Kelvin Walsh v Ambulance Victoria

[2014] FWC 2351

[2014] FWC 2351 [Note: a further decision has been issued in relation to this document]

FAIR WORK COMMISSION

FURTHER DECISION IN REGARD

TO REMEDY

Fair Work Act 2009
s.394—Unfair dismissal

Kelvin Walsh
v
Ambulance Victoria
(U2012/12308)

COMMISSIONER CRIBB MELBOURNE,11 APRIL 2014

Application for unfair dismissal - further decision in regard to remedy- compensation.

[1] In a decision 1 on 20 January 2014, the Fair Work Commission (Commission) determined that Mr Kelvin Walsh (the Applicant) had been unfairly dismissed, that reinstatement is not appropriate and that an order for the payment of compensation is appropriate.2

[2] In the event of such a determination by the Commission, the parties had requested the opportunity to make submissions on matters going to compensation. Accordingly, United Voice (the union) filed submissions together with a witness statement from Mr Walsh, on 14 February 2014. Ambulance Victoria (AV, the respondent) filed its submissions on 28 February 2014.

[3] This decision, therefore, only concerns matters in respect of compensation in lieu of reinstatement.

[4] Having found that an order for the payment of compensation in lieu of reinstatement is considered appropriate, I now turn to the requirements for making such an order. Section 392(2) of the Fair Work Act 2009 (the Act) sets out the criteria for deciding the amount of compensation in all of the circumstances of the case. These criteria are:

“(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.”

[5] I will deal with each of the criteria in turn, guided by the Full Bench decision in Haigh v Bradken Resources Pty Ltd 3 (Haigh).). In Haigh, the Full Bench also referred4 to the Full Bench decisions which have applied the approach in Sprigg v Paul Licensed Festival Supermarket5 (Sprigg). I respectfully adopt the approach taken in Haigh.

Section 392(2)(a) - effect on the viability of the employer’s enterprise

[6] It was submitted by the union that an order for the payment of compensation would have no effect on the employer’s ongoing viability. 6

[7] There is no basis on which to conclude that an order for compensation to Mr Walsh would affect the viability of Ambulance Victoria.

Section 392(2)(b) - Applicant’s length of service

[8] Mr Walsh had 25 years service with Ambulance Victoria as the time of his dismissal. 7

Section 392(2)(c) – remuneration likely to have been received

[9] The union submitted that, had Mr Walsh’s employment not been terminated, it is probable that he would have continued as a MICA Flight Paramedic for a further 8 years until his intended retirement at the age of 60. 8 In addition, it was argued that it is probable that Mr Walsh’s annual earnings would have been at least $145,000.00 per annum based on his remuneration as set out in his PAYG Payment Summaries for previous consecutive financial years.9

[10] On the other hand, Ambulance Victoria argued that the main reason for Mr Walsh’s termination being held to be unfair was a procedural defect. 10 Therefore, it was contended that, if the process had been followed fairly, it is unlikely that the result would have been different. If Mr Walsh had been given the opportunity to comment on the sanction, it was stated that he would have only continued in employment for a relatively short period (say two weeks).11 The Commission was referred to a Full Bench decision in UES (Int’l) Pty Ltd v Leon Harvey12 in support of this contention. It was submitted that account must also be taken of the reasons for the Commission’s finding that the dismissal was unfair.13

Considerations

[11] In the Commission's decision 14 of 20 January 2014, it was found that, on balance, Mr Walsh’s dismissal was harsh. In reaching this determination, account was taken of all of the issues highlighted by the Full Bench in the appeal against the decision15 at first instance. The highlighted issues were the “failure to give Mr Walsh the full benefit of the disciplinary policy, the applicant’s length of service, unblemished record, age and chances of finding employment with the respondent as the only employer of paramedics in Victoria.”16 On balancing all of these issues with a valid reason for the dismissal, it was determined, by the Commission as presently constituted, that Mr Walsh’s dismissal was harsh.17

[12] Therefore, it is not possible to draw the conclusion that the main reason that Mr Walsh’s dismissal was found to be unfair was due to a procedural defect. Accordingly, I find that, had Mr Walsh not been dismissed, it is likely that he would have continued as a MICA Flight paramedic until his intended retirement age – in 8 years’ time. 18

[13] For the purposes of the calculations in accordance with the Sprigg principles, it is determined that the remuneration likely to have been received by Mr Walsh would have been at least three years. Over that three year period, it is likely that Mr Walsh would have received $91,332.80 (gross) (rolled in rate) x 3. 19

[14] This results in a provisional compensation amount of $273,998.40.

Section 392(2)(d) - efforts to mitigate loss

[15] On behalf of Mr Walsh, it was argued that he had gone to considerable time and expense in establishing his own landscaping business. This included on-the-job training after his medical practitioners declared him fit to return to work in October/November 2012. 20 It was also stated that Mr Walsh’s efforts to mitigate his loss have been affected by his role as full time carer for his mother, the final stages of an episode of acute post traumatic stress disorder (PTSD) and becoming primary carer for his two primary school age children.21

[16] In his witness statement, Mr Walsh described his PTSD, his role in caring for his mother (and subsequently as executor of her estate) and his responsibilities as primary carer for his children. 22

[17] Ambulance Victoria contended that the evidence showed that Mr Walsh had made little effort to mitigate his loss until recent months. Reference was made to Mr Walsh’s evidence, during the hearing at first instance, that he had not applied for other jobs as he was waiting for “the case to unfold”. 23 It was acknowledged that Mr Walsh had accounted for some of the period between his dismissal and the outcome of the proceeding (looking after his terminally ill mother). However, it was argued that Mr Walsh made a conscious choice not to seek alternative employment because he was focusing on achieving reinstatement through his unfair dismissal application.24 Further, the respondent’s view was that Mr Walsh could have started his own landscaping business earlier than he did.25

Considerations

[18] I have considered carefully the submissions of the parties on this issue. The respondent is correct that, on 10 December 2012, it was Mr Walsh’s evidence that he had not applied for other jobs since his dismissal because he wanted his job back. Mr Walsh was dismissed on 3 August 2012. According to his witness statement, Mr Walsh’s mother died about three weeks later and he spent about the next six weeks finalising her affairs. 26 In October/November 2012, when he was cleared fit to return to work, Mr Walsh undertook unpaid on-the-job training with Michael Holden Home Maintenance, from October 2012 until June 2013.27 In July 2013, Mr Walsh started his own landscaping business.28

[19] It would appear from the outline of Mr Walsh’s activities since his dismissal, that he took steps to mitigate his loss. It is accepted that Mr Walsh’s evidence was that he had not applied for other jobs between August 2012 and December 2012. During part of that period, Mr Walsh was executor of his mother’s estate and primary carer for his children. Once declared fit to return to work in October 2012, Mr Walsh commenced on-the-job training as a landscaper. This continued until July 2013 when he started his own landscaping business.

[20] Having considered all of the material before me, I am satisfied, on balance, that Mr Walsh made reasonable efforts to mitigate his loss due to his dismissal.

Section 392(2)(e) - remuneration earned and income reasonably likely to be earned (section 392(2)(f)

[21] It was submitted by the union that, on the basis of Mr Walsh’s witness statement and accompanying documentation, he had earned $3,200.00 gross from his landscaping business between 1 January 2014 and 14 February 2014. 29 In addition, Mr Walsh had estimated that it was likely that he would earn $15,000 (gross) for the period from 15 February 2014 to 31 March 2014.30 For the financial year ending 30 June 2013, the PAYG Payment Summary showed that Mr Walsh received from Ambulance Victoria the sum of $89,182.31

[22] For its part, Ambulance Victoria submitted that account should be taken of Mr Walsh’s continuous income insurance. This was on the basis that there is no reason why the income from his income protection insurance should not be taken into account. It was argued that the financial consequences of Mr Walsh’s dismissal had not been substantially reduced by this income and so therefore it should be included as income from other sources. Mr Walsh’s evidence, at first instance, that his insurance had covered half his loss and that it would continue until December 2013, was referred to. It was said that, by the time that date arrived, Mr Walsh was well progressed in his new business. 32

Considerations

[23] I have considered the submissions of the parties and I am not inclined to include Mr Walsh’s income protection payments. These payments could be said to be akin to social security payments which are not generally taken into account by the Commission in determining the amount of remuneration earned.

[24] Therefore, for the period from 3 August 2012 to 31 March 2014, the remuneration earned and income likely to be earned by Mr Walsh is as follows:

3 August 2012 - 30 June 2013	$89,182.00 (gross)  33
1 July 2013 - 31 December 2013	$21,140.00 (gross) 34
1 January 2014 - 15 February 2014	$3,200.00 (gross) 35
16 February 2014 - 31 March 2014	$15,000.00 (gross) 36

This amounts to a total of $128,522.00 which is deducted from the provisional compensation amount of $273,998.40. This results in a revised provisional compensation amount of $145,476.40.

Section 392(2)(g) – any other relevant matter

[25] The union argued that the following matters are relevant:

• Mr Walsh was 52 years old when he was dismissed and he lives on the outskirts of a regional centre.



• Ambulance Victoria is the only employer of MICA Paramedics in Victoria.



• Mr Walsh prospects of finding employment in Victoria, using his specialised training and experience, and at his previous salary level, are negligible.



• There has been a pronounced disruption to his family’s life and financial security in the wake of his dismissal.



• The onset of Mr Walsh’s PTSD appears to have been triggered on or about 26 August 2011 when he was stood down.



• The root causes of the PTSD appear to be the traumatic experiences which Mr Walsh encountered during his employment.



• It is open to the Commission to take into account the possibility that, given that Mr Walsh’s PTSD episode began around 26 August 2011, the effect of fatigue and not having had a meal, may have been heightened. Further, it was contended that Mr Walsh’s decision-making ability may have already been below his usual high standard. 37

[26] The matters surrounding Ambulance Victoria being the only employer of MICA paramedics in Victoria and therefore Mr Walsh’s remote prospects of finding similar work, and at his previous level of remuneration, are considered to be relevant.

Section 392(3) - reduction for misconduct

[27] It was stated by the union that the Commission must reduce the amount of compensation when a finding of serious misconduct has been made. It was conceded that an appropriate reduction would be more than nominal. However, any reduction for misconduct should occur prior to the application of the compensation cap. 38

[28] On the other hand, AV submitted that the reduction for misconduct in this case should be in the vicinity of 90%. This was on the basis that Mr Walsh was dismissed due to his failure to do his job as a MICA Flight paramedic ie. he deliberately delayed his response to a critical incident. Further, it was argued that the dismissal was only found to be harsh due to a procedural flaw. This was said to not detract from the fact that it was Mr Walsh’s misconduct which was the cause of his dismissal. 39

Considerations

[29] Having carefully considered all of the submissions, I am satisfied that Mr Walsh’s misconduct contributed to the Ambulance Victoria’s decision to dismiss him. Therefore, there will be a deduction of 50% of the compensation that would have otherwise been ordered. In accordance with the Full Bench decision in Haigh, the deduction for misconduct will be made prior to the application of the statutory cap.

[30] Therefore, the provisional compensation amount of $145,476.40 will be reduced by 50%. This results in a revised provisional compensation amount of $72,738.20.

Contingencies and taxation

[31] In respect of contingencies, as the anticipated period of continuous employment has not yet passed (approximately 16 months remain), I propose to make a deduction of 15% for contingencies. This would result in $72,738.20 less $10,910.73 = $61,827.47.

[32] Therefore, the revised provisional compensation amount is $61,827.47.

[33] The impact of taxation has been considered but a gross amount will be settled on.

Section 392(4) - shock or distress

[34] No part of the provisional compensation amount relates to any shock or distress suffered by Mr Walsh.

Section 392(5) - compensation cap

[35] On behalf of Mr Walsh, it was argued that the amount worked out in accordance with section 392(6) was $76,263.44. This was made up as follows:

• In the 26 weeks immediately before his dismissal, Mr Walsh received $73, 351.61.



• As he was on leave without full pay for all of that period, under Regulation 3.06(b), account should also be taken of $2, 911.83 of overtime. 40

[36] The union contended that, as half of the high income threshold ($61,550.00) is less than the total amount of remuneration received ($76,263.44), the compensation cap is $61,550.00. 41 Finally, it was stated that, as the dismissal was exceptionally harsh, the maximum amount of compensation should be awarded to Mr Walsh.42

[37] Ambulance Victoria, on the other hand, submitted that Mr Walsh’s remuneration, for the purposes of the statutory cap, is the amount he received in sick leave for the 26 weeks prior to his dismissal - $45,666.00. 43 It was argued that Mr Walsh’s figure of $73,351.61 included superannuation and income protection payments, neither of which should be included in the calculation. This was on the basis that superannuation is not received by the employee but by a superannuation fund. In addition, the income protection payments were said to be payments from a source other than Ambulance Victoria and therefore do not form part of Mr Walsh’s remuneration and so should be excluded.44

[38] Further, it was argued by Ambulance Victoria that any reduction for misconduct should occur prior to the application of the compensation cap. The respondent viewed the comments by the Full Bench in Haigh, on this point, as by way of obiter. It was contended that the Full Bench’s observation was at odds with the operation of section 392(3) of the Act. Tolley C’s approach in Peter Hands v Securency Pty Ltd 45 was referred to in support of this contention.46

[39] Finally, Ambulance Victoria submitted that the compensation payable was $282.10.00 (gross). This was on the basis of a loss of two weeks’ pay less 90% for misconduct 47 Alternatively, if the Commission was of the view that a higher sum is payable, then the statutory cap of $45,666.00 should be reduced by 90% for misconduct. This would result in a figure of $4,566.00 (gross).48 It was also contended that, if the Commission is of the view that the statutory cap is only applied after the deduction for misconduct, the appropriate amount of compensation should not exceed $4 566.00. This was on the basis of Mr Walsh’s responsibility for the loss suffered and his lack of effort to mitigate his loss.49

Considerations

[40] It was common ground that Mr Walsh was on sick leave for the 26 weeks prior to his dismissal. Therefore, I am not of the view that Regulation 3.06 is relevant as Mr Walsh was on sick leave and not on leave without pay or leave without full pay during this time. Accordingly, the appropriate calculation is 26 weeks multiplied by $1,756.40 per week = $45,666.40. 50

[41] At the time of Mr Walsh’s dismissal, the high income threshold was $61,650.00. Half of this amount is $30,825.

[42] Therefore, in terms of the requirements of section 392(5) of the Act, the lesser of the amount worked out under subsection (6) ($45,666.40 gross) and half of the amount of the high income threshold, immediately before the dismissal ($30,825.00 gross) is $30,825.00 (gross). Therefore, the amount ordered must not exceed $30,825.00 (gross).

Conclusion

[43] As the amount of provisional compensation ($61,847.27), calculated according to Sprigg, is higher than the compensation cap ($30,825.00), calculated in accordance with section 392(5), the amount of compensation to be ordered is $30,825.00 (gross).

[44] On this basis, it is considered appropriate to make an order that Ambulance Victoria pay $30,825.00 (gross), less taxation as required by law, as compensation to Mr Walsh in lieu of reinstatement. This amount is to be paid within 14 days of the date of this decision and order 51.

 1   [2014] FWC 482

 2   Ibid at paragraphs 34 - 36

 3   [2014] FWCFB 236

 4   Ibid at paragraphs 10 - 12

 5 (1998) 88 IR 21

 6   Applicant’s Outline of Submission on Compensation, dated 14 February 2014, at paragraph 7

 7   Ibid at paragraphs 8 - 10

 8   Ibid at paragraph 13

 9   Ibid at paragraphs 11 - 12 and Witness Statement of Kelvin Walsh, dated 14 February 2014, at paragraphs 37 - 40

 10   Respondent’s Outline of Submissions on Compensation, dated 28 February 2014, at paragraphs 4 - 6

 11   Ibid at paragraph 6

 12   [2012] FWCFB 5241

 13   Respondent’s Outline of Submissions on Compensation, dated 28 February 2014, at paragraphs 7 - 8

 14   [2014] FWC 482

 15   [2013] FWC 1999

 16   [2013] FWCFB 6867 at paragraphs 10 and 12

 17   [2014] FWC 482 at paragraph 21

 18   Witness Statement of Kelvin Walsh, dated 14 February 2014, at paragraph 48

 19   Ibid at paragraph 2

 20   Ibid at paragraphs 30 - 37 and Applicant’s Outline of Submission on Compensation, dated 14 February 2014, at paragraphs

15 - 17

 21   Applicant’s Outline of Submission on Compensation, dated 14 February 2014, at paragraph 18

 22   Witness Statement of Kelvin Walsh, dated 14 February 2014, at paragraphs 8 - 29

 23   Respondent’s Outline of Submissions on Compensation, dated 28 February 2014, at paragraph 10

 24   Ibid at paragraph 11

 25   Ibid at paragraph 12

 26   Witness statement of Kelvin Walsh, dated 14 February 2014, at paragraphs 7 - 13

 27   Ibid at paragraphs 30 - 36

 28   Ibid at paragraph 37

 29   Ibid at paragraph 44

 30   Ibid at paragraph 46

 31   Ibid at Attachment KW5

 32   Respondent’s Outline of Submissions on Compensation, dated 28 February 2014, at paragraphs 14 - 15

 33   Witness Statement of Kelvin Walsh, dated 14 February 2014, at Attachment KW5

 34   Ibid at paragraph 43

 35   Ibid at paragraph 44

 36   Ibid at paragraph 46

 37   Applicant’s Outline of Submission on Compensation, dated 14 February 2014, at paragraphs 23 - 30

 38   Ibid at paragraphs 31 - 34

 39   Respondent’s Outline of Submissions on Compensation, dated 28 February 2014, at paragraphs 16 - 18

 40   Applicant’s Outline of Submission on Compensation, dated 14 February 2014, at paragraph 37

 41   Ibid at paragraph 38

 42   Ibid at paragraphs 40 - 41

 43   Respondent’s Outline of Submissions on Compensation, dated 28 February 2014, at paragraph 22

 44   Ibid at paragraphs 20 - 21

 45   [2006] AIRC 721

 46   Respondent’s Outline of Submissions on Compensation, dated 28 February 2014, at paragraph 23 - 25

 47   Ibid at paragraph 26

 48   Ibid at paragraph 27

 49   Ibid at paragraph 28

 50   Witness statement of Kelvin Walsh, dated 14 February 2014, at paragraph 2

 51   PR549476

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