Mr Dylan Stonehouse v Della Precast (Vic) Pty Ltd

[2021] FWC 218

[2021] FWC 218

FAIR WORK COMMISSION

DECISION

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

Mr Dylan Stonehouse
v
Della Precast (Vic) Pty Ltd
(U2020/10440)

DEPUTY PRESIDENT MASSON MELBOURNE, 22 JANUARY 2021

Application for an unfair dismissal remedy - dismissal found to be unfair - reinstatement not appropriate - compensation awarded due to loss of post termination earnings.

[1] On 31 July 2020, Mr Dylan Stonehouse (the Applicant) made an application to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (Cth) (the Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Della Precast (Vic) Pty Ltd (the Respondent) on 14 July 2020. The matter was subsequently programmed and was heard on 16 November 2020.

[2] In a decision issued on 23 November 2020 1 (the Decision) I found that the Applicant had been unfairly dismissed within the meaning of section 385 of the Act. However, there was insufficient material before me at that hearing to determine the question of remedy. Consequently, directions were issued to the parties and a further hearing to deal with the question of remedy was held on 21 January 2021.

[3] The Applicant filed submissions and a witness statement in advance of the 21 January 2021 hearing in accordance with the directions issued whereas the Respondent filed various documentary material on 20 January 2021 which was some 4 weeks late and not in accordance with the directions. The material filed by the Respondent did not bare upon the remedy question and was not admitted into evidence.

[4] At the hearing on 21 January 2021, the Applicant, was represented by Mr D Vroland of the Construction, Forestry, Mining, Maritime and Energy Union (CFMMEU). Mr B McMurray (General Manager of Della Precast) appeared on behalf of the Respondent.

[5] I turn now to deal with the question of remedy arising from the Applicant’s unfair dismissal.

Remedy

[6] Being satisfied that the Applicant:

(i) made an application for an order granting a remedy under section 394;

(ii) was a person protected from unfair dismissal; and

(iii) was unfairly dismissed within the meaning of section 385 of the FW Act,

I may, subject to the Act, order the Applicant’s reinstatement, or the payment of compensation to the Applicant.

[7] Under section 390(3) of the FW Act, I must not order the payment of compensation to the Applicant unless:

(a) I am satisfied that reinstatement of the Applicant is inappropriate; and

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

Is reinstatement of the Applicant inappropriate?

[8] The Applicant does not seek reinstatement. In these circumstances and also having regard to the apparent cessation of the Respondent’s operation I consider that reinstatement is inappropriate. I will now consider whether a payment for compensation is appropriate in all the circumstances.

Is an order for payment of compensation appropriate in all the circumstances of the case?

[9] Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, “[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…”²

[10] The circumstances of this case are that the Applicant was dismissed on the grounds of redundancy although the process of dismissal was not conducted in a manner consistent with the Respondent’s consultation obligations under the relevant enterprise agreement, that being the Della Precast (Aust) Pty Ltd and the CFMEU (Victorian Construction and General Division) Precast Panel Enterprise Agreement 2016-2018³ (the Agreement). The dismissal was also unfair having regard to the particular circumstances of the Applicant which were set out in the Decision at paragraphs [72] & [76]. In all of these circumstances, I consider that an order for payment of compensation is appropriate.

Compensation – what must be taken into account in determining an amount?

[11] 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.

[12] I consider all the circumstances of the case below.

Effect of the order on the viability of the Respondent’s enterprise

[13] There was no evidence adduced or material filed by the Respondent that established that an award of compensation would impact on the viability of the employer

Length of the Applicant’s service

[14] The Applicant commenced employment with the predecessor business to the Respondent in 2014 and was terminated on 14 July 2020, however it is noted that the Applicant had several separate periods of employment with the Respondent and its predecessor, the most recent being from mid-late 2017 until 14 July 2020. 4

[15] I do not regard the Applicant’s most recent period of employment of 2.5 years’ service as either supportive of reducing or increasing the amount of compensation ordered.

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

[16] 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.”⁵

[17] In the Decision I determined that the Applicant’s dismissal was due to redundancy, albeit it was not a genuine redundancy 6 due to the consultation failures of the Respondent. It was the absence of a proper consultative process and the personal circumstances of the Applicant that rendered his dismissal unfair. Had a proper process been undertaken that was consistent with the consultation obligations under the Agreement, I assess that the Applicant’s employment would have continued for a period no longer than a further 2 weeks. I note however that the evidence of Mr DeBono in the earlier proceedings in this matter, which I accepted, indicated that the Respondent’s operations appeared to have “ground to a halt” on or by Saturday 25 July 2020.7

[18] The Applicant contends that it would be reasonable to conclude that he would have worked on been placed on JobKeeper for a further two weeks beyond the apparent cessation of the Respondent’s operations on 25 July 2020. I don’t regard that as likely in the circumstances of a proper consultative process having been followed and having regard to the cessation of the Respondent’s operations.

[19] In the above circumstances I find that it is unlikely that the Applicant’s employment would have continued beyond Saturday 25 July 2020. As his employment termination took effect on Tuesday 14 July 2020, the additional period I estimate he would have worked but for his dismissal was the period from Wednesday 15 July to Friday 24 July 2020 inclusive. This represents an additional 8 days of work.

[20] The Applicant was classified at Level 2 under the Agreement and was at the time of his dismissal in receipt of an hourly rate of pay of $43.35 8 plus he also received a daily travel allowance of $45.00.9 Based on an 8 hour day, the Applicant’s daily rate of pay was $391.80 resulting in earnings for the 8 day period of $3,134.40.

[21] Based on the above I am satisfied that it is likely that had the Applicant not been dismissed on 14 July 2020 he would have received $3,134.40 in remuneration.

Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal

[22] The Applicant must provide evidence that he has taken reasonable steps to minimise the impact of the dismissal.¹⁰ What is reasonable depends on the circumstances of the case.¹¹

[23] The Applicant gave evidence that he currently remains unemployed, that he has made efforts to seek alternate employment but that his efforts have been hampered by workplace injuries he has sustained and the ongoing effects of the Covid pandemic. 12

[24] I am satisfied in the circumstances that the Applicant has made reasonable efforts to secure alternate employment and that no deductions of compensation should be made.

Amount of remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation

[25] The Applicant’s evidence is that he has not earned any remuneration from employment or other work since the dismissal. 13 That evidence is not challenged by the Respondent.

[26] I am satisfied that the Applicant has not earned any remuneration from employment or other work during the period since her dismissal. No deduction will be made.

Amount of 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

[27] The Applicant’s evidence is that he is unlikely to earn any remuneration in the period between the making of the order for compensation and the payment of compensation. 14 That evidence is not challenged by the Respondent.

[28] I am satisfied that the Applicant is unlikely to earn any income between the making of the order for compensation and the payment of compensation. No deduction will be made.

Other relevant matters

[29] Other matters raised by the Applicant included the Respondent’s failure to appear in earlier proceedings in this matter and alleged wages underpayment claims that remain unresolved. The matter of alleged underpayment can be pursued in a court of competent jurisdiction and as such I do not believe such claims warrant the adjustment of the amount of compensation that is to be awarded in this matter. As regards the Respondent’s failure to engage in the earlier proceedings before me I apply no weight to that in my consideration.

Compensation – how is the amount to be calculated?

[30] As noted by the Full Bench, “[t]he well-established approach to the assessment of compensation under s.392 of the FW Act… is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).¹⁵ This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages¹⁶.”¹⁷

[31] The approach in Sprigg is as follows:

•  Step 1: Estimate the remuneration the Applicant 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 1

[32] I have estimated the remuneration the Applicant would have received, or would have been likely to have received, if the Respondent had not terminated the employment to be $3,134.40 on the basis of my finding that it is likely the Applicant would have remained in employment for a further period of 8 working days. This estimate of how long the Applicant would have remained in employment is the “anticipated period of employment”.

Step 2

[33] I have found that the Applicant has not earned any amount of remuneration since the date of his dismissal, that he is unlikely to earn any remuneration between the making of the order for compensation and the payment of compensation and that he has taken reasonable steps to mitigate his losses.

[34] Only monies earned since termination for the anticipated period of employment are to be deducted.¹⁸ Consequently, no deductions are to be made for earnings.

Step 3

[35] I now need to consider the impact of contingencies on the amounts likely to be earned by the Applicant for the remainder of the anticipated period of employment.¹⁹

[36] I do not consider it appropriate to deduct an amount for contingencies.

Step 4

[37] I have considered the impact of taxation but have elected to settle a gross amount of $3,134.40 which is to be subject to normal taxation.

[38] Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case.”²⁰

[39] I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the FW Act.

Compensation – is the amount to be reduced on account of misconduct?

[40] I am satisfied that misconduct of the Applicant did not contribute to the Respondent’s decision to dismiss him. Therefore, the amount of the order for compensation of $3,134.40 is not to be reduced on account of misconduct.

Compensation Cap

[41] The amount of compensation to be ordered is less than the compensation cap imposed by s 392(6) of the Act.

Conclusion

[42] I am satisfied that the Applicant was protected from unfair dismissal and that the dismissal was unfair.

[43] I have found that reinstatement is inappropriate, but that compensation of the above amount is appropriate in all of the circumstances.

[44] The payment of the required compensation of $3,134.40 gross, less taxation as required by law, is to be made to the Applicant by the Respondent within 14 days of this decision.

[45] An order will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

Mr D Vroland for the Applicants
Mr B McMurray for the Respondent

Hearing details:

2021
Thursday
21 January
Melbourne

Printed by authority of the Commonwealth Government Printer

<PR726224>

 1   [2020] FWC 6071

2 Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].

3 AE421333

 4   See Decision at [14]-[15] regarding transfer of business in 2019

5 He v Lewin [2004] FCAFC 161, [58].

 6   Decision at [61]

 7   Decision at [81]

 8   Agreement at clause 24.1

 9   Ibid at 25.5

10 Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].

11 Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.

 12   Witness Statement of Mr Dylan Stonehouse dated 10 December 2020 at [5]

 13   Ibid at [3]

 14   Ibid at [5]

15 (1998) 88 IR 21.

16 [2013] FWCFB 431.

17 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [16].

18 Ibid.

19 Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].

20 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].