Gavin Clyne v Surelinc Services Pty Ltd
[2024] FWC 1685
•4 JULY 2024
| [2024] FWC 1685 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Gavin Clyne
v
Surelinc Services Pty Ltd
(U2024/2227)
| DEPUTY PRESIDENT CROSS | SYDNEY, 4 JULY 2024 |
Application for an unfair dismissal remedy
Mr Gavin Clyne (the Applicant) was employed by Surelinc Services Pty Ltd (the Respondent) as an Air Conditioning Technician from 24 November 2014, until his employment was terminated on 26 February 2024. At the time of his dismissal, the Applicant was paid $45 per hour.
On 28 February, the Applicant filed an unfair dismissal application (the Application) pursuant to s.394 of the Fair Work Act 2009 (the Act), seeking a remedy from the Fair Work Commission (the Commission). In response to the question of desired outcome on the Form F2, the Applicant contended that his dismissal was unfair, as ‘[he] received an email whilst on leave starting that I had been dismissed effective immediately due to breach of confidentiality. I do not know what they are referring to and they did not provide details. I reached out to them to ask for more information and evidence of what the breach was. I requested this information be provided with in 48 hours. They have since blocked my emails and will not answer any calls.’ The remedy sought is for ‘… outstanding pay, outstanding notice period paid, outstanding entitlements paid and outstanding superannuation paid.’
The Respondent was served with the Application. In its Form F3 – Employer response - Mr Villi Puletula, a Director of the Respondent, confirmed the dates of the Applicant’s employment.
The matter was listed for a preliminary conciliation with a Commission Staff Conciliator on 28 March 2024, but was unable to be resolved and remitted for hearing. In accordance with usual practice, a directions hearing, and possible member assisted conciliation was convened prior to the first directions for the filing and service of materials. The conference held on 14 May 2024 was unsuccessful, and the matter proceeded to hearing on 27 June 2024.
The Applicant complied with the Directions and filed an outline of submissions, a statement from Mr Clyne and a bundle of annexures on 28 May 2024. On the same day my Chambers sought further submissions from the Applicant with respect to remedy. This was filed shortly thereafter.
The Respondent filed no materials in compliance with the directions. My Chambers sent an email noting the non-compliance. The email relevantly stated:
I note the Respondent has not complied with Direction [2] of the Commission’s Directions (Listing Directions). Please see below Direction:
2. The Respondent is directed to file with the Fair Work Commission, and serve on the Applicant, an outline of submissions, witness statements and other documentary material the Respondent intends to rely on in opposition to the application in this matter by 4pm on 11 June 2024.
The Respondent is required to email Chambers by 4:00pm on 14 June 2024 with their submissions and other materials, or otherwise advise the Commission of any request for extension, discontinuance, or other matter affecting submission.
I draw the parties’ attention to Note c) of the Listing Directions, reproduced below:
c) Any request for an extension of time for the filing of materials, or for an adjournment of the arbitration hearing, must be made as soon as practicable and must be based on substantial grounds. Noncompliance with directions will not otherwise be tolerated.
Please note that any materials must be filed with the Commission via email to this address, being [email protected].
The Respondent once more failed to file any material. On 14 June 2024 my Chambers received the following communication from the Respondent seeking an extension of time. The email relevantly stated:
Dear Deputy President Cross,
I sincerely apologize for the delay in our response. Unfortunately, our office was broken into last week, resulting in significant theft and vandalism. Many power lines were cut, and our servers, landlines, internet line and hard drives were destroyed. This incident has caused considerable disruption to our operations and considerable distress to our team. The individual responsible for the incident is once again [name deleted for confidentiality], whose name is mentioned in the case and who is a close friend of Mr. Clyne.
Additionally, I have copied Mr. Tim Breene, our solicitor for this case, in this email. Please kindly include him in any future correspondence.
Attached, please find photographs documenting the damage.
We are working diligently to restore normal business operations as quickly as possible. Your understanding and patience during this challenging time are greatly appreciated.
Could we kindly request an extension until next Wednesday to submit any additional documents?
Thank you for your support.
The Respondent provided photographs of the office and as such the extension of time was granted. Once again my Chambers issued amended directions which were as follows:
Deputy President Cross has decided to grant the request for an extension of time. Please ensure your material (Respondents material) is filed by no later than 4:00PM on Wednesday, 19 June 2024.
The Applicants reply material will be extended and is no due to be filed by no later than 4:00PM on Wednesday, 26 June 2024.
Noncompliance with directions will otherwise not be tolerated.
The Respondent again failed to comply with the amended directions. My Chambers sent the following email on 21 June 2024:
Dear Respondent,
I refer to the above matter, and in particular, to the Directions contained within the Notice of Listing dispatched to you on 14 May 2024, which outlines the timeframe for the filing of your submissions and other documents. That Notice, containing the Directions, is again attached for your reference.
Chambers has contacted you via email on 13 June 2024 in relation to your non-compliance with Direction 2. Chambers has not received a request for an extension of time for filing those materials, or other communication in reply to this correspondence.
I further draw your attention to Note c) as found in the attached Listing, advising that noncompliance with directions will not be tolerated.
Please be advised that, should you not respond to this communication, file your materials, or attend the Hearing as listed, that your matter may be determined in the absence of your materials and/or attendance, and this may result in your matter being dismissed.
You are required to either:
· file and serve your submissions and other documents as outlined in Direction 2; or
· advise that you do not wish to file any materials; or
· make a request for an extension of time within which to file your materials, including any reason and evidence to support;
by 4:00pm this afternoon.
On 24 June 2024, the Respondent filed a letter which relevantly stated:
I refer to the emails from the Court dated 21 and 24 June 2024.
I wish to inform the Commission that the Respondent does not intend to file any material in relation to this application.
On 26 June 2024, the day before the Hearing was to take place the Respondent issued a further letter stating:
In relation to the hearing tomorrow, please note that we do not oppose the application and we do not intend to appear.
The Hearing took place on 27 June 2024 with only the Applicant and his representative in attendance.
The Evidence and Submissions
The Respondent
The Respondent filed no further material. The only material received from the Respondent was their Form F3. In their Form F3, the Respondent sought to rely on three reasons for dismissal. The first being that that the Applicant's "skill set not being aligned with the requirements of our company. Despite his role primarily being that of a maintenance technician, Mr. Clyne demonstrated an inability to contribute effectively to more complex tasks within the company's operations." (Performance Reason). The second being that the Applicant "received a photo from [name deleted for confidentiality] depicting his unauthorized entry into [the Respondent's] office and factory premises on the night of 18/02/2024" and " failed to notify the Surelinc Director or provide the evidence to aid our police claim" (Break In Reason). The third reason being that the Applicant was "present at [name deleted for confidentiality] private residence in February, despite our explicit directive to avoid contact with him due to the ongoing investigations and legal proceedings against [name deleted for confidentiality]."
As to the response to the Applicants contentions, the Respondent submitted only that ‘we strongly object to any requests for compensation made by Mr Gavin Clyne’.
The Applicant
The Applicant filed an Outline of Submissions and a signed Statement of Mr Clyne. In response the alleged reasons for dismissal relied on by the Respondent, the Applicant submitted:
a)Confidentiality Reason – This reason could not be a sound, defensible or well-founded reason for dismissal as no supporting information was provided by the Respondent with regard to how the confidentiality was alleged to have been 'violated' by the Applicant.
b)Performance Reason – The Applicant submitted he was a diligent and hardworking employee of the Respondent since 2014. He issued quotes and job notes for all tasks. No supervisor, team leader or manager had raised any concerns about the quality of his work during his employment. The only impact to the Applicant's ability to perform his role in a responsive manner was the Respondent's own financial issues that impacted the ability to pay for equipment and resources to complete work. The Commission could not be satisfied, on the balance of probabilities, that the Applicant was not objectively not performing his role as Technician satisfactorily.
c)Break In Reason – The Applicant noted he was not aware of the break-in on 17 February 2024 and therefore could not have notified the Respondent's Director of it. The Applicant only became aware of the break-in after he was dismissed by the Respondent on 1 March 2024 when Mr Puletua contacted him by text message to inform him of the break-in. The Commission cannot be satisfied, on the balance of probabilities, that this allegation occurred.
d)Conflict Reason – In late November 2023, Mr Puletua spoke to the Applicant over the phone and told him [name deleted for confidentiality] had left the Respondent. In that conversation Mr Puletua assured him his job was safe if he chose to stay. The Commission could not be satisfied, on the balance of probabilities, that any such direction was given. The Applicant was never directed by Mr Puletua not to speak to [name deleted for confidentiality]. He only asked the Applicant after he was dismissed if he had spoken to [name deleted for confidentiality]. In any event, restricting an employee from communicating with an individual in any capacity, including outside of work on a personal basis, is not a reasonable and lawful direction. Particularly, in circumstances where the Applicant and [name deleted for confidentiality] had a pre-existing friendship outside of work prior to the applicant commencing employment that was known to the Applicant.
e)Vehicle Reason – The Applicant did not share any information with [name deleted for confidentiality] regarding the location of any of the Respondent's vehicles. The Respondent itself appears to acknowledge they have no supporting evidence of any information being shared, as it says in the Response that the Applicant 'seemingly' provided this information. The Commission cannot be satisfied, on the balance of probabilities, that this allegation occurred.
The Applicant submitted that the reason for his dismissal had changed multiple times since the dismissal took effect on 26 February 2024.
The Applicant further submitted that he was notified of the Dismissal on 26 February 2024, effective immediately and when he was on leave. The Applicant submitted that there was no prior attempt to contact or to notify him of the Dismissal or that the Termination Letter would be sent.
The Applicant submitted that the failure to notify of the reasons for dismissal prior to the decision to terminate his employment constituted a failure to afford procedural fairness and warrants a finding that the Dismissal was unreasonable. The Applicant assertted that the Termination Letter did not provide details of the reason for dismissal, no details were provided of the alleged conduct of the applicant that was a breach of confidentiality, and despite a request by the Applicant on 26 February 2024 for "written details pertaining to the breach of confidentiality as it is not outlined in the letter".
The Applicant assertted that he was not given any opportunity to respond before the Dismissal took effect and that he was not offered a support person.
With respect to the Respondents assertions that the Applicant was dismissed as a result of performance issues, the Applicant contended that the Respondent had not previously raised any concerns about his performance, or warned him that if any concerns where not addressed his employment may be at risk. The Applicant denied there were any issues with his performance and no prior warning was given by the Respondent.
The Statement of Mr Clyne was unchallenged and I have no reason to doubt its veracity. The Respondent clearly stated that it ‘does not oppose the Application’.
Statutory provisions and relevant authorities
Before turning to the merits of the case, the Commission must deal with a number of preliminary matters under s 396 of the Act. That section reads:
396 Initial matters to be considered before merits
The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.
Mr Clynes unfair dismissal application was lodged on 28 February 2024. As he was dismissed on 26 February 2024, his application was lodged within the 21-day statutory time period set out in s 394(2) of the Act. Mr Clyne is a person protected from unfair dismissal in that:
· he had completed the minimum employment period set out in ss 382 and 383 of the Act, namely over 9 years; and
· his remuneration was below the high income threshold in s.382(b)(ii) of the Act and he was otherwise employed under the Award.
Section 385 of the Act sets out four jurisdictional prerequisites which must be satisfied in order for the Commission to find that a person has been unfairly dismissed. By the use of the conjunction ‘and’ joining subsections (a), (b), (c) and (d), it is clear that each of the four requirements must be satisfied for a person to be unfairly dismissed. The section is set out as follows:
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. Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.
For present purposes, I am satisfied that the applicant was dismissed (sub-s (a)), that the Code does not apply (sub-s (c)) and his dismissal was not a case of genuine redundancy (sub-s (d)). The question of whether the applicant’s dismissal was ‘harsh, unjust or unreasonable’ is the remaining matter to be considered at this point.
Was the applicant’s dismissal ‘harsh, unjust or unreasonable’?
Section 387 of the Act sets out each of the matters the Commission is required to take into account when determining this question. The section reads as follows:
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.
Whether there was a valid reason for the applicant’s dismissal (s 387(a))
The meaning of valid reason in s 387(a) is drawn from the judgment of North J in Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 (‘Selvachandran’). This meaning has been considered and applied by members of the Commission and its predecessors for many years. For example, in Rode v Burwood Mitsubishi (Print [R4471]), a Full Bench of the then Australian Industrial Relations Commission (AIRC) discussed the meaning of valid reason in the context of the Workplace Relations Act 1996, citing Selvachandran. The following is an extract from the Full Bench’s decision at paragraph [17]:
‘[17] In relation to the meaning of “valid reason” the following remarks of Northrop J in Selvachandran v Peteron Plastics Pty Ltd are relevant:
“Section 170DE(1) refers to a ‘valid reason, or valid reasons’, but the Act does not give a meaning to those phrases or the adjective ‘valid’. A reference to dictionaries shows that the word ‘valid’ has a number of different meanings depending on the context in which it is used. In The Shorter Oxford Dictionary, the relevant meaning given is: ‘2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.’ In The Macquarie Dictionary the relevant meaning is ‘sound, just or wellfounded; a valid reason’. In its context in s 170DE(1), the adjective ‘valid’ should be given the meaning of sound, defensible or wellfounded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must `be applied in a practical, commonsense way to ensure that’ the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd, when considering the construction and application of a s 170DC.”
[18] While Selvachandran was decided under the former statutory scheme the above observations remain relevant in the context of s.170CG(3)(a). A valid reason is one which is sound, defensible or well founded. A reason for termination which is capricious, fanciful, spiteful or prejudiced is not a valid reason for the purpose of s.170CG(3)(a).
[19] We agree with the appellant’s submission that in order to constitute a valid reason within the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.’
I am satisfied that the Applicant had not been provided with any verbal warnings about his conduct and behaviour. The reasons relied on by the Respondent were not corroborated with any detailed evidence, but were rather statements made after the fact in an attempt to justify the dismissal of the Applicant. The collection of the Respondents’ reasons for dismissal of the Applicant, are neither sound, defensible, or well-founded. Therefore, I find that there was no valid reason for dismissal. In the absence of further material, the Respondents reasons remain uncorroborated and unsubstantiated.
Procedural fairness
Subsections 387 (b)-(g) are procedural fairness matters to be considered by the Commission in any unfair dismissal case, including when a finding of valid reason is made.
The importance of procedural fairness issues in unfair dismissal cases is highlighted in four authorities on the subject. In Crozier v Palazzo Corporation Pty Limited t/as Noble Storage and Transport (2000) 98 IR 137 (‘Crozier v Palazzo’), a Full Bench of the AIRC said at [73]:
‘As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170CG(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment.’
In Wadey v YMCA Canberra [1996] IRCA 568, Moore J made clear that an employer cannot merely pay ‘lip service’ to giving an employee an opportunity to respond to allegations concerning an employee’s conduct. His Honour said:
‘In my opinion the obligation imposed on an employer by that section has, for present purposes, two relevant aspects. The first is that the employee must be made aware of allegations concerning the employee's conduct so as to be able to respond to them. The second is that the employee must be given an opportunity to defend himself or herself. The second aspect, the opportunity to defend, implies an opportunity that might result in the employer deciding not to terminate the employment if the defence is of substance. An employer may simply go through the motions of giving the employee an opportunity to deal with allegations concerning conduct when, in substance, a firm decision to terminate had already been made which would be adhered to irrespective of anything the employee might say in his or her defence. That, in my opinion, does not constitute an opportunity to defend.’
Nevertheless, procedural fairness steps should be applied in a common sense and practical way. In Gibson v Bosmac Pty Ltd (1995) 60 IR 1 (‘Gibson’), Wilcox CJ said at [7]:
‘Ordinarily, before being dismissed for reasons related to conduct or performance, an employee must be made aware of the particular matters that are putting his or her job at risk and given an adequate opportunity of defence. However, I also pointed out that the section does not require any particular formality. It is intended to be applied in a practical, commonsense way so as to ensure that the affected employee is treated fairly. Where the employee is aware of the precise nature of the employer's concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements of the section.’
It goes without saying that any issue(s) of procedural unfairness may not be of such significance as to outweigh the substantive reasons for an employee’s dismissal, particularly in cases of misconduct where the proven misconduct is of such gravity as to outweigh any other considerations such as age, length of service, employment record or contrition.
In a decision of the Full Bench, the following principles were enunciated as to sub-ss 387(b) and (c) of the Act. In Bartlett v Ingleburn Bus Services Pty Ltd t/as Interline Bus Services[2020] FWCFB 6429, the Full Bench said at [19]:
‘[19] The relevant principles as to the meaning and application of s 387(b) and (c) are well-established. They may be summarised as follows:
(1) Each of the matters specified in s 387, including those in paragraphs (b) and (c), must be taken into account as matters of significance, to the extent that they are relevant to the particular case at hand, and given due weight.
(2) Proper consideration of s 387(b) requires a finding to be made as to whether the applicant has been notified of “that reason” – that is, the reason for dismissal relating to the capacity or conduct of the applicant found to be valid under s 387(a) – prior to the decision to dismiss being made.
(3) Proper consideration of s 387(c) requires a finding to be made as to whether the applicant has been given a real opportunity to respond to the reason for dismissal. As a matter of logic, unless the applicant has been notified of the reason, it is difficult to envisage that it could be found that the applicant has been afforded an opportunity to respond to that reason.
(4) Once findings are made in relation to s 387(b) and (c), they may then be weighed together with the other matters required to be taken into account in order to form a conclusion as to whether the applicant’s dismissal was harsh, unjust or unreasonable. Where it is found that the applicant was not notified of the reasons for dismissal and/or was not given an opportunity to respond, a relevant consideration as to the weight to be assigned to this is whether this meant that the applicant was deprived of the possibility of a different outcome in terms of avoiding his or her dismissal’
There was a complete denial of procedural fairness in the dismissal of the Applicant.
Whether the person was notified of that reason (s 387(b))
The applicant was dismissed on 26 February 2024, and was advised of a reason at the time. The Applicant was on leave when the Respondent issued the termination letter. Moreover, the alternate reasons provided on the Respondents Form F3 were not notified to the Applicant until after the dismissal. These factor tell in favour of a finding of unfairness. Once again in circumstances where the evidence of the Applicant is unchallenged, the material provided clearly demonstrate an inadequate notification of the dismissal.
Whether the person was given an opportunity to respond to any reasons related to the conduct of the person (s 387(c))
The Applicant was provided with no opportunity to respond to the termination letter, dated 26 February 2024. This factor tells in favour of a finding of unfairness.
Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal (s 387(d))
Given the applicant had no proper warning of his dismissal, he obviously had no opportunity to request to have a support person with him. It follows there was no refusal. This factor tells in favour of a finding of unfairness.
If the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal (s 387(e))
I accept the Applicant was not warned about his performance, and there was no evidence that he was warned that his employment was at risk. This does not reach the threshold required for a procedural fairness finding. Accordingly, this factor tells in favour of a finding of unfairness.
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 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 (ss 387(f) and (g))
While I accept the respondent has no HR expertise, it would reasonably have been expected to have handled the Applicant’s dismissal with greater care and attention to the statutory and industrial imperatives in such matters. Nonetheless, this is a neutral consideration.
Any other matters the Commission considers relevant (s 387(h))
This section provides the Commission with a broad remit to consider any matters it considers relevant when determining whether a dismissal is unfair. I have taken into account that the Applicant has 9 years of service, a reasonably lengthy period of service.
In weighing all the matters under s 387 of the Act, I am overwhelmingly satisfied that the Applicant’s dismissal was procedurally unfair, and therefore unreasonable. I turn now to remedy.
Appropriate remedy
Section 390 of the Act sets out the circumstances in which the Commission may make an order for reinstatement or compensation, with an emphasis on reinstatement. The section reads:
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.
Note: Division 5 deals with procedural matters such as applications for remedies.
Section 392 reads as follows:
392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled; (whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.
Given the circumstances surrounding the Applicant’s dismissal, and that he does not seek reinstatement, I am satisfied that reinstatement would be inappropriate. I turn then to compensation.
The methodology to be adopted by the Commission in calculating compensation having regard for each of the matters set out in s 392 of the Act, (often referred to as the Sprigg formula), was considered by a Full Bench of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. t/a Ottrey Lodge[2013] FWCFB 431 (‘Ottrey’); see also: Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21 (‘Sprigg’) and Ellawala v Australian Postal Corporation [1999] AIRC 1250. A Full Bench said in Balaclava Pastoral Co Pty Ltd ATF O’Connor-Fifoot Family Trust v Nurcombe[2017] FWCFB 429 (‘Balaclava’) at [42]- [43]:
‘[42] The correct approach to the assessment of compensation was summarised by the Full Bench in the recent decision in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Alan Humphries as follows (footnotes omitted): “[16] The well-established approach to the assessment of compensation under s.392 of the FW Act, taking into account the matters specified in s.392(2), is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket. This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages. Under that approach, the first step to be taken in assessing compensation is to consider s.392(2)(c) - that is, to determine what the applicant would have received, or would have been likely to receive, if the person had not been dismissed. In Bowden this was described in the following way:
‘[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:
‘... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.’
[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the ‘anticipated period of employment’...’
[17] The identification of this starting point amount “necessarily involves assessments as to future events that will often be problematic” . Once this first step has been undertaken, various adjustments are made in accordance with s.392 and the formula for matters including monies earned since dismissal, contingencies, any reduction on account of the employee’s misconduct and the application of the cap of six months’ pay. This approach is however subject to the overarching requirement to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case.”
[43] We would add to this that in quantifying compensation, it is necessary to set out with some precision the way in which the various matters required to be taken into account under s.392(2) (and s.392(3) if relevant), and the steps in the Sprigg formula, have been assessed and quantified. That is to say, the way in which a final compensation amount has been arrived at should be readily apparent and explicable from the reasons of the decision-maker.’ (footnotes omitted)
In adopting the above methodology, I make follow findings:
(a)As the Respondent put no evidence as to the effect any order of compensation would have on the viability of its enterprise, I am satisfied that the order I intend to make would not have any deleterious impact on the Respondent’s viability.
(b)The Applicant had 9 years’ service with the Respondent – a lengthy period of employment.
(c)It is notoriously difficult to speculate with any certainty, how long a period an unfairly dismissed employee would have continued in employment, but for their dismissal. In McCulloch v Calvary Health Care Adelaide[2015] FWCFB 873, the Full Bench of the Commission put it this way and said at [27]:
‘[27] We would also observe that, in our view, the evidence upon which the Commissioner relied was insufficient to sustain the inference that, but for the dismissal, the appellant would only have remained in employment for a further 8 weeks, at which time he would be summarily terminated. Implicit in the Commissioner’s finding is that the conduct which led to his dismissal (and which the Commissioner found did not constitute a valid reason for termination) would not only be repeated within a relatively short period of time but would in fact be repeated in a more serious form such as to constitute serious misconduct. While the task of determining an anticipated period of employment can be difficult, it must be done. In the context of this case it seems to us that the Commission would require cogent evidence to conclude that a person such as the appellant, who was dismissed without a valid reason, would only have worked another 8 weeks at which time he would have been summarily dismissed. The Commissioner’s s.392(2)(c) finding constitutes a significant error of fact, within the meaning of s400(2) of the Act.’
(d)I consider Mr Clyne would have had a reasonable expectation of at least another six months employment. His weekly pay was $2,107.69 per week, and the Applicant would have earned $54,799.94 in six months.
(e) The Applicant obtained alternate employment on 3 June 2024, on comparable pay rates. In the period from 26 February 2024 to 3 June 2024, the Applicant earned $1,800.00. Accordingly I make no accommodation for contingencies, but account for full mitigation from 3 June 2024 (s.392(2)(d) and (g)).
Given I have not found that there was misconduct of the Applicant, I do not intend to factor this in the calculation (s 392(3)).
In accordance with the above conclusions, amount of compensation is 14 weeks pay ($29,507.00), less $1,800.00, being $27,707.66. This amount is obviously below the cap of remuneration the Applicant earned in the 26 weeks prior to his dismissal. Accordingly, I propose to order that amount of compensation.
Conclusion
For the aforementioned reasons, I am satisfied that the dismissal of the Applicant by the Respondent was harsh, unjust and unreasonable within the meaning of s 387 of the Act.
I am satisfied compensation in an amount of $27,707.66 is appropriate with regard to all the circumstances of this case. The amount so ordered will be with any deductions of appropriate taxation according to law. I am satisfied that the remedy I have determined will ensure a fair go all round is accorded to both the Applicant and the Respondent.[1] The amount of compensation is to be paid to the Applicant within 21 days of this decision.
An order giving effect to this decision is issued separately in conjunction with its publication.[2]
DEPUTY PRESIDENT
Appearances:
Ms G Barry (Solicitor) on behalf of the Applicant.
Mr G Clyne the Applicant
Hearing details:
Microsoft Teams.
10:00AM on 27 June 2024.
[1] Section 381(2) of the Act.
[2] PR776469.
Printed by authority of the Commonwealth Government Printer
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