Karen Moore v Fung Family Trust & Lee and Kim Trust
[2023] FWC 3010
•17 NOVEMBER 2023
| [2023] FWC 3010 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Karen Moore
v
Fung Family Trust & Lee and Kim Trust
(U2023/6905)
| COMMISSIONER CRAWFORD | SYDNEY, 17 NOVEMBER 2023 |
Application for relief from unfair dismissal – dismissal not consistent with Small Business Fair Dismissal Code - dismissal unfair – compensation ordered
Background
On 27 July 2023, Karen Moore (Ms Moore) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that she had been unfairly dismissed from her employment by a partnership named Fung Family Trust & Lee and Kim Trust, which operates under the business name of Specialist Neurology Services (SNS).
Ms Moore commenced full-time employment with SNS on 2 May 2022 as a Medical Receptionist/Administration Assistant.[1] The Health Professionals and Support Services Award 2020 applied to Ms Moore in relation to her employment with SNS.[2]
Ms Moore was summarily dismissed on 10 July 2023 by SNS on the basis of “repeated bullying and intimidation of other staff that has resulted in a toxic work environment, and which has led directly to the resignation of three staff members within the 14 months of your employment, two in the last month.”[3]
Ms Moore was provided with two weeks of pay at the time of dismissal. Both parties agreed this was a discretionary payment that was not legally required because Ms Moore was summarily dismissed.
Hearing
There being contested facts involved, the Commission is obliged by s.397 of the FW Act to conduct a conference or hold a hearing.
The application was initially allocated to Deputy President Roberts and was listed for hearing on 13 November 2023. The matter was allocated to me prior to the hearing date.
Neither party sought to be legally represented for the hearing. Ms Moore was represented by a family friend, Frank Cole. Mr Cole clarified during the hearing he is not a lawyer or paid agent and hence did not need my permission to represent Ms Moore. SNS was represented by Professor Victor Fung who is a Principal Neurologist for SNS.
Evidence
Ms Moore
Ms Moore relied on the following evidence in support of her application:
· Witness statement filed on 20 October 2023. This was marked Exhibit A1.
· A copy of her termination letter dated 10 July 2023. This was marked Exhibit A2.
Ms Moore also provided oral evidence during the hearing on 13 November 2023. This was provided in response to questions from me regarding her income since being dismissed and steps to find alternative employment. Mr Cole also asked some questions of Ms Moore. Professor Fung briefly cross-examined Ms Moore on her oral evidence.
Ms Moore’s oral evidence included the following:
· Ms Moore received $1,600 gross per week for her work with SNS at the time of dismissal. This equated to 40 hours work at $40 per hour each week.
· Ms Moore commenced full-time work as a receptionist at Castlereagh Imaging on 9 October 2023. Ms Moore earns $1,240 per week for this work which equates to 37.5 hours per week at $33 per hour.
· Ms Moore performed casual work for around two weeks with Wesley Mission in around September 2023 and earned approximately $1,100 gross in total for the two weeks.
· Ms Moore performed work for the Australian Electoral Commission (AEC) in relation to the recent referendum and earned approximately $500 gross for her work on the polling day.
· Ms Moore received a payment of $1,500 from Centrelink on 17 October 2023.
· Ms Moore made around 30-40 job applications after being dismissed by SNS and unsuccessfully interviewed on seven occasions.
· Ms Moore lives by herself and was unable to pay her rent after being dismissed. She is now paying her landlord back a total of $5,000 in rent that she did not pay while unemployed. Ms Moore also used her savings for a planned overseas holiday in 2024 during this period and has cancelled the holiday.
SNS
SNS relied on the following evidence in opposing the application:
· Statutory Declaration of Tracey-Anne Clark (Practice Manager) dated 19 October 2023. This declaration was marked Exhibit R1.
· Ms Clark also affirmed the accuracy of the following documentary evidence during the hearing:
-Ms Moore’s letter of engagement dated 29 April 2022. This was marked Exhibit R2.
-Letter from Jane O’Donnell, a former SNS employee, dated 11 July 2023. The letter elaborated on the reasons for her resignation in December 2022. This letter was marked Exhibit R3.
-Ms O’Donnell’s resignation notice effective 9 December 2022. This was marked Exhibit R4.
-Discussion notes made by Ms Clark after a meeting with Ms Moore regarding her behaviour in the workplace on 5 May 2023. Ms Clark gave evidence she initially recorded the notes using an application on her phone and used these notes as the basis for an email she sent on 25 September 2023. The email was marked Exhibit R5.
-An email from Jennifer Hort, former SNS employee, communicating her resignation effective 22 June 2023. The email was sent on 29 June 2023 and states “below are my reasons for resigning in writing, as discussed with you both on Thursday 22/6/23.” The email was addressed to Professor Fung and Ms Clark. Ms Clark also provided screen shots of text messages between her and Ms Hort on 27 and 29 June 2023. The email and text messages were marked Exhibit R6.
-Ms Clark provided screen shots of text messages between herself and Sacha Daley, former SNS employee, exchanged on 6 and 7 July 2023. The text messages were marked Exhibit R7.
-Emails exchanged between Ms Daley and Professor Fung on 6 July 2023 where Ms Daley gives notice of her resignation effective 28 July 2023. The emails were marked Exhibit R8.
-An email from SNS’ insurer to Ms Clark and Professor Fung regarding the potential dismissal of Ms Moore dated 7 July 2023. The email was marked Exhibit R9.
-A copy of an unsigned draft termination letter to Ms Moore dated 19 July 2023. Professor Fung confirmed during the hearing this was a draft that was refined prior to the issuing of the final signed copy. The draft letter was marked Exhibit R10.
-Zoom meeting invites sent by Professor Fung on 24 June 2023 for a meeting on 26 June 2023 to discuss the allegations against Ms Moore. The meeting invites were marked Exhibit R11.
Ms Clark was cross-examined by Mr Cole in relation to this evidence and also answered questions from me.
Ms Clark confirmed in response to a question from me that Ms Daley retracted her resignation following Ms Moore’s dismissal but then subsequently resigned for unknown reasons in August 2023.
Ms Clark accepted in cross-examination that the only time she met with Ms Moore to discuss her behaviour was on 5 May 2023 and that no formal warnings were issued to Ms Moore during her employment.
Ms Clark gave evidence that SNS asked Ms O’Donnell for further information about why she resigned around the time of Ms Moore’s dismissal and this explained the evidence being provided more than six months after she resigned.
Submissions
Ms Moore relied on her Form F2 application, a written submission and oral closing submissions from Mr Cole.
SNS relied on its Form F3 employer response, a written submission and oral closing submissions from Professor Fung.
SNS also filed a Small Business Fair Dismissal Code Checklist completed by Ms Clark on 13 September 2023.
When can the Commission order a remedy for unfair dismissal?
Section 390 of the FW Act provides that the Commission may order a remedy if:
(a) Ms Moore was protected from unfair dismissal at the time of being dismissed; and
(b) Ms Moore has been unfairly dismissed.
Both limbs must be satisfied. I am therefore required to consider whether Ms Moore was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that Ms Moore was so protected, whether Ms Moore has been unfairly dismissed.
When is a person protected from unfair dismissal?
Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:
(a)the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii)an enterprise agreement applies to the person in relation to the employment;
(iii)the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.
When has a person been unfairly dismissed?
Section 385 of the FW Act provides that a person has been unfairly dismissed if the Commission is satisfied that:
(a) the person has been dismissed;
(b) the dismissal was harsh, unjust or unreasonable;
(c)the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Was Ms Moore dismissed?
There was no dispute and I find that Ms Moore’s employment with SNS terminated at the initiative of SNS effective 10 July 2023.
I am therefore satisfied that Ms Moore has been dismissed within the meaning of s.385(a) of the FW Act.
Initial matters
Under s.396 of the FW Act, the Commission is obliged to decide the following matters 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.
It is not in dispute and I find that Ms Moore’s application was filed within the relevant 21-day period, and she was protected from unfair dismissal. Ms Moore was employed for around 14 months and her employment with SNS was covered by the Health Professionals and Support Services Award. Ms Moore’s earnings were also well below the high-income threshold.
Although SNS’ Form F3 employer response form did not identify compliance with the Small Business Fair Dismissal Code as a jurisdictional objection, SNS did file a completed version of the Small Business Fair Dismissal Code Checklist. In addition, both parties agreed SNS had less than 15 employees when Ms Moore was dismissed. As a result, I consider I should initially assess whether Ms Moore’s dismissal was consistent with the Small Business Fair Dismissal Code.
Was Ms Moore’s dismissal consistent with the Small Business Fair Dismissal Code?
SNS summarily dismissed Ms Moore for alleged bullying and intimidation of other staff on 10 July 2023.
In Pinawin v Domingo (2012) 219 IR 128, a Full Bench of then Fair Work Australia stated the following concerning the test to be applied for summary dismissal under the Small Business Fair Dismissal Code at [29]:
“There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal.
Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.”
I am satisfied that SNS held a belief that Ms Moore’s conduct was sufficiently serious to justify immediate dismissal. I accept SNS was concerned about three employees resigning based at least to some degree on their interactions with Ms Moore and that SNS thought it was compelled by safety reasons to summarily dismiss Ms Moore.
However, I am not satisfied that SNS’ belief was held on reasonable grounds. SNS did not carry out a reasonable investigation into the allegations against Ms Moore. It appears Ms Daley’s resignation notice was the “final straw” for SNS, in the context of the previous resignations by Ms O’Donnell and Ms Hort. The problem with this is that Ms Moore was given no opportunity whatsoever to respond to the allegations made by Ms Daley in the resignation notice. Ms Moore may have had a completely different version of her interactions with Ms Daley. SNS did not explore this possibility because it decided to summarily dismiss Ms Moore without any formal investigation process.
I am reinforced in the conclusion that the dismissal was not consistent with the Small Business Fair Dismissal Code because Ms O’Donnell’s retrospective explanation for her resignation provided to SNS on 11 July 2023 is focused on her treatment by another SNS employee identified as Athena, as opposed to Ms Moore. While Ms Hort’s written resignation notice dated 29 June 2023 does raise concerns with Ms Moore’s behaviour, none of these concerns were put to Ms Moore before she was dismissed.
I am not satisfied that Ms Moore’s dismissal was consistent with the Small Business Fair Dismissal Code because SNS’ belief that Ms Moore’s conduct was sufficiently serious to justify immediate dismissal was not based on reasonable grounds. I dismiss SNS’ jurisdictional objection.
Having considered each of the initial matters and found Ms Moore’s dismissal was not consistent with the Small Business Fair Dismissal Code, I am required to consider the merits of Ms Moore’s application.
Was the dismissal harsh, unjust or unreasonable?
Section 387 of the FW Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission 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.
I am required to consider each of these factors, to the extent they are relevant to the factual circumstances before me.[4]
I set out my consideration of each below.
Was there a valid reason for the dismissal related to Ms Moore’s capacity or conduct?
In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”[5] and should not be “capricious, fanciful, spiteful or prejudiced.”[6] However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[7]
Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.[8] The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.[9]
The reason for dismissal identified in Ms Moore’s termination letter is:
“repeated bullying and intimidation of other staff that has resulted in a toxic work environment, and which has led directly to the resignation of three staff members within the 14 months of your employment, two in the last month.”[10]
Ms Moore denied she engaged in any bullying or intimidation of other staff. Ms Moore made this denial clearly in her witness statement[11] and SNS decided not to cross-examine her on this evidence. Ms Moore also admitted Ms Clark spoke to her about speaking harshly to a new employee in around May 2023 and acknowledged her behaviour was inappropriate. This admission demonstrates Ms Clark is prepared to accept negative feedback and she presented as a credible witness during the hearing. In circumstances where none of the alleged complainants, Ms O’Donnell, Ms Hort and Ms Daley, attended the Commission to give evidence, I do not consider there is any way I could prefer their evidence to that of Ms Moore.
That is particularly the case given Ms O’Donnell’s initial and contemporaneous resignation notice[12] did not refer to any issues with Ms Moore and her retrospective letter[13] focused on complaints about a different employee. While it is clear Ms Hort and Ms Daley raised issues in writing with SNS about Ms Moore’s conduct, SNS never properly investigated these complaints because they were never raised with Ms Moore. Ms Clark admitted during cross-examination that no behavioural issues were raised with Ms Moore between her meeting on 5 May 2023 and Ms Moore’s dismissal on 10 July 2023. Given Ms Moore denies the allegations and Ms Hort and Ms Daley did not attend to be cross-examined, I do not accept their written statements are sufficient to establish Ms Moore’s alleged conduct occurred.
I find there was not a valid reason for Ms Moore’s dismissal because SNS has not established that the alleged misconduct occurred.
Was Ms Moore notified of the reason for dismissal?
Proper consideration of s.387(b) requires a finding to be made as to whether Ms Moore “was notified of that reason”. Contextually, the reference to “that reason” is the valid reason found to exist under s.387(a).[14]
Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment,[15] and in explicit[16] and plain and clear terms.[17]
As I am not satisfied that there was a valid reason for dismissal, this factor is not strictly relevant to the present circumstances.[18]
However, if I had found there was a valid reason for dismissal, I would have found that Ms Moore was not notified of the reason for her dismissal prior to a decision being made by SNS. This is effectively conceded by SNS because Ms Clark admitted there were no conversations with Ms Moore prior to the termination letter being presented to her on 10 July 2023. The last discussion concerning any issues with Ms Moore’s behaviour was on 5 May 2023.
Was Ms Moore given an opportunity to respond to any valid reason related to his capacity or conduct?
An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment.[19]
The opportunity to respond does not require formality and this factor is to be applied in a common-sense way to ensure the employee is treated fairly.[20] 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.[21]
As I have not found that there was a valid reason for dismissal, this factor is not strictly relevant to the present circumstances.[22]
However, if I had found there was a valid reason for dismissal, I would have found that Ms Moore was not given an opportunity to respond to the reason for her dismissal. SNS had already decided to terminate Ms Moore’s employment and had prepared the termination letter before it met with her on 10 July 2023. This does not constitute an opportunity to respond to the alleged valid reason. The failure was of considerable practical significance in this case because it meant Ms Moore had no opportunity to refute the allegations raised by Ms Hort and Ms Daley.
Did SNS unreasonably refuse to allow Ms Moore to have a support person present to assist at discussions relating to the dismissal?
I was not provided with evidence to establish Ms Moore was unreasonably refused an opportunity to have a support person present at the meeting on 10 July 2023. In any event, it would have made little difference because the final decision had already been made.
Was Ms Moore warned about unsatisfactory performance before the dismissal?
As the dismissal related to alleged misconduct rather than unsatisfactory performance, this factor is not relevant to the present circumstances.
I accept the distinction between unsatisfactory performance and misconduct may not be clear to representatives of a small business like SNS. I acknowledge Ms Moore was spoken to by Ms Clark on 5 May 2023 and have taken this into account in arriving at my decision.
To what degree would the size of SNS’ enterprise be likely to impact on the procedures followed in effecting the dismissal?
SNS is a small business and I accept this is likely to have an impact on the procedures followed in effecting the dismissal.
To what degree would the absence of dedicated human resource management specialists or expertise in SNS’ enterprise be likely to impact on the procedures followed in effecting the dismissal?
I find that a lack of dedicated human resource management specialists contributed to a significant degree to the defects in the procedures followed by SNS in effecting the dismissal. While Ms Clark is engaged to manage the practice, she is a part-time employee and would undoubtedly have a broad range of issues she needs to deal with in addition to those relating to human resource management.
What other matters are relevant?
Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.
I do not consider there are any other relevant matters to consider beyond what has been captured by the criteria above.
Is the Commission satisfied that the dismissal of Ms Moore was harsh, unjust or unreasonable?
I have made findings in relation to each matter specified in s.387. I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable.[23]
Having considered each of the matters specified in s.387 of the FW Act, I am satisfied that the dismissal of Ms Moore was unjust and unreasonable because there was no valid reason for her dismissal.
If I had found there was a valid reason for dismissal, I would have found the dismissal to be unjust and unreasonable because Ms Moore was not notified of the reason for dismissal or provided with an opportunity to respond prior to the final decision being made.
If SNS had established that Ms Moore engaged in bullying and intimidatory conduct towards other employees to an extent that they felt they had to resign from their employment, it is unlikely I would have found the dismissal to be harsh.
Conclusion
I am therefore satisfied that Ms Moore was unfairly dismissed within the meaning of s.385 of the FW Act.
Remedy
Being satisfied that Ms Moore:
· made an application for an order granting a remedy under s.394;
· was a person protected from unfair dismissal; and
· was unfairly dismissed within the meaning of s.385 of the FW Act,
I may, subject to the FW Act, order Ms Moore’s reinstatement, or the payment of compensation to Ms Moore.
Under s.390(3) of the FW Act, I must not order the payment of compensation to Ms Moore unless:
(a) I am satisfied that reinstatement of Ms Moore is inappropriate; and
(b)I consider an order for payment of compensation is appropriate in all the circumstances of the case.
Is reinstatement of Ms Moore inappropriate?
Ms Moore does not seek reinstatement on the basis that the employment relationship has been irreparably damaged. I consider that reinstatement is inappropriate in this case.
Is an order for payment of compensation appropriate in all the circumstances of the case?
Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, “[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…”[24]
Where an applicant has suffered financial loss as a result of the dismissal, this may be a relevant consideration in the exercise of this discretion.[25]
Ms Moore has suffered financial loss in circumstances where I have found there was not a valid reason for dismissal. In all the circumstances, I consider that an order for payment of compensation is appropriate.
Compensation – what must be taken into account in determining an amount?
Section 392(2) of the FW Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to Ms Moore in lieu of reinstatement including:
(a) the effect of the order on the viability of SNS’ enterprise;
(b) the length of Ms Moore’s service;
(c)the remuneration that Ms Moore would have received, or would have been likely to receive, if Ms Moore had not been dismissed;
(d)the efforts of Ms Moore (if any) to mitigate the loss suffered by Ms Moore because of the dismissal;
(e)the amount of any remuneration earned by Ms Moore from employment or other work during the period between the dismissal and the making of the order for compensation;
(f)the amount of any income reasonably likely to be so earned by Ms Moore during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the Commission considers relevant.
I consider all the circumstances of the case below.
Effect of the order on the viability of SNS’ enterprise
Professor Fung referred from the bar table to SNS being a small business and that any compensation order would be like paying for an extra employee that is not working. Mr Cole responded from the bar table that Professor Fung makes substantial income from liposuction procedures.
No proper evidence was presented by either party regarding whether a compensation order would affect the viability of SNS’ enterprise and I consider this to be a neutral factor.
Length of Ms Moore’s service
Ms Moore’s length of service was only around 14 months. I consider this to be a neutral factor.
Remuneration that Ms Moore would have received, or would have been likely to receive, if Ms Moore had not been dismissed
As stated by a majority of the Full Court of the Federal Court, “[i]n determining the remuneration that the employee would have received, or would have been likely to receive… [the Commission must] address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.”[26]
Ms Moore worked at SNS for around 14 months. Ms Moore suggested during the hearing that she intended to work at SNS until she reached a retirement age of 67 years, which would be a further nine years. However, it is apparent that Ms Moore was having at least some level of conflict in the workplace prior to her dismissal and the practice manager, Ms Clark, gave evidence that she found Ms Moore to be somewhat aggressive and intimidating to work with. Taking all the evidence into account, I find Ms Moore would likely have remained employed with SNS for a further six months, or until 10 January 2024.
I calculate the remuneration Ms Moore would have been likely to receive working for SNS from 10 July 2023 to 10 January 2024 to be $41,600 plus superannuation.
Efforts of Ms Moore to mitigate the loss suffered by Ms Moore because of the dismissal
Ms Moore must provide evidence that she has taken reasonable steps to minimise the impact of the dismissal.[27] What is reasonable depends on the circumstances of the case.[28]
Ms Moore gave credible evidence about taking extensive steps to find other work after being dismissed by SNS. This included applying for 30-40 positions, interviewing for seven positions and performing casual work for two employers. Ms Moore eventually secured another full-time role on 9 October 2023.
I find Ms Moore made considerable efforts to mitigate her loss and do not consider any deduction is appropriate.
Amount of remuneration earned by Ms Moore from employment or other work during the period between the dismissal and the making of the order for compensation
Ms Moore’s evidence was that she has earned the following amounts since being dismissed by SNS:
· $1,100 gross for two weeks of work with Wesley Mission;
· $500 gross from the AEC; and
· $1,240 gross per week from working for Castlereagh Imaging from 9 October 2023.
Ms Moore also received a Centrelink payment of $1,500 but this does not fall within the definition of remuneration.[29]
I have decided on balance to include the payment equivalent to two weeks of pay, or $3,200, that SNS made to Ms Moore when it summarily dismissed her. Although this payment would not be strictly required in relation to a summary dismissal, the termination letter states: “we will provide you with two weeks’ pay from and including today, as well as any other accrued annual leave or superannuation entitlements, but you are not to come into the office at any time during this two-week period…” This wording creates some confusion regarding whether Ms Moore was summarily dismissed. I consider there is a sufficient link to a notice period for the amount to be considered remuneration.
Assuming the compensation order will be made on 17 November 2023, I calculate the total remuneration earned by Ms Moore from 10 July 2023 to 17 November 2023 to be:
-$3,200 +
-$1,100 +
-$500 +
-6 weeks x $1,240 per week is $7,440
= $12,240 gross.
Amount of income reasonably likely to be so earned by Ms Moore during the period between the making of the order for compensation and the actual compensation
The amount Ms Moore will earn between the making of a compensation order on 17 November 2023 and the payment of compensation within 14 days is $2,480 gross.
Other relevant matters
Neither party submitted that there were any other relevant matters.
Compensation – how is the amount to be calculated?
As noted by the Full Bench, “[t]he well-established approach to the assessment of compensation under s.392 of the FW Act… is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).[30] This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages[31].”[32]
The approach in Sprigg is as follows:
Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).
Step 2: Deduct monies earned since termination. Workers’ compensation payments are deducted but not social security payments. The failure to mitigate loss may lead to a reduction in the amount of compensation ordered.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.
Step 1
I have estimated that Ms Moore would have remained employed by SNS until 10 January 2024. This is the “anticipated period of employment”.[33]
The remuneration Ms Moore would have received, or would have been likely to have received, from her dismissal on 10 July 2023 until 10 January 2024 is $41,600 plus superannuation.
Step 2
Only monies earned since termination for the anticipated period of employment are to be deducted.[34] Using a compensation order date of 17 November 2023 and with compensation payable within 14 days, Ms Moore has earned a total of $12,240 gross from 10 July 2023 to 17 November 2023 and will earn a further $2,480 between the making of the compensation order and the actual compensation.
For the reasons outlined above, I have not applied a deduction for failure to mitigate loss because Ms Moore has taken significant steps to mitigate her loss.
A figure of $26,880 plus superannuation is left after the deductions for remuneration earned.
Step 3
I now need to consider the impact of contingencies on the amounts likely to be earned by Ms Moore for the remainder of the anticipated period of employment.[35]
Ms Moore will likely remain in her new full-time employment until 10 January 2024. There are around six weeks between the due date of the compensation, 1 December 2023, and 10 January 2023. Ms Moore is likely to earn a further $7,440 during this period.
This reduces the figure to $19,440 plus superannuation.
Step 4
I have considered the impact of taxation but have elected to settle a gross amount of $19,440 plus superannuation and leave taxation for determination.
Compensation – is the amount to be reduced on account of misconduct?
If I am satisfied that misconduct of Ms Moore contributed to the employer’s decision to dismiss, I am obliged by s.392(3) of the FW Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.
Having found that there was not a valid reason for dismissal, I am satisfied the amount of the order for compensation should not be reduced on account of misconduct.
Compensation – how does the compensation cap apply?
Section 392(5) of the FW Act provides that the amount of compensation ordered by the Commission must not exceed the lesser of:
(a) the amount worked out under s.392(6); and
(b)half the amount of the high income threshold immediately before the dismissal.
Section 392(6) of the FW Act provides:
(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…
Given Ms Moore’s gross weekly wage rate of $1,600, a compensation cap of $41,600 plus superannuation applies in accordance with s.392(6) of the FW Act.
Is the level of compensation appropriate?
Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case.”[36]
The application of the Sprigg formula has resulted in an outcome where Ms Moore would be awarded compensation of $19,440 plus superannuation.
I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the FW Act.
Compensation order
Given my findings above, I will make an order that SNS must pay Ms Moore $19,440 less taxation as required by law, plus superannuation of $2,138.40 to be paid into Ms Moore’s nominated fund, with both payments to be made within 14 days of the date of this decision.
COMMISSIONER
Appearances:
Mr Frank Cole on behalf of Ms Moore.
Professor Fung on behalf of SNS.
Hearing details:
2023.
Sydney (in person)
13 November 2023.
[1] Letter of engagement, Exhibit R2.
[2] Letter of engagement, Exhibit R2 and the Form F3 filed by SNS.
[3] Termination letter, Exhibit A2.
[4] Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].
[5] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
[6] Ibid.
[7] Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.
[8] Edwards v Justice Giudice [1999] FCA 1836, [7].
[9] King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000), [23]-[24].
[10] Termination letter, Exhibit A2.
[11] Ms Moore’s statement, Exhibit A1.
[12] Exhibit R4.
[13] Exhibit R3.
[14] Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].
[15] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
[16] Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).
[17] Ibid.
[18] Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000), [41]; Read v Cordon Square Child Care Centre [2013] FWCFB 762, [46]-[49].
[19] Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].
[20] RMIT v Asher (2010) 194 IR 1, 14-15.
[21] Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.
[22] Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000), [41]; Read v Cordon Square Child Care Centre [2013] FWCFB 762, [46]-[49].
[23] ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7].
[24] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].
[25] Vennix v Mayfield Childcare Ltd [2020] FWCFB 550, [20]; Jeffrey v IBM Australia Ltd [2015] FWCFB 4171, [5]-[7].
[26] He v Lewin [2004] FCAFC 161, [58].
[27] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].
[28] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.
[29] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [38], citing Wynn v NSW Insurance Ministerial Corporation [1995] HCA 53, 161-162.
[30] (1998) 88 IR 21.
[31] [2013] FWCFB 431.
[32] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [16].
[33] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].
[34] Ibid.
[35] Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].
[36] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].
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