Mark Angwin v Dimmeys Stores Pty Ltd T/A Dimmeys

[2014] FWC 3633

[2014] FWC 3633

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Mark Angwin
v
Dimmeys Stores Pty Ltd T/A Dimmeys
(U2013/15599)

COMMISSIONER LEE MELBOURNE, 27 JUNE 2014

Application for relief from unfair dismissal.

[1] This matter involves an application made pursuant to section 394 of the Fair Work Act 2009 (the Act) for unfair dismissal remedy. Mr Mark Angwin (the Applicant) claims that he was unfairly dismissed from his employment with Dimmeys Stores Pty Ltd T/A Dimmeys (the Respondent). 

[2] The application was lodged 6 November 2013. The matter was listed for hearing before me on 11 April 2014. The hearing was conducted in Melbourne. The Applicant was self represented and gave evidence on his own behalf. The Respondent did not appear at the hearing.

[3] On 26 February 2014, the Fair Work Commission (the Commission) received a letter from SV Partners, referring to this matter and making specific reference to a telephone conversation with Ms. Lisa Isaac of the SV Partners Office. The letter confirmed that Mr. Cauchi and Mr. Carrafa were appointed joint and several administrators of the Respondent on 13 January 2014.

[4] The letter then states as follows:

“I note that the company is party to proceedings instigated by [employee] and Mark Angwin with respect to unfair dismissal claims.

As you are aware in accordance with the provisions of s.440D of the Act, during the administration of a company, proceeding in a court against the company cannot be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.

Given the company’s current circumstances, I do not propose to be in attendance at any future scheduled hearing(s) in these matters.”

[5] The letter is signed by Peter Gountzos, Joint and Several Administrator.

[6] Subsequent to receiving that correspondence the company was advised by the Fair Work Commission unfair dismissal case management team that as the Commission is not a court for the purposes of the Corporations Act 2001, the matter will still proceed. There is a file note to that effect dated 18 March 2014. Therefore the administrators had been put on notice of the matter would proceed to hearing on 11 April 2014. I indicated at the hearing that I had considered the correspondence and the terms of administration confirm my view that there is no need for an order to be sought from the court in respect of this particular matter. Authority for the proposition can be found in the decision of G.W. Smith, R. Ovcaric, D. Hose and J. Farragher v Trollope Silverwood & Beck Pty Ltd (In liquidation) 1. Subsequently the hearing proceeded.

Background

[7] The Applicant was employed as a General Manager for the Respondent from 12 February 2013 up until he was dismissed on 28 October /2013. The Applicant provided a letter dated 29 October 2013, signed by Mr Doug Zappelli, Managing Director of the Respondent, addressed “to whom it may concern”, which read as follows:

“This is to confirm that Mr Mark Angwin has been made redundant from his position of General Manager effective as of 4pm Monday 28th October 2013 by Mr Peter Preston and Mr Ken Hampson.”

[8] The letter further indicates that the Applicant will be paid his entitlements into his bank account the following day.

[9] The Applicant asserts that he has not been made redundant, but that he was simply instantly dismissed and that his dismissal was unfair.

The law to be applied

[10] Section 394(1) of the Act provides that a person who has been dismissed may apply to the Commission for an order under Division 4 of the Act granting a remedy for unfair dismissal.

[11] Section 385 of the Act provides that a person has been unfairly dismissed if the Commission 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.”

[12] Section 396 of the Act provides that before considering the merits of an application for an unfair dismissal remedy order, the Commission must determine some other matters. Section 396 is as follows;

“396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.”

[13] An effect of s.396 of the Act is that if a dismissal was a case of genuine redundancy, the Commission does not need to consider whether it is satisfied the dismissal was harsh, unjust or unreasonable.

[14] Section 389 of the Act sets out the meaning of “genuine redundancy” and is as follows:

“389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

[15] The Explanatory Memorandum to the Fair Work Bill 2008 says the following in respect of the now s.389:

“Clause 389 – Meaning of genuine redundancy

1546. This clause sets out what will and will not constitute a genuine redundancy. If a dismissal is a genuine redundancy it will not be an unfair dismissal.

1547. Paragraph 389(1)(a) provides that person's dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, project or undertaking.

1548. The following are possible examples of a change in the operational requirements of an enterprise:

● a machine is now available to do the job performed by the employees;

● the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or

● the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.

1549. It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer’s operational requirements relate only to a part of the employer’s enterprise, as this will still constitute a change to the employer’s enterprise.

1550. Paragraph 389(1)(b) provides that it will not be a case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.

1551. Subclause 389(2) provides that dismissal is not a case of genuine redundancy if it would have been reasonable in all circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).

1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.

1553. Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal.” (Underlining added)

[16] Section 387 of the Act sets out the criteria for considering whether a dismissal was harsh, unjust or unreasonable. Section 387 is as follows:

“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.”

[17] Section 390 of the Act sets out when the Commission may order a remedy for an unfair dismissal as follows:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.”

[18] Section 391 of the Act sets out matters relevant to an order for reinstatement. Section 392 of the Act sets out matters relevant to an order for compensation as follows:

“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

(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.

Note: subsection 392(5) indexed to $64,650 from 1 July 2013

(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.”

[19] With regard to s.385(a), s.386 of the Act sets out the meaning of ‘dismissed’. It is clear the Applicant was dismissed within the meaning of the Act.

[20] The Applicant was employed from 12 February 2013 until 28 October 2013, approximately 8 and a half months. As the Respondent is not a small business the Applicant has completed a period of employment of at least the minimum employment period (sections 382(a) and sections 383). The application was lodged within the time period specified in s.394(2)(a).

[21] It was not disputed that the Applicant is not covered by the terms of any modern award. 2 It was not contended that he was covered by an enterprise agreement. Therefore, in order to be a person protected from unfair dismissal the Applicant must earn less than the high income threshold.

[22] At the time of the dismissal the Applicant was being paid $52.88 per hour for a 40 hour week, which equates to $109,990.00 per year. 3 The Applicant also had private use of a motor vehicle, a Porsche Boxster. The use of that vehicle needs to be included in the consideration of the level of remuneration of the Applicant.

[23] In determining the value of motor vehicle to be included for the purpose of determining the level of remuneration, only the proportion of private usage can be counted as remuneration. 4 It appears in this matter that there is no agreed monetary value of the benefit of the private use of a motor vehicle. Therefore, it is appropriate to apply the following formula5 to determine the monetary value:

1. Determine the annual distance travelled by the vehicle in question.

2. Determine the percentage of that distance that was for private use.

3. Multiply the above two figures to obtain the annual distance travelled for private purposes.

4. Estimate the cost per kilometre for a vehicle of that type (may be obtained from RACV, NRMA or other similar motoring association).

5. Multiply the annual distance travelled for private purpose (obtained at step 3) by the estimated cost per kilometre.

[24] The figure obtained is the value of the vehicle to the employee and is added to remuneration. 6

[25] In this case, the Applicant provided a statutory declaration that he travelled approximately 18,000 kilometres in the vehicle during his approximately 8 months of employment and that 10% of that travel was for private use. Therefore the distance travelled for private purposes during the approximately 8 months of employment was 1,800 kilometres. This means the monthly amount of private use was 225 kilometres meaning the annual amount of usage was 2,700 kilometres.

[26] The cost per kilometre for a vehicle of this type is difficult to establish as there does not appear to be a cost per kilometre calculated for this vehicle. I have used as a proxy the running costs as estimated by RACV as at 19 June 2014 for a Mercedes Benz C200 BE 4D sedan; 1.8L Turbo 7 SP Automatic said to be 110.79 cents per kilometre. This yields an amount of $2,991.33. This amount when added to the Applicant’s salary of $109,990.00 totals to an amount of $112,981.33. This is less than the high income threshold of $129,300.00. Hence the requirements of s.382(b) of the Act are met. The Applicant is a person protected from unfair dismissal.

[27] With regard to s.385(d) of the Act, it is clear from the documentation that the Respondent has treated the Applicant’s dismissal as a case of genuine redundancy. The Applicant disputes that he was in fact made redundant. Section 385(d) of the Act is therefore relevant in this matter

[28] Accordingly, the matter for determination is whether the dismissal was a genuine redundancy. If I find that the dismissal was not a genuine redundancy, I must determine whether the dismissal was harsh, unjust or unreasonable.⁷

The evidence:

[29] The Applicant gave evidence on his own behalf. In summary his evidence was as follows.

[30] The Applicant was the General Manager for the Respondent throughout his period of employment. His role included duties typical of a general manager including hiring and firing IT consultants, warehouse managers; hiring new payroll team members; minimising risk to business continuity; was accountable for purchasing decisions of the buying team; was accountable for store sales and operations including the management of approximately 500 staff via 6 area managers. 8

[31] Three to four weeks before the end of the Applicant’s employment, a Mr. Peter Preston was engaged by the business as a consultant. The Applicant understood from a conversation with Mr. Zappelli that Mr. Preston had been hired to sell the business; help with the merchandise process, then move on once the buyer was settled. 9

[32] The Applicant claimed that the director of the store, Mr. Zappelli, was facing legal action taken by Consumer Affairs Victoria for the sale of consumer products without appropriate safety and warning labels.

[33] Mr. Preston assured the Applicant during the time that they worked together that he could not do what he needed to do without the assistance of the Applicant. 10 During visits to the stores, Mr. Preston referred to the Applicant in inclusive terms leading the Applicant to have a sense that he was part of the future of the organisation.11

[34] Despite the Applicant’s understanding that Mr. Preston was brought in to sell the business and then move on, the relationship appeared to evolve to one where the two men were partly managing the business together and partly managing separate parts. 12

[35] Mr. Preston then advised the Applicant on 28 October 2014 that Mr. Zappelli had decided to make the role of the Applicant redundant. When the Applicant asked why his role was being made redundant, Mr. Preston replied, “Mr. Zappelli only wants to pay one salary”. 13 The Applicant believed that Mr. Preston was still engaged as a consultant when he left.14 The Applicant was told by Mr. Preston that his redundancy was immediate and he was not to come back to work from that day.15

[36] There was no other discussion with the Respondent about the alleged redundancy and the reasons for it other than that described above with Mr. Preston. Indeed, the Applicant believes that had he not attended the office the following day, 29 October 2014, and confronted Mr Zapelli and Mr Preston, he would not have received his entitlements and documentation. 16

[37] Subsequent to the termination of employment, an email was distributed to all of the Respondent’s staff dated 31 October 2013 from Doug Zappelli which read as follows:

“I wish to inform all employees that I am stepping aside from the day to day management of Dimmeys. Whilst the Zappelli family continues to own Dimmeys, I feel it is appropriate to spend more time on my other business ventures and pass the management of Dimmeys onto Peter Preston. If at any time anyone needs to contact Luke or I on any matter, please feel free to do so. Doug - [phone number removed], Luke [phone number removed].

Peter will work within Dimmeys in all facets of the business and he will explain that in more detail via a separate email. As part of this restructure, Mark Angwin has been made redundant and finished up on Tuesday. I thank Mark for his commitment and for the hard work he has put in during his time with us and wish him the best for his future.

I wish to reassure everyone that this is a very positive and exciting change for Dimmeys. Peter has a great deal of experience in both retail and importing and is fully committed to working with our team to identify problems and to find the right solutions.”

[38] A new organisational chart was produced subsequent to the email. The new organisational chart is virtually identical to the organisational chart that existed during the Applicant’s employment. However, the new organisational chart has a position for “CEO” and that position is held by Peter Preston. Previously the organisation chart had a position of “General Manager” held by the Applicant. It is clear from viewing the two organisational charts that all of the positions and the reporting relationships, including those of Mr. Zappelli are unchanged except for the change in title from “General Manager” to “CEO” and of course the change from the Applicant’s name to Mr. Preston. As the Applicant put it during the proceedings: “…Preston is the person now that’s on the chart where my name was, in a different title, and everyone else took reporting into him as it was with myself”. 17

[39] The organisational charts lend support to the proposition that the position the Applicant held is not redundant as the job is still being performed by someone, that is, Mr. Preston. While the role is re-titled from “General Manager” to “CEO” 18 there is virtually no other change.

[40] The Applicant speculated on the reasons for his alleged replacement by Mr. Preston as follows: “So Zappelli…was obviously putting Preston in to run the business, and to remove me, for whatever reason. Maybe it’s a long standing relationship they have; I don’t have that relationship with him. Perhaps Peter sold him something else that he had, that I didn’t have.” 19

Was the Applicant’s dismissal a case of genuine redundancy?

[41] A persons dismissal is a case of genuine redundancy if the persons employer no longer required the persons job to be performed by anyone because of changes in the operational requirements of the employers enterprise (see section 389(1)(a)). The onus is on the employer to prove that, on the balance of probabilities, the redundancy was due to changes in operational requirements. 20

[42] In this case, the Respondent has not appeared. I only have the evidence of the Applicant. The Applicant was cogent and forthright in his evidence and I have no reason to doubt the evidence he has given. On the evidence of the Applicant it is patently clear that Mr. Preston, while he may have initially been engaged as a consultant for another purpose, has taken on the function, duties and responsibilities entrusted to the applicant. 21

[43] The renaming of the position to “CEO” does not mean that the “job” of the Applicant is not being performed. The email from Mr. Zappelli refers to a “restructure” and that he intends to “step aside from the day to day management of Dimmeys” and pass the management onto Peter Preston. However, the fact that the organisational charts supplied by the Applicant are identical but for the change from the Applicant as “General Manager” to Mr. Preston as “CEO” suggests that there has been no restructure. In fact, the position of Mr. Zappelli remains the same in both organisational structures.

[44] There is no evidence to support a finding, on the balance of probabilities that the redundancy was due to changes in operational requirements. Rather, it would appear that Mr. Preston spent some time in the business working at the side of the Applicant before simply replacing him. For these reasons, I am not satisfied that this was a case of genuine redundancy.

[45] I note that there was no modern award or enterprise agreement that applied to the Applicant and accordingly no obligation to consult about the purported redundancy.

[46] The Applicant’s evidence is that when he confronted Mr. Preston and Mr. Zappelli the day after he was dismissed to look for further explanations, Mr. Zappelli asked Mr. Preston why the Applicant was still there and suggested he call the police. 22

Was the dismissal harsh, unjust and unreasonable? (s.385(b))

[47] As set out above, the criteria for considering whether a dismissal was harsh, unjust or unreasonable is set out in s.387 of the Act.

Section 387(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);

[48] Having found that this was not a case of genuine redundancy, there was no valid reason for the dismissal in evidence.

Section 387(b) - whether the person was notified of that reason.

[49] The Applicant was notified of the reason for the dismissal on the day that he was dismissed.

Section 387(c) - whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person.

[50] For the Commission to have regard to whether an employee has been given an opportunity to respond to the reason for the dismissal there needs to be a finding that there is a valid reason for the dismissal.²³ In this case, I am not satisfied that there was such a reason.

Section 387(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.

[51] The Applicant did not suggest that he requested a support person. This is a neutral consideration.

Section 387(e) - if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal.

[52] There is no evidence that the dismissal related to unsatisfactory performance.

Section 387(f) - the degree to which the size of the employer’s enterprise would be likely to impact on procedures followed in effecting the dismissal and Section 387(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

[53] The Respondent is a business employing more than 500 employees. The Applicant gave evidence that there was an on-site legal advisor who played a role in the termination. There was also a HR/payroll person employed. Accordingly I consider that there was sufficient expertise in the enterprise to properly manage the dismissal. This is a neutral consideration.

Section 387(h) - any other matters FWA considers relevant.

[54] There are no other considerations.

Conclusion as to the nature of dismissal

[55] I am not satisfied there was a valid reason for the dismissal. There was a total lack of process followed in effecting the dismissal.

[56] For the reasons set out above, I find that the Respondent did not have a valid reason to dismiss the Applicant from his employment. He was notified of the reason but as I have found that the Applicant was not in fact redundant, there is no valid reason. I have considered the size of the Respondent’s enterprise and the fact that it did have some level of human resources and legal expertise. The evidence supports that there was in fact some level of expertise.

[57] In all of the circumstances I find that the dismissal was harsh, unjust and unreasonable.

Remedy

[58] The relevant provisions of the Act pertaining to remedy are contained in s.390 of the Act and have been reproduced already above.

[59] It is also necessary to consider the Objects of Part 3-2 of the Act especially s.381(c) of the Act which provides that an Object of that Part of the Act is to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

[60] The presumption in the legislation is that should a dismissal be found to be unfair, that reinstatement is the primary remedy and that compensation is a secondary consideration if reinstatement is not appropriate.

[61] In this matter, the Applicant does not seek reinstatement. He thinks that there are issues of trust with the Respondent and that returning to work there, “...probably wouldn’t work”. Therefore reinstatement in the circumstances of this case is not an appropriate remedy.

[62] Having determined that reinstatement is not appropriate I must consider what compensation, if any, is payable, in lieu of reinstatement.

[63] The Act provides for compensation as a remedy for unfair dismissal. Section 392 of the Act has already been reproduced above.

[64] In all of the circumstances, I consider that the award of some amount of compensation is appropriate in this matter.

[65] In determining the amount of compensation, I must have regard to “all the circumstances of the case” including each of the paragraphs in s.392(2) of the Act as set out above. No one matter is paramount but regard must still be had to each of them.²⁴

[66] The general approach to the calculation of compensation was well set out by the Full Bench in Tabro Meat Pty Ltd v Kevin Heffernan²⁵ and I will follow that approach in determining this matter.

Section 392(2)(c) - the remuneration that the person would have received or would have been likely to receive, if the person had not been dismissed.

[67] The Applicant’s annual earnings were dealt with earlier in the decision in my consideration of whether the applicant was below the low income threshold. The applicant’s annual remuneration was $112 981.33 plus 9.25% superannuation. I will use this amount as the basis for calculating the amount of compensation to be awarded in this case.

[68] I have no submissions from the Respondent as to how long it was expected the employment relationship would have continued were it not for the dismissal taking place. When the Applicant was asked by me, were it not for the dismissal, how long he expected to continue working for the respondent, he replied as follows:

“Were it not for the dismissal, how long did you expect to continue working?---I'd still be there today. My employment history shows that I am usually at one business for an average of five years, and that was my expectation of Dimmeys. I had great plans, in terms of how to refurbish the business, how to drive sales, how to motivate and inspire people who live in a kind of very unusual environment, due to the way Zappelli runs the business. I was confident that it's a niche in the retail industry, and there is a market for it, for products, and there's a lot of goodwill for the business. So I was very optimistic about the future of the business. But it required a lot of work, a lot of change, and that's what I'm good at.” 26

[69] I have no reason to not accept the evidence of the Applicant on this point. I think it is reasonable to assume that, but for the dismissal, that in all of the circumstances the employment relationship would have continued for a further period of 4 years, considering the applicant had already completed a little over 8 months employment with the Applicant.

[70] Accordingly, I calculate the remuneration that the Applicant would have received or would have been likely to receive, if his employment had not been terminated, at $112,981.33 x 4 = $451,925.32 plus 9.25% superannuation.

Section 392(2)(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 s.392(2)(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

[71] In the circumstances of this matter, subsections 392(2)(e) and 392(2)(f) can be dealt with together. The Applicant was unemployed from the date of his termination (28 October 2013) until 2 January 2014, a period of approximately 2 months. From 2 January 2014 until 1 April 2014, approximately 3 months, the Applicant was employed with Bevilles on a base salary of $165,000.00. On the 1 April 2014, the Applicant was made redundant by Bevilles as they were going into voluntary administration. Therefore, the remuneration earned by the Applicant at Bevilles was $41,250.00. At the time of the hearing of this matter on 11 April 2014, the Applicant remained unemployed but felt that his prospects of gaining employment in the future over the next four years were good though he expected in the current job market that he would be lowering his expectations of salary to something in the order of $110,000.00 per annum. However, the Applicant was clear that he expected to face difficulty in securing any employment in the next four to six months as there is very little around in terms of the retail roles that he is suited for and that a lot of roles don’t open until the new financial year. 27

[72] The evidence of the Applicant in respect to this matter was, as it was throughout the hearing carefully considered and credible. Having considered the evidence of the Applicant, I am satisfied that the Applicant is likely to return to employment on a salary of $110,000.00 within the four year period from the date of cessation of his employment. However, I also accept that it is likely that the Applicant will remain unemployed for four months from the date of cessation of employment with Bevilles.

[73] This means the calculation of the amounts for the purposes of this provision is as follows. The Applicant earned $41,250.00 from Bevilles over 3 months. It is expected that the Applicant will earn $110,000.00 per annum for the remaining 3 years and 3 months of the four year period, an amount of $357,500.00. Adding this to the remuneration already earnt at Bevilles sums to $398,750.00.

[74] In Ellawalla v Australian Postal Corporation²⁸, with respect to a precursor provision, the Full Bench stated that “[o]nly monies earned during the period from termination until the end of the anticipated period of employment are deducted”.

[75] A deduction is therefore appropriate of $398,750.00 representing the monies earned or likely to be earned during the period from termination until the end of the anticipated period of employment. This deduction results in an amount of $53,175.32 gross plus 9.25% superannuation.

Section 392(2)(g) - any other matter that FWA considers relevant

[76] Ordinarily a deduction for contingencies is appropriate.²⁹ Contingencies only apply to the anticipated period of employment. In this matter, the Applicant has been realistic and considered in his assessment of future prospects for future employment and this weighs against a significant deduction for contingencies. However, the period of four years under consideration is a reasonable period of time and it is necessary to make some deduction for contingencies. I have determined to deduct 10% for the contingencies in this matter from the amount of $53,175.32. This leaves an amount of $47,857.79.

[77] There are no other matters that are relevant to the determination of compensation other than ss.392(2)(a),(b) and (d), 392(3) and 392(5) of the Act. I will turn to those factors now.

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

[78] Evidence should be produced in order for the Commission to properly consider this issue. As there is no such evidence, I do not accept the award for compensation will affect the viability of the Respondent.

Section 392(2)(b) - the length of the persons service with the employer

[79] The Applicant was employed by the Respondent for a little over 8 months. This is a short period of service and should be a consideration in the amount of compensation ordered. In light of the short period of employment, I think it is appropriate to deduct a further amount of 10% from the amount of $47,857.79. This leaves an amount of $43,072.01.

Section 392(2)(d) - the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[80] Evidence was provided by the Applicant as to the efforts he went to in the period after the dismissal to secure alternative employment. His evidence was that he made extensive efforts to secure employment using recruitment firms and on line networks such as Linked-In. I am satisfied that the Applicant made reasonable efforts to mitigate the loss and there is no basis for a further deduction for this reason.

Misconduct (s.392(3))

[81] I have found that the Applicant was not dismissed for a valid reason and that no misconduct was in evidence. Therefore there is no basis to make a further deduction for misconduct.

Compensation Cap (s.392(5))

[82] The compensation cap is set in section 392(5) of the Act. The amount ordered to be paid 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.

[83] In this case, the amount of remuneration received by the person for 26 weeks is $56,490.66. Half the amount of the high income threshold is $64,650.00. The lesser amount that acts as the compensation cap in this matter is the amount of $56,490.66. As the amount of $43,072.01 plus 9.25% superannuation is below the applicable compensation cap, no further deduction is required.

Conclusion and order as to remedy

[84] I find that reinstatement is not an appropriate remedy in this case.

[85] I find that an order for compensation is appropriate.

[86] I am satisfied that an order for payment of compensation by the Respondent of $43,072.01 gross plus 9.25% superannuation less tax as required by law, to the Applicant in lieu of reinstatement is appropriate in all the circumstances of the case. It accords a fair go all round to both the Respondent and the Applicant. The compensation payment, less any required deduction in taxation, is to be made within 14 days of this decision. An order³⁰ will be issued concurrently with this decision.

COMMISSIONER

Appearances:

M Angwin representing himself

No appearance from Respondent

Hearing details:

2014

Melbourne:

April 11

 1   PR940508

 2   PN32

 3   PN37

 4   Rofin Australia Pty Ltd v Newton (1997) 78 IR 78, 82; citing Condon v G James Extrusion Company (1997) 74 IR 283

 5   Kunbarllanjnja Community Government Council v Fewings (unreported, AIRCFB, Ross VP, Watson SDP, Bacon C, 7 May 1998) Print Q0675

 6   Kunbarllanjnja Community Government Council v Fewings (unreported, AIRCFB, Ross VP, Watson SDP, Bacon C, 7 May 1998) Print Q0675

7 Section 385(b) of the Act

 8   See Exhibit A1

 9   PN54

 10   Exhibit A2

 11   PN65

 12   PN68

 13   Exhibit A2

 14   PN70

 15   Exhibit A2

 16   Exhibit A2

 17   PN78

 18   PN89-90

 19   PN65

 20   Kieselbach v Amity Group Pty Ltd (unreported, AIRC, Hamilton DP, 9 October 2006) PR973864 [34]

 21   Jones v Department of Energy and Minerals (1995) 60 IR 304, 308

 22   PN93

23 Chubb Security Australia Pty Ltd v Thomas (unreported, AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) Print S2679 [41].

24 Tempo Services Limited v T.M. Klooger and Others, PR953337, [22]

25 [2011] FWAFB 1080.

 26   PN100

 27   PN103-112

28 Print S5109.

29 Slifka v J W Sanders Pty Limited (1995) 67 IR 316 at 328.

30 PR552530

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