Mr Demesw Wederay v Airline Cleaning Services Pty Ltd T/A Cabin Services Australia
[2017] FWC 4941
•22 SEPTEMBER 2017
| [2017] FWC 4941 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Demesw Wederay
v
Airline Cleaning Services Pty Ltd T/A Cabin Services Australia
(U2017/4972)
| DEPUTY PRESIDENT ANDERSON | ADELAIDE, 22 SEPTEMBER 2017 |
Application for an unfair dismissal remedy – forced dismissal found harsh, unjust or unreasonable – reinstatement inappropriate – decision on compensation – reasonable mitigation of loss – substantial discount for contributory misconduct – compensation ordered
By decision of 5 September 2017[1] the Fair Work Commission (the Commission) found that Demesw Wederay’s dismissal on 19 April by Airline Cleaning Services Pty Ltd trading as Cabin Services (Cabin Services) was harsh, unjust or unreasonable. In doing so, I dismissed the employer’s threshold claim that Mr Wederay had not been dismissed. I found that Mr Wederay resigned but that his resignation was a forced dismissal within the meaning of section 386(1)(b) of the Fair Work Act 2009 (FW Act).[2]
This decision concerns the appropriate remedy and orders that should be made in light of my primary decision.
In arriving at this decision I take into account all of the evidence and submissions that were before me at the primary hearing, and further written submissions on remedy. I adopt the findings and conclusions of my primary decision of 5 September as terms of this decision, without repeating them.
A decision to order a remedy for unfair dismissal is discretionary.[3] Sections 390(1) and (2) of the FW Act provide that the Commission “may” make an order. The statute does not provide that the Commission shall do so. In my primary decision I concluded that an order for reinstatement under sections 390(1) and 391 would be inappropriate on the ground that the employment relationship was irretrievably damaged.[4] I further concluded that it would be appropriate to make an order for compensation. In doing so, I said as follows:
“I am satisfied that, in all of the circumstances, it is appropriate to make an order for compensation. Mr Wederay has indeed contributed to his circumstances, but the factors that have led me to find that he was dismissed and that his dismissal was harsh, unjust or unreasonable were also avoidable had the employer taken a more considered approach. For example, had Ms Crook followed what she described as “standard procedure” to have a witness present at staff disciplinary meetings, a third party may have been able to corroborate either her version or Mr Wederay’s version of what occurred. In determining quantum I will be guided by the provisions of section 392 of the FW Act and the principles governing the application of this section set out in established authorities of the Commission.”[5]
Although I received evidence and submissions on remedy at the primary hearing, I was not satisfied that sufficient material was before me to enable an order to be made that took into account all relevant elements of section 392 of the FW Act. I provided both Mr Wederay and Cabin Services a short opportunity to submit further evidence and submissions in writing on the quantum of compensation. Each elected to do so.[6]
Based on the evidence and materials before me, the position of the parties is as follows.
Mr Wederay worked regular night shifts for Cabin Services as a casual Driver/Cleaner for approximately sixteen months. His weekly pay varied depending on whether his roster included Saturdays, Sundays or public holidays when higher casual rates were payable. He contends that he has been financially disadvantaged as a result of his dismissal. He had to resume casual taxi driving earning what is claimed to be substantially less income. He has two infant children to support. He claims his termination placed pressure on his marriage. He had to cancel a trip overseas to attend a wedding of a family member. He claims to now suffer a psychological injury caused by the alleged unfair and unreasonable termination of his employment. He has made an associated WorkCover claim. He says he now takes medication for anxiety, and suffers adverse side-effects. His counsel argues that the employers conduct has been egregious, and that punitive damages should be awarded.
Cabin Services submits that Mr Wederay largely contributed to the circumstances he finds himself in, by engaging in conduct that warranted warnings and by resigning in circumstances where he could have simply accepted a final warning and continued working. It says that Mr Wederay’s employment was casual, was only of a relatively short duration and was likely to have been of a limited duration having regard to his disciplinary record. It says he has an obligation to mitigate his loss by taking available work in the open labour market, including taxi driving.
Section 392 of the FW Act provides as follows:
“392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.[7]
(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.”
In my primary decision I noted that neither section 392 nor the established authorities provide any basis for punitive damages.[8] Compensation for non-economic loss is expressly excluded by statute. Indeed, the statute provides a basis for appropriate discounting of economic loss having regard to income earned, likely to be earned or which could have been reasonably earned since dismissal, as well as discounting for any employee contribution to the events giving rise to dismissal. In any event, there is a six-month statutory cap on compensation.
I now consider each of the criteria in section 392 of the FW Act.
Viability: section 392(2)(a)
Cabin Services is a nationally operating business with ongoing commercial contracts. It is not a small business. There is no evidence before me to suggest that a compensation order would affect its viability.
Length of service: section (section 392(2)(b))
Mr Wederay was employed for a relatively short period of sixteen months. No additional compensation is warranted on account of his period of service. Nor is a reduction in compensation warranted on account of service given that I have already taken into account (through the finding below) the likelihood that his employment would not have continued for more than eight weeks (with notice). No variation is to be made under this consideration.
Remuneration that would have been received: section 392(2)(c)
As a casual employee, Mr Wederay’s remuneration with Cabin Services varied according to his fortnightly roster. At the time of dismissal he earned $982.16 gross per week.[9] I am satisfied this was a broadly typical pattern of working hours[10], and will utilise that figure in my assessment.
To determine remuneration that would have been received by Mr Wederay had he not been dismissed, I need to determine the period of time Mr Wederay would have remained employed by the Cabin Services, or would have likely remained employed, had his employment not terminated.
Mr Wederay’s employment record is not unblemished. In sixteen months he had three written warnings (July 2016, December 2016 and April 2017) and one verbal counselling (November 2016). In my primary decision I concluded that these employer responses were reasonable management action taken in a reasonable manner. Although some incidents were more serious than others, I do not consider any to have been minor.[11] Mr Wederay had been fully trained in the job and knew what was required of him. The warnings of July 2016 and April 2017 were each designated as ‘final warnings’.
In these circumstances, Mr Wederay’s casual employment would have been unlikely to have withstood a further breach of policy or standards of behaviour. Termination was the next available option and the evidence, especially of Mr Priestley, was that the employer’s patience had run thin[12]. I consider there to be a reasonable likelihood that Mr Wederay would have been unlikely to have continued in employment for more than a further eight weeks (including notice) without having been dismissed or removed from the casual roster for cause.
I also take into account the possibility (and I put it no higher) that Mr Wederay may have voluntarily resigned in the wake of further disciplinary action, given my findings of his earlier threats to do so.[13]
I calculate eight weeks remuneration as $7,857.28 gross.
Mitigating efforts: section 392(2)(d)
I consider that Mr Wederay has taken reasonable steps to mitigate his loss. He commenced taxi driving and is earning income from that source. This had been his work prior to being employed by Cabin Services. He has been assessed as having a level of whole body impairment arising from a past work related injury.[14] He has been assessed as suffering some form of anxiety disorder since his termination.[15] Neither of these medical reports were tested in evidence before me. I consider them relevant, but only in that context. His medical condition, howsoever assessed, has not prevented some level of earning from taxi driving albeit sporadic and inconsistent. He also cancelled a planned overseas trip for a family wedding, on financial grounds. In the context of having a young family and litigating his dismissal, I consider this to have been a reasonable level of mitigation.
I will make no reduction on account of this factor.
Remuneration earned: section 392(2)(e)
Mr Wederay’s evidence was that he returned to casual taxi driving following his termination. His accountant’s evidence is that between 19 April and 11 September he earned nett income of $4,475.80.[16] This equates to approximately $5,500 gross. These were earnings across a period of 21 weeks. However, the period for which I will order compensation is less than 21 weeks. I will deduct the amount Mr Wederay earned, on average, across those eight weeks. This amounts to $2,095.24 gross.
I will deduct this amount from the compensation to be ordered.
Income likely to be earned: section 392(2)(f)
I will provide 21 days for my order to be given effect to. However, both the date of my order and the date it is required to be given effect to are more than eight weeks after his termination. It is therefore not appropriate to make any deduction for future earnings.
Other matters: section 392(2)(g)
There are no other matters or contingencies that need to be provided for.
Misconduct: section 392(3)
In my primary decision I found that Mr Wederay materially contributed to the circumstances in which he found himself. I found that he resigned in the heat of the moment. In doing so, I did not accept key aspects of his version of events of his meeting with Ms Crook on 19 April. I found that he orally resigned even though his sworn evidence to me was that he had not done so. Had he not resigned, his employment would not have terminated on 19 April. He chose to leave the workplace in frustration on 19 April without completing his shift. Although his termination was forced within the meaning of the FW Act for reasons set out in my primary decision, I found that he resigned at his initiative, not the employers. I also found that he did not act with the degree of urgency in the hours and days that followed to withdraw or set aside his resignation.
In addition, I found that the final warning he received on 19 April concerned an incident on 31 March that was not minor. Nor was his overall work record unblemished. His previous warnings and counselling were warranted. Although he enjoyed his work, I find that he had a tendency to lose his cool and did not like being subject to management authority when he thought it unwarranted or contrary to his sense of fairness. His workplace behaviour could be, and was on the occasions giving rise to the warnings, casual and carefree. I conclude that Mr Wederay’s conduct was a significant contributory factor to his termination. A substantial discount is warranted.
Section 392(3) of the FW Act requires the amount of compensation that would have been ordered under section 392(1) be reduced by an appropriate amount on account of the misconduct. I consider that a 50% discount is appropriate in this case.
Shock, Distress: section 392(4)
I note that the amount of compensation calculated does not include a component for shock, humiliation or distress. Nor does it include any basis for punitive damages.
Compensation cap: section 392(5)
The amount of compensation I will order does not exceed the six-month compensation cap.
Payment by instalments: section 393
I will provide 21 days to give effect to my order. In these circumstances, and given the nature of the business of Cabin Services, no order for payment by instalments will be made.
Conclusion
Having regard to the provisions of section 392(2) and (3), the amount of compensation I determine that should be paid in lieu of reinstatement is $2,881.02 gross, to be taxed according to law. It is the amount arising from each of the considerations in section 392, applying what is known as the Sprigg formula.[17] It is also an amount which, in a global sense, I consider to be fair and reasonable. It is approximately one week more than the amount he would have been required to be paid by Cabin Services had Mr Wederay been dismissed on notice.
An order requiring Cabin Services to give effect to this decision within 21 days will issue in conjunction with the publication of this decision.
DEPUTY PRESIDENT
Appearances:
Mr M. Irvine (with permission), for the Applicant.
Mr D. Miller and Ms T. O’Connor, for the Respondent.
Hearing details:
2017.
Adelaide.
20, 21 July and 1 August.
Final written submissions:
September, 2017.
[1] [2017] FWC 4603 Deputy President Anderson, 5 September 2017
[2] Ibid at [88] – [92]
[3] Nguyen v Vietnamese Community in Australia trading as Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198 at [9]
[4] [2017] FWC 4603 at [109] – [111]
[5] Bowden v Ottrey Homes Cobram and District Retirement Village [2013] FWCFB 431; Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21; Ellawala v Australian Postal Corporation 17 April 2000 Print S5109
[6] Mr Wederay’s representative emails 13 September 2017 10.18am and 11.08am, and attachments; Cabin Services Submission on Compensation 20 September 2017. Mr Wederay’s representative made a further submission on 21 September. This was beyond the timeframes I had directed at [119] of my primary decision and after Cabin Services had lodged its submission. I have considered this further submission but placed more limited reliance on it given that I did not require a reply submission nor did it contain material that could not have been provided in accordance with my directions
[7] Subsection 392(5)(b) indexed amount is $71,000 from 1 July 2017
[8] [2017] FWC 4603 at [117]
[9] Cabin Services Submission on Compensation at paragraph 4.1
[10] For example, Crook Witness Statement Exhibit R1 Attachment PC10; Armone Witness Statement Exhibit R2 Attachment DA12
[11] Ibid at [101] – [103]
[12] Priestley Witness Statement Exhibit R3 at paragraphs 9 to 14 and Attachment JP1; PN 2799 – 2811 and 3003
[13] [2017] FWC 4603 at [66]
[14] Report, Dr Reece Jennings, 29 July 2017
[15] Report, Dr Stephen Wong, 26 June 2017
[16] Letter Karen Phu Pty Ltd to Michael Irvine, 12 September 2017. In a period of 21 weeks, this averages at $213.33 per week
[17] Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21
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