Illawarra Coal Holdings Pty Ltd T/A South32 v Matthew Gosek

[2019] FWC 2874

[2019] FWC 2874

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Illawarra Coal Holdings Pty Ltd T/A South32
v
Matthew Gosek
(C2019/754)

SENIOR DEPUTY PRESIDENT HAMBERGER SYDNEY, 2 MAY 2019

Dispute concerning entitlements following reinstatement.

[1] On 5 February 2019 Illawarra Coal Holdings Pty Ltd (the applicant) made an application pursuant to s.739 of the Fair Work Act 2009 (the FW Act) for the Commission to deal with a dispute in accordance with the dispute settlement procedure (DSP) in the Dendrobium Mine Enterprise Agreement 2015 (the 2015 agreement). On 12 March 2019 the application was amended to reflect that the 2015 agreement had now been replaced by the Dendrobium Mine Enterprise Agreement 2018 (the 2018 agreement).

[2] The dispute concerns the entitlements of Matthew Gosek following his reinstatement on 13 April 2018 as a result of a Full Bench decision [2018] FWCFB 1829 and associated order (PR601730). This includes whether the applicant should:

•  Credit Mr Gosek with the amount of annual leave that he would have accrued if he had been employed in the normal way between his dismissal and subsequent reinstatement (the relevant period);

•  Take all necessary steps to ensure that the amount of long service leave that Mr Gosek would have accrued if he had been employed in the normal way during the relevant period is credited to him; and

•  Calculate any redundancy pay entitlement (or any other service-related entitlement) for Mr Gosek inclusive of the relevant period.

[3] Mr Gosek’s entitlements to annual leave and redundancy pay arise under the 2018 agreement. Unresolved disputes about matters arising under the 2018 agreement or in relation to the National Employment Standards can be referred to the Commission for arbitration under the DSP. Mr Gosek’s entitlements to long service leave derive from the Coal Mining Industry (Long Service Leave) Administration Act 1992. That Act empowers the Commission to deal with disputes about matters in relation to long service leave.

[4] A hearing was held in Sydney on 30 April 2019. The applicant was represented by Matthew Follett, counsel. Mr Gosek was represented by Adam Walkaden, National Legal Officer with the Mining and Energy Division of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU).

Background

[5] Mr Gosek is currently employed by the applicant as an electrical technician at its Dendrobium mine. His employment is covered by the 2018 agreement.

[6] Mr Gosek was dismissed on 31 January 2017 for misconduct (at which time he had worked for the applicant for around 11 years). He made an application for an unfair dismissal remedy pursuant to the FW Act. On 3 November 2017 Riordan C found he had been unfairly dismissed. The Commissioner ordered that Mr Gosek be reinstated to his former position and that his continuity of employment with the applicant be maintained. He also ordered an amount for lost remuneration (subject to certain discounts).¹

[7] The applicant subsequently filed an appeal against the Commissioner’s decision. On 23 February 2018, by way of a majority decision the appeal was upheld and the Commissioner’s decision and orders were quashed. The Full Bench then reheard the application.

[8] The majority of the Full Bench decided that the dismissal was unfair and that Mr Gosek should be reinstated. It added:

‘We consider that it is appropriate that an order be made maintaining the continuity of employment and his period of continuous service. However, we do not consider it appropriate in light of the circumstances that there be any order for remuneration lost. We do so to reflect the seriousness with which we view Mr Gosek’s conduct.’2

[9] The Full Bench issued the following order on 6 April 2018:

‘Further to the decision issued in this matter, the Fair work Commission orders:

(a) pursuant to s.391(1)(b) of the Fair Work Act 2009 that Mr Gosek be reinstated to the position he occupied immediately prior to his dismissal at Illawarra Coal Holdings Pty Ltd T/A South32.

(b) pursuant to s.391(2) of the Act, Illawarra Coal is ordered to treat the period of employment of Mr Gosek with Illawarra Coal to have not been broken by the dismissal. The intervening period between dismissal and reinstatement of Mr Gosek shall be counted for all purposes as a period of continuous employment.

(c) order shall take affect within 7 days of the date of this order.’

[10] This means that the ‘relevant period’ (that is, the time between Mr Gosek’s dismissal and his subsequent reinstatement) is that between 31 January 2017 and 13 April 2018.

Consideration

[11] The legislative provisions dealing with remedies for unfair dismissal are to be found in Division 4 of Part 3-2 of the FW Act. Reinstatement is provided for in s.391. That section relevantly provides:

‘(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal….

Order to maintain continuity

(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

(a) the continuity of the person’s employment;

(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.

Order to restore lost pay

(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:

(a) 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 reinstatement; and

(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.’

[12] The proper construction of these provisions is that if the Commission makes an order that a person be reinstated under s.391(1) the Commission may make one or more of the following three separate types of additional orders:

1. An order to maintain the continuity of the person’s employment (s.391(2)(a));

2. An order to maintain the period of the person’s continuous service with the employer (s.391(2)(b)); and

3. An order that the employer pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

[13] The Full Bench that dealt with the applicant’s appeal declined to make an order of the third type: that is one to restore lost pay. However while it did not use the precise words of the FW Act I am satisfied that it made orders of both the first and second types (that is, both limbs of s.391(2)).

[14] The reference in the Full Bench’s order to treating the period of employment of Mr Gosek with the applicant as having ‘not been broken’ by the dismissal must be read as an order of the second type: that is an order to maintain the period of Mr Gosek’s continuous service with the employer.

[15] I am satisfied that the effect of such an order is that, to use the words of the applicant:

‘Mr Gosek’s current period of service on and from April 2018 is to be joined and treated as continuous with his period of service prior to his dismissal’.

[16] In other words, one adds Mr Gosek’s service prior to the date of his dismissal to his service since his reinstatement in April 2018.

[17] However the Full Bench did more than this. It also ordered that:

‘The intervening period between dismissal and reinstatement of Mr Gosek shall be counted for all purposes as a period of continuous employment.’

[18] I am satisfied that this is an order of the first type: that is an order to maintain the continuity of Mr Gosek’s employment.

[19] The phrase ‘an order to maintain the continuity of the employee’s employment’ was considered by a Full Bench in the context of s.170CH(4)(b) of the Workplace Relations Act 1996). The Full Bench contrasted such an order with an order for lost remuneration. It said:

‘An order for lost remuneration seeks to compensate an employee for loss of remuneration between their termination of employment and reinstatement. An order to provide for continuity of employment is referable to the same period, but its benefits are more prospective. It ensures that the period specified is taken into account in determining any entitlements to service related benefits.’3

[20] It follows that the benefit of an order to maintain the continuity of an employee’s employment is in relation to such matters as the accrual of annual and long service leave during the period between the dismissal and reinstatement. That this was the intention of the Full Bench is consistent with its reference to ‘the intervening period between dismissal and reinstatement’. This is not just a matter of not going back to ‘day one’ and ignoring the employee’s service prior to his or her dismissal, as contended by the applicant. That was dealt with by the requirement to treat the period of employment of Mr Gosek with the applicant ‘to have not been broken by the dismissal’. It means that one must also include the period while the employee was not (in actual fact) employed by the employer in calculating any service related benefits (that is the ‘relevant period’ between the applicant’s dismissal and his subsequent reinstatement).

[21] The effect, therefore, of the Full Bench’s order for continuity of employment is that Mr Gosek’s service related benefits should be calculated as if he had been employed during the period that he was (in fact) not employed by the employer. It might arguably have been more consistent with the Full Bench’s decision not to make an order for lost remuneration (an order of the third type) if it had not made an order for continuity of employment. However the Full Bench clearly had a discretion to make such an order and chose to do so.

[22] Not only was this not beyond the power of the Commission, (as was suggested by the applicant) but it is something the Commission is specifically empowered to do by s.391(2).

[23] The applicant submitted that one must have regard to s.22 of the FW Act in understanding the effect of the Full Bench’s order to maintain the continuity of Mr Gosek’s employment. Section 22 relevantly provides as follows:

‘22 Meanings of service and continuous service

General meaning

(1) A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period) that does not count as service because of subsection (2).

(2) The following periods do not count as service:

(a) any period of unauthorised absence;

(b) any period of unpaid leave or unpaid authorised absence, other than:

(i) a period of absence under Division 8 of Part 2-2 (which deals with community service leave); or

(ii) a period of stand down under Part 3-5, under an enterprise agreement that applies to the employee, or under the employee’s contract of employment; or

(iii) a period of leave or absence of a kind prescribed by the regulations;

(c) any other period of a kind prescribed by the regulations.

(3) An excluded period does not break a national system employee’s continuous service with his or her national system employer, but does not count towards the length of the employee’s continuous service.’

[24] The general proposition arising from s.22 is that a period of employment (with a national system employer such as the applicant) is a period of service, subject to certain exceptions, in particular certain types of ‘absences’. It is hard to see how Mr Gosek fits into any of the exclusion categories. Obviously Mr Gosek was ‘absent’ in the literal sense of the term during the period between his dismissal and reinstatement. However this cannot have been an ‘unauthorised absence’ (where ‘authorised’ in context must mean authorised by the employer) as it was the actions of his employer that meant Mr Gosek was ‘absent’. It could not have been unpaid leave. Nor in any meaningful sense could it constitute an ‘unpaid authorised absence’. While it is true that Mr Gosek was ‘unpaid’ during the relevant period it strains the English language to suggest he was on some kind of ‘authorised absence’ (that is an absence authorised by his employer) during this period.

[25] I consider that the effect of the Full Bench’s order for continuity of employment was that Mr Gosek should be treated for the purposes of the FW Act as if he was not in fact absent. There is no inconsistency between ss 22 and 391 of the FW Act.

[26] The effect of s.391(2) is specifically to enable the Commission to order an employer to treat a dismissed employee as if he had not been dismissed and was still ‘employed’ at least for the purposes of accruing service-related benefits. It is consistent with s.22 to treat this period of ‘employment’ (as ordered by the Full Bench) as a period of ‘service’.

Conclusion

[27] I determine that:

•  Mr Gosek should be credited with the amount of annual leave that he would have accrued if he had been employed in the normal way between his dismissal and subsequent reinstatement (relevant period);

•  The applicant should take all necessary steps to ensure that the amount of long service leave that Mr Gosek would have accrued if he had been employed in the normal way during the relevant period is credited to him; and

•  The applicant should calculate any redundancy pay entitlement (and any other service related entitlement) for Mr Gosek inclusive of the relevant period.

[28] Finally I note that Mr Walkaden submitted that I should find that Mr Gosek should be issued with shares (or cash equivalent) that appear to have been given to other employees during the period between his dismissal and reinstatement. I decline to do so. There is nothing before me to establish on what basis any shares have been given to other employees. Moreover any such share issue does not appear to arise under the terms of either the 2015 or 2018 agreements, or indeed the NES. I did indicate during the proceedings my view that the applicant should explain to Mr Gosek why it had decided not to issue him with the shares.

SENIOR DEPUTY PRESIDENT

Appearances:

M Follett of counsel with B Popple, solicitor, for the applicant.

A Walkaden of the Construction, Forestry, Maritime, Mining and Energy Union for the respondent.

Hearing details:

Sydney.

2019.

April 30.

Printed by authority of the Commonwealth Government Printer

<PR707545>

1 [2017] FWC 4574

2 [2018] FWCFB 1829 at [76]

3 Kenley v JB Hi Fi Print S7235 at [34]