Kris Ting v Superstop Auto Parts

[2019] FWC 1651

[2019] FWC 1651

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Kris Ting
v
Superstop Auto Parts
(U2018/8923)

COMMISSIONER MCKINNON MELBOURNE, 13 MARCH 2019

Application for an unfair dismissal remedy - compensation.

[1] On 15 February 2009, I issued a Decision 1 in which I found that the dismissal of Kris Ting by Superstop Auto Parts Pty Ltd (Superstop) was unfair.

[2] The parties subsequently filed materials on the question of remedy. This decision deals with the matter to finality.

Submissions

[3] Ting submits that despite applying for 43 jobs in accounts and administration roles over the period from 31 August 2018 to 21 February 2019 (approximately 1 to 2 per week), she has only recently obtained alternative employment and has earned a small amount of income as a result. She says Superstop’s refusal to provide her with a statement of service after the termination of her employment was an impediment to her obtaining other employment. It is apparent from her submissions that in applying for employment, she did so directly and avoided the use of recruitment agencies. 2

[4] Superstop submits that its financial position has not improved since Ting’s dismissal and that its viability will be affected by any order for compensation. It says it has no capacity to make any further payments because it “is and has been struggling from some time”. If compensation is ordered, Superstop has applied to pay by instalments.

Compensation

[5] Having regard to my findings in the Decision 3, I am satisfied Ting has been adversely affected by the dismissal and that compensation is an appropriate remedy in this case.

[6] Section 392(2) of the Act deals with how compensation is to be assessed in connection with an unfair dismissal. The established methodology is discussed in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc (Bowden). 4

Remuneration Ting would have received, or would have been likely to receive, if not dismissed (s.392(2)(c))

[7] Ting had a substantial period of service with Superstop and a personal interest in the business as shareholder. Evidence in the proceedings establishes that Superstop had concerns about Ting’s performance, some of which only became apparent at or around the time of dismissal. But for the dismissal, in my view she would have remained in employment with Superstop for another 6 months, but in a part time role, working 20 hours per week.

[8] Her annual salary at the time of dismissal was $82,839.64 gross, which equates to $1593.07 gross per week or approximately $41 per hour. Adjusting the amount (on account of the part-time role) equates to $820.00 gross, which I find to be the likely weekly earnings capacity of Ting in the 6 month period following dismissal. This gives a total of $21,320 gross (26 weeks x $820).

Viability (s.392(2)(a))

[9] I accept the submissions of Superstop that an order requiring it to pay Ting compensation will adversely affect the viability of its business, because of the precarious financial position it was in at the time of Ting’s dismissal and which remains. It does not follow, however, that no compensation should be ordered. Rather, it is a factor that weighs in favour of a reduction in the amount of compensation. In the circumstances, I consider a reduction of 30% is appropriate, to a total of $14,924.00 gross.

Length of service (s.392(2)(b))

[10] Ting had approximately 10 years’ service. She had accrued a substantial amount of annual leave and long service leave which was paid after the dismissal. The amount included payment of 48 days’ long service leave. The total period since dismissal is 194 days, meaning that the unpaid portion of that period is 146 days or approximately 75% of the total period of 194 days. I consider it appropriate to reduce the compensation amount by 25% on this basis, to $11,193.00 gross.

Mitigation efforts (s.392(2)(d))

[11] Ting has made reasonable efforts to mitigate her loss although in my view, these efforts have been hampered by the choice not to seek assistance from a recruitment agent. The decision not to seek assistance appears to rest on the assumption that agencies will be unable or unwilling to assist without a written reference from Superstop. There is no proper basis before me for that assumption. The amount of compensation will be reduced by 10% on this account, to a total of $10,073.70 gross.

[12] Ting says her attempts to find alternative employment were also undermined by Superstop’s refusal to provide a statement of service. While Ting says she made numerous requests for such a statement, the material before me confirms only a request made on 22 February 2019. By then, Ting had obtained alternative employment. Superstop responded six days later, on 28 February 2019, providing an Employment Separation Certificate but declining to provide a statement of service. While it is hard to understand Superstop’s position in this regard, there was no obligation on it to provide a statement of service and no adjustment of the compensation amount is made on this account.

Remuneration earned in the period since dismissal (s.392(2)(e))

[13] Ting commenced employment in an alternative role on 21 February 2019. Her income in the new role is $1140.00 gross per week. The total earned from 21 February 2019 to the date of this decision is $3420.00 gross. The amount of compensation is reduced by this amount, to $6653.70 gross.

Remuneration reasonably likely to be earned in the period between compensation order and actual compensation (s.392(2)(f))

[14] As Ting now earns a weekly income of $1140.00 gross, the remuneration she will likely earn between the compensation order and the first date for payment of compensation is $1140.00 gross. The amount of compensation is reduced by that amount, to $5513.70 gross.

Other matters (s.392(2)(g))

[15] Ting was paid a substantial amount on account of accrued annual leave on termination. That was her entitlement, and there is no evidence to the contrary. While payment of the amount had a significant impact on Superstop’s financial position, accrued entitlements are contingent liabilities for all businesses. Prudent financial management requires employee entitlements to be accounted for and able to be paid when called upon. No further adjustment of the compensation amount is made on this account.

[16] No deduction is made for contingencies as the events of the 6 months since dismissal are known and have been accounted for in dealing with the question of compensation.

[17] It is appropriate that superannuation be paid on the compensation amount because the order for compensation is made in part in recognition of lost ordinary time earnings for the 6 month period immediately following dismissal.

Misconduct (s.392(3))

[18] Superstop says that misconduct did not contribute to the dismissal decision, but for the reasons set out in my earlier Decision, I do not agree. Nor do I share the concerns of Mrs Makrievski that Ting’s conduct in relation to her working hours and accrual of annual leave involved misconduct, because I am not satisfied that she was directed to work only between normal business hours until the dispute about her annual leave accrual arose. I accept that Ting’s regular pattern of working late over a period of many years exposed Superstop to potential safety risks, but in my view, Superstop acquiesced to the behaviour. It was not until the matter became a potential cost to the business that Superstop sought to intervene. No adjustment on account of misconduct is made.

Shock, Distress (s.392(4))

[19] The amount of compensation does not include a component for shock, humiliation or distress.

Compensation cap (s.392(5)&(6))

[20] The amount of $5513.70 gross plus superannuation is less than the compensation cap of 26 weeks’ pay and no further adjustment of the amount is necessary.

Instalments (s.393)

[21] Superstop has applied to pay any compensation awarded by instalments. I find that payment of the compensation amount by instalments is appropriate in this case because of what I consider to be Superstop’s limited capacity to pay the total amount as a lump sum.

Conclusion on remedy

[22] In my view, the compensation figure arrived at in this case does not yield an amount that is clearly excessive or clearly inadequate.

[23] For the reasons set out above, I am satisfied that a remedy of compensation in the sum of $5513.70 gross plus superannuation in favour of Ting is appropriate in the circumstances of this case. An order [PR705814] is issued to that effect.

[24] The application is determined accordingly.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR705813>

 1   [2019] FWC 1003

 2   Submissions of the Applicant, 1 March 2019

 3   [2019] FWC 1003

 4   [2013] FWCFB 431