Heather Munckton v Laser Bean Pty Ltd T/A Muzz Buzz

[2015] FWC 4105

[2015] FWC 4105 [Note: An appeal pursuant to s.604 (C2015/4735) was lodged against this decision - refer to Full Bench decision dated 8 December 2015 [[2015] FWCFB 8396] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Heather Munckton
v
Laser Bean Pty Ltd T/A Muzz Buzz
(U2014/16102)

COMMISSIONER BISSETT MELBOURNE, 22 JUNE 2015

Application for relief from unfair dismissal - compensation.

[1] On 30 April 2015 I issued a decision in which I found that Ms Heather Munckton had been unfairly dismissed from her employment with Laser Bean Pty Ltd t/as Muzz Buzz. 1 In that decision I concluded that reinstatement was not appropriate (it was not sought by the Applicant) and that I would consider compensation. I considered that the parties had not fully addressed me and I had insufficient material on which to make a decision on compensation.2 I therefore issued separate directions for each party to file and serve submissions on the matter of compensation.

[2] This decision deals with the matter of compensation only.

[3] In determining the amount of compensation the Fair Work Act 2009 (the Act) states:

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 $66,500 from 1 July 2014

(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.

[4] I have considered each of these matters in determining compensation.

[5] The Respondent submits that it is currently in discussions regarding the closure of its operations in Rowville (it operates two sites – one in Rowville and one in Moorabbin). Mr Stinean of the Respondent says that any award of compensation will further jeopardise the employment of other staff with the Respondent. Whilst Mr Stinean says that he has engaged an external firm to advise on the viability of the business he has failed to provide any evidence of this or of the nature of the financial position of the Respondent despite the directions issued requiring that such evidence be provided for the hearing of this matter.

[6] The Respondent has also failed to provide any evidence of the problems said to be experienced by the business even though the direction issued with respect to compensation specifically stated that mere assertion of difficulties would not suffice. I therefore am unable to make any findings with respect to the effect of an award of compensation on the viability of the business (s.392(2)(1)).

[7] The Applicant worked for the Respondent from September 2013 until her employment was terminated on 3 December 2014. She was promoted to the position she held when her employment was terminated in September 2014 (s.392(2)(b)).

[8] In order to determine how much the Applicant would have earned had she not been dismissed I must first decide how long the Applicant would have remained employed with the Respondent had she not been dismissed.

[9] In my decision on the merits of her application I found that there was a lack of a professional relationship between the Applicant and the Respondent. The tone of communications between them left a lot to be desired and did not demonstrate maturity in the relationship between a business owner and his employee. Mr Stinean’s language in addressing the Applicant was woeful and the Applicant demonstrated a level of insubordination. This was reflected in the exchange of emails and texts between the two of them.

[10] The Applicant says she would have continued in employment with the Respondent for at least a further 18 months. Her evidence is that the hours and pattern of work with the Respondent suited her and she would have remained there until her child commenced school in 2016 at which time her partner would also have finished his university studies and have commenced full time work.

[11] Given the state of the communications and relationship between the Applicant and Mr Stinean I am not convinced the Applicant would have remained employed with the Respondent for as long as she claims. I am satisfied however that she would have remained employed longer than I might otherwise conclude because the job enabled her to balance her work and family needs.

[12] For these reasons I am satisfied the Applicant would have remained in employment with the Respondent for six months had her employment not been terminated.

[13] The Respondent submits that the Applicant’s average weekly gross wage over the last 12 months of her employment was $479.21 although at the time of the termination of her employment her gross weekly wage was $804.84. He attributes the difference to her promotion and ‘increased age’.

[14] The Applicant says that her wage, at the time she was dismissed was $804.84 gross.

[15] The Respondent’s submissions as to the Applicant ‘average’ weekly wage over the last 12 months is not explained in any way that enables me to make any sense of it. In any event the question asked is how much the Applicant would have earned had she not been dismissed. Her past ‘average’ earnings are therefore not relevant to this question.

[16] At the time of her dismissal the Applicant was employed on a full time basis. She was earning $804.84 gross per week. Her earnings for a six month period (ie had she not been dismissed) would have been $20,925.84 plus 9.5% superannuation (s.392(2)(c)).

[17] The Applicant’s employment was terminated on 3 December 2014. She gained employment in a coffee shop commencing on 7 January 2015 on a casual basis filling in on shifts as needed. Her total earnings from this employment was $4551.00 gross. 3

[18] On 25 May 2015 the Applicant commenced working in a hair salon. She was earning $15.12 per hour and, up to 3 June2015 (the end of the six months she would have remained employed) earned about $917.88. 4

[19] The Applicant’s lost earnings is therefore $15,456.96 5 (s.392(2)(e)). She has also lost 9.5% superannuation associated with this loss which is part of lost remuneration.

[20] I have not deducted any amount for contingencies. The six month period for which I consider the Applicant would have remained employed by the Respondent had she not been dismissed has now passed. There is nothing to indicate the Applicant was not available or able to work for any of that period such that I should deduct an amount for such contingencies.

[21] I am satisfied that the Applicant made legitimate attempts to mitigate her loss. She sought and gained employment on a casual basis quickly after her employment was terminated and has since sought to find more secure employment (s.396(2)(d)).

[22] The Respondent has raised a number of additional matters which it believes I should take into account in determining if compensation should be paid. Many of these matters are not relevant to the question of compensation and some of them seek to re-litigate the merits of the dismissal and the conduct of the case.

[23] In particular, the Respondent sought to apportion blame to the Applicant for the current state of the Respondent’s business citing her failure to ensure appropriate cleaning, rostering and service quality and her bullying, lack of leadership and performance shortcomings. The Respondent provided no evidence that the alleged shortcomings of the Applicant contributed to the current state of the business. I have not taken these matters into account in deciding compensation.

[24] Further, I do not consider that the award of compensation should be reduced because the Applicant was ‘under qualified and under experienced, in an elevated role on trial’ in circumstances where the ‘employer is being punished… because the trial was unsuccessful.’ Again these matters go to the merits of the claim for unfair dismissal. In any event there is nothing in the contract that suggests the Applicant was ‘on trial’ in the position. Mr Stinean made the decision to promote the Applicant to the Store Manager position she occupied at the time her employment was terminated. In doing so he was aware of her qualifications and experience, having employed her for 12 months prior to the promotion. It should also be observed that this is the first time the Respondent has suggested the Applicant was ‘on trial.’ There is nothing in the contract of employment she signed that suggested this was the case. Further, this was not a matter raised during the hearing of the merits of the unfair dismissal application.

[25] I have not included any amount for lost annual leave or additional travel costs sought by the Applicant. These are not relevant to the matter of compensation that I must decide. I have also not taken into account the disputed ‘prize money’ of $5,000 subject to some submissions in the initial hearing of the application.

[26] I have not reduced the lost remuneration amount for misconduct. The Applicant’s employment was terminated for poor performance, not misconduct. I have not included any amount for shock, humiliation and distress.

[27] In the 26 weeks prior to the termination of her employment the Applicant earned $17,361.11. 6

[28] The amount of the Applicant’s lost remuneration calculated above (at $15,456.96) does not exceed this amount (s.392(6)(a)).

[29] I shall therefore issue an order that the Respondent pay to the Applicant an amount of $15,456.96 plus 9.5% superannuation (paid into the applicant’s superannuation fund) in compensation within 21 days of the date of the order.

COMMISSIONER

Appearances:

J. Frandsen for the Applicant.

C. Stinean for the Respondent.

Hearing details:

2015.

Melbourne:

June 9.

 1   [2015] FWC 2874.

 2   Ibid, [71].

 3   Exhibit A5.

 4   This is based on the payslip provided by the Applicant and her working seven of the nine available days between 25 May and 3 June 2015, including the Saturday and Sunday, and including one tool allowance.

 5   $20,925.84 (earnings if not dismissed) - ($4551 + $917.88) (amount earned) = $15,456.96 (lost earnings).

 6   On request the Applicant provided copies of her pay slips for the last 26 weeks of her employment.

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