Mr Craig Kedwell v WorkPac Mining Pty Ltd
[2022] FWC 7
•4 JANUARY 2022
| [2022] FWC 7 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Craig Kedwell
v
WorkPac Mining Pty Ltd
(U2020/8711)
| COMMISSIONER RIORDAN | SYDNEY, 4 JANUARY 2022 |
Application for an unfair dismissal remedy
On 24 June 2020, the Construction, Forestry, Maritime, Mining, and Energy Union (the CFMMEU) filed 6 unfair dismissal applications (the Applications) on behalf of their members Mr Peni Botiki, Mr Francisco Valdivia, Mr Craig Kedwell, Mr Nathan Calder and Mr Wayne Powell (the Applicants). The Respondent to the Applications was WorkPac Mining Pty Ltd (the Respondent).
I issued a Decision on 8 March 2021 [[2021] FWC 508] in which I found that the dismissals of all of the Applicants were harsh and unjust.
During the Hearing, the parties suggested that if I found in favour of the Applicants, that they would like the opportunity to consult in relation to an appropriate remedy.
I note that all of the Applicants, excluding Mr Kedwell, reached an agreed outcome as to the appropriate remedy.
Further to submissions being filed by the parties, a hearing was convened by Microsoft Teams on 1 December 2021 in relation to an appropriate remedy to be awarded to Mr Kedwell.
Legislation
The relevant provisions of the Act in relation to a remedy for an unfair dismissal are:
“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.”
“391 Remedy—reinstatement etc.
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
Order to maintain continuity
(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:
(a) 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 reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.”
“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.”
Submissions
Applicant’s submissions and evidence
Mr Kedwell does not seek reinstatement but seeks an order of compensation.
Submissions were made for the Applicant that a payment of redundancy pay and notice does not mean there has not been a loss. Mr Kedwell submitted that he has suffered financial loss which is directly attributable to his unfair dismissal and which renders it appropriate for the Commission to make an order of compensation.
As to the criteria in s.392(2) of the Act (extracted below), submissions were made for the Applicant as follows:
(a)Effect on viability of the Respondent’s enterprise: WorkPac is a large labour hire company, with close to 10,000 employees. An order of the maximum amount of compensation therefore would have no effect on the viability of the enterprise;
(b)Legnth of service: Mr Kedwell has a length of service of almost 9 months, having commenced with WorkPac on 11 September 2019;
(c)Remuneration likely to have been earned if not for dismissal: The Applicant cited the Sprigg formula,[1] and submitted that an application of the formula in respect of Mr Kedwell yields the following:
“a) Following dismissal, Mr Kedwell was offered a further job with WorkPac at Appin Mine. Ultimately, the start date of that further job was 31 August 2020. For reasons explained in his evidence, Mr Kedwell decided not to start in that role.
b) As such, it seems fairly clear that the relevant period as it concerns step 1 is the period from dismissal to 31 August 2020. That is a period of 11 weeks.
c) Quantifying the likely remuneration earned in that period would vary greatly depending on the roster.
d) It is reasonable to quantify that amount by reference to the wages earned by Mr Kedwell during his period of employment with WorkPac. That is, a gross weekly wage (including bonus) of $2,550.
e) With those assumptions made, the result produced by step 1 is $28,050 ($2,550 x 11 weeks).
f) In respect of step 2, Mr Kedwell has disclosed the wages that he has received to date, and also the wages earned in that 11 week period. Mr Kedwell earned $8,471.76 (gross) in wages in that 11 week period.
g) The wages earned in that 11 week period should be deducted from the result produced by step 1. The difference is $19,578.24 (gross). That is a fair and appropriate amount of compensation in all of the circumstances.
h) There are a number of assumptions that must be made in respect of Mr Kedwell. Those assumptions go both ways. Therefore, it is not immediately evident that there should be either an increase or decrease for any contingencies.
i) The taxation issues will require consideration.
j) The amount of $19,578.24 that is sought for Mr Kedwell is below the legislative cap.”
(d)Efforts to mitigate: Mr Kedwell stated that following his dismissal, he had performed casual work servicing and maintaining a fleet of generators and welders. He stated that he had recently secured work with a contractor in the coal industry, employed to work at a coal mine in the Hunter Valley. His evidence included that since the termination of his employed, he had applied for about 20-30 jobs in the coal industry or in manufacturing.
(e)Remuneration earned pursuant to s.392(e) and (f): Mr Kedwell gave evidence as follows:
“On about 9 July 2020, I commenced employment with Hunter Valley Welding. This is a business owned by a cousin. I was employed as a casual and was responsible for servicing the diesel powered generators and welders, and then delivering them to site. I worked in this job until about 26 August 2020. The total gross amount of remuneration that I earned in my employment in this job was $8,471.76.
On 24 August 2020, I commenced employment with Southern Cross. They supply lighting towers to open cut coal mines. I was employed as a plant mechanic and was responsible for servicing and maintaining the equipment. I worked in this job until 25 October 2020. The total gross amount of remuneration that I earned in my employment in this job was $18,546.
On 2 November 2020, I commenced employment with Mickala. They also supply lighting towers to open cut coal mines. I was employed as a plant mechanic and was responsible for servicing and maintaining the equipment. I worked in this job until 25 April 2021. The total gross amount of remuneration that I earned in my employment in this job was $38,997.70.
On 10 May 2021, I commenced employment with JR Conveyors. They are a contracting company that work in the coal mines around Lithgow. I was employed to work as a fitter at the Clarence underground coal mine. At the date of making this statement, I remain employed by JR Conveyors working at the Clarence colliery. The total gross amount of remuneration that I have earned, to date, in this job is $59,720.96.
Those are the only jobs that I have held since being dismissed by WorkPac.
In the 11 week period from my dismissal from WorkPac until 31 August 2020, I earned a total gross amount of about $8,471.76 in wages from my employment with Hunter Valley Welding.
I estimate that if I had remained employed by WorkPac on the same terms as prior to my dismissal, I would have earned a gross amount of $28,050 (i.e. $2,550 x 11 weeks) in that same period.
That is a difference of $19,578.24 (gross).
In the 6 months following my dismissal from WorkPac, I earned a total gross amount of $43,670.04 in wages from my employment in that period.
I estimate that if I had remained employed by WorkPac on the same terms as prior to my dismissal, I would have earned a gross amount of $66,300 (i.e. $2,550 x 26 weeks) in a 6 month period.
That is a difference of $22,629.96 (gross).
In the period from 10 December 2020 (i.e. 6 months after my dismissal from WorkPac) until the date of making this statement, I have earned a total gross amount of $82,066.38 in wages from my employment in that period. That is a period of about 10 months.
I estimate that if I had remained employed by WorkPac on the same terms as prior to my dismissal, I would have earned a gross amount of $109,650 (i.e. $2,550 x 43 weeks) in a 10 month period.
That is a difference of $27,583.62 (gross).
The period from my dismissal from WorkPac until the date of making this statement is a period of about 70 weeks.
In that 70 week period, I have earned a total gross amount of $125,736.42 in wages from the jobs that I have discussed above.
I estimate that if I had remained employed by WorkPac on the same terms as prior to my dismissal, I would have earned a gross amount of $178,500 (i.e. $2,550 x 70 weeks) in that same 70 week period.
That is a difference of $52,763.58 (gross).”
At the time of filing his first statement, Mr Kedwell was 49 years old.
Respondent’s submissions
The Respondent submitted that the amount sought by the Applicant is unrealistic, given that his role was redundant and that the Respondent did in fact take appropriate steps to find alternate employment for the Applicant.
The Respondent submitted that where a remedy is ordered it must reflect the genuinely prejudicial impact of the unfairness which has been found, which must take into account a circumstance that irrespective of unfairness there was no, or limited, further employment available for the applicant at the time of termination.[2] The Respondent submitted it is not inevitable that a remedy be awarded even where unfairness is found, and if the facts do not disclose prejudice, or if it is the actions of the Applicant which have led to prejudice when otherwise there would have been none, a remedy should not be awarded.
As to Mr Kedwell, the Respondent submitted that no compensation, or alternatively one weeks’ compensation should be ordered.
The Respondent submitted:
(a)WorkPac does not assert that an order of compensation would affect the viability of its enterprise (per s.392(2)(a) of the FW Act);
(b)The Applicant had a short period of employment with WorkPac (11 September 2019 to 10 June 2020); and
(c)The Applicant's employment was directly linked to WorkPac's contract with PIMS on the Development Contract, a factor which also mitigates against a significant compensation amount being awarded.
The Respondent submitted that under the applicable enterprise agreement, an employee with less than one completed year of service was entitled to a minimum payment of two ordinary weeks’ pay.
The Respondent provided a table addressing standard earnings:
While Mr Kedwell seeks a payment of 11 weeks’ wages as compensation (less his earnings in the period up to 31 August 2020), the Respondent disputes that he is entitled to any amount of compensation for the following reasons:
(a) Mr Kedwell's employment ceased on 10 June 2020;
(b) During the consultation process, Mr Kedwell agreed to be put forward for a Fitter role on the Supplementary Labour Contract;
(c) Due to matters outside WorkPac's control, the onboarding of Fitter roles for the Supplementary Labour Contract was delayed for a period – Mr Kedwell was advised of this on 18 June 2020;
(d) Shortly afterwards, Mr Kedwell was advised that the onboarding process would recommence and Mr Kedwell was put forward by WorkPac on or around 2 July 2020;
(e) Mr Kedwell was ultimately offered a role on the Supplementary Labour Contract on 14 August 2020, to commence on 17 August 2020;
(f) Ultimately, Mr Kedwell sought to delay the commencement of his start date on the Supplementary Labour Contract. This was agreed to by WorkPac, with a new start date being 31 August 2020;
(g) Ultimately Mr Kedwell decided not to commence employment on the South 32 Supplementary Labour Contract;
(h) During this period, Mr Kedwell:
a. worked a casual job and earned $8,471.76 up until 26 August 2020;
b. says he commenced a different job on 24 August 2020.19 He does not explain whether this was a permanent role, but he certainly commenced it before he advised WorkPac that he would not commence on the Supplementary Labour Contract.
The Respondent submitted that, in considering all of the relevant matters, it is apparent that Mr Kedwell overstates the applicable period Mr Kedwell would conceivably have been employed. It noted:
(a) Steps were taken by WorkPac to put Mr Kedwell into a Supplementary Labour Contract role (being the identified redeployment opportunity he agreed to be put forward for) but this was delayed by issues outside of WorkPac's control;
(b) Mr Kedwell was given the opportunity by WorkPac to commence in the redeployment opportunity on 17 August 2020 but Mr Kedwell sought to delay his start date; and
(c) Mr Kedwell took up alternative employment rather than commence on the Supplementary Labour Contract.
The Respondent submitted that in these circumstances, there is very little more WorkPac could have done to redeploy Mr Kedwell into the available Fitter role on the Supplementary Labour Contract when there was no work for Mr Kedwell to perform.
Further, the Respondent submitted that on termination Mr Kedwell was paid:
(a) $7,169.40, being three weeks' pay in lieu of the remaining notice period; and
(b) $2,031.40 by way of redundancy (equivalent to two ordinary weeks' pay at the applicable base rate).
The Respondent submitted that Mr Kedwell is not entitled to any amount of compensation. Alternatively, an award equivalent to one weeks' compensation is the maximum which could reasonably be awarded to compensate for any actual attributable loss associated with the unfairness which has been found (equivalent to $2,000.50 (gross) Mr Kedwell was employed to work day shift on the Supplementary Labour Contract).
Applicants reply submissions
The Applicant submitted that the amount that he would have earned working either weekend day shift or weekend night shift on the Supplementary Labour Contract is greater than the amount earned for working their usual shift on the Development Contract. The gross amounts earned by Mr Kedwell on his usual shift on the Development Contract was $2,550.00.
Mr Kedwell’s evidence also provided as follows:
“I was engaged as a Level 4 – Mineworker. I was paid $40 per hour. That remained my hourly rate of pay throughout the course of my employment with WorkPac.
Initially, I was rostered to work 4 x 12 hour day shifts from Monday – Thursday. That meant I was rostered to work 48 hours each week. For each hour worked in excess of 35 ordinary hours per week, I was paid time and a half and then double time thereafter.
In about December 2019, I began to work the night shift. For working night shift, I was paid a night shift loading. For working 4 x 12 hour night shifts from Monday – Thursday, I was paid a gross weekly wage (not including bonus) of $2,550, which was comprised of:
a) 48 hours at my hourly rate of pay, which amounted to $1,920;
b) 1 hour of a double time uplift, which amounted to $40;
c) 35 hours of night shift loading, which amounted to $350; and
d) 12 hour of time and a half uplift, which amounted to $240.
I remained working to that roster until the shift length of the WorkPac employees at the Appin Mine were reduced to 10 hours. This occurred in about April 2020. The shift length was reduced to 10 hours as a measure introduced as a result of COVID-19.
Thereafter, I worked 4 x 10 hour night shifts from Monday – Thursday until my employment was terminated. That meant I was rostered to work 40 hours per week. For working to that roster, I was paid a gross weekly wage (not including bonus) of $2,050, which was comprised of:
a) 40 hours at my hourly rate of pay, which amounted to $1,600;
b) 35 hours of night shift loading, which amounted to $350; and
c) 5 hours of time and half uplift, which amounted to $100.
Bonus was paid on top of my gross weekly wage.
…, in summary terms, I usually received a weekly production bonus of $300. That meant the total weekly bonus was usually about $500.
Accordingly, my gross weekly wage (including bonus) when working the 12 hour shifts described above was $3,050.
My gross weekly wage (including bonus) when working the 10 hour shifts described above was $2,550.
Following my termination, I received payment of $11,112.80 (plus superannuation), which is recorded on the earnings report as payment made on 22 June 2020 of the following items:
a) Lump Sum A Allowance: $1,912;
b) Lump Sum D + S: $7,169.40; and
c) Lump Sum D – Redundancy: $2,031.40.
I don’t know whether my entitlements, including my annual leave entitlement, was paid correctly.”
Whilst accepting that there was a gap between Mr Kedwell finishing up on the development contract and his intended reengagement on the Supplementary Labour Contract, the Applicant argued that he could have been retained as an employee simply by him taking a period of annual leave.
Mr Kedwell maintained that an order of $19,578.24 in compensation should be made.
Consideration
I have taken into account all of the submissions that have been provided by the parties and I have attached the appropriate weight to the evidence of the witnesses. The fact that an issue is not mentioned in this decision does not mean that it has not been taken into account.
Under section 390(3) of the FW Act, I must not order the payment of compensation to the Applicant unless:
· I am satisfied that reinstatement of the Applicant is inappropriate; and
· I consider an order for payment of compensation is appropriate in all the circumstances of the case.
As stated by a Full Bench, “[i]n assessing whether reinstatement is an appropriate remedy, it is obviously relevant as to whether the dismissed employee has obtained alternative employment. Where that new employment is satisfactory to the employee, it will be no remedy at all to reinstate the employee to the pre-dismissal employment to which the employee, for well-founded reasons, has no desire to return.”[3]
I am satisfied and find that reinstatement of the Applicant is inappropriate. In the circumstances of this case I find that an order for payment of compensation is appropriate.
Section 392(2) of the FW Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement including:
(a) the effect of the order on the viability of the Respondent’s enterprise;
(b) the length of the Applicant’s service;
(c) the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;
(d) the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant because of the dismissal;
(e) the amount of any remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation;
(f) the amount of any income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the Commission considers relevant.
There is no dispute and I am satisfied that an order for compensation would not have an effect on the viability of the employer’s enterprise.
The Applicant’s length of service was only 9 months.
As stated by a majority of the Full Court of the Federal Court, “[i]n determining the remuneration that the Applicant would have received, or would have been likely to receive… the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.”[4]
In this case, the Applicant was made redundant due to a decision by the client (PIMS Group Pty Ltd) to downsize its contract labour workforce. The obligation on the Respondent was to consult with the Applicant before he was made redundant. This did not occur. If the consultation had have occurred at the appropriate time, ie 2 June 2020, then the outcome may still have been the same on the basis that the Respondent may not have had a vacancy until mid-August 2020. Nevertheless, the consultation should have occurred, and it should have taken place face-to-face.
I am satisfied and find that the proper consultation process would have taken no more than 1 week to occur. This would have been ample time for the Applicant to suggest his preference of an appointment closer to home and for the Respondent to undertake the necessary enquiries.
I also note that the Applicant has not deducted from his claim the notice period, redundancy pay or payment of annual leave upon his termination from his claim. It has been held by the Commission that this money would be regarded as income received by the Applicant in his post-employment period.
However, in my view, this is not a case which requires a detailed analysis of the Sprigg formula. Having found that the Respondent had unfairly dismissed the Applicant due to a lack of consultation and its failure to redeploy him, the only consideration is the timeframe that the Respondent should have taken in complying with the Act.
Conclusion
Having taken into account all of the reasons and issues identified above, I am satisfied that if proper consultation had occurred between the Respondent and the Applicant at the time the Applicant was advised that he was being made redundant, the Applicant would have been employed for a further week.
I find that the Applicant is entitled to a remedy of $2,550.00 (taxed at his normal rate) plus his normal superannuation contribution for that week.
I have taken into account the other issues identified in section 392 of the Act and make no adjustment to my Order.
I so Order.
COMMISSIONER
[1] Sprigg formula as explained in Megan Smith v Fearon Howard Real Estate Pty Ltd t/a Ray White (Balmain)[2021] FWCFB 581.
[2] For example Kable v Bozelle, Michael Keith[2015] FWCFB 3512 at [16]-[17].
[3] Seitz v Ironbay Pty Ltd t/a City Beach IGA[2018] FWCFB 1341, [24].
[4] He v Lewin [2004] FCAFC 161, [58].
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