Mr Lucas KouflidisvFitch Retail Pty Ltd T/A Golden Grove Village Shopping Centre
[2011] FWA 2378
•6 MAY 2011
[2011] FWA 2378 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Lucas Kouflidis
v
Fitch Retail Pty Ltd T/A Golden Grove Village Shopping Centre
(U2010/1893)
COMMISSIONER HAMPTON | ADELAIDE, 6 MAY 2011 |
Application for unfair dismissal remedy - small business - whether dismissal complies with small business fair dismissal code - whether dismissal harsh, unjust or unreasonable - whether potential resignation valid reason to dismiss - remedy - compensation.
INTRODUCTION AND CASE OUTLINE
[1] This is an application by Mr Lucas Kouflidis (the applicant) pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking a remedy for an alleged unfair dismissal. The applicant was dismissed from his role as a Duty Manager with Fitch Retail Pty Ltd T/A Golden Grove Village Shopping Centre (the respondent or the employer) in mid November 2010.
[2] The respondent is a small business within the meaning of the Act 1 and manages a shopping centre in the north eastern Adelaide suburb of Golden Grove. The applicant’s role included working on weekends and in the context of discussions with management of the respondent concerning potential changes to work organisation and his hours of work in October 2010, he indicated in effect that if he could not stop working on weekends he would need to resign and/or seek alternative employment. This aspect is in dispute.
[3] In November 2010, when a decision was made by the employer that the proposed changes to the work organisation were not to proceed, the respondent terminated the applicant’s employment largely based upon the earlier alleged “resignation”. This occurred without any indication that this course of action was being considered and followed the reactivation of an earlier complaint made by the applicant about his immediate manager and some apparent complaints about the applicant from some cleaners engaged in the shopping centre.
[4] The determination of this matter requires amongst other issues, the consideration as to the actual reasons for the applicant’s dismissal, the actual conduct of the parties surrounding the alleged “resignation” in October 2010 and the events leading to the decision in November to dismiss the applicant.
[5] Having regard to the matters outlined in s.399 of the Act, I considered that it was appropriate to conduct a hearing in this matter. 2
[6] The applicant represented himself and the respondent was represented by one of its Directors, Mr Mathew Fitch.
[7] Given the absence of professional representation, in the lead up to the hearing I arranged for my office to forward information to both parties regarding some of the issues that may arise in the matter and the need to be in a position to advance evidence on disputed facts. One of those issues was whether the respondent was contending that the dismissal was consistent with the Small Business Fair Dismissal Code as established pursuant to s.388 of the Act. Mr Fitch for the respondent conceded that this was not the case. 3
[8] The applicant contends that his dismissal was harsh, unjust and unreasonable. In particular, he denies that he resigned in October and argues in effect that he announced an intention to seek alternative employment in the context of a hypothetical question about changes in his working hours. He also contends that he had expected that his working hours would be changing and that there was no discussion with him about the decision to terminate his services when those circumstances apparently changed.
[9] The applicant also argues that there were certain events that took place between the October discussions and the dismissal which were at odds with the decision to terminate his employment and that he was dismissed without good reason.
[10] The applicant did not seek reinstatement but rather 10 weeks compensation in lieu of reinstatement.
[11] The respondent contends that the applicant effectively resigned his employment in October 2010 and given that the applicant was apparently continuing to pursue having weekends off, which was not feasible, it was entitled to protect its business interests by dismissing him. The respondent denied that the complaint by the applicant against his manager played any role in the decision to dispense with his services and sought to rely upon some alleged performance issues to further justify the decision.
[12] The respondent also contended that it had the right to dismiss the applicant by giving four weeks’ notice and that it had actually provided over six weeks pay in lieu of notice which should be taken into account.
THE EVIDENCE
[13] The applicant gave evidence on his own behalf.
[14] The following gave evidence for the respondent:
- Mr Mathew Fitch - the respondent’s Director and the person who effectively made the decision to dismiss the applicant;
- Mr Phillip Dunn - the respondent’s General Manager at the shopping centre; and
- Mr Bill Papaioannou - the respondent’s Operations Manager at the shopping centre and the applicant’s immediate manager.
[15] I found each of the witnesses gave their evidence honestly. There are differences in their evidence, including factual conflicts, and these are largely the result of different perspectives and recollections.
[16] The applicant in my view gave his evidence genuinely however he had a rather naive understanding of some of the events and this leads me to be cautious about some elements of that evidence.
[17] There were also some differences between the evidence of the applicant and Mr Fitch which are principally explained by the fact that Mr Fitch did not have a day to day involvement in the management of the shopping centre and he was not aware of certain exchanges that had occurred between the applicant and the local management. These included the nature of discussions about the potential for the applicant to change his working hours, the change in the applicant’s role to include some aspects of casual mall leasing management (sales) and some elements of the local discussions that were taking place in the immediate lead up to the decision to dismiss the applicant. On those matters, I prefer the direct evidence of the applicant.
[18] Where there is conflict between the evidence of the applicant and Mr Fitch about matters where Mr Fitch was directly involved, I generally prefer the evidence of Mr Fitch.
[19] I generally accept the evidence of Mr Dunn and Mr Papaioannou in terms of matters that they were directly involved in, however there was some gloss in my view on elements of the events.
GENERAL FINDINGS OF FACT
[20] Based upon the material before me, and having regard to the above findings, the following facts emerge.
[21] The applicant was engaged by the respondent in the position of Duty Manager in July 2009. The applicant was employed by the previous business that operated the Golden Grove shopping centre in largely the same role.
[22] The role of Duty Manager involved the management of the day to day running of the shopping centre during extended trading periods, particularly in the absence of the General Manager and Operations Manager. As a result, the work required the applicant to attend on weekends and during late trading days. The applicant also contributed to the general operations of the centre in conjunction with the other managers.
[23] During 2010, the applicant had some responsibilities added to his role in the nature of casual mall leasing management which involved him in seeking out leasing opportunities. This work was performed largely during the week and the applicant had a desire to do more of this work and to stop working on weekends in due course. Although there were no guarantees given to him in that regard, I find that Mr Dunn was aware of and did not discourage those expectations.
[24] In August 2010, the applicant also became aware that the respondent was exploring the introduction of alternative security arrangements within the operations. This would have the effect that the applicant would not need to supervise the shopping centre on the weekends. Although he considered that he was assured that this was to occur, I find that the employer was talking up the concept in a very positive manner but did not provide a guarantee at that point.
[25] During August there was also some discussion between the applicant and Mr Papaioannou about the desire of the applicant to stop working weekends. I would add that this topic was discussed on a number of previous occasions but any contentions that the applicant would leave his employment were apparently not taken seriously at the time of the earlier remarks.
[26] In early October 2010 there were some exchanges between the parties in relation to events that took place at that time regarding cleaners and security footage related to an alleged slip and fall incident (involving a member of the public) within the shopping centre. Mr Papaioannou and the applicant exchanged emails about this matter. On 6 October, the respondent apparently received some reports from cleaners at the shopping centre alleging that the applicant had spoken harshly to them. This matter subsequently came to the attention of Mr Dunn but was never raised with the applicant.
[27] On 18 October 2010, the applicant lodged a formal complaint about his treatment by Mr Papaioannou. This alleged ongoing mistreatment and harassment, including the lack of support in front of and in relation to other employees or persons working at the shopping centre.
[28] On 21 October 2010, Mr Dunn and Mr Fitch met with the applicant to discuss his complaints. During the course of that meeting, the applicant was asked what he would do if his working hours were not changed. There is a dispute about the precise response given, however on balance I find that the applicant indicated to the effect that if that happened, he would need to seek alternative employment and would resign.
[29] On 22 October 2010, Mr Dunn wrote to the applicant in an attempt to summarise the outcomes of the meeting and in so doing indicated the view that the applicant’s complaint had been addressed. In relation to the weekend work issue, the letter indicated as follows:
“One concerning issue that was raised to Mathew and myself yesterday was your comment that if we do not have in place by this summer as alternative to the Duty Manager’s current role and employment contract with regards to working on weekends.
It was mentioned by yourself that if you are to work on weekends this Summer (currently agreed in your contract of employment) you will be leaving Fitch Retail as your employer. We note your comments made and concerns raised regarding this.
Whilst we have mentioned in the past of our intention in the future, we are not in a position to guarantee that this will happen within your expected timeline and am disappointed that you have made this comment. Fitch Retail Pty Ltd employed the existing staff based on certain conditions and previous roles and responsibilities at the time of purchasing the Shopping Centre.
I hope this has clarified your concerns and has put to rest this complaint.” 4
[30] Later in October, the applicant was advised that Mr Papaioannou had resigned and in the course of a discussion with management he was sounded out for the position of Operations Manager. Although I do not accept that he was formally offered the position it is clear that this was a positive discussion and would have left the applicant with the impression that his employment was secure. It is also likely that the 22 October 2010 letter was discussed informally in that meeting however the context of the discussions was such that the alleged resignation was not in my view in the forefront of any of the parties’ thinking at that particular time.
[31] I interpose that Mr Papaioannou subsequently withdrew his resignation and other than for an earlier period of annual leave, was not absent from his employment with the respondent.
[32] On 4 November 2010, there was an exchange of emails 5 regarding a request that the applicant had made for leave on an upcoming weekend. In the course of that exchange the applicant indicated that:
“I am aware I don't have much annual leave but once again I was under the impression I would be working Mon-Fri by now, and didn't think I would be in the situation I would not have enough hours annual leave to take a day off work. If you wish I can make up for the time I take off for this weekend, my time will be utilized much better if I am on the road finding more CML clients coming up to the Christmas period.
Tuesdays and Wednesdays will be more useful to me to try and find extra bookings for the centre and also ensure I have annual leave banked away for when I actually want to take a holiday.
I do have a number of occasions to attend to in the upcoming months that I have paid for and organized in advance because I was under the impression my working roster would of changed by now as I was told in August.
Can you please let me know when I will be receiving a letter of apology from Bill due to the harassment I have received from him.”
[33] Mr Dunn then indicated in reply:
“I understand fully your predicament with regards to the impression of working Monday to Friday by now, based on comments and general discussions of our suggestions to improve issues relating to Casual Mall Leasing, Security, Maintenance, etc.
These were discussions, not promises, and I reiterate not promises with timelines. With this in mind, it is still our intent to make some changes regarding hours of some employees to better fulfil their roles of which they are currently employed and were employed when Fitch purchased the Shopping Centre. It is an ongoing pursuit to always try to find ways to improve.
As far as an impending apology, I was under the impression from the letter you received on the 22nd of October that this issue was put to rest. I prefer not to pursue it further, however, if you are still not happy with this, please advise, and I will organize for another meeting with Mathew Fitch and myself to further discuss.
With regards to the extra hours you intend to do in lieu of your time off this weekend, please put forward your proposal for approval. This needs to be done before I can approve any time off requests.”
[34] There was no subsequent discussion about these matters between the parties.
[35] Mr Dunn made a recommendation to Mr Fitch that the applicant be dismissed. I find that this was principally associated with his concerns about the applicant’s intentions with respect to working on weekends but was also directly influenced by the matters that had been raised by the cleaners and more particularly, his annoyance that the complaints against Mr Papaioannou had been “re-raised” by the applicant. I interpose however that the fact that the applicant had “re-raised” the complaint at that point was influenced in part by the fact that Mr Papaioannou was now still going to be part of the business.
[36] The decision to dismiss the applicant was made by Mr Fitch. I find that he took into account and was directly influenced by the recommendation of Mr Dunn. However, his primary concerns were those associated with the weekend work and the applicant’s intentions in that regard. It is also clear that he was not aware at the time of the nature and import of the recent exchange that had taken place regarding these matters between the applicant and Mr Dunn. This included confirmation of on-going endeavours to alter the applicant’s hours (without any guarantees) and consideration of alternative arrangements concerning additional hours to make up for the weekend work missed.
[37] Mr Dunn, acting on Mr Fitch’s instructions, prepared a letter of dismissal and provided it to the applicant on 21 November 2010. The letter provided formal notice of termination in accordance with clause 22.1 of the terms and conditions of employment to be effective on 31 December 2010. The letter also indicated that this was intentionally in excess of the one months’ minimum notice (as specified in the employment contract) and provided the applicant with the choice to take payment in lieu of notice. This is what occurred.
[38] In relation to the reasons for termination, the dismissal letter stated as follows:
“Clause 22.1 does not require Fitch Retail P/L to provide you with reasons for termination and no reasons are hereby given.
For your information however you are advised that the role and position you hold will continue to require weekend work as you are currently doing and required to do. You are aware that there was a possibility that weekend work would not be required for the person in your role if Fitch Retail decided to make operational changes. It is now unlikely that such operational changes will occur. It is noted that your stated position is that you will resign if you are required to continue to do weekend work.” 6
[39] There were no further discussions with the applicant about these matters, or any discussions about the other considerations taken into account by the employer, in the lead up to the provision of the termination letter.
CONSIDERATION - WAS THE APPLICANT UNFAIRLY DISMISSED?
[40] Section 385 of the Act provides as follows:
“385 What is an unfair dismissal
(1) A person has been unfairly dismissed if FWA is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.”
[41] It is clear on either case that ultimately the applicant was dismissed by the respondent. Although Mr Fitch sought to characterise the conversation that took place on 21 October 2010 as a resignation, the subsequent conduct of both parties was not consistent with that contention. The comments were treated as a basis for concerns rather than an outcome and both parties continued to operate on the basis of a continuing relationship. The letter of 11 November 2010 was clearly a dismissal by the employer and there is no basis to contend that it was merely accepting the earlier alleged “resignation” by the applicant.
[42] The employer is a small business within the meaning of the Act however it is not contended that the dismissal was consistent with the Small Business Fair Dismissal Code. 7
[43] There is also no suggestion that this is a matter involving a genuine redundancy. As a result, I must consider whether the dismissal was harsh, unjust or unreasonable.
[44] The Act relevantly provides as follows:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that FWA considers relevant.”
[45] I have earlier set out the general contentions of the parties and although I have considered the full positions advanced by the parties, I will not repeat them for present purposes.
[46] It is clear that s.387 contemplates that an overall assessment as to the nature of the dismissal must be made by FWA. In so doing, the Act sets out a number of considerations that are to be taken into account.
[47] It is convenient therefore to use the various provisions of s.387, with reference to the relevant circumstances, to outline my consideration of the matter.
Section 387(a) – whether there was a valid reason for the dismissal related to the applicant’s capacity or conduct (including its effect on the safety and welfare of other employees).
[48] Valid in this context is generally considered to be whether there was a sound, defensible or well founded reason for the dismissal. Further, in considering whether a reason is valid, the requirement should be applied in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. That is, the provisions must be applied in a practical, commonsense way to ensure that the employer and employee are each treated fairly. 8
[49] The applicant had indicated that he would be seeking other employment and resigning if his working hours expectations were not able to be accommodated. By 4 November 2010, the applicant had been advised that the potential change to the security arrangements was not taking place and that as a result, he would need to be working on weekends until further notice.
[50] In that context, the applicant had confirmed to the employer that as a result of his earlier expectation that weekends would be freed-up, he did have some weekend commitments in the balance of the year. This and the business needs of the respondent were a relevant consideration for the employer given the need to have a Duty Manager at those times.
[51] However, it is clear in the November communication of Mr Dunn that alternative arrangements continued to be considered, including time in lieu for the weekend work and the potential for ongoing changes to the working hours, and there was no indication at that time that further assurances from the applicant were being sought by the respondent.
[52] As a result, there was no reasonable basis to assume that the applicant would simply walk out on the business and leave it exposed as speculated by Mr Fitch. Indeed, there was no basis to assume that the applicant, even if he was then actively seeking employment and gained such, would fail to give the notice required by his contract. The absence of a significant leave balance was a consideration in that context, however the previous conduct of the applicant over some time did not justify the assumption apparently made by the respondent. 9 I also note that the immediate effect of the respondent’s decision itself was apparently to leave the business without a dedicated Duty Manager, at least for a period. There was also no basis to assume that the applicant would refuse to work weekends as required.
[53] In terms of the alleged performance concerns and the issues apparently raised by the cleaners, these were not considered serious enough at the time to even discuss with the applicant and I am unable to place any significant weight upon them for present purposes. 10
[54] When the circumstances are considered as a whole, I find that valid concerns were held by the respondent but these did not extend to a valid reason to dismiss at that point. This finding is clearly relevant to the consideration as to whether the dismissal was unjust or unreasonable.
Section 387(b) – whether the applicant was notified of the reasons for dismissal.
[55] The applicant was not formally notified of the reasons for his dismissal and in fact the respondent declined to do so in the dismissal letter of 11 November 2010. However, in the balance of that letter the respondent did in effect provide its reason, or at least those concerning the alleged resignation.
[56] The dismissal letter does not however refer to the performance considerations that were also relied upon by the respondent.
Section 387(c) – whether the applicant was given an opportunity to respond to any reason related to his capacity or conduct.
[57] The applicant was not given any opportunity to respond to allegations about his conduct and work performance. In fact, the applicant was not made aware of the concerns held by management or the fact that some issues had apparently been raised by the cleaners.
[58] To the extent that the alleged resignation is a factor going to the applicant’s conduct or capacity, the respondent did raise its concerns with the applicant in the letter of 22 October 2010. However, these were not raised in such a way as to make it clear that the respondent considered it to be a resignation and there was no further discussion despite the intervention of certain events that would have given the impression to the applicant that his job was not at risk.
Section 387(d) – any unreasonable refusal by the respondent to allow the applicant to have a support person present to assist in any discussions relating to his dismissal.
[59] There were no direct discussions relating to the applicant’s dismissal as contemplated by this provision. There were discussions that did ultimately contribute to the dismissal and in that context, the applicant did not seek to have a person assist him.
Section 387(e) – if the dismissal is related to unsatisfactory performance by the applicant – whether the person has been warned about that unsatisfactory performance before the dismissal
[60] The applicant was not warned about his alleged performance deficiencies or as to the seriousness that the respondent attached to the earlier alleged “resignation”.
Section 387(f) – the degree to which the size of the respondent’s enterprise would be likely to impact on the procedures followed in effecting the dismissal
Section 387(g) – the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal
[61] The respondent is a small employer and I accept that the absence of any apparent human resources expertise has impacted upon the procedure adopted in effecting the dismissal. This includes the approach to the formalisation of matters, such as the change to some of the applicant’s duties, and more particularly the manner in which the dismissal was handled and communicated to the applicant. I have taken this into account.
[62] I would add that the manner in which the respondent dealt with the applicant’s complaints against his immediate manager does reveal a relatively sophisticated understanding of such matters. The business is clearly not without management expertise.
[63] In this case, there was however a complete denial of procedural fairness about many elements of the decision to dismiss the applicant. These led to assumptions being made that were not reasonable and these go beyond matters of procedure and contributed to demonstrable unfairness in the circumstances.
Section 387(h) – any other matters that FWA considers relevant
[64] The applicant has some 16 months of service with the respondent and he was generally regarded as a diligent worker. This and the associated consideration as to whether the dismissal was harsh, that is, disproportionate to the conduct given all of the circumstances including the impact upon the employee, are also clearly relevant considerations. 11
[65] The fact that the applicant was paid an amount beyond the minimum notice required in the employment contract is also a factor to be considered in this particular case.
Conclusion as to the nature of the dismissal
[66] Having regard to, and weighing up, all of the considerations established by s.387 of the Act, I find that the dismissal of the applicant was harsh, unjust and unreasonable in all of the circumstances of this matter. As a result, I find that the applicant was unfairly dismissed within the meaning of the Act.
REMEDY
[67] Division 4 of Part 3-2 of the Act provides as follows:
Division 4—Remedies for unfair dismissal
390 When FWA may order remedy for unfair dismissal
(1) Subject to subsection (3), FWA may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) FWA is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) FWA may make the order only if the person has made an application under section 394.
(3) FWA must not order the payment of compensation to the person unless:
(a) FWA is satisfied that reinstatement of the person is inappropriate; and
(b) FWA considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.
391 Remedy—reinstatement etc.
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
Order to maintain continuity
(2) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), FWA must take into account:
(a) 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 reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.
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), FWA 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 FWA considers relevant.
Misconduct reduces amount
(3) If FWA is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, FWA 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 FWA 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 FWA 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 FWA under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.
[68] The prerequisites of ss.390(1) and (2) have been met.
[69] Section 390 makes it clear that compensation is only to be awarded as a remedy where I am satisfied that reinstatement is inappropriate and that compensation is appropriate in all the circumstances. As a result, I must consider firstly whether reinstatement is inappropriate.
[70] The applicant does not seek reinstatement and given the overall circumstances of this matter, I am satisfied that reinstatement under the Act is not appropriate.
[71] Accordingly, I must, having regard to the considerations established by the Act, determine whether compensation in lieu of reinstatement is appropriate and if so, to what extent.
[72] Section 392(2) requires me to take into account all of the circumstances of the case including the factors that are listed in paras (a) to (g). These factors include in ss.(g) any other relevant considerations. Without detracting from the overall assessment required by the Act, it is convenient to discuss the identified considerations under the various matters raised by each of the provisions.
The effect of the order on the viability of the employer’s enterprise
[73] The respondent does not contend that the nature of the compensation sought by the applicant would impact upon the viability of the business. 12
The length of the person’s service with the employer
[74] The applicant was employed with the respondent for almost 16 months. This is a relatively short period and subject to the consideration of the other circumstances impacting upon the nature of that service, must be taken into account including in relation to the assessment of the other considerations established by s.392(2)(c) of the Act.
The remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed
[75] This involves in part a consideration of the likely duration of the applicant’s employment in the absence of what I found to have been an unfair dismissal. His gross remuneration at the time was $1,019.23 per week ($53,000 per annum).
[76] In my view, the underlying tensions regarding the weekend work would have meant that this employment would not have continued indefinitely. It is likely that if not dismissed the applicant would have continued in his role for no more than 12 weeks from the point of dismissal and this projection is also reasonable in my view having regard to the other circumstances applying at the time, including the applicant’s employment history and stated intentions.
[77] The remuneration that the applicant would have received but for the termination was therefore $12,231.
The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal
[78] The applicant provided some evidence about his efforts to mitigate (reduce) the loss suffered as a result of his dismissal. Even allowing for the fact that the dismissal itself would have affected those endeavours, I have some reservations as to the extent of efforts made in that regard. 13
[79] In the circumstances, a discount of twenty percent (approximately one week’s pay) on the final compensation is warranted on this count.
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
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
[80] The applicant was paid 6.4 weeks in lieu of notice ($6,523) 14 upon his dismissal. This must be taken into account and should be deducted from the projected remuneration amount.
[81] The applicant did not earn any other relevant income in the immediate (12 week) period contemplated in this assessment. The applicant was however apparently in receipt of some limited recent “income” from a family source however the precise nature, value and ongoing status of such is uncertain. Given the deduction for mitigation that I propose, and in the absence of being able to conclude that any such income was remuneration as contemplated by s.392(2)(e) of the Act, no additional deduction is appropriate in this particular case.
[82] Based upon the information before Fair Work Australia it is not reasonable to infer that any remuneration would be received between the making of the order and the actual compensation being paid.
Any other matter that FWA considers relevant and the remaining statutory parameters
[83] Given the short period over which I have projected the probable duration of employment and the related circumstances of this case, no further discount for general contingencies is warranted. 15
[84] There is no relevant misconduct that should reduce the amount otherwise payable as compensation, as provided by s.392(3) of the Act.
[85] In light of the express requirements of s.392(4) of the Act, I make no allowance for any shock, distress or humiliation that may have been caused by the manner of the dismissal.
[86] The amount of compensation that I assess as appropriate is far less than the maximum prescribed by s.392(5) of the Act as applied in this matter.
COnCLUSIONS AND ORDERS
[87] I find that the applicant was dismissed and that such was unfair within the meaning of the Act.
[88] I find that reinstatement is not an appropriate remedy in this case.
[89] Having regard to all of the circumstances of this matter, including the considerations established by s.392 of the Act, I find that compensation is appropriate and should comprise a payment by the respondent to the applicant calculated as follows:
• The projected amount of income | $12,231 |
• Deduct income paid on termination | ($6,523) |
• Less a discount for mitigation efforts and related matters (20%) | ($1,142) |
• Total compensation payment | $4,566 |
[90] The compensation payment of $4,566 less any required deduction of taxation, is to be made within 14 days of this decision.
[91] An order to the above effect has been issued in conjunction with this decision.
COMMISSIONER
Appearances:
L Kouflidis appeared in person.
M Fitch for Fitch Retail Pty Ltd T/A Golden Grove Village Shopping Centre.
Hearing details:
2011
Adelaide
14 April.
Final written submissions:
2011
19 April.
1 The respondent employed less than 15 FTE’s at the time of the dismissal - s.23 of the Act and Schedule 12A of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.
2 The matter involved multiple witnesses and issues of credit are critical considerations.
3 PN51 of transcript.
4 Exhibit R2.
5 Attached to the Statement of Mr Dunn - exhibit R4.
6 The termination letter was appended to the Form F2 application.
7 Transcript PN29, PN30 and PN44. I have also considered the application of the Small Business Fair Dismissal Code and I consider that the respondent’s concession is appropriate given the requirements of the code in circumstances as found in this case.
8 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 as cited in Potter v WorkCover Corporation, per Ross VP, Williams SDP, Foggo C PR948009, 15 June 2004 and endorsed by the Full Bench in Industrial Automation Group Pty Ltd T/A Industrial Automation [2010] FWAFB 8868, 2 December 2010 per Kaufman SDP, Richards SDP and Hampton C at par [36].
9 Mr Dunn speculated that the applicant may walk out on his employment - transcript PN544.
10 There was no direct evidence led in relation to the alleged concerns raised by the cleaners and these matters were not put to the applicant at any time.
11 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 465.
12 This matter was raised with the respondent at the commencement of proceedings.
13 The applicant approached two or three potential employers but was not in my view overly proactive or dedicated in that regard.
14 This figure is taken from the material supplied by the respondent on 11 March 2011 and it has been rounded to the nearest dollar.
15 See the discussion of contingencies in Ellawala v Australian Postal Corporation AIRC Print S5109, 17 April 2000 per Ross VP, Williams SDP and Gay C and in Enhance Systems Pty Ltd v James Cox AIRC PR910779, 31 October 2001 per Williams SDP, Acton SDP and Gay C.
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