Francine Rolfe v Kids Choice ELS WA Pty Ltd T/A Kids Choice

[2016] FWC 1457

[2016] FWC 1457

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Francine Rolfe
v
Kids Choice ELS WA Pty Ltd T/A Kids Choice
(U2014/13803)

DEPUTY PRESIDENT KOVACIC CANBERRA, 7 MARCH 2016

Application for relief from unfair dismissal – remedy – Decision ([2015] FWC 8798) and Order (PR575264) varied in accordance with s.603 of the Fair Work Act 2009 to reflect subsequent sale of Respondent’s Cooma child care centre.

[1] The Fair Work Commission (the Commission) issued a Decision 1 (the Decision) and Order2 (the Order) pursuant to s.394 of the Fair Work Act 2009 (the Act) on 18 December 2015. The Order, which among other things required Kids Choice ELS WA Pty Ltd T/A Kids Choice (the Respondent) to reinstate Mrs Rolfe from the first day its Cooma child care centre was open for business in January 2016, was premised on the Kids Choice continuing to own and operate the centre.

[2] On 22 December 2015, shortly after the Decision and Order were issued, the sale of the Cooma child care centre was finalised. Both parties subsequently wrote to the Commission, with Mrs Rolfe requesting that the Order be varied to include a timeframe for payment of the amount ordered by the Commission, expressing the view that the first two elements of the Order were unenforceable in the light of the sale of the centre and advising that she was in discussions with the new owner of the centre regarding whether they were willing to offer her employment. Kids Choice, on the other hand, in correspondence dated 23 December 2015 requested that the Commission permit the amount ordered to be paid to Mrs Rolfe to be paid over a six month period from the date of the Order. Also in that correspondence, Kids Choice stated that:

“… if the new employer formalises a view not to employ the Applicant, then the Applicant will effectively be made redundant. If the Applicant is made redundant, the Respondent will pay the Applicant the required entitlements arising from the NES in addition to the payments required by the Order of 18 December 2015.”

[3] The Commission subsequently convened a number of telephone conferences to discuss the issues raised by the parties, most recently on 22 February 2016. During those conferences it became clear that the new owner was not going to offer Mrs Rolfe employment.

[4] In other developments, on 19 February 2016 Kids Choice advised that full payment of the amount ordered by the Commission will be made to Mrs Rolfe within seven days.

[5] Against that background, both parties acknowledged at the most recent conference on 22 February 2016 that the Commission needed to reconsider the issue of remedy, with the remedy to be compensation as opposed to an order to reinstate Mrs Rolfe and restore lost pay. Accordingly, and in accordance with s.603 of the Act, this decision varies the Commission’s Decision and Order of 18 December 2015.

The relevant statutory framework

[6] As to the issue of compensation, the relevant statutory provision is s.392 of the Act which provides as follows:

“392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.

Note: subsection 392(5) indexed to $68,350 from 1 July 2015

(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.”

Consideration of the issues

[7] I will deal first with each of the criteria for deciding amounts specified in s.392(2) of the Act.

(a) The effect of the order on the viability of the employer’s enterprise

[8] There is no evidence before the Commission that an order for compensation would affect the viability of the Respondent’s enterprise. While Kids Choice initially requested that the Commission permit the amount initially ordered to be paid to Mrs Rolfe to be paid over a period of six months, on 19 February 2016 it advised that full payment of the amount ordered by the Commission will be made to Mrs Rolfe within seven days.

(b) The length of the person’s service with the employer

[9] Mrs Rolfe commenced employment with Kids Choice on 26 August 2013. On the basis that Mrs Rolfe’s employment would not have continued beyond the sale of the Cooma child care centre on 22 December 2015, her total period of employment would have been in the order of two years and four months. I do not consider that Mrs Rolfe’s relatively short period of employment warrants any special consideration.

(c) The remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[10] I had previously determined 3 that Mrs Rolfe had been dismissed by Kids Choice on 31 October 2014. As noted above, but for her dismissal, Mrs Rolfe’s employment would have continued until the sale of the Cooma child care centre on 22 December 2015, i.e. for a further 417 days. However, as noted in the Decision, Mrs Rolfe was declared unfit for work for the period 31 October 2014 to 27 March 2015, a period of 147 days. After accounting for this latter period, Mrs Rolfe would have been employed for 270 days, which equates to 19 fortnights and 2 working days. Based on her fortnightly salary of $2371.20, Mrs Rolfe would have been paid $45,527.04 for this period.

[11] In addition, Mrs Rolfe would have been entitled to paid personal leave for part or all of the period she was deemed unfit for work. As noted in the Decision, Kids Choice advised the Commission on 16 December 2015 that at the time of her dismissal Mrs Rolfe had 55.81 hours of accrued personal leave 4. Based on an hourly rate of pay of $31.205, the 55.81 hours of accrued personal leave paid at this hourly rate is valued at $1741.27.

[12] As noted at paragraph [2] above, Kids Choice advised the Commission on 23 December 2015 that “… if the new employer formalises a view not to employ the Applicant, then the Applicant will effectively be made redundant …” Given that the new owner has indicated that it will not employ her, Mrs Rolfe would also be entitled to redundancy pay and pay in lieu of notice. Mrs Rolfe was employed under the Children’s Services Award 2010 6 which provides at clause 12.1 that redundancy pay is provided for in the National Employment Standards (NES). Based on her length of service, under the NES Mrs Rolfe would have been entitled to 6 weeks’ redundancy pay and 3 weeks’ notice (which includes an extra week on the basis that Mrs Rolfe had completed two years continuous service with Kids Choice and is over 45 years old). Based on her fortnightly salary of $2371.20, nine weeks equates to $10,670.40.

[13] Mrs Rolfe would have also accrued annual leave for the period 27 March to 12 July 2015, the day before she started in her new job, a period of 107 days or 15 weeks and 2 days. Accruing annual leave at a rate of 2.923 hours per week, she would have accrued 43.85 hours for this period which at an hourly rate of pay of $31.20 equals $1367.94. Annual leave loading for this amount is $239.39, giving a total amount of $1607.33.

[14] Together these amounts total $59,546.04, with this being the remuneration Mrs Rolfe would have received, or would have been likely to receive, had she not been dismissed.

(d) The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[15] I am satisfied that Mrs Rolfe took steps to mitigate her loss once she was declared fit to return to work. This is evidenced by the fact that she commenced employment in a new job on 13 July 2015.

(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

[16] Mrs Rolfe commenced a new job on 13 July 2015, with that employment continuing as at 22 December 2015. Mrs Rolfe earns $1225.50 per week in that job, so over the period 13 July to 22 December 2015 she would have earned $28,431.60 (23 weeks and one day x $1225.50 per week).

(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

[17] This is not a relevant consideration given that Mrs Rolfe is continuing in her new employment which pays more than what she was paid by Kids Choice.

(g) Any other matter that the FWC considers relevant

[18] There are no other matters which are relevant.

[19] In summary, based on the above analysis, Mrs Rolfe would have been received remuneration totalling $59,546.04 from which $28,431.60 is to be deducted , i.e. the amount which Mrs Rolfe earned from her new job, leaving an amount of $31,114.44.

[20] Other considerations specified in s.392.

Misconduct (s.392(3))

[21] In the Decision I determined that the amount calculated did not need to be adjusted to reflect Mrs Rolfe’s behaviour 7. Consistent with that finding, there is no basis to reduce the proposed compensation amount on account of misconduct.

Compensation cap (s.392(5))

[22] The proposed amount of compensation of $31,114.44 is greater than the applicable compensation cap specified in s.392(5) of the Act which in this case is $30,825.60 based on what Mrs Rolfe would have earned in the 26 weeks immediately before the dismissal. Accordingly, the amount of compensation ordered is reduced to $30,825.60 less any applicable tax.

Conclusion

[23] Kids Choice is ordered to pay Mrs Rolfe an amount of $30,825.60 less any applicable tax within seven days. A revised Order to that effect will be issued in conjunction with this decision.

 1   [2015] FWC 8798

 2   PR575264

 3   [2015] FWC 6458

 4   [2015] FWC 8798 at paragraph [25]

 5   $2371.20 divided by 76 hours per fortnight

 6   MA000120

 7   [2015] FWC 8798 at paragraph [28]

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