Miss Jessica McCormack v Goldbreak Holdings Pty Ltd T/A the Local Shack

[2018] FWC 2362

[2018] FWC 2362

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Miss Jessica McCormack
v
Goldbreak Holdings Pty Ltd T/A The Local Shack
(U2017/13326)

DEPUTY PRESIDENT BEAUMONT PERTH, 30 APRIL 2018

Application for an unfair dismissal remedy.

[1] On 14 December 2017, Goldbreak Holdings Pty Ltd T/A The Local Shack (Local Shack) dismissed Miss Jessica McCormack (Ms McCormack) for serious misconduct. Subsequently, on 15 December 2017, Ms McCormack made an application to the Fair Work Commission (the Commission) for a remedy in respect of her dismissal (the Application).

[2] At the time of her dismissal Ms McCormack was employed as a Second in Charge (2IC) at the Local Shack located in Scarborough, Western Australia. The Local Shack dismissed Ms McCormack because it said she had engaged in deliberate acts of negligence, failure to follow reasonable and lawful direction, and bullying.

[3] I have taken into account each of the matters specified in s.387 of the Fair Work Act 2009 (Cth) (the Act) and I am satisfied that the Local Shack did not have a valid reason for dismissing Ms McCormack and that the dismissal was unfair within the meaning of the Act. I consider that reinstatement is not an appropriate remedy in this case and that compensation is appropriate in the amount of $8,167.15 less applicable taxation as required by law. My reasons for reaching that conclusion are set out as follows.

Background to the hearing

[4] Mr Brad Wright (Mr Wright) represented the Local Shack in these proceedings and did not participate in the initial conciliation conference. Notwithstanding attempts to contact the Local Shack’s representative, the Local Shack did not file an Employer Response and failed to comply with the direction to file an Outline of Submissions, Statement of Evidence and Document List by Monday, 19 March 2018.

[5] With regard to the Employer Response my Chambers had observed a file note of a telephone conversation between the case manager and the Local Shack regarding the completion of the Employer Response Form F3, in which a staff member of the Local Shack stated ‘that’s more work for me’ and that the Commission was ‘not gonna receive a letter from me’.

[6] After contact from my Chambers, Mr Wright decided to participate in a Mention on 28 March 2018. However, the representative of Ms McCormack was delayed and did not respond to the call from Chambers in a timely manner. It followed that Mr Wright ended the call noting that he had another commitment but not elaborating further save to say it was private.

[7] My Chambers thereafter wrote to the parties informing them that a Mention would be listed for Tuesday, 3 April 2018. In response Mr Wright informed my Chambers ‘we are not available now until April 24^th’ notwithstanding that the matter was listed for hearing on 11 April 2018.

[8] My Chambers wrote back to the Local Shack stating that in the absence of cogent reasons explaining the sudden unavailability and why the Commission was not notified earlier, the Mention would go ahead. Nothing was heard from the Local Shack.

[9] The Mention was held and despite calling Mr Wright twice he did not answer. Following the Mention further directions were issued to the parties. The Local Shack did not comply with the further directions and did not present for the Hearing. My Chambers did not receive a request for an adjournment and despite calls made, and emails sent, to the Local Shack on 19 March, 22 March and 3 April 2018, no response to the directions was forthcoming.

[10] The object of Part 3-2 of the Act is to establish a framework for dealing with unfair dismissal that balances the needs of business (including small business) and the needs of employees. Further, the procedures set down are to be quick, flexible and informal, thus addressing the needs of both employers and employees. A fair go all around is to be accorded to both the employer and employee concerned 1.

[11] Having considered the object of Part 3-2 and having provided ample opportunity for the Respondent to file relevant documents in addition to alerting the Respondent that should it be unavailable for hearing an application for an adjournment must be made, the hearing proceeded as listed although the Respondent was absent.

Background to Ms McCormack’s dismissal

[12] Ms McCormack started with the Local Shack in May 2017 as a part-time waitress at their Joondalup venue. Thereafter she was promoted to the 2IC role, was transferred to the Local Shack located in Scarborough and assumed the position of Acting Venue Manager after the previous Venue Manager was dismissed.

[13] The Local Shack is a restaurant business and Ms McCormack’s role initially was to wait on tables. When promoted to a 2IC she would open and close the store, direct the bar and wait staff regarding their duties and ensure that the front of house worked smoothly over the course of a shift. When acting as Venue Manager her duties included rostering.

[14] There was no written employment contract between Ms McCormack and the Local Shack. However, Ms McCormack said that she was employed as a permanent employee. She had simply been interviewed by Mr Wright, and after a successful interview worked anywhere in the vicinity of 40 to 100 hours a fortnight. As a 2IC Ms McCormack said she was paid an hourly rate of $25.00 per hour.

[15] In early December 2017, Mr Wright had asked Ms McCormack to move from Joondalup to the Scarborough location as he purported having a few staffing problems. On her first shift at Scarborough, Ms McCormack was promoted to a 2IC and by that evening she assumed that she was the Acting Venue Manager given that Mr Wright had dismissed the current Venue Manager that day.

[16] Ms McCormack’s evidence was that she knew she had been promoted when the current Venue Manager walked out of the restaurant and informed Ms McCormack that she had been fired. Shortly after Mr Wright was said to have met with Ms McCormack to complete paperwork for her to work in the Venue Manager position.

[17] As Venue Manager, Ms McCormack became more involved in ordering stock, arranging rosters, and a lot of ‘behind the scenes stuff’. Ms McCormack said that she held the Acting Venue Manager position for approximately 2 weeks until a replacement was found.

[18] Approximately three days after reverting back to the 2IC position Ms McCormack’s employment was terminated. She had been rostered to work on the afternoon of 14 December 2017, starting her shift at 1500hrs. Earlier in the day she received a phone call from Mr Wright informing her that the bartender had not presented for her shift. Ms McCormack noted that rostering and finding replacement staff was now the responsibility of Carl the new Venue Manager, not her.

[19] Mr Wright asked Ms McCormack where the bartender was, to which Ms McCormack confirmed that she was not sure but would follow it up. Ms McCormack said that she sent two text messages to the bartender and called her twice. She then informed Mr Wright that she received no response.

[20] Having advised the Venue Manager on Whatsapp that she could not get in touch with the bartender, Ms McCormack said that the Venue Manager said to her that he would sort it. Ms McCormack understood from what was said to her that the Venue Manager would get another staff member in to cover.

[21] Approximately an hour (1130hrs) later Ms McCormack received a phone call from Mr Wright who asked her where she was. Ms McCormack gave evidence that Mr Wright said ‘where the fuck are you’ and she replied that she was at Joondalup and that she did not start her shift until 1500hrs. Ms McCormack tendered into evidence hand written notes that stated:

Brad: Are you fucking serious why aren’t you at work.

Jess: I wasn’t told I had to come into work.

Brad: So when I told you …. you didn’t say you would drop everything and come in.

Jess: No I never said that I said I would contact Mallie and see where she was. I then contacted Karl and Thought he was going to sort it out as he said Alan may come in.

Brad: So when I told you we were understaffed you went to the gym.

Jess: Yes no one told me I had to go into work and I do have a life as well Brad.

Brad: How dare you what type of leader are you, this is showing no teamwork and no leadership.

Jess: Brad no one told me I had to be at work or go in. I thought it had been sorted. I didn’t find out until half an hour ago no one could go in … 2

[22] The discussion with Mr Wright continued and Ms McCormack said that she informed Mr Wright that she was going to drop everything and would go into work. In addition, Ms McCormack said she would try and find out where the bartender was for him. Ms McCormack gave evidence that she considered the demeanour of Mr Wright to be aggressive and the conversation ended, having decided to just ‘let it be’.

[23] Ms McCormack left Joondalup and went to the Local Shack in Scarborough. On the way she received a phone call from the Scarborough Venue Manager wanting to know why she had been removed off the WhatsApp Group Chat that the Local Shack used.

[24] All management employed at the Local Shack were said to have been included on a Group Chat on WhatsApp. The Group Chat was used to report figures throughout the day and to allow for basic communication. Each store had their own Group Chat and the Management team had a separate Group Chat.

[25] When asked by the Venue Manager why she had been removed from the Group Chat and if she even knew she had, Ms McCormack said she informed the Venue Manager that she had no idea whatsoever.

[26] Ms McCormack arrived at the Scarborough restaurant at approximately 1200hrs, 3 hours before her rostered shift. She said that she was expecting to see Mr Wright there and on observing his absence she made a phone call to him and sent a text.

[27] Having called Mr Wright he responded to her query by informing her that her services were no longer needed. Ms McCormack said she asked why her employment had been terminated and was advised that she was no longer needed. Ms McCormack left the restaurant some 15 minutes later.

[28] While working for Local Shack, Ms McCormack cannot recall having ever been spoken to about not performing tasks, acts of negligence of workplace bullying. Notwithstanding, having emailed the Human Resources email address for a copy of her separation certificate and termination letter, Ms McCormack learned that she had been dismissed for:

Serious Misconduct; deliberate acts of negligence, failure to follow a reasonable and lawful direction, and a bullying claim 3.

[29] Ms McCormack was not provided with a notice period or payment in lieu of notice. This much was evinced from the payslips she provided as evidence 4. Further, she was informed in the letter of termination that her dismissal was by way of summary dismissal5. It is observed that Ms McCormack’s letter of termination was dated 21 December 2017 however her evidence was that she received the letter in January 2018 having requested it.

[30] Having departed the Local Shack, Ms McCormack said that she had been actively looking for work and had secured a position with Hays Recruitment which would see her undertake utility duties at a remote site in the Pilbara. The position was a fly in fly out role and Ms McCormack, while uninformed of her start date, was to complete an online induction for the position within the week of the hearing.

CONSIDERATION

[31] In the absence of a contradictor, I can only but be satisfied on the evidence before me that:

(a) Ms McCormack is a person protected from unfair dismissal because, at the time of his dismissal, she had completed a period of employment with the Local Shack of at least the minimum employment period, and a modern award applied 6 to Ms McCormack in relation to her employment7;

(b) Ms McCormack was dismissed by the Local Shack 8;

(c) Ms McCormack’s dismissal was not a case of genuine redundancy 9;

(d) Ms McCormack’s Application was made within the period required 10; and

(e) The Local Shack was not a ‘small business employer’ as defined in s.23 of the Act, so the Small Business Fair Dismissal Code was inapplicable 11.

[32] Ms McCormack’s annual rate of earnings was less than the high income threshold and it was not apparent on the evidence before me that Ms McCormack was employed on a casual basis.

Matters in dispute

[33] While it may be the case that the Local Shack disputes that Ms McCormack was unfairly dismissed I have neither evidence nor submission to support its case. Therefore, I turn my consideration to the various matters that must be taken into account when considering whether a dismissal was harsh, unjust or unreasonable and note the absence of evidence from the Respondent.

Valid reason for the dismissal – ss.387(a)

[34] When determining if a dismissal was unfair the Commission must take into account whether there was a valid reason for dismissal relating to the employee’s capacity or conduct 12.

[35] Where the reason for termination of employment relates to an employee’s capacity or conduct, it is not the Commission’s function to stand in the shoes of the employer and determine whether or not the decision made by the employer was a decision that would be made by the Commission. It is rather for the Commission to assess whether the employer had a valid reason connected with the employee’s capacity or conduct 13.

[36] The reasons considered are the employer’s ‘reason(s)’ 14. The Full Bench in B, C, and D v Australia Postal Corporation T/as Australia Post15 (Australian Postal Corporation) stated:

[34]... In a misconduct case, the Commission is concerned with whether the misconduct in fact occurred, not with whether the employer has reasonable grounds to believe that it occurred (eg. Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201, Sherman v Peabody Coal Ltd (1998) 88 IR 408; Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1).

[35] Subject to that, as indicated by Northrop J in Selvachandran, “valid reason” is assessed from the perspective of the employer and by reference to the acts or omissions that constitute the alleged misconduct on which the employer relied, considered in isolation from the broader context in which they occurred. It is the reason of the employer, assessed from the perspective of the employer, that must be a “valid reason” where “valid” has its ordinary meaning of “sound, defensible or well founded”. As Northrop J noted, the requirement for a valid reason “should not impose a severe barrier to the right of an employer to dismiss an employee”.

[36] A failure to comply with a lawful and reasonable policy is a breach of the fundamental term of the contract of employment that obliges employees to comply with the lawful and reasonable directions of the employer. In this way, a substantial and wilful breach of a policy will often, if not usually, constitute a “valid reason” for dismissal 16.

[37] Therefore, the question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the matter before it. As referred to in Australian Postal Corporation, the test is not whether the employer believed, on reasonable grounds after sufficient enquiry the employee was guilty of the conduct which resulted in termination 17.

[38] The valid reason need not be the reason given to the employee at the time of the dismissal 18 and the reason should not be ‘capricious, fanciful, spiteful or prejudiced’19. It is the case that the provisions must be applied in a practical, common sense way to ensure that the employer and employee are treated fairly20.

Consideration

[39] Based on Ms McCormack’s evidence and in the absence of any evidence to suggest otherwise, it is not apparent that there was a valid reason for Ms McCormack’s dismissal.

[40] While the letter of termination of 21 December 2017 referred to deliberate acts of negligence, a failure to follow a reasonable and lawful direction and a bullying claim there was no evidence before the Commission to substantiate that such events had occurred. There was some apparent confusion regarding staffing on 14 December 2017. From Ms McCormack’s account it would be fair to surmise that Mr Wright was more than perturbed by Ms McCormack’s failure to work earlier on that day when a staff member did not present to work. However, I am not satisfied that the events of 14 December 2017 constituted a valid reason for Ms McCormack’s dismissal.

[41] It logically follows that I find there was no valid reason for the termination of Ms McCormack’s employment.

Notification of the valid reason –ss.387(b) and an opportunity to respond –ss.387(c)

[42] The Commission must take into account whether notification of a valid reason for termination has been given to an employee protected from unfair dismissal before the decision is made 21, and in explicit22, plain and clear terms. It is accepted that this is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality23.

Consideration

[43] It is evident from Ms McCormack’s account that she was not notified of a valid reason for her dismissal before the decision was made. It would appear that Ms McCormack was initially confused why she had been dismissed and her letter of termination only served to increase her confusion given she was unaware of having committed acts of negligence, bullying, or failing to follow lawful and reasonable instruction. Ms McCormack gave evidence that at no time during her employment had these matters been raised with her. I am satisfied that Ms McCormack was not notified of the valid reason and was not afforded an opportunity to respond.

Unreasonable refusal of a support person – ss.387(d)

[44] When considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal.

Consideration

[45] In the circumstances of this case this would appear to be a neutral factor. Ms McCormack was seemingly unaware that her phone call to Mr Wright on 14 December 2017 to ascertain why she had been removed off a WhatsApp Chat Group would culminate in her dismissal. As such there was no opportunity for her to request a support person and it would follow that a support person was not unreasonably refused.

Warnings regarding unsatisfactory performance – ss.387(e)

[46] When considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, if the dismissal related to unsatisfactory performance by the person, the Commission must take into account whether the person had been warned about that unsatisfactory performance before the dismissal.

[47] Unsatisfactory performance is more likely to relate to the employee’s capacity to do the job, than their conduct 24. The Commission must take into account whether there was a period between an employee being warned about unsatisfactory performance, and a subsequent dismissal. This period gives the employee the opportunity to understand their employment is at risk and to try to improve their performance25.

Consideration

[48] This is a neutral factor given that Ms McCormack’s evidence is that performance issues were never raised with her during the course of her employment.

Impact of the size of the respondent on procedures followed and absence of dedicated human resources management specialist/expertise on procedures followed – ss.387(f)-(g)

[49] When considering whether a dismissal was harsh, unjust or unreasonable, the Commission must take into account the degree to which: (a) the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and (b) 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.

Consideration

[50] There is no evidence before me to ascertain the size of the business of Local Shack. While Ms McCormack referred to sending an email to the Human Resources email address, I am no further enlightened regarding whether the Local Shack could avail itself of a dedicated human resource specialist or similar expertise. It is therefore a neutral factor.

Other relevant matters – ss.387(h)

[51] The Local Shack terminated Ms McCormack’s employment absent payment in lieu of notice and informed her via a letter of termination of 21 December 2017 that she was dismissed for serious misconduct.

[52] There is no evidence before me to indicate that Ms McCormack’s conduct while working for the Local Shack constituted misconduct or serious misconduct. In the absence of a valid reason for dismissal it is unequivocally the case that the action of the Local Shack in dismissing Ms McCormack was disproportionate to the conduct found by the Commission.

Conclusion

[53] I have found that there was not a valid reason for dismissal and that the dismissal was unreasonable and harsh. Consequently, my attention now turns to the matter of remedy.

REMEDY

[54] The Act provides the following with respect to remedy:

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.

[55] Subsection 390(3) of the Act underscores the primacy of reinstatement as a remedy for an unfair dismissal.

[56] A decision of the Commission to order a person’s reinstatement is a discretionary decision, 26 exercisable if the Commission is satisfied the person was relevantly protected, the person was unfairly dismissed and the person has made a s.394 application27.

[57] A Commission decision to order the payment of compensation to a person is also a discretionary decision, but is only exercisable if, amongst other things, the Commission is satisfied reinstatement of the person is inappropriate and the FWC considers a compensation order is appropriate in all the circumstances of the case 28.

[58] Section 392 of the Act sets out the criteria to which regard must be had in determining any amount of compensation ordered.

[59] In determining the amount of compensation to be ordered, the Act provides:

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.

(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.

CONSIDERATION

Reinstatement

[60] I am satisfied that Ms McCormack was relevantly protected from unfair dismissal, was unfairly dismissed and has made an application under s.394 of the Act. Perhaps unsurprisingly, she does not seek reinstatement, submitting she has no desire to be re-employed by the Local Shack and simply seeks her 2 week notice period that was not paid.

[61] In all of the circumstances, including those that lead to her dismissal and were traversed, I am satisfied that reinstatement is not appropriate in the circumstances.

[62] I find an order for compensation is appropriate and will consider each of the criteria in s.392 of the Act to determine the quantum of the compensation.

Compensation

[63] The ‘Sprigg Formula’, derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket 29(Sprigg), is the well accepted approach for assessing the amount of compensation under ss.392(2) of the Act. The Full Bench in Bowden v Ottrey Homes — Cobram and District Retirement Villages Inc (t/as Ottrey Lodge)30 (Bowden) adopted the Sprigg Formula in the context of determining compensation under the Act.

[64] In Bowden the approach was described in the following way:

[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’... 31

[65] In Haigh v Bradken Resources 32, the Full Bench reaffirmed the principles set out within Sprigg, and in particular the steps needed to be taken in assessing compensation. The first of those steps is to estimate the amount the employee would have received, or would have been likely to receive if the employment had not been terminated; the second step being to deduct moneys earned since termination; the third being to make deductions for contingencies; fourthly, to calculate any impact of taxation; and fifthly, to apply the legislative cap33.

[66] The Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Alan Humphries 34 stated:

The identification of this starting point amount ‘necessarily involves assessments as to future events that will often be problematic’ 35. Once this first step has been undertaken, various adjustments are made in accordance with s.392 and the formula for matters including monies earned since dismissal, contingencies, any reduction on account of the employee’s misconduct and the application of the cap of six months’ pay. This approach is however subject to the overarching requirement to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case.

[67] The notion of ‘taking into account’ a matter (such as those described in s.392 of the Act) connotes a genuine consideration of the relevant provision and the apportionment of the appropriate weight in the circumstances 36.

Remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

Anticipated period of employment

[68] Ms McCormack has submitted to the Commission that her earnings at the time of dismissal were based upon an hourly rate of $25.00 per hour and that she worked from 40 to 100 hours a fortnight before her dismissal 37. Having reviewed the payslips of Ms McCormack it is evident that she received $25.00 per hour for the period 11 December 2017 until 24 December 2017 and for the period 15 May 2017 until 10 December 2017 she received $20.08 per hour. Before her dismissal, Ms McCormack had resumed the position of 2IC, in light of a Venue Manager having been appointed.

[69] Over the course of 14 pay cycles in the period of 15 May 2017 until 10 December 2017, Ms McCormack earnt an average fortnightly salary that equated to $1356.09 (gross) based on a rate of $20.08 per hour.

[70] The question of the anticipated period of employment can be a particularly difficult issue. However in this case, notwithstanding the letter of termination, there is no evidence to suggest that there was anything other than an expectation of ongoing employment.

[71] While there is a paucity of evidence before me, I am satisfied that Ms McCormack’s employment would have continued for at least 10 weeks of the maximum compensation period. As result I set the anticipated period of employment at 10 weeks.

Notice period

[72] Ms McCormack did not receive payment in lieu of notice and was informed that she was summarily dismissed.

[73] I consider that the Restaurant Industry Award 2010 covered Ms McCormack in her employment. It provides at cl. 16 that the notice of termination is provided for in the National Employment Standards.

[74] The remuneration that the Ms McCormack would have received or would have been likely to have received would include payment for the period worked on notice, or the payment received in lieu of notice 38. Notice is payable at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum notice period, which in this case would have been one week39.

[75] The evidence before the Commission is that preceding her dismissal, Ms McCormack had reverted to her 2IC position from that of Acting Venue Manager. It is apparent, having reviewed Ms McCormack’s payslips, that while a 2IC she attracted earnings of $20.08 per hour.

[76] Having concluded that Ms McCormack was a permanent employee, and having no evidence before me that Ms McCormack had been paid out a notice period, I am satisfied that she is entitled to an amount of compensation that equates to 1 week.

The effect of the order on the viability of the employer’s enterprise

[77] There is no evidence before the Commission regarding the effect of the order on the viability of the employer’s enterprise. It is therefore a neutral factor.

Length of the person’s service with the employer

[78] Ms McCormack had been employed for some 7 months with the Local Shack. A short period of service does not negate the making of an order for compensation.

The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[79] I am satisfied that Ms McCormack has taken steps to mitigate her loss. I have therefore not reduced the amount of compensation ordered in this respect.

The amount of remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation

[80] There is no evidence to show that Ms McCormack has generated remuneration after becoming unemployed on 14 December 2017.

[81] It is noted generally in relation to orders for monetary compensation, that workers’ compensation payments are deducted from such orders, but not social security payments. 40 

Any amount of income reasonably likely to be earned during the period between the making of the order and the actual compensation

[82] Based on the evidence that Ms McCormack provided to the Commission I am satisfied that by 30 April 2017, Ms McCormack will have commenced employment. Ms McCormack’s evidence was that she had been offered work and was to complete an online induction with her prospective employer in the week commencing 9 April 2017.

[83] However, I consider it unlikely that Ms McCormack will generate earnings during the period between the making of the order and the actual compensation.

Misconduct and shock, distress or humiliation

[84] I do not consider there has been any misconduct which would require me to reduce the amount of compensation. I do not include any component by way of compensation for shock, distress or humiliation caused by the manner of the dismissal.

Compensatory cap

[85] The amount of compensation the Commission may order is capped. If the appropriate quantum of compensation initially assessed exceeds that cap then the Commission must reduce the amount to the amount of the cap.

[86] The Act stipulates that the compensation cap is the lesser of:

•  the amount of remuneration received by the person, or that he or she was entitled to receive (whichever is higher) in the 26 weeks before dismissal;

•  half the amount of the high income threshold immediately before dismissal 41.

[87] The high income threshold is defined in s.333 of the Act as an amount prescribed by, or worked out in the manner prescribed by, the Regulations. Regulation 2.13 sets out the manner in which the high income threshold is to be worked out. The steps in Regulation 2.13(3), particularly Step 1 and Step 2, refer to ‘ordinary time earnings’. The Act defines ‘earnings’ such that they exclude contributions to a superannuation fund 42.

[88] Under ss.392(5) of the Act I am obliged to determine the amount worked out under ss.392(6) of the Act. The amount is calculated by reference to the ‘total amount of remuneration’ received by the person or to which the person was entitled (whichever is higher) for any period of employment with the employer during the 26 weeks immediately before dismissal. ‘Remuneration’ is not defined in the Act. Both ss.392(6) of the Act and ss.392(2) of the Act refer to ‘remuneration’ under Part 3-2.

[89] The meaning of ‘remuneration’ has been considered in various iterations of what is now the Act and with regard to differing legislative provisions. What appears clear from the decisions is that the term ‘remuneration’ has adopted a consistent meaning whereby superannuation is included. I have considered that Ms McCormack was entitled to superannuation contributions at 9.5%.

Any other matter that the Commission considers relevant

[90] I consider that there are no other matters that prove to be relevant.

CONCLUSION AND ORDERS

[91] After consideration of the foregoing issues, I find that the Ms McCormack was dismissed and that it was unfair within the meaning of the Act.

[92] I find that reinstatement is not an appropriate remedy in this case and that compensation is appropriate. The calculation for compensation is set out in the following table.

Compensation	Calculation	Gross	Total Gross Amount
Anticipated employment period	10 weeks x $678.05 + $644.15 (superannuation) = $6780.50	$6780.50	$7424.65 (inclusive superannuation)
Notice period	1 week = $678.05 Superannuation at 9.5% = $64.41	$678.05	$742.50 (inclusive superannuation)
Deduct monies for misconduct	$0.00	$0.00	$0.00
Deduct monies earned since termination	$0.00	$0.00	$0.00
Deduction for contingencies	0%	$0.00	$0.00
Calculate any impact of taxation	To be taxed according to law
Apply the compensation cap	Last six months amount of remuneration received by Ms McCormack $19,685.51 + (9.5% superannuation $1,870.12) = $21,555.63 Half the amount of the high income threshold = $71,000	Cap applied
TOTAL	$8,167.15

[93] For the reasons I have given earlier, and on the basis of the calculations there completed, I order that the Local Shack pay to Ms McCormack an amount of $8,167.15 less applicable taxation as required by law. In determining the amount for the purpose of the order I have taken into account all of the circumstances of the case including the criteria set out in ss.392(2) of the Act.

[94] The total amount does not exceed the compensation cap applying at the time of dismissal.

[95] The amount ordered to be paid must be subject to ordinary taxation.

[96] The compensation is paid within 14 days from the date of the accompanying order 43 (as issued simultaneously with this decision).

DEPUTY PRESIDENT

Appearances:

Mr S Shadgett, for the Applicant.

Hearing details:

2018

April

11

<PR606321>

 1 s.381 of the Act.

 2   Exhibit A5.

 3   Exhibit A1.

 4   Ibid.

 5   Ibid.

 6   Restaurant Industry Award 2010.

 7 s.382 of the Act.

 8 ss.385(a) of the Act.

 9 ss.385(d) of the Act.

 10 ss.394(2) of the Act.

 11 ss.385(c) of the Act.

 12 ss.387(a) of the Act.

 13   Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.

 14   Owen Sharp v BCS Infrastructure Support Pty Limited[2015] FWCFB 1033 [25].

 15   [2013] FWCFB 6191.

 16   Ibid [34] – [36].

 17   King v Freshmore (Vic) Pty Ltd [2000] AIRC 1019 [24]; B, C and D v Australian Postal Corporation T/A Australia Post[2013] FWCFB 6191 [34].

 18   Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 377-8.

 19   Ibid.

 20   Ibid as cited in Potter v WorkCover Corporation (2004) 133 IR 458 and endorsed by the Full Bench in Industrial Automation Group Pty Ltd T/A Industrial Automation (2010) 202 IR 17 [36].

 21   Trimatic Management Services Pty Ltd v Daniel Bowley[2013] FWCFB 5160; Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 151.

 22   Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at 151; Previsic v Australian Quarantine Inspection Services Print Q3730.

 23   Royal Melbourne Institute of Technology v Asher (2010) 194 IR 1 14-15.

 24   Annetta v Ansett Australia Ltd (2000) 98 IR 233 237.

 25   Johnston v Woodpile Investments Pty Ltd T/A Hog’s Breath Café – Mindarie[2012] FWA 2 [58].

 26   Ellawala v Australian Postal Corporation, Print S5109 [24].

 27   Gloria Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey [2013] FWCFB 431 [15].

 28   Ibid[16].

 29 Print R0235, (1998) 88 IR 21.

 30   [2013] FWCFB 431.

 31   See also Ellawala v Australian Postal Corporation Print S5109 [34].

 32   [2014] FWCFB 236.

 33 Ibid [10].

 34   [2016] FWCFB 7206 [17].

 35   Smith, Arthur and Kimball, Brett v Moore Paragon Australia Ltd PR942856 [32].

 36   Ms Diane Lewis v Glendale RV Syndication Pty Ltd T/A Glendale Care Bundaberg [2014] FWC 1086.

 37   Exhibit A2.

 38   Mr Anthony Callahan v Graphic Impressions[2014] FWC 437 [106].

 39 Subsection 117(2)(a) of the Act.

 40   Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21, 29.

 41   Subsection 392(5) and (6).

 42 Subsection 332(2)(c) and (4) of the Act; Craig Ablett v Gemco Rail Pty Ltd [2010] FWA 8124.

 43   PR606322

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