Mr John Smith v Aussie Waste Management Pty Ltd
[2015] FWC 1824
•17 MARCH 2015
| [2015] FWC 1824 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr John Smith
v
Aussie Waste Management Pty Ltd
(U2014/13262)
DEPUTY PRESIDENT WELLS | HOBART, 17 MARCH 2015 |
Unfair dismissal – decision on compensation in lieu of reinstatement.
[1] On 12 February 2015 I delivered a decision determining that Mr John Maxwell Smith had been unfairly dismissed by Aussie Waste Management Pty Ltd (AWM). Mr Smith was not seeking reinstatement and my decision ([2015] FWC 1044) (the decision) held at [67] to [69]:
[67] I am satisfied that Mr Smith’s dismissal was unfair.
[68] To enable assessment of compensation (if any) payable in this matter, the applicant is required to provide a statutory declaration as to all efforts he made to obtain employment following his termination by AWM, the date on which he [obtained] employment, and evidence of any paid work he obtained between those dates (excluding any welfare payments). AWM will be afforded an opportunity to make submissions on these points should they so desire. Directions for the provision of this documentation are issued separately.
[69] An order giving effect to this decision will be issued, following receipt of the documentation contained in the Directions.
[2] Both parties filed documentation in accordance with the directions issued. A further hearing was held on 5 March 2015 in relation a request by AWM that part of its submissions not be disclosed to the applicant and his representative. Following that hearing, AWM indicated that it sought to rely on the document, a letter from its accountant, and that the document should be subject to a confidentiality order of FWC, due to the sensitive nature of the financial information it contained. The applicant also provided submissions as directed on this point. I accept AWM’s submissions on the matter of confidentiality. The document was provided to the applicant and his representative on 12 March 2015 and I have issued the parties with an order for confidentiality. I have had regard for all of the relevant information provided by way the directions issued in this matter on 12 February and 5 March 2015 and the applicant’s response dated 13 March 2015 as to the confidential document provided to him on the same date.
[3] These are my reasons for decision on remedy for compensation in lieu of reinstatement and should be read in conjunction with my reasons contained in [2015] FWC 1044.
[4] The relevant section of the Fair Work Act 2009 (the Act) dealing with Remedy–compensation provides:
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 section (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:
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 pa 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] Accordingly, having regard to the considerations in the Act, I must determine whether compensation in lieu of reinstatement is appropriate and if so, to what extent.
[6] Section 392(2) requires me to take into account all of the circumstances of the case including the factors that are listed in ss.(a) to (g) above. These factors including (in ss.(g)) any other relevant considerations. I now turn to identifying the relevant considerations under the headings of the subsections of s.392(2).
[7] On the issue of remedy, Mr Smith provided a statutory declaration with annexures1 indicating that whilst he had obtained casual employment in early November 2014 with NBN contractor JRV Civil Construction, the work was sporadic in nature. 2 Mr Smith stated he had enrolled with two labour hire companies in Tasmania, sent his resume to companies he had identified in the phone book, followed these applications up by telephone, but had been unable to find full-time work. Mr Smith advised he was stood down from work with JRV Civil Construction on 21 December 2014 for the Christmas to New Year break with no wages for that period.
[8] From the period early November 2014 to the date of hearing, a period of approximately 13 weeks, Mr Smith’s pay slips indicate he worked an average of approximately 26 hours per week at a pay rate of $25.00 per hour. Therefore his average income over that period was $650.00 before tax.
[9] AWM provided detailed submissions3 in relation to the criteria in s.392(2), stating that it is a relatively small business which is subject to financial pressures currently that would require them to request any compensation payable be subject to instalments under s393 of the Act.
[10] Having regard to the usual principles of compensation in unfair dismissal cases, AWM submitted that:
• Due to a history of poor performance Mr Smith’s employment with AWM out likely have been terminated within a period of approximately 18 weeks;
• Mr Smith’s pay slips indicate he had earned $8,414.50 over a 14 week period, which should be deducted from any compensation considered;
• Mr Smith has experienced a shortfall in pay since his termination of $234.96 per week, in addition to a four week period he was without any work;
• any amount of compensation should be discounted by 20% for contingencies;
• due to misconduct, any amount of compensation should be discounted by 2 weeks’ pay;
• the financial situation of AWM; and
• the compensation cap of 26 weeks pay does not require consideration as it is unlikely the employment period would have continued for more than 18 weeks.
The effect of the order on the viability of the employer’s enterprise
[11] AWM is a small sized business and is under financial pressure in a competitive market. I have had regard for the submissions of AWM on this point when considering an appropriate amount for compensation but more particularly when considering its request that any compensation ordered be payable by instalments, pursuant to s.393.
The length of the person’s service with the employer
[12] Mr Smith was employed by AWM for two and a quarter years. Whilst not a significant period of time which encourages the making of an order for compensation, the period does indicate that Mr Smith had settled and enjoyed continuous employment with his employer. I consider this factor neutral in my assessment of compensation.
The remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed
[13] This factor involved a consideration of the likely duration of the applicant’s employment in the absence of what I have found to be an unfair dismissal. It is a necessary element of consideration by the Commission, as was acknowledged in the Full Bench in Sprigg v Paul’s Licensed Festival Supermarket (1988) 88 IR 21 (Sprigg). However, consideration must include any relevant circumstances known at the time. The evidence reflected that the relationship between Mr Smith and his employer was strained, with Mr Smith having received at least one warning due to performance approximately three months prior to his dismissal. I have accepted AWM’s view that due to performance issues highlighted during the hearing, Mr Smith could have expected his employment with AWM to come to an end no longer than 18 weeks from his termination on 3 October 2014.
[14] It was established at hearing that a week’s pay for Mr Smith was calculated at $22.00 per hour for a 38 hour working week. This equates to $836.00 per week or $15,048.00 over the 18 weeks projected as compensation.
The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal
[15] I am persuaded by Mr Smith’s evidence that he acted to mitigate any loss inflicted on him by seeking and obtaining work by November 2014. The respondent conceded in its submissions that Mr Smith had successfully mitigated much of his loss and had provided evidence of his reasonable steps to minimise the impact of his dismissal.
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
[16] I have had regard to the approach to lost remuneration as outlined in Sprigg and reaffirmed in Ellawalla v Australian Postal Corporation4, with respect to a precursor provision, the Full Bench held that “only monies earned during the period from termination until the end of the anticipated period of employment are deducted”.
[17] I have already concluded at paragraph [12] that it is reasonable to assume that Mr Smith would have continued to be employed by AWM for a further 18 weeks from 3 October 2014 had he not been unfairly dismissed.
[18] Mr Smith obtained employment in the civil construction industry with his first pay slip indicating a pay period from 29 October to 12 November 2014. It is not clear on the evidence the exact date he was employed. I am of the view that Mr Smith has mitigated any loss from his termination. I accept AWM’s submissions, and based on the pay slips provided by Mr Smith, that Mr Smith earned $8,387.50 from termination until the hearing of this matter.
[19] It is therefore appropriate to make a deduction of $8,387.50 from the amount of compensation, representing the monies earned during the period from termination until the end of the anticipated period of employment, leaving an amount of compensation of $6,660.50.
[20] Due to the relatively short period of projected employment with AWM (18 weeks) that I have determined, I am of the view that the figures for compensation are capable of a reasonably precise assessment5 and therefore only a small reduction of 10% should be made for contingencies. This provides for a provisional amount of compensation of $5,994.45.
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
[21] This is not a matter that requires further consideration.
Any other matter that FWC considers relevant
[22] There are no other matters which I consider relevant to deciding an amount for compensation, so I now turn to consider s.392(3) of the Act.
Misconduct
[23] As found at paragraph [2] above, s.392(3) of the Act states:
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.
[24] If I am satisfied that the misconduct of Mr Smith contributed to the employer’s decision to dismiss him, I must reduce the amount of compensation I would otherwise order. In my previous decision in this matter at paragraph [54] I held that:
“[54] Whilst Mr Smith’s conduct should not be tolerated in the workplace, in the context of a one-on-one heated discussion with his Manager without anyone else present, I have concluded that the conduct is not sufficiently insubordinate to establish a valid reason for dismissal. The conduct did, however, warrant a form of disciplinary action, other than dismissal.”
[25] I have concluded that the compensation should be discounted by 30% (or $1,798.34) to reflect Mr Smith’s conduct. Whilst the quantification of the discounting applicable to the misconduct in this matter is not an exact science, I have sought to reach a balanced outcome having regard for my findings and reasons set out in this decision and the original decision. This provides for the amount of compensation ($5,994.45) to be discounted due to misconduct thereby requiring an amount of compensation payable to Mr Smith of $4,196.11.
[26] I make no allowance for any shock, distress or humiliation that may have been caused by the manner of the dismissal.6
Compensation cap
[27] The amount of compensation that I determine as appropriate is less than the maximum prescribed by s.392(5) of the Act.
Conclusion in relation to remedy
[28] Having previously found that Mr Smith was unfairly dismissed and as he does not seek reinstatement, I find that compensation is appropriate.
[29] I am satisfied that an order for payment of compensation by AWM of $4,196.11 gross, less tax as required by law, to Mr Smith in lieu of reinstatement is appropriate in all the circumstances of the case.
[30] I have determined that the compensation should be paid, less any required deduction in taxation, in three equal instalments, the first such payment to be made within 14 days of this decision and each instalment thereafter to be made monthly.
[31] The Order [562085] to effect this decision and the decision [2015] FWC 1044 in this matter, has been issued separately.
DEPUTY PRESIDENT
Applicant’s statutory declaration & evidence as to compensation:
2015
20 February
Respondent’s submissions-in-response as to compensation:
2015
27 February
1 Statutory Declaration of John Maxwell Smith, dated 17 February 2015
2 Ibid (see payroll slips attached to statutory declaration)
3 Respondent’s submissions, dated 2 March 2015
4 Print S5109
5 Slifka v J W Sanders Pty Ltd (1995) 67 IR 316 at 328
6 With regard to the express requirements of s.392(4) of the Act and the absence of any evidence to support such a proposition.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR562084>
0
3
0