Grant v State of Victoria (the Office of Public Prosecutions) (No.2)
[2014] FCCA 991
•22 May 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| GRANT v STATE OF VICTORIA (THE OFFICE OF PUBLIC PROSECUTIONS) (No.2) | [2014] FCCA 991 |
| Catchwords: INDUSTRIAL LAW – Consideration of remedies arising from contraventions of the Fair Work Act2009 – whether applicant should be reinstated – consideration of compensation and ancillary matters. |
| Legislation: Fair Work Act 2009, ss.351, 391, 392, 539, 545, 545(1), 545(2), 546, 546(2)(b), 546(3), 547 |
| Cases Cited: Shea v TruEnergy Services Proprietary Limited (No 6) [2014] FCA 271 National Tertiary Education Union v Royal Melbourne Institute of Technology [2013] FCA 451 Kelly v Fitzpatrick [2007] FCA 1080 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 |
| Applicant: | ANTHONY EDWARD GRANT |
| Respondent: | STATE OF VICTORIA (THE OFFICE OF PUBLIC PROSECUTIONS) |
| File Number: | MLG 1558 of 2012 |
| Judgment of: | Judge Burchardt |
| Hearing date: | 13 March 2014 |
| Date of Last Submission: | 13 March 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 22 May 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr M. Addison |
| Solicitors for the Applicant: | Maddison and Associates |
| Counsel for the Respondent: | Ms E. Holt |
| Solicitors for the Respondent: | Herbert Smith Freehills |
ORDERS
That the Applicant be reinstated in his former position with the Office of Public Prosecutions or in an equivalent position with the Respondent.
Liberty to apply be granted to the parties in relation to any matter arising from order 1.
The Respondent pay the Applicant $93,750 less applicable tax.
The Respondent pay the Applicant interest on the sum in order 3 calculated pursuant to the Federal Court Rules (being the Reserve Bank Australia rate plus 4 per cent) from 1 August 2013 to the date of judgment.
A pecuniary penalty be imposed on the Respondent pursuant to s.546 of the Fair Work Act 2009 for its contravention of that Act in the sum of $10,000 and such sum be paid to the Applicant.
All applications be otherwise dismissed.
| FEDERAL CIRCUIT COURT AT MELBOURNE |
MLG 1558 of 2012
| ANTHONY EDWARD GRANT |
Applicant
And
| STATE OF VICTORIA (THE OFFICE OF PUBLIC PROSECUTIONS) |
Respondent
REASONS FOR JUDGMENT
Introductory
This decision follows my judgment delivered on 23 January 2014. It should be read in conjunction with that earlier judgment.
What is at issue now is the remedies that should be granted to
Mr Grant, the applicant, arising from the contravention of s.351 of the Fair Work Act 2009 (“the FW Act”) committed by the respondent.
The applicant seeks extensive remedies, including reinstatement to his previous position, all remuneration lost because of his dismissal, compensation for pain and suffering and emotional distress, interest, aggravated damages and that a penalty be imposed on the respondent pursuant to s.539 of the Fair Work Act and paid to him.
The respondent resists almost all of these aspects of the application.
For the reasons that follow, I am going to order that the applicant be reinstated, whether to the position he formerly occupied or to an equivalent position. I am further going to order that he be paid the sum of $93,750 by way of compensation together with interest thereon from 1 August 2013, until the date of judgment. I will further order that a pecuniary penalty of $10,000 be imposed on the respondent and paid to the applicant.
All other claims will be, in effect, dismissed.
A brief outline of the history of the matter
In their written submissions, the parties sought to extract from my earlier judgment aspects that were favourable to their cases. In my view, it is sufficient to note for these purposes that:
a)the applicant was employed from October 2007 onwards and his performance until 2010 was, at the very least, satisfactory;
b)in late September 2010, the applicant’s performance of his duties started to become problematic, albeit that much of the difficulty was interrelated with Mr Grant’s health;
c)by late 2011 and early 2012, Mr Grant’s performance of his duties was becoming extremely problematic, albeit that, once again, to an extent this arose from problems with his health;
d)Mr Grant revealed his medical difficulties to the respondent in February 2012;
e)Mr Grant was dismissed for reasons which, as I have found, included his ill health. He had been stood down from employment in March 2012, been the subject of an investigation by Mr Cotter thereafter and was dismissed in August 2012.
Materials provided since my earlier judgment
I made, on 6 February 2014, orders for the further conduct of the trial. The parties filed written submissions further to those orders.
The submissions of the applicant in relation to remedy
The applicant’s submissions indicated the remedies sought in the Statement of Claim and confirmed that all save compensation for loss of future earnings and the imposition of a penalty against Mr Bird were still pressed. One of the matters pressed was “punitive damages” which I think I clarified with counsel for the applicant at the final hearing as being an application for aggravated damages.
The applicant’s submissions pointed to the remedies available to the Court pursuant to s.545 of the FW Act and submitted at paragraph 5 that reinstatement should be considered the primary remedy in relation to proceedings under the Fair Work Act. The submissions, relevantly, said:
“5. …whilst the section referred to above does not give any privacy to the remedy of reinstatement it is clear from an examination of the provisions relating to the powers of the commission under the unfair dismissal regime that reinstatement is the primary remedy (see section 391). It is submitted that the scheme of the act is such that the court should consider reinstatement as the primary remedy.”
The submissions suggested that the applicant was in no way responsible for his termination of employment because he was terminated because of an illness and that the Court should give emphasis to the fact that before his illness he had been a satisfactory employee.
The submissions went on to traverse various matters relating to the desirability or otherwise of reinstatement and sought to meet anticipated arguments from the respondent relating to an absence of trust and confidence.
The submissions proceeded to deal with the payment of remuneration lost due to the termination and submitted that because the applicant was on a salary of approximately $75,000 per annum, his economic loss was at least $150,000, including salary increases and the like. It was also submitted at paragraphs 15, 16 and 17 that:
“15. Because of the particular circumstances of this matter the applicant was not in a position to seek employment within his skill set. It is submitted that it would have been impossible in the circumstances for the applicant to have been able to secure employment as a solicitor either in the public sector or in the private sector.
16. In terms of mitigating his loss the applicant focused his attention on preparation of the case that is currently before the court
17. It is submitted that the court should award the full economic loss to the applicant given the findings of fact that the termination of the applicants employment was unlawful and due to factors that were beyond the applicant’s control. …”
The submissions went on to refer to compensation for pain and suffering and emotional distress and relied upon a written report of Dr Frean annexed to the submissions to which I shall come in due course.
The submissions continued to deal with the question of interest and then dealt under the heading “Punitive Damages” with the imposition of the civil penalty. It was submitted that there were three contraventions inasmuch as the applicant was stood down, investigated and dismissed and that penalties should be imposed for each such three breaches of the provisions of the Act. It was submitted that the “punitive damages” ought to be paid to the applicant pursuant to s.546(3) of the FW Act. The submission drew attention to various aspects of the matters relevant to the quantification of the penalty.
The submission then sought a declaration that the respondent had breached the terms of the FW Act and costs. The issue of costs has been deferred to further hearing after the penalty matter is completed.
The revelation of the offer
The applicant’s written submissions, relevantly, asserted at paragraph 35:
“35. It is further submitted that the action of the respondent in refusing to settle the litigation pursuant to an offer by the applicant in writing dear (sic) 25 June 2013 amounts to, in the circumstances, an unreasonable act or omission ...”
Very unfortunately, counsel for the applicant revealed the amount indicated in that correspondence during the hearing before me. I refused to accept the tender of the relevant correspondence and indicated that I would put the receipt of this document out of my mind in writing my judgment. I can indicate that I had no regard to the figure thus disclosed in my deliberations, albeit that I would not pretend that I am unable to remember what it was.
Neither party sought that I recuse myself as a result of the receipt of this information and, in the circumstances, I believe that the way I have dealt with this is appropriate.
The respondent’s submissions
The respondent’s submissions can be summarised as they are set out in paragraph 2 of the Outline of Submissions on Remedies and Costs, as:
“2.
(a) Reinstatement is not appropriate in the circumstances;
b) The amount of compensation sought by the applicant is excessive;
c) Any penalty imposed should be minimal; and
d) An order for costs is not appropriate in the circumstances.”
As with the applicant’s written submissions, the respondent’s written submissions sought to emphasise aspects of my earlier judgment that were favourable to the position for which the respondent contended. Not surprisingly, reinstatement was opposed in part because the relation of trust and confidence was said to have broken down. Further, it was submitted that the applicant’s difficulties with his work performance in part pre-dated the development of his depression. The submission emphasised the difficulties the applicant had had with stress, anxiety and alcohol and the erosion of trust and confidence as a result of the incidence of misconduct in 2012, as found by Mr Cotter.
In relation to compensation, the respondent’s submissions concentrated upon the failure of the applicant properly to mitigate his loss and opined (paragraph 23) that the employment relationship might have come to an end in any event as a result of the applicant’s difficulties. The written submissions pointed out that the $150,000 claimed by the applicant as economic loss was unsubstantiatable because he was dismissed less than two years ago and was earning $64,708 a year at the time. The submission continued (paragraph 25) to submit that a period of three months salary would be reasonable because of the applicant’s failure to mitigate his loss and the fact that he had not suffered depression since May or June 2012 and had been fit to work since March 2012.
In relation to non-economic loss, the written submissions point to the judgment of Greenwood J in McIlwain v Ramsey Food Packaging Pty Ltd (No 4) (2006) 158 IR 181 at [87], in which his Honour said:
“In reaching the conclusion that it is appropriate in the circumstances of the case to order compensation, I recognise that compensation must be confined within reasonable limits and that restraint is required (Burazin v Blacktown City Guardian Pty Ltd 1997) 142 ALR 144 at 156). In addition, not every termination of employment will attract compensation. In Burazin, their Honours Wilcox CJ, Von Doussa and Marshall JJ concluded that in the circumstances of that case, there were ‘unusual exacerbating circumstances that make it appropriate to include in the compensation an allowance for distress unnecessarily caused to Mrs Burazin’. In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v ACI Operations Pty Ltd [2006] FCA 122 at [11], Marshall J concluded that something more than the usual element of distress which accompanies most terminations must be demonstrated although the notion of ‘unusual and exacerbating circumstances’ is not necessarily the test.”
The submissions asserted that there was simply no and/or no sufficient evidence to justify a claim for compensation of this sort and that the claim for aggravated damages was not available. It was submitted, “The stress of litigation in itself is not sufficient to attract an award of aggravated damages” (paragraph 29).
So far as penalty was concerned, the written submissions sought to group the three contraventions as arising out of one course of conduct and referred to a number of matters designed to minimise the assessment of the wrongdoing of the respondent and submitted that a minimal penalty was appropriate.
The first respondent’s submissions did not address the question as to whether a declaration should or should not be made.
The evidence provided to the Court – the report of Dr Frean
Dr Frean has provided a report dated 21 February 2014, annexed to the applicant’s submissions, and in the circumstances I am going to set out the entire relevant text, which is as follows:
“In spite of two difficult years and living much of his time in Queensland, Mr. Grant has continued to see me reasonably regularly during this period. I believe the dispute may be close to resolution and I have been asked to comment on his current fitness to return to work.
Mr. Grant remains committed to returning to work, and while two years out of the work force is a long time for any professional, I believe Mr. Grant has sufficiently recovered from his depressive illness to return to work. The harm produced by his enforced period away from work, has done damage to him emotionally and is likely to have some long term impact.
In light of this damage, I encourage Mr. Grant to attend private counselling sessions to assist him in his smooth transition back into the workforce. It is my belief (and has been so for almost two years) that the sooner Mr. Grant is back to full time work the better his outcome will be. I can see no medical impediment to him returning to his job as a Crown solicitor with the O.P.P.”
The affidavit of Ms Helen Boussounis
Ms Boussounis is the Human Resources Manager of the respondent. She has deposed to the salary of the applicant at the time of his termination of employment, which was deposed to being $64,708, plus 9 per cent superannuation of $5,823.72.
His current salary would be $67,663, plus superannuation of 9.25 per cent being $6,258.83 as at 1 January 2014.
The applicant was on paid leave from the date of his suspension on
13 March 2012 until the date of his termination on 15 August 2012. At termination, he was paid salary up to and including the termination date and for untaken annual leave accrued during his suspension, in the total of $3,293.28 (before tax). He was also paid a one-off bonus of $1,500 (before tax) for reasons no longer presently relevant.
Otherwise, Ms Boussounis relevantly deposed that as at 5 March 2014 the respondent employs a total of 317 employees. It has not been the subject of any penalty order for a breach of the FW Act.
It should be noted that neither Dr Frean or Ms Boussounis were required for cross-examination and no endeavour was made to lead evidence from either the applicant or from anyone on behalf of the respondent in support of the orders now sought.
Reinstatement
I do not accept the applicant’s submission that reinstatement is the primary remedy for the Court to consider under s.545 of the FW Act. Section 545(1) reads:
“The Federal Court or the Federal Circuit Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.”
Section 545(2) reads:
“Without limiting subsection (1), the orders the Federal Court or the Federal Circuit Court may make include the following:
(a) an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention;
(b) an order awarding compensation for loss that a person has suffered because of the contravention;
(c) an order for reinstatement of a person.”
The applicant’s submission that the Court should, by analogy with the terms of s.391, conclude that reinstatement is the primary remedy is not, in my view, sound. The first and most obvious reason for saying this is that if the Parliament had intended the remedies for unfair dismissal to be the same as the orders that may be made for contravention of a civil remedy provision, Parliament would no doubt have done so. It did not.
Further, the remedies are expressed in a different way, with reinstatement in s.391 and compensation in s.392. Moreover, the remedies as to compensation include an express requirement that any amount of compensation awarded be reduced by an appropriate amount in the event of misconduct, and an express requirement that there be no amount paid by way of compensation for shock, distress, humiliation or other analogous hurt caused by the manner of the person’s dismissal. More importantly again, compensation is limited, in effect, to six months’ pay. The analogy between s.391 and s.545 therefore is clearly inappropriate.
This leaves aside a further consideration, namely, that the civil penalty regime involves what is sometimes referred to as a quasi-criminal regime.
I have obtained guidance from the recent decision of Dodds-Streeton J in Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271, where her Honour said at [856] and following, under the heading “The applicable principles and authorities”:
“859. In Quinn v Overland (2010) 199 IR 40; [2010] FCA 799 (“Quinn”) at [97]-[98], Bromberg J observed that the historical reluctance to order specific performance of employment contracts had been modified by recognition of the realities of modern employment relations. His Honour stated at [98] that under modern statutory unfair dismissal regimes:
Dismissed employees are regularly reinstated into their former employments without apparent consequent difficulties. The long-standing nature of this remedy, and its acceptance as part of the industrial furniture, is a testament to the fact that as a matter of practice, a breakdown in confidence is not necessarily irreconcilable.
[857] It is well established that reinstatement requires an employee to be restored to his or her former position with the same terms, conditions, benefits and work as were previously enjoyed: (authorities admitted).
[858] In Perkins v Grace Worldwide (Aust) Pty Ltd (1997) IR 186 (“Perkins”) at 191, the Full Federal Court (Wilcox, Marshall and North JJ) observed that a loss of trust and confidence, if “soundly and rationally based”, is relevant to determining whether reinstatement is appropriate.
[859] A breakdown in confidence between an employer and employee is not necessarily fatal to reinstatement if sufficient trust and confidence for the particular employment relationship can be restored: (authorities omitted).”
It should be noted that Dodds-Streeton J went on to find that the trust and confidence necessary to the employment relationship between
Ms Shea and the respondent had broken down and could not be sufficiently restored to permit her reinstatement. Ms Shea would have had to work closely with the managing director, Mr McIndoe, with whom it was clear the relationship had totally broken down.
Each case necessarily turns on its own facts. There are a number of relevant facts here.
First, the person who took the decision to dismiss the applicant and who contravened the legislation as a result was Mr Hyland. The applicant historically has had virtually no contact with Mr Hyland, who had scarcely even heard of him until February 2012. There is no reason to suppose he will have any contact with Mr Hyland in the event that he is reinstated.
Mr Bird and Mr Sabljak were clearly very disturbed and worried about Mr Grant’s conduct as an employee in the period leading up to his termination of employment. Both Mr Bird and Mr Sabljak were attacked as to their credit (particularly in the case of Mr Bird) during the conduct of the trial. These attacks must have been disconcerting and distressing to them.
Against this, however, the evidence in the original hearing shows that Mr Bird and Mr Sabljak, greatly to their credit, were essentially very sympathetic to Mr Grant and had responded, in my view, in a generally entirely reasonable way to the numerous difficulties that Mr Grant’s various problems had given rise.
As I find, both Mr Bird and Mr Sabljak are sufficiently mature and decent people to have got over any of the emotional disturbance that the trial itself would have created. This would, in my view, more probably than otherwise be the case given the very favourable remarks I had to make about them in my earlier judgment.
The evidence does not suggest that Mr Bird and Mr Sabljak, who are the people who would supervise Mr Grant were he to be reinstated, would struggle to deal with him.
Mr Grant is perhaps slightly more problematic. In my opinion, he will need some assistance, as his doctor says, to enable him to return to work. Although not expressly stated, the fact that Dr Frean describes the last two years as difficult for Mr Grant suggests that he may still harbour a sense of injustice which may be directed, at least in part, against Mr Bird and Mr Sabljak, although, as I would see it, any such resentment would be wholly misplaced.
In the circumstances, however, and bearing in mind, in particular, the decency of Mr Bird and Mr Sabljak, if the relationship in trust and confidence has, to an extent, been marred, I am fully confident it could be repaired.
This does not of itself, however, mean that Mr Grant is automatically entitled to be reinstated. It should be noted that, as I found in my earlier judgment, he had misconducted himself in a number of ways, albeit that in part these arose out of his illness.
One of the matters that I think is very persuasive in respect of this particular point is the very likely difficulties that Mr Grant will suffer should he try to obtain employment anywhere else. It is true to assert, as the respondent’s written submissions do, that the various matters antithetical to Mr Grant were not made public at the time of his termination of employment. They were kept confidential.
Nonetheless, even this finding is scarcely a complete picture. Had Mr Grant sought other employment, he would have undoubtedly faced the necessity of explaining why he had ceased employment. Assuming that he were to be honest, which, as an officer of the Court is an assumption that may properly in my view be made, he would have had to explain that he had been terminated for misconduct.
Furthermore, my earlier judgment has attracted widespread publicity. It would be unrealistic to presuppose that future employers in at least Victoria would not be likely to be well aware of it.
As Gray J pointed out in National Tertiary Education Union v Royal Melbourne Institute of Technology [2013] FCA 451 at [150] that:
“… If Professor Bessant decides to seek employment elsewhere, at least she will have the benefit of doing so while she is holding the position of a professor at RMIT, rather than being unemployed after dismissal.”
Mr Grant’s capacity to obtain future employment is undoubtedly going to be enormously enhanced if he is back in the workforce.
Furthermore, Dr Frean has asserted that it is in Mr Grant’s best interests, in terms of his health, that he be back to work at the OPP as soon as possible.
In all the circumstances, in my opinion, it is appropriate to order that Mr Grant be reinstated in his former position or in some equivalent position, either within the OPP or another branch of the Victorian Public Service. It should be noted that the respondent in this case is the State of Victoria. Mr Grant is a public servant. In the event that his return to the OPP is regarded as problematic, I have no doubt that some alternate position could be provided.
Lest there be controversy about any alternative position that might be offered, I will grant the parties liberty to apply in this regard.
Compensation
Compensation for loss of earnings has, on any view, been somewhat overstated by the applicant. His claim of $150,000 a year reflects two years pay at $75,000 per year. His true benefits as at the time of dismissal, as disclosed by Ms Boussounis, was of the order of just over $70,000. Furthermore, he has not been out of pay or, indeed, even out of work for two years. His dismissal took place on 15 August 2012.
Doing the best I can, bearing in mind that pay has gone up slightly in the interim, it would seem to me that the real financial loss that the applicant has suffered will be between one and a half and one and three-quarter years by the time judgment is delivered. At the relevant figures, that would be of an amount of approximately $125,000 at a maximum.
In my opinion, the applicant should, on balance, not suffer a reduction of the amount to be paid to him because of the acts of misconduct during his ill health in late 2011 and early 2012. To do so would be to penalise him for something that the Act expressly provides him with protection for, namely, adverse action as a result of ill health. That is so even though, as I said in my earlier judgment, there is a strong thread of entitlement running through Mr Grant’s behaviour which at times has been unattractive and misguided.
It is true, as the respondent asserts, that some of the things that the applicant did in the lead up to his dismissal pre-dated his depression (or, at least, his diagnosed depression), but in truth the serious matters that really led to his dismissal arose during the period of, and were interrelated with, his depression.
The area where the applicant, in my view, faces very real difficulties is his failure to mitigate. His case is that he has concentrated his affairs entirely on this case. That is not necessarily in my view made out by Dr Frean’s evidence. Dr Frean relevantly states that the applicant had been “living much of his time in Queensland” for the last two years. It is true, of course, that the applicant may have been stewing (to use a phrase he used in his own evidence) over this case for that time, but the reality is that his involvement as a client with his legal advisers cannot have fully occupied his time over the last two years.
The suggestion made by the applicant’s counsel that it was wholly impossible for him to have sought other work is misconceived. There was a lengthy period of time during which, according to Dr Frean, he was able to work (Dr Frean certified him fit to work from March 2012 onwards), and even if one accepts that he was not required to seek work until August 2012, he had a lengthy period of time available to him thereafter in which to do so.
Furthermore, and accepting as I do, that termination of employment for misconduct stands as a formidable obstacle, it was still in my view necessary and appropriate for the applicant to seek employment and, as it were, find out whether what had occurred really did stand against him as severely as he thought. A candid admission of his ill health may well have provoked a more compassionate employer to have engaged him notwithstanding his past difficulties.
Bearing in mind the applicant’s failure properly to seek to mitigate his loss, and bearing in mind, albeit as a minor matter, the misconduct that has not been proved to have interrelated with his depression, I think there should be a reduction in the prima facie amount of approximately $125,000 that the applicant should receive. In my view, it should be a significant amount. There is simply no precision in these matters and there is no very significant guidance to be found in the authorities. I think that a discount of 25 per cent is appropriate, reducing the sum to be paid to the applicant, less, of course, applicable tax, to $93,750.
I do not think that it is appropriate in the particular circumstances of this case, as the respondent submits, to reduce the amount payable to the applicant by reference to the possibility that the employment would have lawfully come to an end in any event. The reality is that Dr Frean declared that the applicant was fit to work in March 2012.
While it is clear that the applicant’s conduct up to that time was likely to have led to dismissal, the dismissal was in contravention of the protection provision. It is impossible to speculate with sufficient certainty whether Mr Grant would have continued to behave in a fashion which would, once his depression was treated, have led to his termination of employment. Indeed, the very order for reinstatement that I am making presupposes in a sense the opposite conclusion.
Compensation for injury to feelings and the like
This matter may be dealt with shortly. The highest the evidence goes for these purposes is the assertion of Dr Frean that, “In spite of two difficult years, and living much of his time in Queensland, Mr Grant has continued to see me reasonably regularly during this period”, and “I believe that Mr Grant has sufficiently recovered from his depressive illness to return to work. The harm produced by his enforced period away from work has done damage to him emotionally and is likely to have some long-term impact”.
This is not evidence of sufficiently telling import, notwithstanding that Dr Frean was not required for cross-examination, in my opinion, to justify an award under this heading in this instance. The termination of employment must have been extremely stressful and difficult for Mr Grant, but termination of employment is almost always likely to be so to every employee who suffers that misfortune.
Dr Frean’s observations are general in nature and by no means decisively expressed. Although the test stated by Greenwood J in McIlwain is not comprehensive, this is not a case on any view in which there are unusual and exacerbating circumstances, and even if that is not to be taken to be an inclusive or decisive formulation of the relevant test, in all the circumstances of this case I would decline to order compensation under this heading.
Interest
The Court is required to contemplate interest up to judgment (other than pecuniary penalty orders) and to include an amount, unless good cause is shown to the contrary (see s.547 of the FW Act).
In my view, it is appropriate that the applicant have interest on the sums of which his termination of employment has deprived him. In my opinion, bearing in mind that interest would have run on some of it from 15 August 2012 and on other parts of it, so to speak, from the day before today, a fair compensation is to order interest at the relevant rate from halfway between the filing of the application and now. The application was filed on 6 December 2012. This judgment will issue in May 2014. Interest will begin from 1 August 2013. It will be calculated on the rates prescribed by the Federal Court Rules.
Aggravated damages
Aggravated damages are designed to compensate a party for injury to feelings or mental distress caused by the manner in which the wrongful act was committed by the tortfeasor. The manner in which the applicant was dealt with unlawfully in this case has none of the qualities that make it appropriate to make an award of aggravated damages. The respondent proceeded in accordance with the relevant industrial instrument. The decision to dismiss, whilst unlawful, followed a careful (even if conceivably flawed) process of investigation and there was nothing contumelious in the way in which the respondent dealt with the applicant.
The imposition of a pecuniary penalty
The applicant seeks that three penalties be imposed for what is submitted to be the three contraventions of the FW Act, namely, the stand down, investigation and the dismissal of Mr Grant. He seeks that penalties be imposed at the mid to high range. The parties, as I understand it, agree that the maximum for each contravention pursuant to s.546(2)(b) of the FW Act is $33,000. The applicant seeks that any sums imposed by way of penalty be paid to him.
The respondent submits that the respondent’s conduct constituted a single course of conduct and that one penalty at the lower end of the scale should be imposed, with the moneys paid into the Consolidated Revenue Fund.
The written submissions of the parties reveal that there is not much in the way of dispute between the parties as to what the applicable authorities binding this Court are. Both sides referred, either expressly or implicitly, to cases like Kelly v Fitzpatrick [2007] FCA 1080 per Tracey J at [14] (see applicant’s written submissions paragraph 28) and the Full Court of the Federal Court in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560. I accept that the matters set out by Tracey J may be a helpful guide, but I also accept, with respect, the reservation expressed by Buchanan J in McAlary-Smith to the effect that there are no statutory criteria and that checklists should not be adopted as (see at [91]:
“[91]…a rigid catalogue of matters for attention.”
In my view, both sides somewhat overstated their positions in relation to this question of penalty. I accept the submission of the respondent that once Mr Bird brought Mr Grant’s conduct to Mr Hyland’s attention, it followed, pursuant to the relevant industrial instrument, that an investigation had to take place. I also accept that the suspension, investigation and dismissal can only really be seen as a single course of conduct. While, for the reasons given in my earlier judgment, I have found that that course of conduct contravened the legislation, it is clear that it all was part of a single course of action and arose from the same controversy, namely, the respondent’s perception of Mr Grant’s conduct.
It would in my view, in the circumstances of this particular case, be manifestly unfair not to treat the three contraventions as one.
Conversely, however, the respondent’s submissions failed to take account of the importance of the legislation itself. The FW Act prohibits certain forms of action, including, in this instance, taking steps to an employee’s detriment for reasons which include ill health. The respondent, as I made clear in my earlier judgment, well knew of the applicant’s ill health and I do not need to repeat the various criticisms I have made in my earlier judgment.
While it is true that the respondent proceeded on the basis of legal advice, which subject to appeal must be thought now to have been wrong, the fact is that the respondent’s conduct involved serious consequences for Mr Grant.
If one turns to the sort of matters indicated by Tracey J in Kelly v Fitzpatrick, the following matters seem to me to be of significance.
First, the conduct was at one level of analysis understandable in that Mr Grant was ostensibly mis-conducting himself, the industrial instrument required an investigation and the ultimate outcome was not the subject of caprice or inattention on the part of the respondent.
Conversely, however, the course of action that led to Mr Grant’s dismissal was, as I have found, fundamentally flawed. It ignored the ill health of which the respondent had active knowledge.
The loss and damage caused to Mr Grant is, in my view, not as severe as he has sought to assert for the reasons given in this judgment. But on any view, and notwithstanding his failure to mitigate, this must have been an extremely distressing and difficult period for him.
There is no previous misconduct by the respondent and, clearly, as I have found, the contraventions arose out of one course of conduct.
The respondent is not a small operation, employing some hundreds of people. It is also a public authority which is, certainly no less than any other authority, required to obey the law.
Clearly, senior management was involved in the contravention and there has been no contrition whatever expressed at any stage. One might have thought that the respondent, having read my earlier judgment, would have been moved to make some sort of submission in this regard. Nonetheless, of course, it is important to remember that a failure to express contrition does not make the contravening conduct worse or give rise to any increase in penalty. Its absence is merely a relevant consideration and deprives the respondent of the benefit that any contrition might have obtained in mitigation of the reduction of the penalty.
I think there is little doubt that the respondent will not contravene in the future. The need for specific deterrence is not in any way apparent.
The need for general deterrence is, in my view, a relevant consideration. Mr Grant is not the first, and will not be the last, person to suffer ill health interrelated with misconduct. The FW Act gives people in Mr Grant’s position the benefit of protection. It is important that the nature of this protection be generally understood.
Taking all these matters together, and applying the instinctive synthesis to which the authorities refer, and bearing in mind the totality principle (which has, of course, little work to do here given that I have treated the three contraventions as one), in my opinion, the appropriate penalty is $10,000 or approximately just under one-third of the total available.
The insistence that the money not be paid to the applicant advanced by the respondent, in my view, has an almost churlish quality to it. Mr Grant will have expended substantial amounts of money in prosecuting his case in what is essentially a no cost jurisdiction. I appreciate that the issue of costs is still extant between the parties, but in all the circumstances of the matter, I see no reason why the penalty ought not be paid to Mr Grant. He has been out of work, albeit partly through his own failure to mitigate, for quite some time and his finances might be thought reasonably to be such as to be likely to benefit from the payment to him of the penalty.
No authority has been cited to me, and the discretion in s.546(3) of the FW Act is, in my view, at large. The appropriate exercise of my discretion in this instance is, in my view, that the penalty be paid to Mr Grant.
Declaration
The applicant has sought a declaration as to the contravening conduct. This is not a matter specifically addressed in the respondent’s written or oral submissions. There has been from time-to-time some measure of difference of opinion as to the utility of declarations. In my opinion, in the particular circumstances of this case it is inappropriate that the declaration be made as it will not add to the purport of this judgment. The parties are lawyers with a developed understanding of the issues and in these circumstances a declaration is unnecessary.
I certify that the preceding ninety-two (92) paragraphs are a true copy of the reasons for judgment of Judge Burchardt.
Associate:
Date: 22 May 2014
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