Kevin Clark v Reliable Signs and Refinishing
[2023] FWC 612
•16 MARCH 2023
| [2023] FWC 612 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
s.392—Remedy – compensation
Kevin Clark
v
Reliable Signs and Refinishing
(U2022/9502)
| COMMISSIONER BISSETT | MELBOURNE, 16 MARCH 2023 |
Application for an unfair dismissal remedy – remedy – compensation ordered
On 8 February 2023 I issued a decision (the liability decision)[1] in which I determined that Mr Kevin Clark (the Applicant) had been unfairly dismissed from his employment with Reliable Signs (the Respondent) in September 2022.
In considering the remedy that should be awarded to the Applicant I determined that reinstatement was not appropriate (and was not sought). Given the lack of material to assist me in a determination of appropriate compensation I issued further directions to the parties which addressed the requirements of s.392 of the Fair Work Act 2009 (FW Act).
The Applicant and Respondent both filed material in response to the directions issued. Both the Applicant and Respondent sought that some specific sensitive business information be redacted from the material prior to its provision to the other party. This being so it is the case that neither party has had the ability to provide a full response to all of the material each other has provided.
The Respondent requested that, due to health reasons, the remedy be determined on the basis of the material filed. The Applicant did not object to the matter being determined on this basis. There being no factual dispute between the parties in relation to the matters I need to consider I agreed with this course of action.
Consideration
In determining the amount of compensation that should be awarded to the Applicant I have considered each of the matters in s.392 of the FW Act.[2]
Section 392(2)(a) The effect on an order for compensation on the viability of the Respondent
The Respondent submits that an order for compensation may have an effect on the viability of the Respondent.
I return to this issue below.
Section 392(2)(b) the length of the Applicant’s employment
The Applicant commenced employment with the Respondent in February 2010. He was therefore employed for over 12 years at the time his employment was terminated.
The Applicant says that prior to his commencement with the Respondent he was employed by a different company owned by Mr Tom Hamer and that business was “dissolved” but he was not paid redundancy at the time. On the dissolution of the business he then went to work for the Respondent.
The Respondent says that this earlier employment is not relevant. The Respondent submits that, if the Applicant has issues with his employment at that time and/or what he received at the end of that employment, he needs to take it up with the previous company.
I do not need to resolve the dispute between the parties in relation to earlier employment of the Applicant for the reasons given below.
Sections 392(2)(c), (e) and (f) the remuneration the Applicant would have received had his employment not been terminated and remuneration earned and anticipated
This matter requires a determination of, firstly, how long the Applicant would have remained in employment if his employment had not been terminated and, second, what his remuneration would have been for this period.
The Applicant gave evidence that he had no intention of leaving his employment with the Respondent. In the hearing in relation to liability the Applicant said:
Well, I had no plans of leaving at all. I've been there for that long, and I was, what, two and a half years off another - off another long service leave thingy as well. So, you know, I was in no rush to go anywhere. I always showed up every day and - yes.[3]
The Respondent submits that the Applicant would not have continued in employment for any more than 3-6 months as his “performance, work ethic and general attitude…in the past 3-6 months would have resulted in [the Applicant] pursuing other employment”. The Respondent relies on my findings in the liability decision that the Applicant was “careless and wrong and did not complete the task properly”[4] and that the Applicant had incurred tolls for personal travel in a work provided vehicle.
I am satisfied that the Applicant would have remained with the Respondent for at least a further 12 months. The Applicant clearly viewed his further long service leave as important and there is no reason to assume he would not have continued in his employment.
Whilst I did find that the Applicant had failed to complete the task of dropping the banner and that this was “careless and wrong” I also found that the actions of the Applicant were “not designed to deliberately mislead Mr [Kayne] Hamer.” Further, while I found that the Applicant had incurred tolls for personal travel in his work provided car I also found that, when he was advised this was not permissible, he stopped doing so.[5] Neither of these matters is enough to convince me that the Applicant’s employment would have ended within the next 3-6 months. Further, I note that, while the Respondent says there were other matters in relation to the Applicant’s attitude – being late for work and taking extended lunch breaks – these clearly were not of such importance that anything had been raised with the Applicant and there was nothing but “generalised complaints” of these before the Commission.
I am not prepared to suggest that the Applicant would have remained employed with the Respondent for more than 12 months. The incident, which I found did not justify dismissal of the Applicant, and in particular the reaction of Mr Tom Hamer, is indicative of some deterioration in the relationship between the Applicant and Respondent. This gives me some pause as to considering any longer period of employment than the 12 months I have determined.
At the time his employment was terminated the Applicant was earning $28 per hour for a 38-hour week plus superannuation of 10.5%. The Applicant worked some overtime but the material before the Commission does not suggest this was regular or rostered overtime. The Applicant had some limited use of a work car for personal reasons with a fuel card supplied by the Respondent.
I have not taken into account the Applicant’s use of a work provided vehicle or the fuel card that came with it in relation to determining lost remuneration. There clearly were limits placed on the personal use of the vehicle. This is not to suggest that there was not some benefit to the Applicant in the use of the vehicle but not such that it would be considered part of a remuneration “package”. A “pay run history report” provided in relation to the liability hearing[6] suggests the Applicant was given the fuel card in lieu of a pay rise in about April 2022. Nothing however has been put which sheds light on the value of the fuel card to the Applicant’s personal use of the vehicle, who paid for the fuel for the vehicle prior to this and how much fuel the Applicant used in using the vehicle for personal reasons.
I am therefore satisfied that the Applicant’s lost wages (i.e. what he would have earned had his employment not been terminated) is
$28.00 per hour x 38 hours x 52 weeks = $55,328 + 10.5% superannuation
I am also satisfied that the Applicant would have accrued a further 4 weeks of annual leave over the period he would have remained in employment and a further period of long service leave.
In its submissions the Respondent provided a “payroll activity report” for the Applicant which showed that he had been paid 360.70 hours of long service leave ($10,099.60). This is equivalent to 9.492 weeks.
The Applicant’s long service leave is determined by reference to the Victorian Long Service Leave Act 2018 (Vic). Utilising the calculator on the Victorian Government “Business Victoria” website[7] the Applicant would have been entitled, for his total period of employment taking into account the period I say he would have worked had his employment not been terminated, to 11.8 weeks of long serviced leave, a further 2.308 weeks from that paid to him.
In circumstances where my assessment of the further period of employment is 1 year, I am satisfied, given the value of the leave to the Applicant, that his lost remuneration calculation should include payment for lost annual and long service leave.
I have not taken into account any overtime the Applicant says he would have worked. The Applicant did not work regular rostered overtime – it was an amount paid only when such work was performed. There is no basis on which the calculation could be made and I decline to use estimates or include any amount for this purpose.
I therefore determine that the Applicant’s lost remunerations is:
Wages $55,328.00
Annual leave $4,256.00
Long service leave $2,455.71Total remuneration $62,039.71
The Applicant would also be entitled to 10.5% superannuation on this amount.
In the period immediately following the termination of his employment the Applicant established his own business. On the Applicant’s material he derived an income, after expenses, of $13,288.82 for the 22 week period following the termination of his employment. I am satisfied, on the information provided, that the Applicant’s income and anticipated income is $604 per week. I do not accept the Applicant’s calculation that his future earnings, beyond the first 22 weeks of running his own business, would reduce from $604 to $486 per week. The basis for this reduction is opaque at best. I have for this reason, based my assessment on an ongoing income of $604 per week.
The amount of lost remuneration must therefore be reduced by the amount earned to the time of submissions and that anticipated to be earned for the remaining period I consider the Applicant would have remained in employment. That is, $604 x 52 weeks = $31,408
Lost remuneration of the Applicant over the period I assess he would otherwise have remained in employment is therefore:
$62,039.71 - $31,408 = $30,631.71 + 10.5% superannuation.
Section 392(2)(d) attempts by Applicant to mitigate his loss
The Applicant has taken proactive steps to mitigate his loss. He has established a business which, on its face, is operating at a reasonable level.
There is risk, and reward, in establishing a business. I make no deduction in this respect as I consider the Applicant has made reasonable attempts to mitigate his loss.
Section 392(2)(g) any other matters
The Applicant raises issues with respect to missing entitlements he says he should have been paid that were not paid or were withheld.
It is not possible for the Commission to take these matters into account in determining compensation. However, it is recommended that the Respondent obtain appropriate advice – particularly in circumstances where the Commission has found the Applicant did not resign – and ensure all entitlements are properly paid up until the date of dismissal of the Applicant.
Any ongoing issues in relation to entitlements should be dealt with through the Fair Work Ombudsman.
I have not taken these amounts into account. Nor have I taken into account matters associated with the fuel card.
Section 392(3) reduction for misconduct
While I found that the Applicant was wrong to not ensure the job he was required to do was completed (i.e., the banner dropped) I do not consider that this amounts to misconduct such that any deduction from the amount of compensation I intend to award should be made.
Further, I have not found that the Applicant engaged in any misconduct in relation to tolls. As soon as the Applicant was advised that he should not be incurring tolls when using the vehicle for personal reasons he stopped doing so. His conduct in this respect is to be applauded and no deduction will be made for this reason.
Section 392(4) no payment for shock, humiliation or distress
I have not included any amount for shock, humiliation or distress.
Section 392(5) application of the compensation cap
I have found above that the Applicant’s lost remuneration is $30,631.71 plus 10.5% superannuation.
The purpose of compensation is to put the Applicant back in the position he would have been had he not been unfairly dismissed. However, the FW Act places a cap on how much compensation can be awarded. The amount so ordered, in this case, can be no more than what the Applicant received in the 26 weeks prior to the termination of employment.
In the 26 weeks preceding the termination of his employment the Applicant earned $27,664.00 + 10.5% superannuation.
Section 392(5) requires that I apply this cap to the compensation amount due to the Applicant.
I will therefore award compensation of $27,664.00 + 10.5% superannuation (to be paid into the superannuation account of the Applicant).
Section 392(2)(a) the effect of any order on the viability of the enterprise
I said above that I would visit this issue in light of the compensation I intend to award.
I am not convinced that the amount I intend to order will adversely affect the viability of the business given my preparedness to consider payment by instalments.
I accept that the Respondent was adversely affected by COVID-19 pandemic and the subsequent economic downturn, Further, I acknowledge the advice from the Respondent’s accountant of potential effects of any order for compensation on the business. However, this advice is very broad in nature and of little value in determining the amount of compensation.[8] While the Respondent submits it has provided a letter from its accountant that states that “any significant lump sum payment…would adversely impact the viability of their enterprise continuing into the future” it is not obvious what a “significant lump sum” might be.
I do accept however that it may be difficult for the Respondent to pay the compensation all at once. Therefore, while I will order that the amount of $27,664.00 + 10.5% superannuation be paid to the Applicant, I will give the Respondent 1 week to put forward a proposed schedule of instalments for payment[9] over a reasonable period of time should they choose to do so. In putting forward any instalment plan the Respondent is required to justify that plan.
I will allow the Applicant to make comment on the Respondent’s instalment plan but advise each party that they should not file any financial information unless they are prepared to have that shared with the other party subject to a confidentiality notice.
The amount I will order is in addition to any payments the Respondent is required to make arising from incorrect deductions made at the time of dismissal.
Conclusion
An order[10] for the payment of compensation of $27,664.00 + 10.5% superannuation will be issued with this decision. The period for payment of that amount will be issued following any submissions from the Respondent as to instalments it considers reasonable.
COMMISSIONER
[1] [2023] FWC 276
[2] The provisions of s.392 are set out in full in the liability decision: [2023] FWC 276, [107] and are not repeated here.
[3] Transcript PN668
[4] [2023] FWC 9502, [71]
[5] [2023] FWC 9502, [80]
[6] See Court Book in liability hearing (CB) page 239
[7] Long service leave: employment termination | Business Victoria
[8] See K. Beames v BDRP Falconer P/L PR916075, [49]
[9] Such an approach being permitted by s.393 of the FW Act
[10] PR760285.
Printed by authority of the Commonwealth Government Printer
<PR760284>
1
0
0