Flavel v Railpro Services Pty Ltd (No.2)
[2013] FCCA 1449
•27 September 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FLAVEL v RAILPRO SERVICES PTY LTD (No.2) | [2013] FCCA 1449 |
| Catchwords: INDUSTRIAL LAW – Unlawful dismissal – damages sought for past and future economic loss – general damages also sought – total award of $95,000 – imposition of a penalty for contravention of s.340(1)(a)(ii) and s.351 of the Act – penalty of $5,000 to be paid to applicant. |
| Legislation: Fair Work Act 2009 (Cth), ss.340(1)(a)(ii), 351, 539, 545(2)(b) and 546 Workers Rehabilitation and Compensation Act (1986) SA, s.58B |
| Flavel v Railpro Services Pty Ltd (No.1) [2013] FCCA 1180 Latham, Taylor, “Assessing compensation in adverse action cases” Workplace Review Volume 3, No. 2 Winter 2012 |
| Applicant: | COLIN FLAVEL |
| Respondent: | RAILPRO SERVICES PTY LTD |
| File Number: | ADG 24 of 2012 |
| Judgment of: | Judge Simpson |
| Hearing date: | 16 August 2013 |
| Date of Last Submission: | 17 September 2013 |
| Delivered at: | Adelaide |
| Delivered on: | 27 September 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr A Wright |
| Solicitors for the Applicant: | Wright & Kirsten Lawyers |
| Counsel for the Respondent: | Mr R Manuel |
| Solicitors for the Respondent: | Marsh & Maher |
ORDERS
The respondent shall forthwith pay the applicant damages in the sum of NINETY FIVE THOUSAND DOLLARS ($95,000).
The respondent shall forthwith pay the applicant a penalty of FIVE THOUSAND DOLLARS ($5,000) for the contravention found proven in paragraph 2 of the declarations made on 29 August 2013.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADG 24 of 2012
| COLIN FLAVEL |
Applicant
And
| RAILPRO SERVICES PTY LTD |
Respondent
REASONS FOR JUDGMENT
My reasons in relation to liability were delivered on 29 August 2013.[1] The action was then adjourned to 17 September 2013 for the parties to put to the Court any further submissions that they considered appropriate on the topic of the relief to be granted.
[1] Flavel v Railpro Services Pty Ltd (No. 1) [2013] FCCA 1180.
On the adjourned date, counsel for the applicant advised the Court that the applicant no longer sought reinstatement. The applicant merely sought compensation and the imposition of a pecuniary penalty.
The orders of 29 August 2013 included declarations that the respondent contravened ss.340(1)(a)(ii) and 351 of the Fair Work Act 2009 (Cth) (“the Act”). Both of these provisions are civil remedy provisions. As such, the Court can make orders awarding compensation for loss that a person has suffered because of the contravention.[2] The Court can also impose a pecuniary penalty.[3]
[2] See subs.545(2)(b) of the Act.
[3] See s.546 of the Act.
A party must not be punished twice for the same conduct, even when the conduct happens to breach two provisions.[4] In the present case it is the same conduct namely, terminating the applicant’s employment, that is relied upon for each of these two breaches. I propose therefore to provide relief only in relation to one of the contraventions, namely the s.340(1)(a)(ii) contravention.
[4] Section 556 of the Act prohibits double jeopardy in relation to civil remedy provisions.
Compensation
It has been said that the amount that may be awarded as compensation for adverse action cases and the like may be greater than available at common law.[5] As the Full Federal Court held in Re: Bostik (Australia) Pty Ltd v Gorgevski (1992) 36 FCR 20 at 32:
“Where an employee is wrongfully dismissed, he is entitled, subject to mitigation, to damages equivalent to the wages he would have earned under the contract from the date of the dismissal to the end of the contract. The date when the contract would have come to an end, however, must be ascertained on the assumption that the employer would have exercised any power he may have had to bring the contract to an end in the way most beneficial to himself; that is to say, that he would have determined the contract at the earliest date at which he properly could do so …”
[5] Latham, Taylor, “Assessing compensation in adverse action cases” Workplace Review, Volume 3, No. 2 Winter 2012 at page 61.
In Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd[6] (“the Australian Aircraft case) Barker J of the Federal Court used the following formula to determine compensation:
“In accordance with usual principle, an order awarding compensation must be assessed on the basis that an applicant establishes loss that a person has suffered because of the contravention and that this requires an appropriate causal connection between the contravention and the loss claimed.”
[6] (2011) 193 FCR 526.
It is appropriate that the damages awarded include an amount for any non-economic loss. Damages for non-economic loss for distress, hurt or humiliation were awarded in the adverse claim of the Australian Aircraft case[7]. Flick J later adopted that proposition stating that, “an order pursuant to that power may include an amount representing “hurt and humiliation” suffered by reason of a contravention.”[8]
[7] Supra
[8] Transport Workers’ Union of Australia, NSW Branch v No Fuss Liquid Waste Pty Ltd [2011] FCA 982.
The applicant seeks the sum of $61,321.21 for past economic loss for the period 30 November 2011 until 17 August 2012. He seeks future economic loss of $500,252,48. He seeks general damages of $40,000. The total damages sought are therefore $601,573.69.
My assessment of the compensation that should be made is to be arrived at after a careful consideration of the evidence on the topic. Submissions on behalf of the parties are only of assistance if they are supported by the evidence that has been tendered.
In my reasons of 29 August 2013, I found that Mr Flavel suffered from a chronic post-traumatic stress disorder, together with moderately severe depression.[9] I found that these conditions were as a result of the train crash. It is important in this case to bear in mind that the applicant is to be paid compensation for the dismissal, not the accident.
[9] At para 72.
If the respondent had not dismissed the applicant, the respondent would have been obliged, pursuant to s.58B of the Workers Rehabilitation and Compensation Act (1986) SA, to provide the applicant with other suitable employment if possible. It is difficult to say what other suitable employment the respondent would have been able to provide to the applicant since he was at the time suffering from a post-traumatic stress condition. No evidence has been put before me about the work that the applicant would have been able to undertake, whether or not the respondent would be able to provide that work, and the remuneration that the applicant would have received for performing that work.
I note from Dr Bem’s report that Mr Flavel had not, at that time (July 2012) recovered from his post-traumatic stress disorder or depression, but that with appropriate treatment he would be likely to make a return to his pre-morbid level of functioning within the next 3 – 6 months.
So far as further treatment is concerned, Dr Bem noted that Mr Flavel was exposed to a combination of pharmacotherapy and cognitive behavioural therapy (“CBT”). He said that CBT is the “gold standard of treatment for post-traumatic stress disorder”. He said that Mr Flavel would require a minimum of 12 CBT sessions and that his treatment program would require about a further 3 months. He recommended that Mr Flavel continue on anti-depressants for at least another 6 months.
Dr Bem expressed the hope that upon completion of his treatment that Mr Flavel would be able to return to train driving duties. He said that at that particular point in time (July 2012) Mr Flavel was totally incapacitated and would remain so for the next 2 – 3 months. He concluded his report by saying that he considered Mr Flavel’s prognosis to be relatively favourable. With assertive treatment, he envisioned Mr Flavel being able to return to train driving duties within the next 3 – 6 months.
It is a difficult exercise in this case to calculate what portion of the applicant’s economic loss is attributable to the consequences of the train accident and what portion can be attributed to the applicant’s dismissal. The applicant has a duty to mitigate his loss by taking steps to obtain other suitable employment. The evidence shows that it is likely that the applicant would have been able to return to work as a train driver (whether for the respondent or for some other suitable employer) in or about January 2012. Taking into account that it is likely to have taken some time for the applicant to find suitable employment, I consider that his loss would be of the order of six months wages. Taking into account that the applicant was receiving a salary of approximately $140,000 per year, I consider that $70,000 is an appropriate sum for the applicant to receive for his economic loss.
The applicant is also entitled to damages for his distress, hurt and humiliation that resulted from his dismissal. Bearing in mind that the applicant was in a vulnerable state at the time that the dismissal occurred, I believe that the distress, hurt and humiliation would be felt more acutely than would otherwise have been the case. I would allow $25,000 for the non-economic component of his compensation.
Penalty
The respondent should pay a penalty in accordance with s.539 of the Act for the contravention found proven in my reasons of 29 August 2013. The maximum penalty for an adverse action such as this is 60 penalty units. A penalty unit is $110 making the maximum penalty payable $6,600.
The factors relevant to the imposition of a penalty under Commonwealth workplace laws have been summarised by Mobray FM in Mason v Harrington Corporation Pty Ltd, t/a Pangaea Restaurant and Bar[10] as follows:
[10] [2007] FMCA 7.
a)The nature and extent of the conduct which led to the contravention;
b)The circumstances in which the conduct took place;
c)The nature and extent of any loss or damage sustained as a result of the contraventions;
d)Whether there had been similar previous conduct by the respondent;
e)Whether the contraventions were properly distinct or arose out of the one course of conduct;
f)The size of the business enterprise involved;
g)Whether or not the contraventions were deliberate;
h)Whether senior management was involved in the contraventions;
i)Whether the party committing the contravention had exhibited contrition;
j)Whether the party committing the contravention had taken corrective action;
k)Whether the party committing the contravention had co-operated with the enforcement authorities;
l)The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
m)The need for specific and general deterrence.
This summary was adopted by Tracey J in Kelly v Fitzpatrick[11]. While the summary is a convenient checklist, it does not proscribe or restrict the matters which may be taken into account in the exercise of the Court’s discretion.[12]
[11] (2007) 166 IR 14.
[12] Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550 at para 11; Merringtons at para 91 per Buchanan J.
The task of the Court is to fix penalties which pay appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations.
The respondent’s conduct on 29 November 2011, and in the lead up to that day, suggest that the respondent may have decided to terminate the applicant’s employment well before 29 November 2011. The termination was carried out without giving the applicant a full and proper opportunity to prepare and put forward submissions as to why he should not be terminated. No steps were taken by the respondent to address the concerns that the respondent had about the applicant’s work performance. They knew that at his age, Mr Flavel might find it difficult to find other suitable employment.
So far as I am aware, there has not been any other similar previous conduct by the respondent of not complying with industrial legislation.
The respondent is a substantial company that is a subsidiary of another established company, Specialised Bulk Rail Pty Ltd (“SBR”). The respondent employs the drivers and other employees who are then required to undertake work for SBR. The respondent is a company that employs or has the assistance of human resources personnel.
The respondent’s contravention was clearly deliberate. I do not believe that the decision to terminate the applicant’s employment was a spur of the moment decision.
The evidence supports the conclusion that senior management of the respondent were involved in the contravention.
There is no indication that the respondent is contrite. They maintain that they were entitled to terminate the applicant’s employment.
There is certainly a need to send a clear message to this employer and others, that employees should only have their employment terminated for proper and lawful reasons. If the employer does not have a proper reason, the employer should expect an appropriate penalty for this unlawful conduct.
Bearing in mind, the seriousness of the respondent’s conduct, the fact that there is only one contravention, and that the maximum penalty for that contravention is $6,600, I consider that a penalty of $5,000 is justified.
I make the orders to be found at the beginning of these reasons.
I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of Judge Simpson
Associate:
Date: 27 September 2013
3
6
3