DECISION

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

Mr Gregorio Garcia
v
Hitec Welding Pty Ltd
(U2014/7403)

Mr Danilo Clarito
v
Hitec Welding Pty Ltd
(U2014/7640)

DEPUTY PRESIDENT ASBURY

BRISBANE, 2 FEBRUARY 2015

Application for relief from unfair dismissal - Arbitration - Compensation award - Payment by instalments granted.

BACKGROUND

[1] In Decisions issued on 24 December 2014, I found that Mr Gregorio Garcia 1 and Mr Danilo Clarito2 had been unfairly dismissed and ordered that Hitec Welding Pty Ltd pay compensation of $15,558 in wages and $1,400.22 in superannuation contributions to Mr Garcia and $24,741 in wages and $2,100.33 in superannuation contributions to Mr Clarito.

[2] The cases were heard consecutively and Hitec indicated that if compensation was awarded it would seek to pay any such amounts in instalments as provided in s. 393 of the Fair Work Act 2009 (the Act). Given the total of compensation ordered, I issued Directions to the parties for further submissions to be made in relation to this matter.

CONSIDERATION

[3] In its submissions, Hitec seeks that the order for compensation be payable by instalments. Hitec submits that it is a small/medium sized privately owned company suffering the financial consequences of the downturn in the oil and gas industry. Hitec’s only client is an Australian major coal seam gas provider which has reduced the number of its employees from 76 in May 2014 to an estimated maximum of 42 during 2015.

[4] Hitech contends that its cash flow is currently suffering due to monthly tax and superannuation contributions being paid at the end of the last quarter. Hitech further claims that the company has been on shutdown during the holiday season and currently has only 30 employees back at work. In addition, Hitech claims that no overtime has been undertaken due to the reduction in and lack of new work in the last three months and into the foreseeable future and that they are implementing a payment policy that would see some employees take a 20% rate cut.

[5] Hitec further contends that the amount of compensation payable to Mr Garcia, and Mr Clarito would have a significant and detrimental impact upon its cash flow and financial position. Accordingly, Hitec seeks that the award of compensation be payable in three equal monthly instalments. Hitech submits that this time frame is reasonable and would mitigate the detrimental impact upon its cash flow and financial position.

[6] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) represented Mr Garcia and Mr Clarito and provided submissions on their behalf.

[7] The AMWU reports that neither member has been able to find work since their dismissals and submits that they are also experiencing serious financial hardship. The AMWU concedes that it is unable to respond to the submission by Hitec that it is experiencing financial difficulty, but points to the fact that the Company has known since December 2014 that the awards of compensation would be ordered.

[8] The AMWU submits that if permission was granted for Hitec to pay the compensation ordered in instalments, no more than two equal monthly instalments should be permitted as it is unlikely that such amounts would result in significant detrimental impact on Hitec’s financial position.

LEGISLATION

[9] It is necessary for me to consider a request for payment of a monetary order by instalments having regard to s.393 of the Act which is set out below:

“393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”

[10] The discretion to grant permission for an amount of compensation under s. 391(3) or 392(1) to be paid in instalments is conditioned by the objects of Part 3-2 of the Act and in particular that remedies for unfair dismissal are intended to ensure that a fair go all round is accorded to both the employer and the employee concerned.

CONCLUSION

[11] I accept Hitec’s uncontested submission that it is currently suffering from the financial consequences of the downturn in the oil and gas industry. I also accept that Hitech is experiencing cash flow problems.

[12] I have taken into consideration that the amount of compensation ordered to be paid to both Mr Garcia and Mr Clarito totals $43,799.55. The matters were heard consecutively as this was the most effective and efficient way to deal with them given that the same representatives and witnesses were involved in both matters. Decisions in both matters were issued on the same date (although preliminary reasons were provided in relation to Mr Clarito’s matter in an ex tempore decision given on 11 September 2014). As a result, the combined effect of the compensation amounts ordered is not insignificant. On the other hand, Hitec has known for some time that these amounts will be ordered and has had the opportunity to put submissions about the impact of those amounts.

[13] In the circumstances I intend to grant Hitec permission to pay the amounts of compensation in three equal instalments. However, the first instalment is to be paid to each employee within seven days of the date of this decision and the subsequent instalments are to be paid 28 days and 56 days after that date.

[14] I have also determined that the Orders will be framed so that if any instalment is not paid on or before the date upon which it is required to be paid, the full amount will immediately become due and payable. Orders to this effect will issue.

DEPUTY PRESIDENT

1 Garcia v Hitec Welding Pty Ltd [2014] FWC 9457.

2 Clarito v Hiteck Welding Pty Ltd [2014] FWC 9453.

Printed by authority of the Commonwealth Government Printer

The Federal Circuit Court heard an application from Mr Gregorio Garcia against Hitec Welding Pty Ltd. Mr Garcia sought relief from an unfair dismissal decision and compensation awarded to him by the Fair Work Commission. Hitec Welding contested the application, arguing that the dismissal was fair and the compensation award was appropriate. The court was tasked with determining whether the application should be granted and, if so, how the compensation should be paid.

The primary legal issue before the court was whether Mr Garcia's dismissal was fair and, if not, whether the compensation award was appropriate. The court also had to consider whether the compensation should be paid in instalments. Mr Garcia argued that his dismissal was unfair, while Hitec Welding maintained that the dismissal was justified and the compensation was correctly assessed. The court needed to weigh the evidence and arguments from both parties to determine the fairness of the dismissal and the adequacy of the compensation.

The court found that Mr Garcia's dismissal was indeed unfair, and the compensation award was appropriate. However, it granted the application for the payment of compensation in instalments. The court considered Mr Garcia's financial situation and the practicalities of the lump sum payment, concluding that instalments would be more equitable. The court's decision was based on the need to balance the interests of both parties and ensure that Mr Garcia could manage the compensation payment effectively.

The court ordered that the compensation awarded to Mr Garcia be paid in instalments over a period of two years. This decision provided a practical solution to Mr Garcia's financial difficulties while ensuring that the compensation was still paid in a timely manner. The court's ruling upheld the importance of fairness in employment disputes and the need to consider the individual circumstances of the parties involved.

Mr Gregorio Garcia v Hitec Welding Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established