Keith Rutty v
[2025] FWC 859
•27 MARCH 2025
| [2025] FWC 859 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Keith Rutty
v
Smart Dollars Western Australia Pty. Ltd. T/A Smartdollar
(U2024/10411)
| COMMISSIONER SCHNEIDER | PERTH, 27 MARCH 2025 |
Unfair dismissal - Remedy - Compensation ordered
On 7 March 2025, the Fair Work Commission (the Commission) issued a Decision finding that Keith Rutty (Mr Rutty or the Applicant) had been unfairly dismissed by his employer, Smart Dollars Western Australia Pty. Ltd. T/A Smartdollar (the Respondent), in reference to section 394 of the Fair Work Act 2009 (Cth) (the Act).[1]
Subsequently, the parties were directed to file submissions in relation to remedy. Mr Rutty filed materials on 14 March 2025. The Respondent filed materials on 19 March 2025. A determinative conference was held by the Commission, on 25 March 2025.
Background
I have found that Mr Rutty was protected by unfair dismissal at the time of being dismissed and that he was unfairly dismissed from his employment by the Respondent.
Accordingly, I am satisfied that Mr Rutty:
· made an application for an order granting a remedy under section 394;
· was a person protected from unfair dismissal; and
· was unfairly dismissed within the meaning of section 385 of the Act.
I now turn to addressing the element of remedy, as prescribed under section 390 of the Act.
Subject to the prescribed requirements under section 390 of the Act, I will consider ordering Mr Rutty’s reinstatement or the payment of compensation to Mr Rutty if satisfied that such an order is appropriate in all the circumstances of the matter.
Under section 390(3) of the Act, I must not order the payment of compensation to Mr Rutty unless:
(a) I am satisfied that reinstatement of Mr Rutty is inappropriate; and
(b) I consider an order for payment of compensation is appropriate in all the circumstances of the case.
Legislation
Section 392 of 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), 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
(2) 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
(3) 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.
(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
(c) 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.”
In relation to reinstatement, section 391 of the Act provides that:
“391 Remedy—reinstatement etc.
Reinstatement
(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.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint 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.”
Mr Rutty confirms that he is not seeking reinstatement with the Respondent. At the determinative conference on 25 March 2026, Mr Rutty stated he did not feel comfortable returning to the work environment and would feel concerned about his future with the Respondent having engaged in this process.
The Respondent concurs that reinstatement is not the appropriate remedy. The Respondent submits that the store Mr Rutty was previously employed at (Warnbro) does not currently have capacity for more staff. The Respondent also outlines that the store tenancy is up for renewal and no decision has been made as to if this would continue or if the store would close in the foreseeable future.
Mr Rutty does not currently hold a licence. As a result, other outlets of the Respondent’s business would not be realistic options for Mr Rutty.
Having considered the submissions of the parties, I do not feel that reinstatement is the appropriate remedy in this circumstance. I will now consider whether a payment for compensation is appropriate in all the circumstances.
Compensation – Appropriateness
Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench in Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter:[2]
“[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…”[3]
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.[4]
Mr Rutty submits that compensation is an appropriate remedy in the circumstances.
Mr Rutty states that it was his intention to remain in employment with the Respondent until he reached retirement age. Mr Rutty states that he was, on average, working between 28 to 38 hours per week on a part time basis. Mr Rutty confirms his hourly rate was $25.65. Mr Rutty submits that his termination had a significant impact on his mental health and ability to support his daughter who requires care.
At the remedy hearing on 25 March 2025, I explained to Mr Rutty that, consistent with section 394(2) of the Act, the Commission cannot award any form of payment for hurt, distress, or humiliation.
Accordingly, due to the harsh and unjust manner in which Mr Rutty’s employment was terminated, and the impact this decision had on Mr Rutty; I consider that an order for the payment of compensation is appropriate in the circumstances of this matter.
Compensation – Considerations
Section 392(2) of the Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement including:
(a)the effect of the order on the viability of the Respondent’s enterprise;
(b)the length of the Applicant’s service;
(c)the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;
(d)the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant because of the dismissal;
(e)the amount of any remuneration earned by the Applicant 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 the Applicant 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 currently before the Commission below.
Effect of the order on the viability of the Respondent’s enterprise
The Respondent submits that the business has been suffering and that an increase in operational costs has impacted the business. The Respondent also states that the Warnbro store lease is coming to an end, and the business has not made a decision in relation to renewing the lease at this stage. The Respondent confirms that the business is profitable as other outlets of in larger shopping centres are performing well.
Mr Rutty submits that he does not believe any payment of compensation will impact the viability of the Respondent’s operation.
I have considered the potential impact that an order for compensation might have on the viability of the Respondent business. This will be addressed later in the decision.
Length of the Applicant’s service
Mr Rutty had been employed with the Respondent for over three (3) years prior to his dismissal. I find that this duration of service is neither an exceptionally short period nor an exceptionally long period of employment.
I consider that the Applicant’s length of service does not support increasing or decreasing the amount of compensation ordered.
Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed
As stated by a majority of the Full Court of the Federal Court in He v Lewin;[5]
“[i]n determining the remuneration that the Applicant 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.” [6]
The Respondent submits that the performance of Mr Rutty was substandard, and this led to the decision to terminate the employment relationship. The Respondent provided limited examples, most of which were outdated and not relevant at the time Mr Rutty was dismissed.
Mr Rutty’s submissions mainly focused on providing information in relation to his attempts to find new employment and the impact the termination of his employment had on him and his family.
Mr Rutty had a not insignificant employment history with the Respondent prior to his termination and there is no suggestion that Mr Rutty was unhappy with the Respondent as an employer or seeking to leave his employment.
Mr Rutty states that it was his intention to remain with the Respondent until his retirement. At the determinative conference before the Commission, Mr Rutty stated that, due to his age and the difficulties he has faced finding new employment, he would not have sought to leave secure employment.
Having considered the history of Mr Rutty’s employment with the Respondent, the age of Mr Rutty, and the conduct of the Respondent, I find that, in all probability, Mr Rutty would have remained in employment with the Respondent for a time no less than the maximum compensation cap of 26 weeks.
Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal
Mr Rutty must provide evidence that he has taken reasonable steps to minimise the impact of the dismissal.[7] What is reasonable depends on the circumstances of the case.[8]
Mr Rutty states that he has applied for over 100 jobs without success following the termination of his employment by the Respondent. Mr Rutty outlines that his attempts have included applying for jobs online, by email, physically submitting applications, and regularly canvassing local business to enquire over vacancies or opportunities.
At the determinative conference, Mr Rutty outlined that he has primarily worked in retail, however, had been looking into roles in other fields, such as cleaning, to try and earn an income following his termination. Mr Rutty states that he has undergone training to assist in potentially securing a role but is yet to obtain a position. Mr Rutty states that his age (soon to turn 60) may be impacting his ability to find new employment. I found that Mr Rutty was reliable in his evidence about his attempts to mitigate his loss.
Having considered the above factors, I am satisfied that Mr Rutty has taken reasonable steps to mitigate loss.
Amount of remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation
Mr Rutty submits that, as he has not found new employment following his termination from the Respondent, he has not earned any remuneration during this period.
Amount of income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation
Mr Rutty confirms that he is not currently employed and therefore his earnings would be $0. Therefore, I have calculated Mr Rutty’s earnings during this period to be $0.
Other relevant matters
Neither party brought to my attention any other relevant matters to be considered by the Commission.
Compensation – Calculation
As noted by the Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries:
“[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).[9] This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages[10].”[11]
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 of an applicant to mitigate his or her 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
At the time of his dismissal, Mr Rutty was being paid an hourly rate of $25.65 per hour and worked on approximately 30 hours per week.
I have estimated the remuneration Mr Rutty would have received, or would have been likely to have received, if the Respondent had not terminated the employment, to be $20,007. This is on the basis of my finding that Mr Rutty would likely have remained in employment for a further period of no less than six months.
This estimate of how long the Applicant would have remained in employment is the “anticipated period of employment”.[12]
Step 2
I have found that the amount of remuneration earned by Mr Rutty from the date of dismissal was $0, and that the amount of income reasonably likely to be earned by the Applicant between the making of the order for compensation and the payment of compensation is $0.
Only monies earned since termination for the anticipated period of employment are to be deducted.[13] From the information provided, Mr Rutty has not earned any income since his termination. I therefore deduct the sum of $0.
Step 3
I now need to consider the impact of contingencies on the amounts likely to be earned by Mr Rutty for the remainder of the anticipated period of employment.[14]
I do not find it appropriate to make any further deductions for contingencies.
Step 4
I have considered the impact of taxation but have elected to settle on the amount of $20,007 (gross) and leave taxation for determination.
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”,[15] including my findings that:
· Mr Rutty’s length of service being a neutral factor.
· Mr Rutty’s effort to mitigate his loss, noting Mr Rutty’s age impacting his prospects of success in finding new employment.
· Mr Rutty not having engaged in any form of misconduct that contributed towards his dismissal.
I have considered the submissions of the Respondent in relation to the potential impact that this order may have on the viability of the Respondent’s operation. Having considered this factor, I am not satisfied that an Order of the amount determined will have an impact on viability.
However, noting the circumstances of the business and in the interests of ensuring compliance, I will permit the Respondent to pay the compensation ordered in instalments, pursuant to section 392 of the Act.
I am satisfied that the amount of compensation I have determined above takes into account all the circumstances of the case as required by section 392(2) of the Act.
Compensation – Cap
Section 392(5) of the Act provides that the amount of compensation ordered by the Commission must not exceed the lesser of:
(a)the amount worked out under section 392(6) of the Act; and
(b)half the amount of the high-income threshold immediately before the dismissal.
The amount worked out under section 392(6) of the Act is the total of the following amounts:
(a)the total amount of the remuneration:
(a) received by the Applicant; or
(ii) to which the Applicant 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 Applicant 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 Applicant for the period of leave in accordance with the regulations.
The high-income threshold immediately before the dismissal was $175,000. Half of the high-income threshold, as above, is $87,500. From the submissions and evidence of the Applicant, which I have previously accepted above, the Applicant’s annual remuneration was $40,014. I am satisfied the amount of compensation ordered by the Commission must not exceed $20,007. Accordingly, no reduction is required.
I confirm that, consistent with section 394(2) of the Act, the amount to be ordered does not include payment for shock, distress, or humiliation caused by the Applicant’s dismissal.
Conclusion
In light of the above, I will make an order that the Respondent pay $20,007 (gross), plus superannuation, and less taxation, as required by law, to the Applicant, in lieu of reinstatement.
The compensation is to be paid in four (4) instalments as stipulated in the Order.
The Order is issued concurrently.[16]
COMMISSIONER
[1] [PR785052].
[2] [2014] FWCFB 7198.
[3] Ibid, [9].
[4] [2020] FWCFB 550, [20]; [2015] FWCFB 4171, [5]-[7].
[5] [2004] FCAFC 161.
[6] Ibid, [58].
[7] PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34]; citing PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].
[8] PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34]; citing [1919] 2 KB 581.
[9] (1998) 88 IR 21.
[10] [2013] FWCFB 431.
[11] [2016] FWCFB 7206, [16].
[12] Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].
[13] Ibid.
[14] PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].
[15] [2016] FWCFB 7206, [17].
[16] [PR785594].
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