Gerri Tinios v Eastern House Setouts

[2014] FWC 5841

[2014] FWC 5841

The document previously issued on 25 August 2014 with the document reference [2014] FWC 5778 is replaced with the attached.

The document reference has been corrected.

Associate to Commissioner Ryan

Dated: 27 August 2014

[2014] FWC 5841

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Gerri Tinios
v
Eastern House Setouts
(U2014/5815)

COMMISSIONER RYAN MELBOURNE, 25 AUGUST 2014

Application for relief from unfair dismissal.

[1] On 14 August 2014 I issued a decision in transcript where I found that the Applicant had been unfairly dismissed. This decision deals with the Applicant’s application for a remedy in relation to the unfair dismissal.

[2] For the reasons given below I determine that it is appropriate that a remedy be granted, that it is inappropriate for reinstatement to be the remedy, that a remedy of compensation is appropriate and that the amount of compensation be $5,355.00 gross to be taxed at the appropriate rate.

Relevant Statutory Provisions

[3] The relevant provisions of the Fair Work Act are:

“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.”

“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.”

393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”

[4] A remedy in relation to an unfair dismissal can only be ordered if 3 conditions precedent are met: (1) that the employee is a person protected from unfair dismissal, (2) that the person has been unfairly dismissed, and, (3) that the person has made an application under s.394. In the present matter each of these conditions precedent have been met.

[5] Whether or not any remedy is ordered in relation to an unfair dismissal is at the discretion of the Commission. A finding by the Commission that the employee has been unfairly dismissed does not of itself require that any remedy be granted.

[6] In all of the circumstances of the present matter I am of the view that it is appropriate for the Commission to exercise its discretion to order a remedy in relation to the unfair dismissal.

[7] In the present matter the Applicant does not seek the remedy of reinstatement and the Respondent contends that reinstatement would be inappropriate as the Respondent has replaced the Applicant with another person. The Respondent is a small business and it is clear that there are no to her positions within the employer’s business to which the Applicant could be reinstated.

[8] I find that reinstatement is not an appropriate remedy in this matter.

[9] I consider that the remedy of compensation is the appropriate remedy.

[10] Calculation of an amount of compensation must be done in accordance with s.392.

[11] I will address each of the criteria set out in s.392(a) to (g) in turn.

The effect of the order on the viability of the employer’s enterprise - s.392(2)(a)

[12] The Respondent contended that any order of compensation would have an impact on the Respondent’s business. Mr Paterson the effective owner of the Respondent made a very strong submission from the bar table that any order for compensation would simply become an additional debt for him personally as he was already in debt for a very large amount in relation to the business. There was no evidence from Mr Paterson that an order for compensation would have real effect on the viability of the employer’s enterprise.

The length of the person’s service with the employer - s.392(2)(b)

[13] The Applicant had been a permanent employee of the Respondent for 2 years. The length of service is neither so long that it should be a factor in favour of a high amount of compensation nor is so short that it should be a factor in favour of reducing an amount of compensation. In the present matter this criteria is neutral.

The remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed - s.392(2)(c)

[14] Mrs Paterson in answer to a question from the Commission conceded that but for the incident on 4 March that the Respondent anticipated that the employment relationship would have continued for a long time.

[15] On the basis of this concession I would conclude that the amount of remuneration that the Applicant would have received if the Applicant had not been dismissed would be not less than and most likely more than 1 year’s pay or $46,410.00.

The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal - s.392(2)(d)

[16] The material before the Commission identifies that the Applicant has made real efforts to mitigate the loss suffered because of the dismissal. The Applicant has gained employment since her dismissal but at reduced hours and a reduced rate of pay.

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 - s.392(2)(e)

[17] Since 9 July 2014 the Applicant has been employed part time for 20.5 hours per week at an hourly rate of $19.98. The Applicant’s gross wage is $409.59. The amount of remuneration that the Applicant would have earnt between the date of dismissal and the date of the order for compensation is $2663.00.

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 - s.392(2)(f)

[18] The order for compensation in this matter requires payment by close of business on Monday 8 September 2014. The amount of income reasonably likely to be earned by the Applicant during the period between the making of the order for compensation and the actual compensation is $819.18.

Any other matter that the FWC considers relevant - s.392(2)(g)

[19] The Commission considers that the circumstances which led to the termination of the employment relationship are directly relevant to the calculation of an amount of compensation.

[20] As I noted in my ex tempore decision in transcript, the termination of the employment relationship came about through a miscommunication between the parties. That miscommunication was not one sided but was equally shared by both the Applicant and Mrs Paterson. The Applicant’s conduct must be taken into account and is a factor which warrants a significant reduction in the amount of compensation.

Conclusion as to the Amount of Remedy under s.392(2)

[21] Having taken into account all of the circumstances of the matter including each of the criteria in paragraphs (a) to (g) of s.392(2) I conclude that the appropriate amount of compensation is $5,355.00.

[22] The amount of compensation does not contain a component by way of compensation for shock, distress or humiliation or other analogous hurt, caused to the Applicant by the manner of the Applicant’s dismissal.

[23] There was no contention from the Respondent that there was any misconduct of the Applicant which contributed to the employer’s decision to dismiss the Applicant and therefore no reduction need be made to the amount of compensation by reason of s.392(3).

[24] The amount of compensation is well below the compensation cap determined under s.392(6).

[25] Finally, I also note that the amount of compensation does not include any component to take account of any unpaid entitlements that might be owed to the Applicant from the Respondent.

[26] An order for payment of compensation will be issued separately.

COMMISSIONER

Appearances:

Ms J. Boots of counsel on behalf of the Applicant.

Mr A Paterson and Mrs A Paterson on behalf of the Respondent.

Hearing details:

2014.

Melbourne.

August 14.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR554663>