Mr Jason McNally v Neale Taylor Plumbing Pty Ltd T/A Neale Taylor Plumbing & Gas

[2014] FWC 5226

[2014] FWC 5226

FAIR WORK COMMISSION

DECISION

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

Mr Jason McNally
v
Neale Taylor Plumbing Pty Ltd T/A Neale Taylor Plumbing & Gas
(U2014/4467)

DEPUTY PRESIDENT BARTEL ADELAIDE, 1 AUGUST 2014

Termination of employment - compensation remedy .

[1] Jason McNally (the applicant) has made application pursuant to s.394 of the Fair Work Act 2009 (the Act), seeking a remedy in relation to his dismissal from Neale Taylor Plumbing Pty Ltd T/A Neale Taylor Plumbing & Gas (the employer) on 24 January 2014.

[2] On 4 July 2014 I issued a decision (“the decision on merit”) 1, in which I concluded that the dismissal was harsh because of its impact on the applicant and because it was disproportionate to the applicant’s conduct.

[3] I also determined that reinstatement was impracticable because of the applicant’s migration status, but that there was insufficient information upon which to determine the amount of compensation, if any, that should be awarded. 2 Further written submissions were subsequently received from the parties and a short hearing was held on 25 July 2014.

[4] The relevant provisions of the Act are 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.

(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.”

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.”

[5] I have had regard to the submissions of the parties and make the following findings in relation to the criteria under s.392(2) of the Act.

The effect of the order on the viability of the employer’s enterprise

[6] The employer is seeking that any compensation ordered be paid in instalments of $500 and this is not opposed by the applicant. Mr Taylor presented a range of documentation at the hearing in relation to the financial position of the employer and I am satisfied that the payment of any compensation in instalments is appropriate. The employer is a small business operating on an overdraft and has an agreement with Australian Taxation Office to pay its taxation obligation by instalments.

The length of the person’s service with the employer

[7] The applicant had approximately 17 months service as at the date of dismissal. I do not regard this period as a ‘short’ period of service but neither is it a substantial period that would support compensation at the higher level provided under the Act.

The remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[8] Subsection 392(2)(c) of the Act requires that the Fair Work Commission (the Commission) make an assessment of the likely duration of the applicant’s employment, and the consequent remuneration that would have been received, absent the harsh, unjust or unreasonable dismissal. In this case the applicant was in receipt of a weekly wage of $992.80. He was engaged under a sub-class 457 visa which expired in early February 2014, some 8 days after his dismissal. Mr Taylor submitted that the employer’s sponsorship agreement expired on 12 July 2014 and that, prior to the applicant’s dismissal, he applied to the Department of Immigration and Citizenship (DAIC) to re-nominate the applicant so that his visa would be extended. As at the date of dismissal DAIC had not approved the application 3 and, according to Mr Taylor, “there was uncertainty whether it would [be approved]”.4

[9] The applicant is seeking 6 months compensation less the amount of remuneration he has earned since dismissal. He submitted that had Mr Taylor not withdrawn the application to DAIC it would have been approved and his employment could and would have continued to at least 12 July 2014. I note that even if the application had been approved by DAIC this of itself would not be a guarantee of employment to this date.

[10] On the evidence before the Commission, the applicant had received prior warnings in October 2013, although for the reasons outlined in the decision on merit, it is appropriate to regard the two warnings as one. 5 In the decision on merit I found that Mr Taylor’s concern with the quality of some of the work undertaken by the applicant after October 2013 was warranted. However, I also consider that if managed appropriately those issues would most likely have been able to be resolved.

[11] The veracity of the particular complaint that triggered the applicant’s dismissal was not investigated by the employer at the time and the evidence before the Commission did not enable a finding to be made on this matter. I cannot discount that the allegation may have had some veracity which if properly investigated may have resulted in a further warning to the applicant or otherwise impacted on the expected duration of the employment.

[12] An assessment of the anticipated period of employment, absent the dismissal, involves a degree of speculation as to what would have likely occurred, however in my view a realistic assessment of the anticipated period of employment is 4 months. The applicant would have received remuneration of $17, 209.33 in this period, being one third of the annual wage of $51, 628 agreed between the parties.

The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[13] The decision on merit discussed the circumstances of the applicant in relation to his efforts to obtain reasonable employment in view of his visa status. I found that he had taken reasonable steps to mitigate his loss 6 and consequently there should be no reduction in compensation for this factor.

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

[14] The applicant has earned $3,006 since his employment was terminated, but a portion of these earnings were received beyond the 4 month anticipated period of employment and should be discounted accordingly.

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

[15] No adjustment is necessary in relation to this matter as the decision and order of the Commission post-date the anticipated duration of the applicant’s employment.

Any other matter that the FWC considers relevant

[16] I consider that it is more likely than not that the applicant’s visa would have been extended. However the possibility that the extension would not have been granted is a contingency that I have taken into account in the determination of the compensation amount. I have assessed this contingency at 5%.

[17] The applicant received two weeks pay on termination ($1,985.70) which should be taken into account. I have also taken into account the applicant’s period of service, the financial position of the business, and the financial hardship caused to the applicant as a result of the dismissal. 7

Section 392(3) Deduction for misconduct

[18] Section 392(3) of the Act requires that the Commission discount the compensation that would otherwise be ordered by an appropriate amount if the misconduct of the applicant contributed to the employer’s decision to dismiss.

[19] In this regard, Mr Taylor referred in his written submission to complaints the applicant made to SafeWork SA and to the South Australian Police in relation to the vehicle he was allocated by the employer to carry out his work. He submitted that these matters became known to him after the dismissal and that the complaints were without foundation and designed to damage the employer’s reputation. Mr Taylor contended that this should be taken into account in considering the amount of compensation.

[20] The applicant said that his complaints were legitimate. The Commission has no evidential basis to assess the validity of the complaints or the intention behind them and no deduction is made. As noted earlier, there was an insufficient evidentiary basis to reach a conclusion as to the veracity of the complaint against the applicant that triggered his dismissal, and no deduction is made in relation to this matter. However it is a matter that has been taken into account in my assessment of the anticipated period of employment.

[21] I have determined that a fair and appropriate amount of compensation is $12,000. An order to this effect is issued with this decision and provides payment by instalments as agreed between the parties.

DEPUTY PRESIDENT

Appearances:

The Applicant in person

The Respondent in person

Hearing details:

Adelaide

25 July

2014

Final written submissions:

18 July

2014

 1   McNally v Neale Taylor Plumbing Pty Ltd T/A Neale Taylor Plumbing & Gas[2014] FWC 4486

 2   At paras [62] and [63]

 3   The application was subsequently withdrawn by the employer after the applicant was dismissed.

 4   Respondent’s Outline at paragraph 12

 5   At para [32] of the decision on merit

 6   At para [64] of the decision on merit

 7   At para [60] of the decision on merit

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