Katherine Box v Sam Riley Swim Schools Training & Development P/L

[2012] FWA 8736

Note: An appeal pursuant to s.604 (C2012/5893) was lodged against this decision.

[2012] FWA 8736

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Katherine Box
v
Sam Riley Swim Schools Training & Development P/L
(U2012/7177)

COMMISSIONER BISSETT MELBOURNE, 17 OCTOBER 2012

Application for unfair dismissal remedy - compensation.

[1] On 4 September 2012 I issued a decision [[2012] FWA 7298] in which I found that Ms Katherine Box (the Applicant) was unfairly dismissed from her employment with Sam Riley Swim Schools Training & Development P/L (the Respondent). At that time further directions were issued for submissions with respect to remedy arising from the unfair dismissal.

[2] Written submissions were subsequently received from both the Applicant and the Respondent.

Submissions of the Applicant

[3] Ms Box:

• Does not seek reinstatement as she considers that the breakdown in the relationship between herself and the Respondent makes this untenable.



• Says she has not been able to find any work in addition to existing casual work she was performing prior to her dismissal.



• Seeks maximum compensation.

Submissions of the Respondent

[4] The Respondent:

• Considers reinstatement of the Applicant is appropriate on the same terms and conditions as she was previously employed.



• Says that it was always its intention to increase the hours of casual swim instructors (of which the Applicant was one) with the increased demand associated with warmer months.

Consideration

[5] The Fair Work Act 2009 (the Act) provides the following with respect to remedy:

390 When FWA may order remedy for unfair dismissal

(1) Subject to subsection (3), FWA may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) FWA is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) FWA may make the order only if the person has made an application under section 394.

(3) FWA must not order the payment of compensation to the person unless:

(a) FWA is satisfied that reinstatement of the person is inappropriate; and

(b) FWA considers an order for payment of compensation is appropriate in all the circumstances of the case.

[6] In this case, whilst the Respondent seeks reinstatement, the Applicant does not. This is an unusual circumstance not often encountered. Generally the Applicant will seek reinstatement and the Respondent will argue against it on the grounds that the relationship between the employer and employee has broken down to the extent that continued employment is not tenable. In this case the Applicant says that the breakdown of trust between herself and the Respondent makes reinstatement untenable.

[7] The primary remedy for unfair dismissal is reinstatement. Where one party seeks reinstatement this should, in my opinion, carry weight. That the Respondent says reinstatement should be the preferred remedy is in accord with its submissions in relation to the claim for unfair dismissal that it had done no more than reduce the Applicant’s casual employment hours to zero during the quiet season and that it always intended to increase these when the summer season approached.

[8] The Applicant does not seek reinstatement and her assessment of her ability to continue to work with the Respondent following her unfair dismissal must also be given weight.

[9] I can only order compensation as a remedy to the unfair dismissal if I am satisfied that reinstatement is inappropriate.

[10] I have carefully weighed up the submissions of each of the parties on the question of remedy and have also taken into account the evidence adduced during hearing of the merits of the application. Whilst the matter is finely balanced I am not satisfied that reinstatement is, in this instance, appropriate.

[11] In determining compensation the Act provides:

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), FWA 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 FWA considers relevant.

Misconduct reduces amount

(3) If FWA is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, FWA 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 FWA 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 FWA 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 395(5) indexed to $61,650 from 1 July 2012.

(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.

Section 392(2)(a)

[12] Nothing was put to me to suggest that any order for compensation would have an adverse effect on the Respondent.

Section 392(2)(b)

[13] The Applicant commenced working for the Respondent in September 2006. Her employment was terminated in March 2012. She had therefore worked for the Applicant for a period of 5 ½ years. She was a long serving employee of the Respondent.

Section 392(2)(c)

[14] The Applicant says she worked 18.5 hours per week. The Respondent says that it was not unusual to reduce the hours of casual workers during the winter months to take account of the general downturn in demand for swimming lessons during that period. The letter of employment (undated but not disputed) provided to the Applicant indicated that her hours of work would vary between 0-38 hours per week and week to week ‘depending on demand and staff requirements’. 1 The Applicant says, and it is not disputed, that she was being paid $23.00 per hour.

[15] The Applicant has another casual job but she has held this position for some time and it has been in addition to her position with the Respondent.

[16] Whilst I accept that the Applicant worked 18.5 hours per week it is axiomatic that the demand for swimming lessons would decrease in winter months. The letter of employment raises this as a real possibility.

[17] No specific submissions were made to me on the hours the Applicant would otherwise have worked had her employment not been terminated except that the Respondent says it did not terminate her employment but reduced her hours to zero. The decision to reduce the Applicant’s hours to zero however does not appear to be fully attributable to the reduced demand for services during winter. Mr Noonan of the Respondent gave evidence that it was obvious that the Applicant and the Respondent needed a break from each other. I consider that it was this ‘obvious’ need for a break that drove the Respondent to reduce the Applicant’s hours to zero and that if there had not been such a view, whilst the Applicant’s hours inevitably would have been reduced, they would not have been reduced to zero.

[18] There is no evidence on which I can base any assessment of the hours the Applicant would have worked but I consider that the hours she would have worked had her employment not been terminated would have been reduced. Given these circumstances I have determined that she would have worked eight hours per week for the period 1 April to 1 October 2012 and her hours would have increased back to 18.5 hours per week from that date.

[19] Had the Applicant’s employment not been terminated I estimate that she would have remained in employment for at least a further 12 months. I understand from submissions made that the Applicant is currently studying. Whilst I am not aware when she will finish her course of study I consider that such study is indicative of the likelihood that she will, in the near future, seek full-time and/or on-going employment.

[20] On this basis I find the lost remuneration of the Applicant to be:

[26 weeks at (8 hrs x $23.00/hour)] + [26 weeks at (18.5 hrs x $23.00/hour)] = $15,847

[21] I estimate that $6060.50 would have been earned by the Applicant in the period immediately following her dismissal and the date of the order with a further $9786.50 made in the period from the date of the order until the completion of 12 months employment from the date of dismissal.

[22] Apart from another, pre-existing casual position held by the Applicant, she has not earned any other income. As her other casual work had existed prior to the loss of her position with the Respondent it is not income that should be deducted from what she would have earned with the Respondent had her employment not been terminated. No deduction shall be made for this.

[23] The amount the Applicant would have earned from the date of the order with the Respondent must however be reduced for contingencies. I shall apply a figure of 30% for contingencies to that amount that would have been earned from the time of making the order for the remainder of 12 months of employment. In determining this deduction I am mindful that the Applicant is a casual employee and hence is not entitled to any paid leave - any periods of absence for university study and exams, illness, holidays etc. would therefore be without pay and these matters should be taken into account. 2

[24] The remuneration the Applicant would have received if she had not been dismissed would therefore have been $12,911 plus superannuation payments as required by law.

Section 392(2)(d)

[25] The Applicant says that she has been unable to obtain any additional hours in her second casual job and has not been able to gain employment in her preferred area as a swimming instructor.

[26] I can only take from this information that the Applicant has had a limited search area in seeking alternative employment. I am not satisfied she has made substantial attempts to mitigate her loss. I shall therefore deduct a further amount of 25% due to the lack of evidence of substantial efforts by the Applicant to mitigate her losses.

Section 392(2)(e)

[27] I have indicated above that I have not taken into account the Applicant’s second casual job. She has had this second job for some time and has worked it in conjunction with her position with the Respondent. Calculations above have been based on her continuing to work a maximum of 18.5 hours with the Respondent.

Section 392(2)(f)

[28] I do not consider that the Applicant will earn any income for the 18.5 hours per week relevant to this decision between the making of any order and the actual payment of compensation.

Section 392(2)(g)

[29] There are no other matters I consider relevant.

Conclusion as to remuneration

[30] The total amount of compensation payable to the Applicant calculated above is therefore $9,587 plus superannuation.

Section 392(3)

[31] The Act provides that the amount of compensation can be reduced if a person’s misconduct contributed to the employer’s decision to dismiss them. In the circumstances of this case, where the Respondent maintains that the Applicant was not dismissed but rather her hours reduced, there is no basis to reduce compensation for misconduct.

Section 392(4)

[32] No amount has been included for shock, humiliation or distress.

Section 392(5)-(6)

[33] On the basis of the assumptions I have made above with respect to the hours that would have been worked by the Applicant had she not been dismissed the amount that would have been received by the Applicant in the 26 weeks immediately preceding her dismissal would have been 26 weeks @ (18.5 hrs x $23.00/hour) = $11,063. The amount that I order to be paid cannot be greater than this amount.

Conclusion

[34] On the basis of all of the material the Respondent is required to pay to the Applicant compensation of $9,683 plus superannuation according to law. This amount should be taxed according to law and the superannuation component should be paid into a superannuation fund as nominated by the Applicant.

[35] The amount should be paid within 14 days of the issuing of the order. Should the Respondent not be able to meet the payment date an application to vary the order with respect to the date by which payment is required should be made prior to that date.

[36] An order to this effect will be issued with this decision.

COMMISSIONER

Final written submissions:

Applicant: 16 September 2012.

Respondent: 2 October 2012.

 1  Exhibit R7.

 2   See Sprigg v Pail’s Licensed Supermarket (1988) 88 IR 21.

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