safety risk, that it could be assumed that a degree of fault should be attributed to the Applicant and that this should be reflected in the compensation amount. However, it was other contributing factors that were referred to, regarding the configuration of the work yard and risks associated with the bus operations therein.
[60] The Respondent relied on the answer to a question about the need to have a “fair bit of skill to do that”, where the Applicant responded “Yes, I do” 38and where the Applicant went further to explain her experience by stating ‘I’ve done every night during my 8 year old service’.39
[61] The Respondent acknowledged that it was accepted that the Applicant attempted to stop the vehicle using the foot brake, but was not able to stop the bus despite her attempts however, it was the submission of the Respondent that the Commissioner when determining fault should take into account that the Applicant, continually, and in the Respondent’s submission, incorrectly claimed that the brakes failed.
[62] The Respondent submitted that the evidence was clear that the Applicant knew actually what she was doing, what the skills required for the task were and more importantly no accident such as this ‘had ever happened before’, as identified by the Applicant 40. And the evidence of the expert witness of the Respondent, Simon Thorpe was conclusive in that he stated; ‘No.’ to the question; “In your experience, is it possible for the brakes to fail for a 15 minute period in a 24 hour period and then for the brakes to re-engage? Is it possible?”
[63] The Respondent referred to the evidence of Mr Thorpe in relation to the examination of the bus (2624) which was involved in the incident of 31 January 2015 41, where he concluded that the brakes were in proper working order on 31 January 2015.42
[64] The Respondent relied on the Decision at first instance, of Deputy President Wells in Noel Cannan and Kevin Fuller v Nystar Hobart Pty Ltd 43, where a 50% discount was given on the amount to be back paid on the basis of the Applicant’s conduct and behaviour (bullying and harassment) that was considered inappropriate.44
[65] It was not accepted that the Applicant was at fault, or that her behaviour constituted misconduct. It was accepted that the brakes failed. It is not appropriate to discount an amount for misconduct in these circumstances.
s.392(5) Compensation Cap
[66] The Applicant submitted that the legislative cap amounted to $30,182.36 (gross), being 26 weeks of the Applicant’s weekly rate, $1,160.86 (gross), as per s.392(6)(a).
[67] The Respondent did not make any alternative submissions directly as to the amount of the legislative cap. However, the Respondent emphasised that due to the nature of the incident and the Applicant’s subsequent injury they should not have to pay the full amount in compensation.
s.393: Instalments
[68] Neither party submitted that the compensation should be paid in instalments.
[69] Other relevant factors as submitted by the parties in relation to these range of legislative criteria have been considered.
Conclusion
[70] Accordingly, applying the approach to compensation in Sprigg v Paul’s Licensed Festival Supermarket as re-stated in Ellawala v Australian Postal Corporation, but having applied the contingencies directly to the amount the remuneration the Applicant would have been likely to receive 45, I find as follows:
[71] An order for the payment of compensation would not affect the viability of the Respondent’s business (s.392(2)(a)). The 8 years of the Applicant’s service is a relatively long period (s.392(2)(b)) and therefore no deduction is warranted due to these criteria.
[72] The Applicant would have remained in employment until 9 October 2016 if she had not been dismissed. As such, the amount of remuneration the Applicant would have been likely to receive, but for her dismissal, is $96,848.81 (gross) (s.392(2)(c)). A 30% discount for contingencies for the Applicant’s wrist injury and possible resignation to access a potential entitlement to pro rata long service leave before 10 years’ service, is considered appropriate, to reduce the amount to $67,794.167 (gross).
[73] No deduction is warranted for a failure by the Applicant to mitigate loss (s.392(2)(d)).
[74] The Applicant earned $4,807.15 in income following her dismissal, which should be deducted, leaving an amount of $62,987.017 (gross) (s.392(2)(e)). No deduction is made for income likely to be earned during the period between the making of the order and the actual compensation (s.392(2)(f)) as it is unlikely on the basis of the Applicant’s wrist injury and employment prospects such will be earned.
[75] No amount is deducted for Centrelink benefits or the entitlement to pro rata long service leave, which are separate matters. No amount is deducted for misconduct (s.392(3)), the reasoning for such has been provided in the initial Decision.
[76] With respect to taxation, the Applicant submitted that the amount the Applicant claimed ($92,041.66) should be reduced by the tax that the Applicant would have paid if she had received the amount as wages, then increased by the amount of tax liability that will be incurred by the Applicant. The Applicant submitted that tax considerations will not affect the ultimate compensation amount as the amount calculated exceeds the legislative cap pursuant to s.392(5) of the Act. This remains the case.
[77] The legislative cap, in accordance with s.392(6)(a), is applied, resulting in an amount of $30,182.36 (gross).
[78] This amount has been reached, having considered the circumstances of the case and considerations pursuant to s.392 of the Act.
[79] A final Order for compensation [PR573148] will issue, requiring the Respondent to pay to the Applicant an amount of $30,182.36, to be taxed according to law, within 14 days of the date of the Order.
COMMISSIONER
1 Mrs Eszter Konya v Transit Australia Pty Ltd T/A Marlin Coast Sunbus[2015] FWC 4178.
2 Ibid.
3 [2015] FWCFB 84.
4 [2015] FWC 4178 at [119].
5 [2015] FWCFB 84.
6 Respondent’s Supplementary Submissions on Compensation, filed 21 October 2015.
7 [2015] FWCFB 2267.
8 (1988) 88 IR 21.
9 Print S5109.
10 PR908053.
11 Ibid at [56].
12 Enhance Systems Pty Ltd v Cox, PR910779 at [38].
13 Print S5109 at [43].
14 [2015] FWCFB 2267.
15 [2015] FWCFB 2267 at [22].
16 [2010] FWA 3674 at [74].
17 Submissions for the Applicant dated 6 October 2015 at paragraph 21(c); Affidavit of Eszter Konya dated 10 June 2015 at paragraphs 67-68.
18 Submissions for the Applicant dated 6 October 2015 at paragraph 21.
19 Mrs Eszter Konya v Transit Australia Pty Ltd T/A Marlin Coast Sunbus[2015] FWC 4178 at [106].
20 [2014] FWC 7014.
21 [2015] FWCFB 888.
22 [2015] FWCFB 888 at [110].
23 Submissions in reply for the Applicant dated 26 June 2015 at paragraph 18.
24 Print N6928.
25 (1995) 67 IR 316.
26 [2015] FWC 1249.
27 Ibid at [18].
28 [2015] FWCFB 2267.
29 PR908987; Also see Steggles Ltd v West, Print S5876.
30 Kennedy and Cumnock No.1 Colliery Pty Ltd, PR908987 at [10].
31 Ibid at [11].
32 [2010] FWA 3674.
33 [2010] FWA 3674 at [75] - [75].
34 Mrs Eszter Konya v Transit Australia Pty Ltd T/A Marlin Coast Sunbus[2015] FWC 4178 at [91].
35 Ibid at [88].
36 Ibid at [89].
37 Mrs Eszter Konya v Transit Australia Pty Ltd T/A Marlin Coast Sunbus[2015] FWC 4178 at [108].
38 PN163.
39 PN165.
40 PN166.
41 PN782 - PN804.
42 Affidavit of Simon Thorpe at paragraph 9.
43 [2014] FWC 7014.
44 [2014] FWC 7014 at [17].
45 Lockwood Security Products Limited v Sulocki and Others PR908053 at [56]; cited in McCulloch v Calvary Health Care Adelaide[2015] FWCFB 2267 at [20].
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