Mr Andrew White v The Heran Building Group Pty Ltd
[2020] FWC 5985
•9 NOVEMBER 2020
| [2020] FWC 5985 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Andrew White
v
The Heran Building Group Pty Ltd
(U2020/6024)
DEPUTY PRESIDENT ASBURY | BRISBANE, 9 NOVEMBER 2020 |
Application for an unfair dismissal remedy.
BACKGROUND
[1] Mr Andrew White (the Applicant) applies under s.394 of the Fair Work Act 2009 (the FW Act) for an unfair dismissal remedy in respect of his dismissal by The Heran Building Group Pty Ltd (the Respondent). The application was made on 1 May 2020.
[2] The background to the application can be set out in short compass. The Respondent is a construction company engaged in the residential sector building homes, town homes and apartments. The Applicant was employed as a Draftsperson on a full-time basis from 22 January 2018 until his dismissal on 14 April 2020. The Applicant was paid a weekly wage of $1,752.40 based on an ordinary working week of 40 hours at the hourly rate of $33.81.
[3] On 9 April 2020, the day before the Easter break, the Applicant received an email from the Respondent’s accountant, informing him that due to an overall reduction in workload, he was being given two weeks’ notice of the termination of his employment and that it would end on 24 April 2020. The Applicant attended work on Tuesday 14 April 2020 and when his attempts to meet with a Director of the Respondent were not successful, the Applicant left the workplace on that date and did not return.
[4] The Applicant communicated with the Respondent’s accountant seeking redundancy pay and was subsequently offered “reinstatement of his position” on the basis that he would be working a 22.5 hour week and would be paid under the JobKeeper scheme an amount of $750 per week. The Applicant rejected the offer and again sought redundancy pay which was refused by the Respondent on the ground that it was asserted the Applicant’s position was not redundant. On 24 April 2020, the Respondent’s Accountant sent a further email to the Applicant informing him that as he had not taken up the Respondent’s offer of work “under the JobKeeper situation”, his termination pay was being processed and would be paid to him. It was later asserted by the Respondent that the Applicant had abandoned his employment.
[5] The matter was not resolved in conciliation and was allocated to me for determination. Directions for filing of material were issued and the application was listed for hearing on the basis that there were disputed issues of fact and after considering the views of the parties I determined that it was appropriate to conduct a hearing. Permission was given for the Respondent to be represented by a lawyer on the basis that I was satisfied that there were some issues of complexity involving the manner in which the Respondent had utilised the JobKeeper program and a number of potential jurisdictional issues. The Respondent was represented by Mr Sneddon of Shand Taylor Lawyers.
[6] At the Hearing the Applicant gave evidence on his own behalf. Evidence for the Respondent was given by Mr Stuart Knock, Accountant and Mr Brian Heran, Director. Mr Heran was suffering from flu-like symptoms on the day of the hearing. Given that the matter was listed, the parties were ready to proceed and an adjournment would have caused delay, I permitted Mr Heran to give his evidence by telephone, notwithstanding the objection of the Applicant to this course. I have considered all of the evidence and submissions and summarise below that which is relevant to the issues for determination.
ISSUES IN DISPUTE
[7] Section 396 of the Act requires that four specified matters must be decided before the merits of the application may be considered. The Respondent did not raise any jurisdictional objection to the application. I find that:
(a) the application was made within the period required by s.394(2);
(b) the Applicant was a person protected from unfair dismissal;
(c) the Respondent had some 50 employees when the Applicant was dismissed and was not a “small business employer” as defined in s.23 of the FW Act; and
(d) the dismissal was not a case of genuine redundancy.
[8] I note that the argument that the Applicant abandoned his employment was not pressed as a jurisdictional objection. Further, I note that the Respondent did not press an objection on the basis of asserting that the dismissal was a case of genuine redundancy and on the evidence before me I am not satisfied of this in any event given: the Respondent’s evidence that it is in the process of replacing the Applicant and has intended to do so since the Applicant was dismissed; the lack of consultation with the Applicant before he was dismissed; and the lack of evidence in relation to attempts to redeploy the Applicant. The issues for determination are whether the Applicant was unfairly dismissed, and if so, whether he should have a remedy for his unfair dismissal.
EVIDENCE
[9] Mr Heran’s evidence in relation to the reasons for the Applicant’s dismissal can be summarised as follows. During March 2020, Mr Heran became concerned at the increasing reports of the rapid spread of COVID-19 within Australia. He recalled an increasing number of restrictions being imposed by the Federal and Queensland governments about social distancing, restricting travel arrangements and encouraging people to stay at home.
[10] Mr Heran said that it was not certain what the restrictions meant for the construction industry, as many aspects of a construction project cannot be delivered remotely, and he became concerned about projects being delayed or placed on hold due to government restrictions. These circumstances caused Mr Heran to consider what the effects of COVID-19 would mean for the Respondent’s business and its cashflow. He said he formed the view that the Respondent was at risk of not having enough work for the Applicant to do due to the impact of COVID-19. Accordingly, Mr Heran decided to dismiss the Applicant. Mr Heran did not decide to dismiss any other employees.
[11] At the Hearing, I questioned Mr Heran as to why he determined to dismiss the Applicant only. Mr Heran’s response was as follows:
“THE DEPUTY PRESIDENT: Look, I'm just going to put this proposition to you and invite you to comment. You've got 40-odd employees?---Yes. At any one time. It could vary from - I've got 20 in the office and got about 30 or 40 externally.
So you've got a - you're not a small business, you've got a number of employees. Accepting that you were adversely hit by COVID-19, which I perfectly accept that you were, why, on 9 April, did you zero in on Mr White, and Mr White only, to terminate, due to shortage of work?---Because that's the first part of the company that gets affected. The design department is where everything starts within the company and if there's no designs coming in, no demand for work comes in, there's no work for that department, it dries up. That's the first department that gets hit. Since Andrew was the last person employed in that department, I figured that he should be the first one to go because of the situation, you know what I mean? The other guys, Tony has been there for seven or eight years and Dean's been there for six years and Mr White has been there for two years. So it's last on - unfortunately, the last on the first off.” 1
[12] Mr Heran said that on 9 April 2020, he requested Mr Knock to provide the Applicant with a notice of termination. Mr Knock confirmed that Mr Heran informed him that the reason for the termination of the Applicant’s employment was a reduction in Heran’s workload due to the uncertainty of its projects, because of the effect of the COVID-19 Pandemic. The Applicant said that he received the email on the day prior to his Easter break on 9 April 2020, at approximately 3:30pm. The Applicant was on sick leave on that date and opened the email at approximately 9:30pm. The email was in the following terms:
“Andrew,
It is my sad duty to inform you that the directors have decided to end the working relationship with you.
Please advise that you have now been given 2 weeks’ notice, and will finish up with Heran Building Group P/L on Friday 24th April 2020.
The directors have had to take this action due to a reduction in the overall work load of the Heran Group.
We thank you for your contribution over the last 2 years and wish you well in the future.
Regards,
Stuart” 2
[13] The Applicant said that prior to the dismissal, he had not engaged in any talks with senior colleagues or directors regarding his performance of work. Additionally, he was unsure whether he was to return to work Tuesday 14 April 2020 – after the long weekend. The Applicant decided to return to work on Tuesday 14 April 2020 and was hoping to seek advice as to whether he should continue to work during the remaining two weeks, or whether he was summarily dismissed and should pack up his belongings and leave.
[14] The Applicant said that on 14 April 2020, while in the office, he forwarded an email to Mr Brian Heran, requesting a meeting to gain a better understanding of the situation he was currently in. The Applicant did not receive a response and after waiting three hours, left the workplace and did not return. In relation to why he decided to leave, the Applicant said that the floor on which he works on is an open plan environment and that he could see senior managers of the Respondent and other Heran family members coming in, talking with one another, and looking at him, but no one spoke to him. The Applicant said that this was intimidating and he decided to walk out of the office as believed that he was not going to be treated with “any human decency.” 3 The Applicant said that he did not receive a response from Mr Heran either that day or the next. The Applicant maintained that he remained in the office until 11.30 am.
[15] Mr Heran gave evidence that he was aware the Applicant had attempted to contact him on 14 April 2020 but Mr Heran was not yet in the office, and said the Applicant consequently left at 9:00am without an explanation. In his oral evidence, Mr Heran said that he was busy on 14 April after the long weekend and assumed that as the Applicant was being paid that day, he would remain at the office. Mr Heran also said that he planned to speak to the Applicant later in the day.
[16] On 15 April 2020, the Applicant sent an email to Mr Knock, setting out details of redundancy payments to which the Applicant claimed to be entitled. Mr Knock responded on the same day, stating that he would seek advice from an employer organisation before responding. Mr Knock said that he was informed by the employer organisation that the Applicant was not entitled to redundancy payments. Mr Knock said in this regard that he told the employer organisation that the Applicant would be replaced and could not recall whether he had stated that the Applicant’s employment was terminated due to a shortage of work. 4
[17] On 17 April 2020, Mr Knock spoke with Mr Heran and another Director of the Respondent, who asked that Mr Knock make contact with the Applicant and enquire whether the Applicant would come back to work on reduced hours, because the Company could now pay him because of its eligibility for the JobKeeper program. Mr Knock sent the Applicant an email on 17 April 2020 in the following terms:
“Andrew,
The directors have looked into your situation, and are prepared to offer you the following position with Heran Building Group P/L;
1. Reinstatement of your position, under the direction of Tony Battams
2. You will be re-employed under the JobKeeper program, for a period of 6 months.
3. Your remuneration will be the JobKeeper allowance of $1,500 per fortnight less tax.
4. Your hours will reduce to an average of 22.5 hours per week, based on your former salary rate.
5. Under the Jobkeeper subsidy, there is no Superannuation Guarantee allowance to be paid on your behalf.
We ask that you consider this offer, and should accept these terms, please advise me by return email. Assuming that you accept this offer, can you please liaise with Tony Battams regarding your work times etc. Hoping you can see your way to accepting this offer,
Regards,
Stuart” 5
[18] The Applicant said that the position offered in the email was at a reduced pay compared to what he was originally receiving and said that he felt this was a legal ploy by the Respondent to avoid paying his redundancy entitlements. The Applicant sent an email to Mr Knock on 20 April 2020 declining the offer as follows:
“Morning Stuart,
I refer to your email dated 17th April, 2020. The offer in the email is clearly not a reinstatement of my former position, it is a new position paying less than half of my salary and no superannuation contribution. There is no guarantee that my employment will continue when JobKeeper ends, when I would most likely be dismissed again. The offer protocols are consistent with the termination with no discussion or negotiation with me beforehand and as a result no recognition that living within commuting distance close to the job would be unsustainable.
In my view the offer is a ploy to deny payment of redundancy payments of six weeks salary on the 24 April in accordance with the award. The offer was made only after I forwarded an email dated l5th April,2020 to Stuart Knock asking if redundancy payments were to be actioned.
Your action to terminate my employment by email late Thursday afternoon before Easter without any discussion, counselling or negotiation caused me great anxiety and ruined my planned Easter break.
I returned to the office on Tuesday after Easter to try and find out why the termination happened, requested an interview with Brian and was left sitting at my desk for 3 hours with no response despite there being two of the Heran family in the same room. It was then I walked out of the office as it was clear no one was going to talk to me.
This termination was done in a callous and heartless manner. There was no warning, counselling or negotiation at any time. There has been no recognition of the two years of hard work I have provided the company, I have been treated as a disposable commodity not a human being. As a result, my trust in the management of the company has been irretrievably damaged to the point that I cannot contemplate working again for Heran Building Group.
Please ensure my redundancy payment and other entitlements are transferred on the 24 April 2020.
Regards,
Andrew White”
[19] On 20 April 2020, Mr Knock replied to the Applicant’s email as follows:
“Andrew,
Leaving aside all of the emotive matters that you have raised, the question of redundancy only comes into play, if the position is not being replaced.
My understanding is that this is not the case.
The offer, was for you to return to HBG, and continue your work, at reduced hours, due to these unusual economic times.
I feel that you have misinterpreted the offer put to you on Friday, and I ask that you reconsider your position, and think about the future with HBG.
The offer will remain open for only a short time, as work programs must continue.
Please let me know your thoughts.
Stuart”
[20] Mr Heran’s evidence about these events was that the JobKeeper eligibility rules were not released until mid-April and that upon becoming aware that the Respondent was eligible, he decided to ask the Applicant to come back to work on reduced hours. Mr Heran said that he expected that when the economic uncertainty lifted, the Applicant would resume his normal working arrangements. In his oral evidence, Mr Heran said that he applied for, and received, JobKeeper payments for all eligible employees. In all cases, Mr Heran used the JobKeeper payment to top up wages for employees so that they worked their usual hours and maintained their wages. Mr Heran accepted that this is not what he offered the Applicant and that had the Applicant accepted the offer, he would have been the only employee on reduced hours and wages. In this regard, I had the following exchange with Mr Heran:
“You can agree or disagree with this, but when you offered Mr White a job, on the JobKeeper arrangement, he would have been the only employee in the whole company on JobKeeper who was getting less than his normal salary and working less than his normal hours?---That's due to because his department is the first hit in the event of a downturn. It's unfortunate that his department is the first, on the frontline, that's going to be effected, and that will filter through to the whole of the company eventually, in time. But because the government brought the JobKeeper in, a few weeks after Andrew left, and then supported the Home Builders Grant as well, to stimulate the economy, we've been able to maintain some sort of - keep everybody in employment on full salary because of those two government subsidies. Does that answer your question?
What was offered to the applicant was he would work less than his full-time hours and he would get $1500 a fortnight, or $750 a week. The evidence is that every other employee in the whole company who's on the JobKeeper arrangement is still working their normal hours, getting their normal salary, and you're just using the JobKeeper subsidy to subsidise and you're topping it up, which you're perfectly entitled to do. But from - the applicant appears to be the only one who's been dealt with in that way, in the whole company?---Because, as I was saying, he's the first - Andrew's department or the architectural department is the first to be hit in the downturn.
Well no one else in that department got hit?---It's the first to feel the effects of the downturn.
So no one else in that - - -?---It'll filter through all the other departments eventually, do you know what I mean?
Well, it didn't. It hasn't, has it, Mr Heran, because the other departments - - -?---No, because the government brought in the subsidy then, subsequent to Andrew's dismissal.
All right?---Do you know what I mean? They brought the (indistinct) they brought the JobKeeper in, which was a relief to everybody, the whole of Australia, and still thanking God for it, and then the government's now brought the Home Keeper - so it's kicked things along. It's an artificial stimulus, but it's kicked us along for another six months and we've got to hang on and hopefully the (indistinct) stimulated to go on beyond the six months and indefinitely, hopefully. But Andrew's department was the first to get hit. That's unfortunate but the architectural department was the first to be hit. By the way, if you (indistinct) involved and Andrew then, as the last employed, was the first to go, unfortunately.” 6
[21] Mr Knock also confirmed that this was the case in his oral evidence and when asked why the Applicant was the only employee who would have been working reduced hours and receiving a reduced salary, said that this was the offer that the Respondent’s Directors wanted to put to the Applicant. 7 Under cross-examination it was put to Mr Knock that notwithstanding his evidence that he sought to allay the Applicant’s concerns about the Respondent’s offer, it was not an offer whereby the Applicant was invited to return to work on the same basis as other employees who were in receipt of JobKeeper payments.8
[22] In relation to the Applicant’s alleged abandonment of employment, Mr Knock said that the Applicant did not turn up to work during the period from 14 April 2020 onward, and did not provide Mr Knock with any explanation for why he was not at work. Mr Knock said the Applicant was not due to finish work with the Respondent until 24 April 2020, and he was not aware that the Applicant contacted any of his managers to inform them he would not be attending work during this time.
[23] In his statement, the Applicant said that he was confused as to whether he was required to work his notice period. At the Hearing, the Applicant conceded that he spoke to Mr Knock on 14 April and Mr Knock confirmed that the Respondent wanted the Applicant to work out his notice period. The Applicant further conceded he did not work after 14 April 2020, and in relation to this matter had the following exchange with the Respondent’s representative:
“MR SNEDDON: So why do you say, in your statement, you didn't know whether you should come back to work, when in the termination email Stuart says you're going to finish up on 24 April?---I have never received a termination notice and, clearly, there's no direction, apart from 'And will finish up with Heran Building Group'. It doesn't - it doesn't state that anything apart from - any other instruction to it. I mean, correct me if I'm wrong, but, 'And will finish up', I mean whether that means two weeks in lieu, if that's the right word, or if I'm to attend the office. I mean I'm pretty sure there could have been some other direction stated there, from Stuart Knock, into what 'Will finish up' means.
Right. So then you say between 11 and 11.20 am you left the workplace?---Yes.
Right. And you never returned to the workplace?---No.
…
That's not withstanding the fact that you've just described work that you were doing between 8.35, say, and 11.20, and it's notwithstanding the fact that you were told that Brian wanted you to work out your notice period, do you agree?---Yes, I agree. Yes.” 9
[24] The Applicant put to Mr Knock that nowhere in the termination letter was he notified that he was required to work out his notice period, and that no clear direction was given that he work the notice period. Mr Knock rejected this and said that the Applicant should have understood from the termination letter that he was expected to work until 24 April 2020. 10 In response to questions from me, the Applicant maintained that he left the work place because he felt intimidated but also said that he also left because he felt that he needed to hold onto some dignity after his request for a meeting was not responded to within three hours.11
[25] Mr Knock said he considered the Applicant’s actions to be an abandonment of his employment. Mr Heran said that at some point after 14 April 2020, Mr Knock informed him the Applicant had not returned to work since 14 April 2020 and had not contacted him to let him know why he absent from work. Mr Heran said that on 22 April 2020, he directed Mr Knock to proceed on the basis the Applicant did not wish to accept the Respondent’s offer and his employment had come to an end.
[26] Mr Knock said that he emailed the Applicant on 22 April 2020 and advised him that as he had not heard from him, the Respondent had concluded he did not wish to work for the business anymore and Mr Knock would process his termination pay, subject to the final approval of the directors. Mr Knock also advised that the Respondent would be advertising for the Applicant’s position, and the Applicant was advised they would accept an application from him. The email was in the following terms:
“Andrew,
As we have not heard from you since my last email, we can only conclude that you have decided not to take up our offer of work under the Jobkeeper situation.
Therefore, we will commence advertising for your replacement, and we will gladly accept an application from yourself.
Your final pay is being made up today, and just requires the Directors to approve this payment – which should happen tomorrow morning.
I will advise you when it has been sent to your nominated bank account.
All the best for the future,
Stuart”
[27] Mr Heran and Mr Knock said the Applicant’s termination pay and final pay was processed on 23 April 2020, and the Applicant was provided with a copy of his final payslip and employment separation certificate. Mr Heran also said that the Applicant’s position has not been replaced but it is his intention to employ a person to fill that position. Mr Heran did not clearly state whether the role that he was intending to fill was the same role as was held by the Applicant and indicated that the salary of the replacement employee may be similar or less than that paid to the Applicant. 12
[28] The Applicant submitted that he should be awarded the maximum compensation of 26 weeks pay as well as his entitlements under the National Employment Standards and the Award to six weeks of redundancy pay. The Applicant further submitted that the position he was offered was misleading and was not equivalent to the position he held before his dismissal.
LEGISLATIVE PROVISIONS CONCERNING UNFAIR DISMISSAL
[29] In deciding whether a dismissal was unfair on the grounds that it was harsh, unjust or unreasonable, the Commission must consider the criteria in s.387 of the Act which are:
(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.”
[30] The matters in s.387 go to both substantive and procedural fairness and it is necessary to weigh each of those matters in any given case, and decide whether on balance, a dismissal is harsh, unjust or unreasonable. A dismissal may be:
Harsh - because of its consequences for the personal and economic situation of the employee, or because it is disproportionate to the gravity of the misconduct;
Unjust - because the employee was not guilty of the misconduct on which the employer acted; and/or
Unreasonable - because it was decided on inferences that could not reasonably have been drawn from the material before the employer.13
[31] I turn now to consider these criteria on the basis of the evidence and submissions in relation to the dismissal of the Applicant.
CONSIDERATION
Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?
[32] Section 3878(a) of the FW Act requires that the Commission consider whether there was a valid reason for a person’s dismissal related to the person’s capacity or conduct. In the present case, the reason for the Applicant’s dismissal was not related to his capacity or conduct and accordingly, the criteria in s. 3878(a) is not relevant. In reaching this conclusion, I note that while asserting that the Respondent believed the Applicant abandoned his employment, the Respondent does not submit that this constituted a valid reason for the Applicant’s dismissal. It could not be seriously argued that the Applicant did abandon his employment or that the Applicant’s employment terminated by abandonment.
[33] In this regard, the Respondent at no stage queried the Applicant on his failure to attend work during his notice period. There was no direction that he attend work and the proposition that he had abandoned his employment was not put to the Applicant before the email of 22 April confirming the ending of the Applicant’s employment. Further, the Applicant and the Respondent continued to exchange correspondence regarding the offer of work under JobKeeper throughout this period.
[34] Ultimately, the Respondent relies on the COVID-19 Pandemic and concerns of its Directors about its impact, as the reason for dismissing the Applicant. Whether this was a valid reason for his dismissal is a matter that I will consider under the criteria in s. 387(h).
Was the Applicant notified of the reason for his dismissal?
[35] Section 387(b) requires that the Commission consider whether the person who was dismissed was notified of “that reason”. It is apparent that the relevant reason is the reason referred to in s. 387(a) related to the person’s capacity or conduct. Where a dismissal is not related to capacity or conduct, this criteria is not relevant. However, whether an employee is notified of a reason for dismissal is also a matter that can be considered under s. 387(h).
Was the Applicant given an opportunity to respond to the reason for his dismissal related to his capacity or his conduct?
[36] For the reason that the dismissal of the Applicant did not relate to his capacity or conduct, this consideration is also not relevant in the present case.
Was there an unreasonable refusal by the Respondent to allow the Applicant to have a support person present to assist at any discussions relating to dismissal?
[37] There is no positive obligation on an employer to offer an employee the opportunity to have a support person to assist in discussions relating to dismissal14. The inquiry in s.387(c) is directed to whether any request was unreasonably refused. Notwithstanding that there appears to have been no meeting or discussion concerning the Applicant’s dismissal as the Applicant was dismissed in writing by email, there is no evidence that the Respondent denied the Applicant the assistance of a support person at any discussion which may have occurred concerning his dismissal. To the extent that it is relevant, this factor is therefore a neutral consideration.
Was the Applicant warned about the unsatisfactory performance before the dismissal?
[38] For the reason that the dismissal of the Applicant did not relate to his capacity or conduct, this consideration is also not relevant in the present case.
Did the size of the employer’s enterprise impact on the procedures followed in effecting the dismissal of the Applicant?
[39] The Respondent indicated that at the time of the Applicant’s dismissal, it had 50 employees. It is not a small business and it would be expected that the Respondent would have the capacity to implement proper procedures for effecting the dismissal of an employee.
Did the absence of dedicated human resource management specialists or expertise in the enterprise impact on the procedures followed in effecting the Applicant’s dismissal?
[40] The Respondent submitted that it does not employ dedicated human resources personnel, and the procedures followed by the Respondent in effecting the Applicant’s termination were implemented quickly due to the increasing restrictions announced by the Australian and Queensland government and the economic uncertainty arising from the spread of COVID-19 in Australia. The Respondent argued these circumstances were highly unusual and outside the Respondent’s control.
[41] While I consider that the Respondent’s lack of human resource management specialists and expertise impacted on the procedures followed, but I note the Respondent is not a small business and had the means to access legal advice, including from an employer organisation. I also note that the Respondent employed an Accountant who should have had the capacity to access advice in this regard. Given these circumstances, this is not a matter that excuses the manner in which the Respondent dealt with the Applicant’s dismissal.
Are there any other relevant matters?
[42] In my view there are other matters relevant to whether the Applicant’s dismissal was unfair. The termination letter of 9 April 2020 identifies that the Applicant was dismissed due to a reduction in the overall workload of the business. While I accept that the Respondent suffered adverse impacts as a result of the COVID-19 Pandemic, the Respondent did not provide any evidence of those impacts beyond the statements and oral evidence of Mr Heran and Mr Knock. No financial information was presented, and no specific figures were provided. Mr Heran and Mr Knock gave evidence the Respondent was eligible for JobKeeper, meaning that the Australian Tax Office was satisfied that there had been at least a 30% reduction in business. Mr Knock said that the reduction in the Respondent’s turnover had been in the order of 38%.
[43] Notwithstanding this reduction, at the time the Applicant was dismissed, every eligible employee of the Respondent was receiving their usual salary supplemented by the JobKeeper subsidy. The only employee selected for dismissal was the Applicant and when the Respondent attempted to retract the dismissal and offer the Applicant “reinstatement” it was not on the same terms and conditions as applied to other employees. Had the Applicant accepted the offer, he would have been the only employee subject to a reduction in salary and working hours. There was no evidence to support this approach and I do not accept that the Respondent’s financial position was so finely balanced that the amount of $602.40 which would have been necessary to top up the Applicant’s weekly wage, would have made any real difference to the Respondent’s financial position. There was no reasonable explanation provided by the Respondent’s witnesses in relation to why the Applicant could not have been offered his former wage rate and full time hours when reinstatement was proposed.
[44] I am also of the view that the manner in which the dismissal was carried out left much to be desired. The Applicant was provided with notification of his dismissal by email sent to him at 3.30 pm on the day before the Easter break and when he was absent from work on sick leave. At the hearing, the Applicant asked Mr Heran why the Respondent issued the termination notice quickly. Mr Heran’s evidence was as follows:
“MR WHITE: (Audio malfunction) - - - in March, which is four or five weeks before issuing the termination notice. So my question is, why was it necessary to issue a notice with such haste, by email, on 9 April, being the day before the Easter break, without at least some discussion in the intervening five week period?---I don't think it was - COVID hit pretty suddenly and there was a mass panic worldwide. So we acted suddenly to try and counteract the outfall of the corona.
So in March - in your statement you say March 2020?---March, so it could have been, say, 31 March, 28 March, yes, for April. What day did you dismiss you? So a couple of weeks before that, three or four weeks in between those two times. Things progressed pretty frantically from the corona thing and there was mass panic. You might recall, there was a panic worldwide, caused by the corona panic and people panic and - everyone rushes out hastily and certainly the unknown is about to happen and, yes. Did that answer your question?”
[45] I am unconvinced by this evidence and I see no reason why Mr Heran or some other manager of the Respondent could not have afforded the Applicant the common courtesy of informing him in person of the reasons why he was to be dismissed, particularly in circumstances where the Applicant was the only person who was to be dismissed. I am also unconvinced about the evidence of the witnesses for the Respondent in relation to the timing of the JobKeeper announcements and the decision to offer the Applicant the alternative role. What appears to have prompted the offer is the fact the Applicant claimed redundancy payments rather than the timing of JobKeeper. In this regard I note that the Respondent did not put on any evidence about when it was informed that its application for the JobKeeper program was accepted. This evidence was only offered in response to questions from me at the hearing and was far from clear. I also note that the Applicant was dismissed due to a “short term down turn of work” as evidenced by the Employment Separation Certificate issued by the Respondent in relation to the termination of his employment. The Applicant had not been replaced at the point this matter was heard, and Mr Heran’s evidence about his intentions in this regard was unclear.
[46] On that basis, I am of the view that it is equally probable that the offer of “reinstatement” was made to avoid or postpone the requirement for the Respondent to pay the Applicant an amount of redundancy and this is a matter to which I have had regard in determining whether the Applicant’s dismissal was unfair.
[47] Another matter to which I have had regard is that at the time of the termination letter, no issue had been raised with the Applicant’s capacity or conduct at any stage. The termination letter does not outline any concerns related to capacity or conduct. The dismissal appears to have been for purely financial reasons. The Respondent has not advanced the jurisdictional objection that the dismissal was a case of genuine redundancy and had expressed to the Applicant that they were going to fill the Applicant’s role.
[48] I also note the Applicant’s evidence that he relocated to the Gold Coast to take up his position with the Respondent and had just committed to a rental property. As a result of his dismissal his income has been reduced and he has been compelled to withdraw funds from his superannuation account which will have a long-term detrimental effect on his life savings.
[49] Finally, I have considered whether the Applicant’s response to his dismissal was unreasonable such that it mitigates a finding of unfairness. In this regard, I note that the Applicant left the workplace when he had been clearly informed that he was required to work out his notice period. It is also the case that if the Applicant had simply remained at work on 14 April 2020, he might have had a discussion with Mr Heran which could have resulted in him remaining in employment. Mr Heran was busy on 14 April 2020, having returned from his own Easter break and it was not unreasonable that he did not meet the Applicant’s expectations in regard to the timing of the meeting requested by the Applicant. However, on balance, I am satisfied that the Applicant’s response to the unfairness of the manner in which he was treated, was not so unreasonable that it should mitigate that unfairness.
[50] I am satisfied that the Applicant’s dismissal was unfair. The dismissal was harsh because of the economic and personal consequences for the Applicant. It was unreasonable because of the inference that the Applicant had abandoned his employment, and the failure of the Respondent’s Directors to treat the Applicant in the same way as they had treated other employees in relation to JobKeeper payments and to communicate appropriately with the Applicant so that he could have properly considered his options in relation to participating in the JobKeeper program.
REMEDY
[51] Having found that the Applicant is a person protected from unfair dismissal and that he has been unfairly dismissed, I am satisfied that he should have a remedy in relation to his unfair dismissal. The Applicant submits that the trust and confidence he holds in the Respondent has been damaged, and that the employment relationship has been irreversibly damaged by the dismissal. The Applicant did not seek to be reinstated.
[52] Section 390(3)(b) of the Act provides the Commission may only issue an order for compensation if it is appropriate in all the circumstances. The remedy of compensation is designed to compensate an unfairly dismissed employee in lieu of reinstatement, for losses reasonably attributable to the unfair dismissal, within the bounds of the statutory cap on compensation that is to be applied. 15
[53] Having regard to all the circumstances of the case, including the fact that the Applicant has suffered financial loss as a result of his unfair dismissal, I consider that an order for payment of compensation to him is appropriate. Accordingly, it is necessary to assess the amount of compensation that should be ordered to be paid to the Applicant. In assessing compensation I am required to take into account the circumstances of the case including the matters in s. 392(2) as follows:
“(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.”
[54] The established approach to the assessment of compensation was set out by a Full Bench of the Commission in Sprigg v Paul Licensed Festival Supermarket. 16 That approach has been consistently applied in the context of the current legislative provisions by Full Benches of the Commission in a number of cases.17 The approach to calculating compensation in accordance with these authorities is as follows:
Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).
Step 2: Deduct monies earned since termination.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.
Step 5: Apply the legislative cap on compensation.
[55] I therefore now to the particular criteria I am required to consider in deciding the amount of compensation to be awarded to the Applicant for his unfair dismissal.
The effect of the order on the viability of the Respondent – s.392(2)(a)
[56] The Respondent has as part of their case advanced the proposition that the business has suffered a reduction in business due to COVID-19, such that it was eligible for JobKeeper. I note that during the hearing, evidence was led that all employees working for the Respondent continue to be paid their ordinary wage, with JobKeeper serving as a subsidy and the Respondent “topping up” wages for employees exceeding this threshold.
[57] There is no evidence that the order I propose to make will have an effect on the viability of the Respondent.
Length of the Applicant’s service – s.392(2)(b)
[58] The Applicant had been employed by the Respondent for two years. This is a relatively short length of time. I consider this factor as neutral in calculating the appropriate compensation.
Remuneration the Applicant would have or would likely have received – s.392(2)(c)
[59] There is an element of speculation in determining an employee’s anticipated period of employment because the task involves an assessment of what would have been likely to happen in the future had the employee not been dismissed. 18
[60] I am satisfied on the balance of probabilities that if the Applicant had not been dismissed on 9 April 2020, he would have remained employed by the Respondent for at least a further six months. The Applicant had no record of any issues relating to his performance or capacity, and in fact was offered further employment under the JobKeeper scheme. No other employees have been dismissed by the Respondent in the interim and no evidence has been led that the Respondent’s financial position is such that it could not support the Applicant. The JobKeeper scheme continues to operate and Mr Heran’s evidence is that the Respondent will access the scheme until March next year.
[61] The Applicant was paid an hourly rate of $33.81 per hour on the basis of a 40 hour week, for a total of $1,352.40 per week. While the Applicant may have been paid only the JobKeeper subsidy had he remained in employment, no other employee of the Respondent was dealt with in this manner and on balance I find that the Applicant would have earned the amount of $35,162.40.
The Applicant’s efforts to mitigate loss – s.392(2)(d)
[62] The Applicant’s evidence and submission was that he had attempted to obtain other employment but had been unable to do so.
The amount of any remuneration earned since dismissal – s.392(2)(e)
[63] The Applicant has earned no remuneration since his dismissal and no deduction is made in relation to this matter.
The amount of any income reasonably likely to be earned during the period between the making of the order for compensation and the actual compensation – s. 392(2)(f)
[64] Given the period over which I have calculated compensation, this criteria does not arise.
Any other matter that the FWC considers relevant – s.392(2)(g)
[65] If the Applicant had remained in employment, the Respondent would have been entitled to claim JobKeeper subsidy in respect of his wages in the amount of $1,500 per fortnight. As a consequence of his dismissal the Applicant has received $1,100 per fortnight in Jobseeker payments.
[66] In circumstances where the Applicant is not entirely blameless in the fact that he was not able to participate in JobKeeper, I am of the view that there should be some adjustment to the compensation awarded. Such an adjustment will also reflect the fact that the employer could have obtained the benefit of JobKeeper and the employee has obtained the benefit of JobSeeker. I am also of the view that both payments are relevant only to the present COVID-19 Pandemic and therefore are not necessarily subject to the usual approach whereby unemployment benefits are not taken into account in assessing compensation. Further, I am conscious that notwithstanding the lack of evidence as to the financial position of the Respondent, it is probable that it has suffered detriment from the effects of the Pandemic given the industry in which it operates.
[67] Accordingly, I intend to deduct the amount of JobSeeker payments from the compensation awarded to the Applicant in the amount of $14,300.00. This leaves an amount of compensation of $20,862.40.
[68] There are no other matters that I consider to be relevant to the calculation of compensation.
Misconduct – s.392(3)
[69] There was no misconduct on the Applicant’s part. I make no reduction on this basis.
Shock, distress or humiliation, or other analogous hurt – s.392(4))
[70] In accordance with s 392(4) of the Act, the amount of compensation calculated does not include a component for shock, humiliation or distress.
Compensation cap – s.392(5)-(6)
[71] The amount of $20,862.40 is less than half the amount of the high income threshold immediately before the dismissal. It is also less than the total amount of remuneration to which the Applicant was entitled in his employment with the Respondent during the 26 weeks immediately before his dismissal. In those circumstances, my view is that there is no basis to reduce that amount by reason of s. 392(5) of the Act.
Instalments – s.393
[72] No application has been made to date by the Respondent for any amount of compensation awarded to be paid in the form of instalments.
Conclusion on compensation
[73] In my view, the application of the Sprigg formula does not, in this case, yield an amount that is clearly excessive or clearly inadequate. Accordingly, my view is that there is no basis for me to reassess the assumptions made in reaching the amount of $20,862.40. 19
[74] For the reasons I have given, my view is that a remedy of compensation in the sum of $20,862.40 (less taxation as required by law) in favour of the Applicant is appropriate in the circumstances of this case. An Order requiring that the Respondent pay compensation to the Applicant in the amount of $20,862.40 in gross wages, to be taxed according to law, and superannuation contributions in the amount of $1,981.92 by 30 November 2020 has been issued. 20
DEPUTY PRESIDENT
Appearances:
Mr A White on his own behalf.
Mr J Sneddon of Shand Taylor Lawyers for the Respondent.
Hearing details:
12 August.
2020.
Brisbane.
Printed by authority of the Commonwealth Government Printer
<PR724373>
1 Transcript. PN560-561.
2 Applicant’s Document List- E.01
3 Applicant’s Statement of Evidence
4 Transcript PN404.
5 Applicant’s Document List – E.04
6 Transcript. PN560-567
7 Transcript PN429 – 437.
8 Transcript PN450.
9 Transcript, PN146-157
10 Ibid, PN391-397
11 Transcript PN596.
12 Transcript PN536.
13 Stewart v University of Melbourne (U No 30073 of 1999 Print S2535) Per Ross VP citing Byrne v Australian Airlines (1995) 185 CLR 410 at 465-8 per McHugh and Gummow JJ
14 Explanatory Memorandum to Fair Work Bill 2008 at para. 1542
15 Kable v Bozelle, Michael Keith T/A Matilda Greenbank [2015] FWCFB 3512 at [17]
16 (1998) 88 IR 21
17 Tabro Meat Pty Ltd v Heffernan [2011] FWAFB 1080; Read v Golden Square Child Care Centre [2013] FWCFB 762; Bowden v Ottrey Homes Cobram [2013] FWCFB 431
18 Double N Equipment Hire Pty Ltd v Humphries[2016] FWCFB 7206 at [16]-[17]
19 Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32]
20 PR724370.
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