Kumudha Krishnan v WMC Health Pty Ltd T/A Waverley Medical Centre
[2018] FWC 4926
•22 AUGUST 2018
| [2018] FWC 4926 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Kumudha Krishnan
v
WMC Health Pty Ltd T/A Waverley Medical Centre
(U2018/2215)
| Commissioner Gregory | MELBOURNE, 22 AUGUST 2018 |
Application for relief from unfair dismissal – jurisdictional objection – Small Business Fair Dismissal Code – valid reason – dismissal ‘harsh’ and ‘unreasonable’ – remedy – compensation awarded.
Introduction
Ms Kumudha Krishnan was first employed by WMC Health Pty Ltd T/A Waverley Medical Centre (“the Medical Centre”) in October 2011, and worked as a Receptionist on a part-time basis until she was dismissed from her employment on 21 February 2018. She subsequently lodged an unfair dismissal claim and this decision deals with that application.
The Medical Centre initially raised two jurisdictional objections in response to the application, namely that it is a small business and the dismissal was consistent with the Small Business Fair Dismissal Code. It also claims that the application was lodged out of time. However, it then raised a further additional objection on the basis that Ms Krishnan was not dismissed. These matters were dealt with in a decision handed down by Deputy President Gostencnik on 24 May 2018.[1]
It is not necessary to go to that decision in detail at this point, however, it is noted that the Deputy President stated in conclusion:
“[21] It is clear on the evidence before me that there was a dismissal at the employer’s initiative and that that dismissal took effect on 21 February 2018. Although not expressed as a dismissal, the implication of the instruction in the text message of 21 February 2018 is clear: no work for you, your employment has ended, we will withhold you final pay and other documents until you return company property. An alternate construction of the events following the Applicant’s return from leave is that the Respondent would no longer provide the Applicant with work and did not continue to pay the Applicant. This is a repudiatory breach of the employment contract, entitling the Applicant to accept the repudiation and to bring the contract and the employment under it to an end which she did by the text message of 21 February 2018. On either view, there was a dismissal within the meaning of s.386 of the Act. It follows that the Applicant was dismissed on 21 February 2018 and that the application for an unfair dismissal remedy was lodged within the time prescribed by the Act.
[22] The jurisdictional objections raised by the Respondent in respect of the late lodgement of the application for an unfair dismissal remedy and the additional objection of no dismissal are therefore dismissed.
[23] The application will be reallocated to the Unfair Dismissal Case Management Team in order that the application be dealt with noting that the question whether the dismissal was consistent with the Small Business Fair Dismissal Code should be determined in conjunction with the merits. I would observe for the benefit of the Respondent that my preliminary assessment of the Respondent’s prospects of success in maintaining that the dismissal was consistent with the Small Business Fair Dismissal Code, in the face of the material before me, is that the prospects are weak.”[2]
As a consequence of the decision by the Deputy President the Commission has now proceeded to deal with Ms Krishnan’s application on the basis that her employment was terminated by the Medical Centre with effect from 21 February 2018.
Ms Krishnan appeared on her own behalf. Mr M. Beard, Practice Manager, appeared on behalf of the Medical Centre.
The Issue to be Determined
Ms Krishnan claims she has been unfairly dismissed under s.385 of the Fair Work Act 2009 (Cth) (“the Act”).
Section 385 of the Act states as follows:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”[3]
In determining whether a dismissal was “harsh, unjust or unreasonable” the Act continues at s.387 to set out various considerations that the Commission must take into account. It states:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.”[4]
The Commission is accordingly now required to determine whether Ms Krishnan’s dismissal was “harsh, unjust or unreasonable” taking into account the various considerations in s.387. It is also required to consider whether the Small Business Fair Dismissal Code has application.
The Submissions and Evidence
Ms Kumudha Krishnan
Ms Krishnan was first employed by the Medical Centre in October 2011 and worked as a receptionist on a part-time basis. Since February 2015 she has generally worked from 7.30 a.m. until 2 p.m., Monday to Friday, and prior to her termination was earning $25.00 per hour. During the last 12 months year she earned a gross amount of $42,044.00. She also worked on weekends and public holidays on occasions when other reception staff were unavailable, and has done so throughout the time she was employed. Ms Krishnan last worked at the Medical Centre on 5 December 2017.
In February last year Ms Krishnan made application for five weeks of paid annual leave and three weeks of unpaid leave for the period from 6 December 2017 until 30 January 2018. She recalls this leave application being approved by Mr Beard and it was only after that time that she booked her airline tickets on 22 February 2017. Her last day of work before commencing leave was 5 December 2017. Ms Krishnan was asked at that time to leave her set of office keys so that other staff could use them. However, she was not told that this would be her last day at work, or that her position would not be available on her return from annual leave. She also said that she was not asked to clear out her locker at work at this time, and her personal belongings remained in the locker when she went on leave.[5]
She also denies that she threw the office keys at Mr Beard when asked to return them, or that she had taken leave without it having been approved.[6] She also provided copies of payslips indicating that she received annual leave payments during the relevant time as confirmation that her leave had been approved.
She also stated that at no time before going on annual leave was she told her roster arrangements were to be changed in the future.[7] She also indicated in response to a question from the Commission that she had never received any warnings about her work performance, and had not been disciplined in any way during the time she was employed.[8]
Ms Krishnan also stated that she believed she had been terminated because she had sought advice from the Fair Work Ombudsman about various issues to do with her roster and pay arrangements.[9] In June last year she asked Mr Beard to provide her with copies of her payslips because she was concerned her leave entitlements were not being administered correctly. In addition, it appeared her superannuation contributions were not being made on time or being calculated correctly. However, Mr Beard repeatedly ignored these requests.
Ms Krishnan then called Mr Beard on 29 January, after returning from annual leave, to arrange to pick up her office keys given her understanding that she would be returning to work on Wednesday, 31 January 2018. However, Mr Beard did not answer the call and after calling the Practice again she was told by one of the staff that he was busy but would return her call when he could. Ms Krishnan then went to the Medical Centre on 30 January and met with Mr Beard in his office. He told her that she was not on the current roster, but he would try and put her on the roster that was due to commence on 18 February. There had also been a previous series of text message exchanges between Ms Krishnan and Mr Beard in regard to her return to work. However, after repeated requests seeking confirmation about when she would be able to return to work, she simply received a text message from him indicating “there are no spots on this roster so there is nothing to talk about.”[10]
Ms Krishnan also confirmed that during the time she had been employed she had never received any warnings about her performance, or been subjected to a performance management plan.[11] She was also not aware of any complaints about her by other staff or the Doctors at the Practice. She also denied the claims made in the submissions provided by the Medical Centre that she had been the subject of several performance management discussions over the 9 month period prior to her dismissal, or that other employees had expressed concerns about working with her.[12]
She also denied that she had been called into a meeting with Mr Beard and the Principal of the Practice, Doctor Eva Wu, in September last year and been given a warning, as well as being asked to change her annual leave arrangements.[13] She denied any such meeting took place, and the only time she had met with Mr Beard and Doctor Wu was when she went to the Medical Centre on 30 January in an attempt to clarify when she would be returning to work.
Since her dismissal Ms Krishnan has applied for various jobs and worked as a casual medical receptionist at the Boulevard Family Practice from 12 March 2018 until 4 June 2018 earning $24.00 per hour. She then commenced working in a new position on 5 June 2018 where she is now earning $25.00 per hour and working 25 hours per week.[14] However, she did not wish to disclose the name or location of her current employer because of threats she claims have been directed at her.[15]
Ms Krishnan also enclosed a series of documents including a Letter of Engagement and Contract of Employment dated 14 June 2017 confirming her ongoing employment at the Medical Centre. She also attached payslips confirming she received payments in respect of annual leave for the relevant period. She also attached a letter from Doctor Angela Vinci, who is one of the doctors at the Medical Centre indicating, in part, that “[d]uring the entire time I have worked with her, I have found her to be loyal, courteous, and polite to staff and patients…She took and followed instructions very well.”[16]
Waverley Medical Centre
The Medical Centre did not provide any witness evidence in response to the application in the materials filed prior to the hearing. However, it did provide a submission. It submits that prior to Ms Krishnan taking leave discussions had taken place with her on three occasions about the amount of annual leave she was taking, and the position it placed the practice in as other staff were being denied the opportunity to take leave because of the extended amount of leave she was taking.[17] The practice had also been unable to find any approved leave application in respect of the period of annual leave taken by Ms Krishnan.
It continues to submit that when she went on leave Ms Krishnan was told there would not be a role at the Practice for her on her return to Australia, but it would look at the possibility of obtaining another placement for her closer to home.[18] It is also the policy of the practice to return all property when a person is leaving the practice.
It continues to submit that Ms Krishnan threw the keys at the Practice Manager, Mr Beard, and cleared out her locker on her last day at work on 5 December 2017.[19] However, during the second week of February Ms Krishnan arrived at the Practice unannounced and asked to speak to the Principal, Doctor Wu. However, she met with Mr Beard and was again told there was no longer a role available for her.
It continues to submit that there were several discussions with Ms Krishnan over a nine-month period where attempts were made to try and change her behaviour and attitude, and to arrest her poor performance and punctuality.[20] Two additional staff were also hired in the months leading up to her last day at work meaning Ms Krishnan was no longer required.
An undated letter from Doctor Eva Wu was also handed up during the proceedings. It indicates that Dr Wu is “ … the owner and Principal of the Waverley Medical Centre,”[21] and she “… was present in the meeting when it was explained to Kumudha that continued length of leave was unacceptable to the practice and was unfair to her colleagues and was in violation of company policy. The initial response was that the employee would not change her application for extended unpaid leave.”[22] The letter continues to state that “Mr Beard then explained that the position that she enjoyed with the practice would not be available on her return from overseas and that left the practice with no choice but to engage new staff and fully trained to ensure continued service to our patients. This training occurred with her awareness as she was present each day.”[23] The letter continues to indicate that in the following eight weeks her “attitude and attention became a concern but we continued to honour out the time period before leave. And as a consequence Kumudha left of own free will.”[24] However, Doctor Wu did not attend the proceedings and was not available to be cross-examined about the content of this correspondence. However, Ms Krishnan denied in answer to a question from the Commission that the meeting referred to ever took place, and neither Doctor Wu or Mr Beard had ever raised any issues with her about her attitude or performance.[25]
It is also noted that the Waverley Medical Centre did not provide any evidence or submissions about it being a small business, or that Ms Krishnan’s dismissal took place in accordance with the Small Business Fair Dismissal Code.
Consideration
As indicated at the outset the Commission is required to determine whether Ms Krishnan’s dismissal was “harsh, unjust or unreasonable” having particular regard to the various matters set out in s.387. It is also noted that the circumstances in which an employee’s termination of employment can be considered to be “harsh, unjust or unreasonable” have been considered in a number of previous decisions.
The decision in Byrne v Australian Airlines Ltd[26] is often cited in this context. The joint judgement of McHugh and Gummow JJ concluded that
“...It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”[27]
The decision of the Full Bench of Fair Work Australia in L. Sayer v Melsteel Pty Ltd[28] also provides guidance about the Commission’s role in regard to each of the considerations in s.387 that must be taken into account in determining whether an employee’s dismissal was “harsh unjust or unreasonable.” The Full Bench concluded:
“Where the applicant does present a case, in the ordinary course each of the criteria in s.387 which is capable of being relevant on the facts emerging at the hearing must be taken into account.”[29]
I now turn to deal with each of the considerations in s.387 and those authorities that I consider relevant to the determination of this matter.
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees)
Before coming to the particular circumstances involved in this matter it is noted that various authorities have had regard to what is required in order to conclude that there was “a valid reason for the dismissal related to the person’s capacity or conduct.” The judgement of Northrop J in Selvachandranv Peteron Plastics Pty Ltd[30] is often referred to in this context. His Honour came to the following conclusions:
“The reasons of an employer for terminating the employment of an employee are solely within the knowledge of the employer. The employer may state a reason but that reason need not be the actual reason nor need it be the only reason. This is the rationale for the onus of proof provisions contained in s 170EDA.
Section 170DE(1) refers to ‘‘a valid reason, or valid reasons’’, but the Act does not give a meaning to those phrases or the adjective ‘‘valid’’. A reference to dictionaries shows that the word ‘‘valid’’ has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is: ‘‘2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.’’ In the Macquarie Dictionary the relevant meaning is ‘‘sound, just, or well founded; a valid reason’’
In its context in s 170DE(1), the adjective ‘valid’ should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, commonsense way to ensure that’ the employer and employee are each treated fairly…”[31]
In Parmalat Food Products Pty Ltd v Wililo[32] the Full Bench also concluded that:
“The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair. The finding of a valid reason is a very important consideration in establishing the fairness of a termination. Having found a valid reason for termination amounting to serious misconduct and compliance with the statutory requirements for procedural fairness it would only be if significant mitigating factors are present that a conclusion of harshness is open.”[33]
The Full Bench majority in B, C and D v Australian Postal Corporation T/A Australia Post[34] (“Australian Postal Corporation”) also provides a useful summary of the approach to be taken by the Commission in weighing the factors to be considered:
“Reaching an overall determination of whether a given dismissal was “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason” involves a weighing process. The Commission is required to consider all of the circumstances of the case, having particular regard to the matters specified in s.387, and then weigh:
(i) the gravity of the misconduct and other circumstances weighing in favour of the dismissal not being harsh, unjust or unreasonable;
against
(ii) the mitigating circumstances and other relevant matters that may properly be brought to account as weighing against a finding that dismissal was a fair and proportionate response to the particular misconduct.”[35]
It is also clear that the reason must be valid when viewed objectively. It is not sufficient that the Employer believed it had a valid reason for termination. This was made clear in the Full Bench decision in Rode v Burwood Mitsubishi[36] at paragraph 19 when the Full Bench stated:
“…the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.”[37]
These authorities make clear that the existence of a “valid reason” is often the most important consideration among the matters the Commission must have regard to in s.387. It is also clear from these authorities that a “valid reason” is one that is “sound defensible and well founded,” as opposed to one that is capricious, spiteful or prejudiced. It must also be valid in the context of both the employee’s capacity or conduct, and the operational requirements of the business. The test must also be applied in a practical, common sense way to ensure the parties are treated fairly in circumstances where each has rights and privileges, but duties and obligations as well. I have sought to adopt the approach of these authorities in coming to a decision in this matter.
As indicated, the earlier decision of Deputy President Gostencnik makes clear that Ms Krishnan was dismissed as a consequence of the text messages sent to her by Mr Beard on 21 February this year. Those messages make reference to there being no spot for her on the roster. The submissions provided on behalf of the Medical Centre also make reference to various performance issues concerning Ms Krishnan during the last nine months of 2017, however, she denies any such issues were raised, and there was no evidence provided by the Medical Centre in support of these submissions. Ms Krishnan also sought payslips and other information from her employer in June of last year because she had concerns about her leave entitlements, and whether her superannuation contributions were being paid correctly. She states that the Medical Centre repeatedly refused her requests for this information.
The Medical Centre also claims Ms Krishnan was taking extended periods of leave and, as a consequence, denying other employees from being able to take leave during the Christmas/New Year period. However, there is no evidence of Ms Krishnan’s leave requests being rejected, and payslips provided by her indicate she received payments in respect of annual leave during the relevant period. While little turns on this the Medical Centre also claims that Ms Krishnan cleared out her personal locker on 5 December when there is no evidence indicating this was the case. This is one of a number of inconsistencies in its position.
In summary, when it comes to consideration of the evidence it is difficult to understand what valid reason existed for Ms Krishnan’s dismissal, with the only explanation provided by the Medical Centre being that there was no longer any room on the roster for her. All of this occurred against the background of a person who had been employed by the Medical Centre for more than six years, with no evidence of any kind provided about any warnings, disciplinary action, or performance issues raised with her during that time. At the very least it could be expected that someone with this length of service would have been treated in a more considered and respectful way.
I am not satisfied, in conclusion, that the Medical Centre can be said to have had a “valid reason” to dismiss Ms Krishnan in the sense that the reason can be said to be sound and defensible. It is also difficult to conclude on any objective analysis of the relevant facts that the reason can be said to have been well founded.
(b) whether the person was notified of the reason
Ms Krishnan was notified by text message that there was no longer a spot for her on the roster.
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
There have been various claims made about deficiencies in Ms Krishnan’s capacity or conduct, but no evidence was provided in support of these submissions. I am not able to conclude that there is any evidence confirming Ms Krishnan was spoken to about her performance or conduct on any occasion. It follows that she was not given any opportunity to respond to any such matters.
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal
I am not aware of any offers to have a support person present in any discussions or any unreasonable refusal to allow this to occur.
(e) if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal
It is not entirely clear why Ms Krishnan was dismissed. However, the Medical Centre submits she was given warnings at some point, but no evidence was provided to substantiate these submissions. Ms Krishnan denies she was ever provided with a warning about unsatisfactory performance.
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal.
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal.
I am satisfied that it is appropriate to deal with the above matters together. The Medical Centre is evidently a reasonably small organisation, and while it employs a Practice Manager there was no evidence indicating that it has dedicated human resource management specialists or expertise. It is accepted that a relatively small organisation with limited resources is not necessarily going to be aware of the appropriate processes and procedures to be followed when dealing with the circumstances involved in dismissing an employee. However, at the same time I am not prepared to accept that these circumstances provide it with a reason or an excuse to not act in a reasonable and considered way when dealing with these matters.
(h) any other matters that the FWC considers relevant
Ms Krishnan is obviously upset and annoyed about what occurred after having been employed by the Medical Centre for an extended period of time. These are normal and understandable reactions from someone in her position. I am not aware of any other matters that are of particular relevance in this context.
Conclusion
I have had regard to all of the submissions and evidence provided by the parties in this matter. As indicated, I have also had regard to each of the matters in s.387 that the Commission is required to take into account. I am satisfied in all the circumstances that Ms Krishnan’s termination was at least “harsh” and “unreasonable,” and that she has therefore been unfairly dismissed. In coming to this decision I have had particular regard to the conclusions reached in regard to “valid reason,” and to the limited opportunities provided to her to engage or respond to whatever were the reasons relied on for her termination.
Having come to this conclusion I am now required to consider what is an appropriate remedy in the context of s.392 of the Act. I can also indicate that I am satisfied that reinstatement is not a relevant consideration given the degree of antipathy indicated by the participants in the proceedings, and the fact that the Medical Centre is a relatively small organisation. In addition, Ms Krishnan clearly does not seek to be reinstated to her position, and the Medical Centre is opposed to any such suggestion.
Remedy
Section 392 of the Act states:
“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
(3) 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
(4) 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
(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.”[38]
In relation to the amount of compensation to be ordered it is necessary to take into account all the circumstances of the case, including the specific matters identified in s.392(2) (a) to (g), and to consider the other relevant requirements in s.382. The long established approach to the assessment of compensation under s.392 is to apply the formula derived from the Full Bench decision in Sprigg v Pauls Licensed Supermarket (‘Sprigg’)[39]. This approach was more recently confirmed in the context of the present legislative framework in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge (‘Bowden’).[40] The first and perhaps most important step to be taken is to determine what the Applicant would have received by way of remuneration, or would have been likely to receive, if the person had not been dismissed. This was described in Bowden in the following terms at [33]:
“[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:
‘... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.’
[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the ‘anticipated period of employment’…”[41]
Once this assessment has been made various adjustments are then required, including for the amount of income earned since the time of dismissal, any amount on account of contingencies, any reduction on account of the employees misconduct, and the application of the statutory salary cap. This approach is, however, subject to the overarching requirement to ensure that the level of compensation is an amount that is considered appropriate having regard to all of the circumstances.
I now turn to deal with the matters in s.392 in the order in which they appear. I am not aware of any evidence in the first place to suggest, firstly, that there is any issue concerning the effect of any order of compensation on the viability of the Medical Centre. It apparently has around 20 employees and has been operating for a significant period of time.
As indicated previously Ms Krishnan was employed by the Medical Centre for almost six and a half years. This is clearly a significant period of service by any reasonable standard.
The Commission is next required to consider what remuneration Ms Krishnan would have earned if she had not been dismissed. This involves making an estimate about how long she might have remained in employment had she not been dismissed. As indicated, this is inevitably a matter that is difficult to come to a definitive conclusion about, and is ultimately a matter of some speculation. However, I am satisfied that Ms Krishnan had a good employment record over an extended period of time in the absence of any evidence to the contrary. It could accordingly be expected that she would have continued in her role for a further period of time if not for having been unfairly dismissed. Given she has already been employed for a period of more than six years I am satisfied that it is reasonable to conclude that at the very least she would have been employed for a further period of twelve months if not for her unfair dismissal.
Ms Krishnan has provided evidence about her attempts to mitigate the income lost since her dismissal, and she has fortunately been able to obtain employment with two different employers since that time, and is apparently in on-going employment at the present time. She indicated that she is currently working in a part-time role involving 25 hours per week at an hourly rate of $25.00. She was not able to obtain further work until one month after her termination, and I have based her anticipated earnings over the remaining eleven months of the year at an amount of $625.00 per week or $27,500 at the end of the period of 12 months since she was terminated. This amount is to be deducted from the figure of $42,044.00.
The legislation also makes clear that if the Commission is satisfied that the employee’s misconduct contributed to the decision to dismiss the employee then the amount that might otherwise be ordered is to be reduced. I am not aware of any evidence that warrants a deduction on these grounds.
The decision in Sprigg also makes reference to the requirement to consider the impact of contingencies, and whether they should have any impact on the amount to be awarded. This only applies to the anticipated period of employment. I am satisfied that it is appropriate to make a deduction of 15% from the total amount in respect of these potential uncertainties.
The compensation cap is then referred to in s.392(5) of the Act and provides that the amount ordered by the Commission must not exceed the lesser of the total amount of remuneration either received by the person, or to which the person is entitled for any period of employment with the employer during the 26 weeks immediately before the dismissal, and half the amount of the high income threshold immediately before the dismissal. That amount was $142,000 per annum at the time of Ms Krishnan’s dismissal. The amount of compensation currently under consideration is clearly well below the compensation cap.
Conclusion as to Remedy
The amount of compensation that the Commission has accordingly arrived at has been calculated on the following basis:
| · STEP 1: LOST REMUNERATION (TWELVE MONTHS) | $42,044.00 |
| · Step 2: remuneration earned a likely to be earned | ‑$27,500.00 |
| · Step 3: deduction for contingencies (15 percent) | ‑$2,181.60 |
| · Step 4: deduction for misconduct (nil) | ‑$0.00 |
| $12,362.40 |
The final amount of compensation to be ordered is therefore $12,362.40, less deduction of any tax as required by law. I am satisfied that this amount of compensation is an appropriate amount in all the circumstances. In accordance with s.392(1) the amount of the order does not include any amount by way of compensation for shock, distress or humiliation, or other analogous hurt caused to Ms Krishnan by the manner of her dismissal.
The Commission accordingly orders that the Waverley Medical Centre pay Ms Krishnan the sum of $12,362.40, less deduction of any tax as required by law, within 21 days of the date of this decision. An Order to this effect is issued in conjunction with this decision.
COMMISSIONER
Appearances:
K Krishnan on her own behalf.
M Beard for the Respondent.
Hearing details:
2018.
Melbourne:
July 30.
[1] Krishnan v WMC Health Pty Ltd T/A Waverley Medical Centre[2018] FWC 2647.
[2] Ibid, [21]-[23].
[3] Fair Work Act 2009 (Cth) s 385.
[4] Fair Work Act 2009 (Cth) s 387.
[5] Applicant’s submissions, filed 19 June 2018, [4a].
[6] Ibid, [4c].
[7] Ibid.
[8] Transcript, 30 July 2018, PN 68.
[9] Applicant’s submissions, filed 19 June 2018, [4c].
[10] Ibid, [4d].
[11] Ibid [4f].
[12] Ibid [5a].
[13] Transcript, 30 July 2018, PN 158 – PN 160.
[14] Ibid, PN 56.
[15] Applicant’s witness statement, filed 19 June 2018, p 3.
[16] Attachment to Applicant’s submissions, filed 19 June 2018, Letter from Dr Angela Vinci, dated 18 April 2018.
[17] Respondent’s submissions, filed 12 June 2018, p 1.
[18] Ibid.
[19] Ibid.
[20] Ibid, p 2.
[21] Document handed up in proceedings, 30 July 2018, Letter from Dr Eva Wu, undated.
[22] Ibid.
[23] Ibid.
[24] Ibid.
[25] Transcript, 30 July 2018, PN 158 – PN 160.
[26] (1995) 185 CLR 410.
[27] Ibid, 465.
[28] [2011] FWAFB 7498.
[29] Ibid, [20].
[30] (1995) 62 IR 371.
[31] Ibid, 373.
[32] [2011] FWAFB 1166.
[33] Ibid, [24].
[34] [2013] FWCFB 6191.
[35] Ibid, [58].
[36] Print R4471 (AIRCFB, Ross VP, Polites SDP, Foggo C, 11 May 1999).
[37] Ibid, [19].
[38] Fair Work Act 2009 (Cth) s 392.
[39] (1998) 88 IR 21.
[40] [2013] FWCFB 431.
[41] Ibid, [33]-[34].
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