Mr Rhayne Cooper v The Trustee for Cleveland 24/7 Unit Trust

[2020] FWC 6715

[2020] FWC 6715

FAIR WORK COMMISSION

REASONS FOR DECISION

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

Mr Rhayne Cooper
v
The Trustee for Cleveland 24/7 Unit Trust
(U2020/5371)

DEPUTY PRESIDENT ASBURY BRISBANE, 16 DECEMBER 2020

Application for an unfair dismissal remedy – Jurisdictional objection on grounds of genuine redundancy – Dismissal not a case of genuine redundancy – Dismissal unfair – Compensation awarded.

Background

[1] This Decision concerns an application by Mr Rhayne Cooper (the Applicant) under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy in respect of his dismissal by The Trustee for Cleveland 24/7 Unit Trust (the Respondent). 1 The application was made on 21 April 2020.

[2] The Applicant was employed by the Respondent as a Gym Manager on a full-time basis from 24 April 2019 until his dismissal on 9 April 2020. The Applicant’s salary at the time of dismissal was $57,500, and he was paid 1 weeks’ wages in lieu of notice on termination of his employment.

[3] The matter has some procedural history which it is necessary to recount. On 4 May 2020, the Respondent filed a Form F3 – Employer response to unfair dismissal application raising no jurisdictional objections to the application but asserting that there was no dismissal on the basis that the position was made redundant because of a forced closure as a result of the COVID-19 Pandemic. On 24 June 2020, the Respondent filed a Form F4 – Objection to unfair dismissal application, objecting to the application on the grounds that the dismissal was a case of genuine redundancy and that the Applicant’s employment did not meet the minimum employment period, because the Respondent is a small business. The matter proceeded to conciliation on 2 June 2020 before a Fair Work Commission conciliator but was not resolved and was allocated to me for hearing.

[4] On 24 June, the Applicant filed a preliminary witness statement in response to the objections raised by the Respondent in which the Applicant asserted that the Respondent is part of a group of companies known as “The TBH Group” and provided the results of ASIC searches for interests held by Mr Todd Howard, Owner and Manager of the Respondent. As evidenced by that material, Mr Howard owns eight fitness clubs and has interests in a range of other businesses involved in franchising, health and well-being, children’s nutrition and education, pre-natal and post-natal health and nutrition, hospitality and property. Mr Howard also manages 28 fitness centres on behalf of other franchisees.

[5] I held a Mention by telephone on 10 July 2020 and issued Directions for filing of material. There were issues with both parties filing material in accordance with the Directions and both parties were provided with extensions and opportunity to file material to support their respective positions. The matter was listed for hearing in relation to the jurisdictional objection on the ground of genuine redundancy and merits. Both parties sought and were granted permission to be represented by lawyers on the grounds that the matter involved complexity given the jurisdictional objections and no issues of fairness arose. The Applicant was represented by Ms Bassingthwaighte of Hall Payne Lawyers. The Respondent was initially represented by Ms Hignett of HR Law until 3 September 2020, when Ms Hignett notified that she had ceased to act because of her client’s economic position, and that Mr Howard would represent the Respondent at the hearing in order to save costs. The Applicant gave evidence on his own behalf and evidence for the Respondent was given by Mr Howard.

[6] Prior to the hearing, but only after the Applicant had put on evidence establishing that Mr Howard had interests in a range of related entities so that the Respondent was not a small business, the Respondent withdrew its jurisdictional objection in relation to minimum employment period. At the conclusion of the hearing and in its final submissions, the Respondent also withdrew its objection on the basis that the dismissal was a case of genuine redundancy. Notwithstanding that these concessions were appropriate they were made late in the day and after the Applicant had filed his material in response.

Initial matters to be considered

[7] Section 396 of the Act sets out four matters which I am required to decide before I consider the merits of the Application.

a) Whether the Application was made within the period required in s 394(2) of the Act;

b) Whether the Applicant is a person protected from unfair dismissal;

c) Whether the dismissal was consistent with the small business fair dismissal code; and

d) Whether the dismissal was a case of genuine redundancy.

[8] I am satisfied and find that the application was made within the required period and that the Applicant is a person protected from unfair dismissal. I also find that the small business fair dismissal code does not apply on the basis that Respondent is not a small business employer as defined in s. 23 of the FW Act, because it has associated entities within the meaning in s. 50AAA of the Corporations Act 2001. I am also satisfied that the Applicant’s dismissal was not a case of genuine redundancy as defined in s 389 of the Act. The Respondent conceded at the hearing – in my view correctly – that it did not meet the consultation requirements as provided in s. 389(1)(b) of the FW Act and the Fitness Industry Award 20120 with respect to the Applicant’s dismissal. On the basis of the evidence before me, and the Respondent’s concession, I am satisfied and find that the dismissal was not a case of “genuine redundancy” in the statutory sense. The questions of whether the position was redundant in the ordinary sense in that it was no longer required and the reasonableness of redeployment, are matters I will return to when considering whether the dismissal was unfair.

Evidence

[9] The evidence provided to the Commission by both parties was deficient. Mr Howard’s evidence about the organisational structure in which his businesses operates, left much to be desired and despite being informed on a number of occasions that a detailed explanation of that structure pre and post COVID-19 would be required in order to advance his case, Mr Howard did not provide clear evidence in relation to this matter, even at the hearing. Despite the fact that Mr Howard did not file all of his material in accordance with directions, I received that material into evidence. Despite being given further opportunities to file material that was available and should have been filed at the time required by the directions, Mr Howard objected to any failure by the Applicant to meet dates in the directions. The Applicant’s representative failed to file material in relation to lost income and despite being given an opportunity to file further material in relation to JobKeeper payments and their treatment in the assessment of compensation, did not do so.

[10] It appears from Mr Howard’s evidence that the company referred to as TBH Group is owned by Mr Howard. It does not trade and does not have any employees. There is a management Company referred to by Mr Howard as FMC. That Company employs head office staff and contracts to gyms to provide management functions on behalf of their owners. Mr Howard states that he has no proprietary interest in any of the gyms managed by FMC. At the point Mr Howard provided a statement for these proceedings, 14 of the 28 gyms managed by FMC remained closed as a result of the COVID-19 Pandemic – some permanently – and there was no known date for reopening.

[11] The gyms in which Mr Howard has a 100% proprietary interest, are under the banner of an entity referred to in his evidence as TBH FT. It appears that each gym is a separate company and that Mr Howard operates gyms with different partners under the TBH FT banner. Cleveland 24/7 P/L as trustee for Cleveland 24/7 Unit Trust, operated the gym where the Applicant was employed prior to his dismissal. Mr Howard said that the number of gyms under the TBH FT banner has decreased by one and the number of employees from 11 to 8 following the COVID-19 related closedown.

[12] The Applicant said that each Snap Fitness gym has a Manager, and depending on the size of the gym, some also employ an Assistant Manager. The Applicant was employed in the position of Manager. In March 2020, the Covid-19 Pandemic significantly impacted many Australian businesses. In particular, the fitness industry was impacted by an Australian Government direction that gyms were to close indefinitely. The Respondent had to close its operation in compliance with this directive.

[13] The Applicant’s employment was covered by the Fitness Industry Award 2010, which contains clause regarding consultation about major workplace change. Mr Howard stated that he held three meetings with staff, including the Applicant, after the directive for closure was issued. Those meetings were held on 24 March 2020, 26 March 2020 and 2 April 2020. The purpose of the meetings was to discuss the stand down of staff and as announcements were made regarding JobKeeper payments, to discuss the impact of any Government payments on employees’ roles, remuneration and positions. Mr Howard said that at the time the meetings were conducted, he was still unsure what roles would be secure as JobKeeper payments were required to be made in advance of receiving payment from the Government which the Respondent could not afford. Mr Howard also said that the Respondent was unsure what clubs would remain open following the effects of COVID-19, noting a restructure of the business would likely occur.

[14] Mr Howard also said that as the owner of FMC and the TBH FT Group of gyms, at the time of the closures he identified there was a surplus of staff in head office and he either had to combine roles to ensure the staff costs were shared across his business, or to make the decision to make some positions redundant. As to the steps taken in satisfying the consultation provision under the Award, Mr Howard stated that the business was forced to close and it had to take steps quickly to inform the staff and find ways to mitigate its losses. He stated that once the closure directive was issued by the Government, the Respondent realized the effects of COVID-19 were going to be significant and long term, and that permanent measures had to be considered to save the businesses in the TBH Group.

[15] The decision was made to stand down all employees, including the Applicant, from 23 March 2020. Mr Howard said that he sent a “blanket letter” to all employees on 25 March 2020, with the intention of advising employees that the Respondent would need to stand them down but that it was doing everything possible to ensure the least amount of impact on them as possible. His evidence included a concession that:

“In hindsight, I could have worded this letter better however I simply used the content of the letter that was drafted by the Franchisor (Snap Fitness). I was so unsure about everything at this stage and had so many worries about the future that I didn't consider the content in much detail or how it may be interpreted”. 2

[16] Mr Howard stated this was a “frantic” time and the Respondent was “simply reacting on [its] feet” to the changing landscape of the COVID-19 pandemic. Mr Howard conceded that he knew big changes would need to be made, but stated that he did not know exactly what that would look like.

[17] Mr Howard also stated that this time, “management was consulting with its employees regularly” and providing updates as relevant, including around JobKeeper and the Government directives and that employees could have contacted him at any time to talk about their individual situations. Further, Mr Howard said that unlike other staff, the Applicant did not make contact to discuss his personal situation.

[18] As to the three meetings of 24 March, 26 March and 2 April 2020, Mr Howard stated all employees were advised of the time of the meetings and were required to attend and that these meetings provided an opportunity to employees to give feedback or ask questions. At the beginning of the meetings Mr Howard asked his assistant to confirm that all employees in their group were on the line, and that he was not advised that the Applicant was not on the line or that he had provided any reason for not being on the line. At the hearing, under cross-examination by Ms Bassingthwaite, Mr Howard maintained that his belief at the time was that the Applicant was present at all three meetings. 3 He conceded however that he did not personally confirm the persons on the line and therefore had no way of knowing whether the Applicant was in attendance or not.4 Mr Howard also stated that it was not until the filing of the Applicant’s materials that he was informed the Applicant had not been present at the meetings of 24 or 26 March. He noted however that the Applicant had been informed of the three meetings and advised he must attend.

[19] Mr Howard stated that he made it clear to the Applicant and other attendees at the meetings, that he was unsure about the future of any managers in the business, in light of the closure and the uncertainty around the financial impact on the business moving forward. His evidence was that, even if the Applicant had not been at the 24 and 26 March meetings, he believed the Applicant was “well aware of what was happening and what the effect was on his position or avenues to seek further information should they need to”.

[20] As to the meeting of 2 April, at which the Applicant was present, Mr Howard’s evidence was that he made clear to all employees including the Applicant: what the TBH structure was; the effects that COVID-19 and the Job Keeper scheme was having on all positions; and that the ongoing viability of all gyms and their employees will be affected into the future, some on a permanent basis. Mr Howard said that at this meeting:

•  the termination and redundancy of roles was specifically discussed including what the impacts of redundancies would likely be, that is the termination of employment of a number of staff.

•  staff present, including the Applicant were advised that Mr Howard was doing all he could to mitigate the effect of COVID-19 on the business and its employees.

•  Employees were encouraged to ask questions firstly in the meeting of 2 April 2020 and after the meeting.

•  the Applicant, as well as all other staff, in this meeting were specifically advised if they wish to talk about their individual situation or have any further questions, they should contact Mr Howard by email or telephone.

•  the Applicant did not ask any questions during the meeting or after the meeting.

•  the Staff were advised by Mr Howard that they could access their annual leave.

•  the Staff were advised that the Company was working out JobKeeper and that it was still unfolding and that Mr Howard did not know the ins and outs of JobKeeper at this time; and

•  The Staff were advised that despite the receipt of JobKeeper there will still be redundancies and that these redundancies were likely to result in the termination of employees.

[21] Mr Howard stated that the first time the Applicant asked any specific questions about his employment was after he was made redundant when the Applicant contacted Mr Howard seeking to discuss JobKeeper payments. Mr Howard’s view was that the Applicant thought he “simply had an automatic right to JobKeeper and that [Mr Howard] did not have the right to make operational decisions and to effect redundancies and terminations that were necessary for the ongoing viability of the businesses in the TBH Group”. Mr Howard stated this was not correct, and the JobKeeper program was to support businesses to maintain employment; it was not designed to simply keep employees out on JobKeeper when Mr Howard knew their position was never going to be in the structure long term.

[22] His evidence was that as with most business owners, he had a requirement to be “constantly looking at [his] organizational structure and to constantly be looking at ways [they] can get operation efficiencies and constantly looking at how to react to the COVID-19 pandemic and its effect of businesses and jobs”. Mr Howard also said that within the TBH FT Group, between the period of early March 2020 and 30 June 2020:

•  the number of employees went from 11 to 8 (excluding head office staff);

•  the number of Club Managers went from 8 to 5; and

•  the number of employees at the Snap Fitness Cleveland went from 1 full-time employee, 1 part time employee and a trainee, to the trainee (who is Mr Howard’s son) and the part-time Creche employee went part-time so 1.5 employees, 1 of which was his son.

[23] The Applicant’s evidence was that as to the three meetings held, as claimed by Mr Howard, he only participated in one meeting, being a teleconference on 2 April 2020. The Applicant said that on 24 March 2020, he received correspondence from Mr Howard advising that he had been stood down due to closure of the gym and that his employment was “‘safe, secured and ready for [him]’ as soon as the Respondent had approval to trade again”. 5

[24] The Applicant stated that employees of Snap Fitness gyms communicated via the instant messaging platform “Viber” and that around 30 people were in a group chat titled ‘TBH Group’, including Mr Howard. Further to a request to return his work phone and keys, the Applicant installed the Viber app on his personal phone. He stated he sent a text message to, Mr Kalym Growcott, regional manager for the Respondent, at 9.04am on 24 March 2020, in response to which Mr Growcott sent the Applicant two screen shots of messages in the Viber group chat where Mr Howard had stated earlier that morning: ‘None of you are expected at work today. I will be in touch with each of you at some point’.

[25] The Applicant stated he sent further text messages to Mr Growcott, asking that his Viber account be verified so that he could be added into the group chat. He stated he again sent a text message to Mr Growcott the next day, 25 March 2020, asking ‘Am I meant to be getting Viber msg yet?’. Mr Growcott responded: “I couldn’t add you to the national group as I’m not admin so only my group. No real updates yet. Todd just vibered last night saying he will call everyone today as still trying to figure out the HR staff”.

[26] It is not in dispute that the Commonwealth Government announced the JobKeeper Payment scheme around 30 March 2020. The Applicant stated on 2 April 2020 he received a text message from Mr Growcott stating: ‘Morning team, if you haven’t done so already please check Viber. Webinar in 1 hour with Todd. Let me know if you can/can’t make it.’ The Applicant joined the webinar around 12pm. He stated there were around 30 people in attendance, and the call lasted about an hour which Mr Howard speaking “almost the entire time” and that Mr Howard said words to the effect:

“It’s my intention to apply for the JobKeeper payment and I expect that we will be successful in getting access to this payment. I was fighting with my lawyers about whether you guys were able to work for the JobKeeper payment. I don’t think it’s fair that I have to pay you when you are not at work. I’m not getting paid either.”

[27] The Applicant disagreed with Mr Howard’s suggestion that it was “made clear” to him in the webinar of 2 April 2020 that Mr Howard was unsure about the future of any managers in the business. On his evidence, the webinar was primarily about JobKeeper and how it would allow people to remain employed by the TBH Group.

[28] As to Mr Howard’s evidence that staff were afforded the opportunity to provide feedback or ask any questions, the Applicant stated during the webinar of 2 April, questions asked by staff centred on whether they were going to get paid or whether they could access annual leave, to which Mr Howard said words to the effect of: “You can access annual leave and have that paid out. Otherwise you’ll have to wait until the JobKeeper payments start to be paid.” The Applicant’s evidence was that he did not have many questions regarding his employment as he was of the view, based on Mr Howard’s letter of 25 March 2020, that he was stood down without pay but that his position was “safe, secure and ready for [him]” to return to. He stated further he was of the understanding from the meeting of 2 April, that he would start receiving JobKeeper payments as soon as they were able to be made.

[29] The Applicant stated he received text messages from Mr Growcott “every couple of days” to check how he was going, but never provided any “substantive information regarding [his] employment”. He confirmed he received text messages from Mr Growcott on 7 and 8 April 2020, in which he was not given any indication that his employment would be terminated the following day.

[30] On 9 April 2020, Mr Howard determined that the Applicant’s employment would be terminated by way of redundancy and the Applicant was provided notification via email. Mr Howard stated this decision was made as the Respondent did not know how long the closure of the business would last, and the business was not financially able to sustain its structure at that time. Mr Howard gave evidence that he took over the Applicant’s managerial responsibilities, and accordingly the Applicant’s position was no longer required to be performed by anyone. As the Applicant had been employed for less than a 12 month period he was not entitled to any redundancy pay as he had not completed the required period of service for such a payment; accordingly, he was paid one weeks’ notice on termination.

[31] The Applicant said he was never contacted or consulted regarding a potential redundancy or any definite decision to make his role redundant or offered any opportunities for redeployment. The Applicant was not contacted by Mr Howard or any other representative of the Respondent after the decision was made by Mr Howard and at any time prior to receiving the email terminating his employment. Other than the texts from Mr Growcott checking on him, the Applicant was not contacted about his employment after the webinar of 2 April, and was therefore not consulted about any potential redundancy as required under the Award. The Applicant also said that he was shocked on receiving his letter of termination due to redundancy, as Mr Howard had sounded confident at the 2 April webinar that he would soon be in receipt of the JobKeeper payments.

[32] Under cross-examination at the hearing, Mr Howard made the following concessions regarding his requirement to consult with the Applicant:

“Do you accept that it's your responsibility to ensure that employees are consulted?---Correct.

Did you try to reach out to Mr Cooper directly?---Not other than on our group calls, no.

Group call.  Do you accept that you should have tried to contact Mr Cooper personally to discuss the potential redundancy?---Yes.

Particularly because at that stage he was the only employee that was going to be made redundant?---There was no notice as to who was going to be made redundant at that time.

No, I think you said before that Mr Cooper was the only employee that was earmarked for redundancy as at least 9 April?---No, that's incorrect.  I'd already made someone redundant prior to Mr Cooper becoming redundant from head office.

He was the only manager that was to be made redundant.  Correct?---At that time.

Yes, and it would have been important for you to contact Mr Cooper as the only manager that was to be made redundant to discuss that decision with him?---Correct.” 6

[33] The Applicant stated he emailed Mr Howard on 9 April 2020, asking about the JobKeeper program. He also sent a text message to Mr Growcott on 11 April 2020, asking: “Since Todd won’t reply to my emails...where do send the uniforms too?!?”

[34] The Applicant’s evidence is that he sent this text message to Mr Growcott as the Respondent was withholding his final pay and he needed the money in order to provide for his family.

[35] The Applicant received an email response from Mr Howard on 14 April 2020 in which Mr Howard advised the Applicant that his “only option based on the face we have proceeded with redundancy is JobSeeker.” The Applicant stated that Mr Howard’s statement in this regard was inconsistent with the information about JobKeeper that he had included in his email to Mr Howard, which was:

“The JobKeeper Payment is also available for employees that have already been stood down, or who have been terminated from their employment (for example, by way of redundancy or eligible casuals who were advised they had no further shifts) since 1 March 2020.”

[36] In relation to his position, the Applicant said that each Snap Fitness gym has a manager”, and depending on the size of the gym, some also employs an assistant manager. He stated he was not aware of any operational changes that would result in Snap Fitness Cleveland not requiring a manager. The Applicant also said that on 6 July 2020, he went on to the Snap Fitness Cleveland Facebook page and took a screenshot of a post promoting the “new club manager”, Mr Pete Moratti. He also took a screenshot of the Snap Fitness Cleveland website which listed Mr Moratti as the Cleveland “Club Manager”. The Applicant tendered the screen shots. The Applicant also said that Mr Moratti was listed as Club Manager until at least 24 July 2020, and on 1 August 2020, he accessed the Snap Fitness Cleveland Facebook page again and found that the 6 July post announcing Mr Moratti as the new Club Manager had been removed.

[37] Mr Howard’s evidence in reply was that Mr Moratti had been an employee of the TBH Group since 17 June 2019, and is a family friend of Mr Howard who had assisted Mr Howard through the COVID-19 crisis in many capacities both paid and unpaid. Mr Howard confirmed that Mr Moratti was originally employed as the manager of the Buranda gym, and on 22 June 2020, Mr Moratti assumed the role of area manager and the role of part-time management of the Meadowbrook, Cleveland and Beaudesert gyms. His evidence was Mr Moratti took on “all of these additional responsibility [sic] at zero additional cost”. Mr Howard also said that from 22 June 2020, Mr Moratti’s duties included Area manager of Meadowbrook, Cleveland and Beaudesert gyms and Part-time and front facing manager of Meadowbrook, Cleveland and Beaudesert gyms working days and hours as required.

[38] Mr Howard stated there is a requirement under the Franchise Agreement with Snap Fitness, that each gym must have a designated Manager and that he decided to have an existing employee fulfil this role for three gyms. This was said by Mr Howard to have been a definite decision to make an operational cost saving that was required. Mr Howard also said that the managers of the Meadowbrook and Beaudesert gyms were also made redundant at the same time as the Applicant.

[39] In relation to the operations of the Cleveland gym prior to COVID-19, Mr Howard confirmed that the Applicant was the Manager and there was a casual staff member who was a cleaner, a creche assistant and one school based trainee (Mr Howard’s son) who undertook administrative duties and was completing a certificate in fitness. After COVID-19 Mr Howard took on the responsibilities while the club was closed with his senior team. When the gym reopened the role was broken up into a number of different roles that are undertaken by other persons including Mr Moratti and some roles are undertaken by Mr Howard personally. The crèche assistant has stepped up to complete some administration duties, and Mr Howard’s son has taken on some extra responsibility, and is doing work previously performed by the club Manager. In response to the proposition that there is no dedicated manager at the Cleveland Club, Mr Howard said that Mr Moratti fills the role on three days of the week, Mr Bennick on one day, the Respondent’s Marketing Manager is at Cleveland for a half day each week, Mr Howard’s son is there three half days per week and the Creche/Admin assistant spends four days a week there between 9.00 am and 3.00 pm. 7

[40] In relation to the Cleveland gym, Mr Howard also said in oral evidence at the hearing, that it is the most disrupted because of the financial position of the business. The financial position of the business is that hereis no signed official lease on that building giving rise to uncertainty and that there was a contract of sale on that business that was signed pre-COVID, and that contract of sale fell over during COVID-19 when one of the clauses of the contract could not be met by the purchaser. However, the purchaser retained a first right of refusal based on the outcome of the lease negotiations going forward, and it was also made known to Mr Howard that the purchaser did not want him to make any “drastic permanent decisions”for the business until such time as they had a position on the lease and therefore a position on their sale contract.

[41] In relation to other gyms Mr Howard said that the manager of Meadowbrook gym is still employed but in a “modified version of his club manager role” and is assisted by Mr Moratti. 8 The manager of the Beaudesert gym transferred to another gym operated by a franchisor and a decision was made that two staff members were not required, and that the creche manager would be promoted to a “club manager interim role”. When this arrangement was not successful, a further decision was made that Mr Moratti would oversee that employee and support her in a creche assistant/administration role.9 At the Yamanto gym the manager and a creche assistant continued in employment post COVID-19 with the creche assistant taking on additional hours for the extra income from JobKeeper.10 At West End, the full time manager remained employed post COVID-19 and receives JobKeeper payments.11 The Gladstone club does not currently have a full time manager as it is subject to a sale offer and has not had a manager since the COVID-19 pandemic caused the gym to close.12 Clubs in New South Wales at Canterbury and Bathurst also retained their pre-COVID-19 staffing. The Canterbury club manager received JobKeeper payments and the Bathurst manager did not because she was a s. 457 visa holder.13 Mr Howard said that with respect to the clubs his business manages on behalf of other franchisors, he may or may not employ the staff. In Queensland the management company does not hire staff but is part of the recruitment process. Mr Howard said that if there was a role in one of the gyms operated by a franchisee, he could put someone forward and assist in filling the role but the ultimate decision lies with the franchisee.14

[42] Under cross-examination, Mr Howard agreed that every one of the 44 Snap Fitness centres around the south-east corner of Queensland and Gladstone, every one of those gyms has a manager but added that this was “by title” and that this is a requirement of the franchise agreement. Mr Howard also agreed that it is a requirement of the franchise agreement that each gym not only has a designated manager but a manager that is capable of being present during the hours that it's staffed, and that the staffed hours at Cleveland continue to be from 9.30 am to 7 pm. 15 In response to a question as to whether his evidence that Mr Moratti performs the equivalent of three days' work at the Cleveland gym, means that he is physically present at the Cleveland gym on three days, Mr Howard said that Mr Moratti is present as required and there is no consistency in his roster.  Rather, he works around the availability of the trainee and also the crèche assistant, who is now completing admin duties. Mr Howard agreed that the trainee is his son and said that he is a school student undertaking a school based traineeship which requires him to go to school three and a half days a week and have one and a half days to complete his traineeship studies. Mr Howard also agreed that at the times his son is at school he cannot answer the telephone for the Cleveland gym.16

[43] Mr Howard was also cross-examined about posts on club websites in relation to Mr Moratti’s role and accepted that as at 30 August, the club manager at Meadowbrook was promoted as being Mr McDonald and at Beaudesert, Ms Wilcox. Mr Howard also accepted on 2 September 2020 when his evidence was due to be filed in the Commission, the names and photos of Mr McDonald and Ms Wilcox had been removed from the postings and replaced with a photo of Mr Moratti. Mr Howard was not aware of who told the marketing person to remove the references to Mr McDonald and Ms Wilcox and rejected the proposition that he had issued the instruction because it contradicted the explanation that he had concocted about how Mr Moratti's current role differed from the role being performed by Mr Cooper. Mr Howard also rejected the proposition, put to him in cross-examination, that Mr Moratti does not perform the role of cluster manager and that this title is a fiction that was created sometime around 2 September, prior to the Respondent’s additional material being filed in the Commission. 17

[44] In response to questions about the timing of the same changes in relation to information in Facebook posts, which were also made on 2 September 2020, Mr Howard said that he could not explain this but:

“---Potentially if it aligned with our restructure on 1 September, where Mr Moratti took up a variation of that role, where he looked after Cleveland in a part-time capacity and also took on some additional responsibilities in some other locations to assist us financially - it may align with that.  I'm unsure of the date that she made those changes, but that's the date that we restructured and made those appointments.” 18

[45] Also under cross-examination Mr Howard maintained that in most cases he is prevented from transferring employees to gyms in which he does not have a proprietary interest but accepted that he did transfer the Applicant from Sunnybank, which is not a gym that he had a proprietary interest in, to Cleveland. Mr Howard also accepted that he transferred Mr Moratti from Buranda, which is not a gym that he had a proprietary interest in, to Cleveland, but maintained that this was with approval. 19

[46] In relation to the effects of COVID-19 in staffing, Mr Howard agreed that pre COVID-19 he managed 28 clubs and post COVID-19 only 14 of those 28 clubs. Mr Howard also said that all of the Clubs he owns are open. Mr Howard also agreed that when he stated in his evidence that he had 43 employees pre-COVID and 19 employees post-COVID, he was not including the 19 employees of the clubs that are temporarily closed with employees being stood down on JobKeeper. Mr Howard agreed, in response to a question from me, that his figures did not accurately reflect who is employed because employees on JobKeeper are still employed. Mr Howard also agreed that it was not accurate to say that he had 43 employees pre-COVID and 19 post-COVID and that he actually has 19 employees at work and a further 12 who are stood down and receiving JobKeeper. 20 In relation to his evidence that over half the gyms managed by FMC have permanently closed or are closed, Mr Howard agreed under cross-examination that he did not know whether they would reopen and that there was a possibility that they would.21

[47] In relation to redeployment, Mr Howard’s evidence was that at the time of the Applicant’s dismissal by way of redundancy, there were no suitable alternative positions available for the Applicant to be redeployed to, and that this was also the case for the other employees whose roles were made redundant. At the time of filing his witness statement, he stated this fact remained given the continuing closures of the gyms, the restructure undertaken and the “consolidation of the TBH Group as a whole based on the situation in Victoria in particular”.

[48] The Applicant’s evidence was that around 4 May 2020, he accessed Seek.com.au and saw that TBH Group was advertising for a position titled “Senior Club Manager (Brisbane South East)”. The Applicant tendered a screen shot of the advertisement and said that Mr Howard operates three clubs in Brisbane’s South-East, at Sunnybank, Cleveland and Buranda. The Applicant said that he had previously worked at the Sunnybank club, and was working at the Cleveland club prior to his role being made redundant.

[49] Mr Howard said under cross-examination in relation to the Seek advertisement that there was no position and the Company advertises on a bi-monthly basis all year round, to collate potential applicants. In response to the proposition that this was a strange thing to do at the relevant time, Mr Howard said:

“Not at all.  It's the most prominent time to be trying to seek highly qualified people to put into a pool should we come out of COVID the other end and lose employees and therefore need new ones.” 22

[50] Mr Howard maintained that no-one had been employed in the advertised position and that there were no available positions available in the TBH group at the time the Applicant's employment was terminated due to the redundancy of his role. The Applicant disputed this and said that he viewed the Snap Fitness Sunnybank Facebook page on or about 13 June 2020, and saw that the Sunnybank club was promoting its new club manager, “Ms Caitlin (Caity) Schofield (nee Caarels)”. His evidence was at the time of filing his witness evidence, Ms Caarels was still listed on the Sunnybank Club’s website as club manager. Mr Howard agreed with the proposition, put to him in cross-examination, that he did not seek to make any other managers redundant at that stage and that it was just the Applicant who needed to go at that point, as well as some senior members of staff. 23

[51] Mr Howard stated that after the JobKeeper Scheme had been announced by the Government, the Applicant contacted him on 9 April 2020 to ask if he could be put on JobKeeper payments. Mr Howard’s said that in his opinion, the scheme was designed to keep employed those who would have a position post COVID-19, and that the Applicant was not such an employee. Mr Howard also said that he did not feel it was ethical to put the Applicant on JobKeeper payments, given he would not have a position post COVID-19, and therefore Mr Howard advised the Applicant of his option to seek JobSeeker payments.

[52] At the conclusion of Mr Howard’s evidence in chief, I asked him whether there was anything he wished to clarify or respond to and Mr Howard made the following statement:

“I guess all I'd like to say - and excuse me for not being formal and following the exact rules if I don't follow them, but it's certainly acknowledged by myself that when COVID hit and we were forced to close 39 locations within 24 hours that there were certainly some processes and procedures that may have not been followed to the letter of the law, and in this particular case with the applicant, I acknowledge that there could have been and should have been more specific correspondence with the applicant during that time.  I believe in my statements I've been clear in what I did provide, in that I did provide opportunities and opened lines of communication for the applicant to have a discussion with us if there was any concern around that, however due to the stresses and pressures of what was going on at that time, I do acknowledge that we did not follow every procedure that is required under the redundancy laws for Fair Work and accept consequences according to that, but nothing else other than acknowledging that, Deputy.” 24

[53] In closing submissions, I also had the following exchange with Mr Howard:

‘THE DEPUTY PRESIDENT:  But just so we're clear, the way that the Act works in terms of the genuine redundancy objection is that it effectively removes - it removes an application from being an unfair dismissal.  So if you tick those three boxes, that we consulted, we considered redeployment and the job's gone, then the Commission doesn't go to the other sections of the Act and say, "Was there a valid reason, was there discussion?" any of those things.

MR HOWARD:  Right.

THE DEPUTY PRESIDENT:  And by saying that you don't tick one of those boxes in the genuine redundancy space are you conceding that you're abandoning your jurisdictional objection and you're just simply saying, "This is not an unfair dismissal, because even if we didn't technically comply with the genuine redundancy provisions it is still a redundancy and there was a valid reason for dismissal", et cetera.  Is that what you're saying?

MR HOWARD:  That's correct.” 25

[54] The Applicant’s evidence was that during his employment with the Respondent, he was never made aware of any issues with his performance or conduct in the role, other than being placed on a performance improvement program in early 2020, in relation to his performance of administrative tasks, specifically forgetting to process requests of members and incorrectly filing certain documents. The program went for one month and at the end of the month the Appicant heard nothing further about the matter. The Applicant said that he was told by the manager who placed him on the program that it was not disciplinary but was to help to improve his skills. There was no evidence from the Respondent to the contrary and nor was there any evidence of issues with the Applicant’s performance or conduct.

[55] The Applicant also said that he had informed his manager that he needed time off work in April or May to undergo knee surgery. The Applicant said that it was postponed due to COVID-19 and that he had undergone the surgery on 29 June 2020. The Applicant accepted that if he had remained in employment he would have been required to be absent from work for two to three weeks to recover and that he had exhausted all of his personal leave and would have been required to take unpaid leave for this purpose.” 26 Under cross-examination, the Applicant said that he would have returned to work after the three week period, but conceded that this may have been on alternative duties under a return to work plan.27

[56] The Applicant also gave evidence of the impact of his dismissal on his personal and financial circumstances. In this regard the Applicant said in his witness statement that he is 26 years old and was the sole income earner for his family consisting of his fiancée and two children aged 2 and 4 years. The Applicant’s fiancée is the primary carer for their children and was not working at the time the Applicant was dismissed. The Applicant said that his skills, training and experience are limited to the fitness industry and he has not been able to locate a comparable position in this industry following my dismissal. The Applicant is also recovering from knee surgery. He has not earned any remuneration from other employment or work, following his dismissal and was required to withdraw 2 amounts of $10,000.00 from his superannuation to cover living expenses for himself and his family. The Applicant said that if he was not dismissed he intended to keep working for the Respondent for at least the next 6-12 months. The Applicant also said that he harbors no animosity or ill feelings towards the Respondent or Mr Howard, and there are no impediments to him resuming employment at Snap Fitness Cleveland.

[57] Under cross-examination the Applicant confirmed he received Jobseeker payments at $1,071 net a fortnight and agreed that the difference between JobSeeker and JobKeeper payments was approximately $300 gross before tax. Regarding jobs applied for since his dismissal, the Applicant said in response to a question from me that he has applied for 15 to 20 jobs and that a lot of them were outside the fitness industry. More recently the Applicant has applied for jobs in the fitness industry. In response to a question from me, the Applicant said that he would have remained in employment given his family obligations and that he could not afford to simply quit a job. The Applicant said that he sought compensation for lost wages and “redeployment” to another gym not owned by Mr Howard. 28

[58] Mr Howard said that if the Respondent had followed the correct process to make the Applicant redundant, it would have come to the same position within a week or two in that the Applicant’s position no longer exists and he would have been made redundant at that time. I put the proposition to Mr Howard that there was a tension in his evidence on the one hand that he was constantly advertising for new managers in anticipation of needing them and the decision not to keep the Applicant employed to cover such an eventuality particularly when JobKeeper was available for such a purpose. Mr Howard said that there are no roles now and that even if he had kept the Applicant employed, the Respondent could not afford a full-time gym manager at the Cleveland gym and he would have been dismissed in any event when the effect of the COVID-19 Pandemic subsided. Mr Howard disputed that the fact that if he had waited another four weeks before dismissing the Applicant he would have been entitled to redundancy, had any relevance to the timing of his dismissal. Mr Howard accepted that he knew that the Applicant needed to have knee surgery but not the date on which the surgery was scheduled.

Legislation

[59] Section 389 of the Act deals with genuine redundancy and provides as follows:

“389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

[60] Where a dismissal is not a case of genuine redundancy, the employer does not have a complete defence to an unfair dismissal application in relation to the dismissal resulting from the redundancy. The dismissal then falls to be considered under the criteria in s. 387 of the Act which are in the following terms:

(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 the FWC considers relevant.”

Consideration

Was the dismissal a case of genuine redundancy?

[61] On the basis of the concession made by Mr Howard at the hearing, and on my own assessment of the evidence, I am satisfied that the dismissal was not a case of genuine redundancy. The Applicant was covered by an award which provided for consultation obligations. The Respondent did not meet those obligations. That is sufficient to remove the dismissal from the genuine redundancy exclusion. It is therefore necessary to consider whether the dismissal was unfair on the grounds that it was harsh, unjust or unreasonable. Accordingly, I next turn to consider the criteria in s. 387.

Was the dismissal unfair?

[62] The Applicant was not dismissed for any reason related to his capacity or conduct. Accordingly, the criteria in s. 387(a) is not relevant to the question of whether the Applicant was unfairly dismissed. Given that the reason for dismissal did not relate to capacity or conduct, the consideration in s. 387(b) and s. 387(c) is not relevant. There were no discussions about the Applicant’s dismissal and the Applicant did not request a support person so that s. 387(d) is also not relevant. Further, the dismissal did not relate to unsatisfactory performance and the question of whether the Applicant was warned is not relevant to the question of whether his dismissal was unfair and accordingly the consideration in s. 387(e) is not relevant.

[63] With respect to s. 387(f) and (g), while the employer is not a small business, neither is it a large business. The Respondent does not have dedicated human resource management specialists or expertise. Notwithstanding this, the Respondent had access to a legal practitioner for the purpose of preparing material for this case including mounting two jurisdictional objections which ultimately could not be sustained. Regrettably, it appears that the Respondent did not utilise the money it undoubtedly spent preparing material in relation to those objections, on obtaining advice prior to dismissing the Applicant.

[64] With respect to s. 387(h) there are a number of matters which in my view are relevant to the question of whether the Applicant’s dismissal was unfair. Generally, I found Mr Howard to be an unconvincing witness. In short, Mr Howard did not provide a credible explanation as to why the Applicant was the only manager in any of the gyms in which Mr Howard has a proprietary interest, who was made redundant during the COVID-19 Pandemic.

[65] The Applicant had a good employment record. He had previously moved from a gym operated by a franchisee to a gym operated by Mr Howard. While he had been on a performance improvement program, his evidence was that this was not disciplinary and that there was no disciplinary action arising from the program. There was a total inconsistency in Mr Howard’s evidence about advertising for gym managers on a bi-monthly basis so that vacancies can be filled, and his rationale for dismissing the Applicant. Mr Howard kept every other gym manager in employment during the period when gyms were required to be closed due to COVID-19, on the basis that he would need them when the effects of the pandemic abated. Mr Howard also advertised for additional managers in May 2020 for the same reason, approximately one month after he had dismissed the Applicant. There is no cogent reason why Mr Howard could not have maintained the Applicant in employment and paid him the JobKeeper subsidy given the regular and ongoing requirement for gym managers for the Respondent to operate its business.

[66] I do not accept Mr Howard’s explanation that he could not in good conscience claim the JobKeeper subsidy for the Applicant in circumstances where he believed there would not be a job for him when the pandemic abated. On Mr Howard’s own evidence, he does not know whether or not a number of his gyms will ever open again, and that did not prevent him claiming JobKeeper subsidies for the managers of those gyms and retaining those managers in employment. Mr Howard’s evidence about Mr Moratti and his involvement in the Respondent’s operations was also entirely unconvincing. There was no mention of Mr Moratti in any document filed by Mr Howard until his third witness statement dated 2 September 2020 was filed. It is passing strange that this is the same date upon which information about Mr Moratti appeared on websites for the gyms he was said to have been managing since April 2020 and on FaceBook, and the names of the managers who had previously been promoted on the website were removed. Mr Howard’s evidence about this being done by a marketing person and having no relation to the present proceedings was also unconvincing. In my view, this was no co-incidence and it is more probable than not that the promotion of Mr Moratti on the websites for the Cleveland, Buranda and Meadowbank gyms was to shore up the Respondent’s case that the role of manager for each of those gyms had been abolished or restructured. Patently this is not so and the managers of the Buranda and Meadowbank gyms continued to be employed after the Applicant was dismissed.

[67] Further, I am of the view that Mr Howard’s figures in relation to the impact of COVID-19 on numbers of employees were to say the least, rubbery. The failure to count 19 persons as employees in circumstances where they were stood down on JobKeeper, appeared to be directed to creating the appearance of a significant reduction in employee numbers to disguise Applicant’s dismissal as a redundancy and to minimise opportunity to question why the Applicant was not retained in employment and paid the JobKeeper subsidy in the same way as those employees. Mr Howard is an experienced business person who owns a large number of gyms and other enterprises, and I do not accept that this failure was entirely inadvertent or that he did not understand that persons who were stood down were still employed.

[68] Finally, I do not accept Mr Howard’s evidence that the possible sale of the Cleveland gym had any impact on his decision to dismiss the Applicant. Mr Howard accepted that his evidence and submissions to the Commission in these proceedings were prepared by an experienced legal practitioner. It is unlikely that such a significant matter would be overlooked in that material, particularly given the lengths that Mr Howard went to in his evidence to attempt to establish the cluster scenario involving Mr Moratti. The possible sale of the Cleveland gym would have gone some way to explaining the decision to make the Applicant’s role redundant and it is improbable that such evidence would only emerge as a result of a question from me during the hearing. It is also the case that issues with the lease in the Gladstone gym did not stop Mr Howard appointing a manager, albeit temporarily.

[69] At the end of the day, given the lack of a cogent reason for the Applicant’s dismissal, and the fact that he was the only manager of a gym owned by Mr Howard who was made redundant, it is more probable than not that the Respondent took an opportunity to dismiss the Applicant under the cover of the COVID-19 Pandemic, in circumstances where there was no reason – operationally or on the basis of the Applicant’s conduct, capacity or work performance – for the Applicant to have been dismissed.

[70] The dismissal was harsh because of its impact on the Applicant’s personal and financial circumstances. The Applicant was the sole income earner for his family including two young children and he was required to withdraw funds from his superannuation account to pay living expenses, which will detrimentally affect his financial situation into the future. The economic circumstances at the time the Applicant was dismissed were extremely difficult which increases the harshness, in circumstances where there was no cogent reason for the Applicant to have been dismissed. The dismissal was unjust because the Applicant was dismissed with no discussion, much less consultation, in relation to mitigation of the effects of dismissal. The dismissal was also unreasonable because there was no cogent reason why the Applicant could not have been retained in employment in circumstances where the employer would have been entitled to claim the JobKeeper subsidy on his behalf. The Respondent claimed JobKeeper for all other gym managers and given the turnover as evidence by the fact that the Respondent advertises bi-monthly for gym managers, there was no reason not to retain the Applicant in employment, particularly when he had previously worked at another location.

[71] I accept that employers cannot be found to have unfairly dismissed an employee by simply by virtue of deciding that the employee’s position will not be required at the end of the COVID-19 Pandemic. An employer is not obliged to keep an employee in employment because of the availability of JobKeeper subsidies, in circumstances where the employee’s job is genuinely redundant either in the ordinary sense or consistent with the statutory definition of genuine redundancy. However, in the present case, I do not accept that the Applicant’s position was genuinely redundant either in the statutory sense or the ordinary sense. The evidence about the precise nature of Mr Moratti’s role was sketchy and I do not accept the manager role at that gym was filled by a school based trainee (the Mr Howard’s son) and Mr Moratti. I am also of the view that there would have been other options to deploy the Applicant to a different location, had he been retained in employment and the Applicant’s retention in employment would have been entirely consistent with the objectives of the JobKeeper subsidy. Accordingly, I find that the Applicant was unfairly dismissed.

Remedy

[72] Having found that the Applicant was protected from unfair dismissal, and that his dismissal was unfair, it is necessary to consider what, if any, remedy should be granted to him. The Applicant sought “redeployment” to a gym not owned by the Respondent. Redeployment to an entity owned by a third party is not available as a remedy for unfair dismissal. The submission of the Applicant’s representative that the Applicant sought reinstatement to the Cleveland gym where he was working at the time of his dismissal, was at odds with the Applicant’s evidence that he did not seek this outcome, and in all of the circumstances I accept that it would be inappropriate to reinstate the Applicant. I also accept that the Applicant has agitated his dismissal with other staff by seeking statements from them in support of his application and at least one staff member has approached Mr Howard to seek his assistance in having the Applicant cease contact. Further, the Applicant has successfully challenged Mr Howard’s credit and the relationship is most likely irreparable.

[73] Section 390(3)(b) of the Act provides the Commission may only issue an order for compensation if it is appropriate in all the circumstances. A compensation remedy is designed to compensate an unfairly dismissed employee in lieu of reinstatement for losses reasonably attributable to the unfair dismissal within the bounds of the statutory cap on compensation that is to be applied. 29

[74] Having regard to all the circumstances of the case, including the fact that the Applicant has suffered financial loss as a result of his unfair dismissal, I consider that an order for payment of compensation to him is appropriate.

[75] It is necessary therefore for me to assess the amount of compensation that should be ordered to be paid to the Applicant. In assessing compensation, I am required by s 392(2) of the Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a) to (g) of this subsection.

[76] The established approach to assessing compensation in unfair dismissal cases was set out in Sprigg v Paul Licensed Festival Supermarket 30 and applied and elaborated upon in the context of the current Act by Full Benches of the Commission in a number of cases as follows:31

Step 1: Estimate the remuneration the employee 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 5: Apply the legislative cap on compensation.

Remuneration the Applicant would have received, or would have been likely to receive, if she had not been dismissed (s 392(2)(c))

[77] Calculations of damages or compensation involve an element of speculation in determining an employee’s anticipated period of employment. This is because the task involves an assessment of what would have been likely to happen in the future had the employee not been dismissed. 32

[78] I am satisfied on the balance of probabilities that if the Applicant had not been dismissed on 9 April 2020, he would have remained employed by the Respondent until 31 October 2020. The Applicant had no reason to cease his employment with the Respondent and has family commitments that I accept would have provided him with an incentive to remain in employment particularly during the COVID-19 Pandemic and in the current economic circumstances. I have also had regard to the fact that the Applicant had an unblemished work record in the sense that there is no evidence that he had ever been warned in relation to his conduct, capacity or work performance.

[79] Further, the Respondent continues to advertise bi-monthly for gym managers and has a manager in the significant majority of its gyms. There is also evidence of staff movement which in my view increases the likelihood that the Applicant could have retained his employment for 12 months, particularly given his preparedness to work at other locations. Finally, for reasons given elsewhere in this Decision, I did not find Mr Howard a credible witness and I do not accept his evidence that the Applicant would only have remained in employment for a further two week period.

[80] I do not accept the 12 month period of anticipated employment as contended for by the Applicant. Notwithstanding the lack of reasons for the Applicant’s dismissal at the relevant time, the Respondent may have restructured its operations and made the Applicant’s position redundant and I also note that the Applicant stated in his Form F2 Application that he and Mr Howard “have not seen eye to eye for a long time” and the Applicant may have left the Respondent’s employment to pursue other opportunities once the effects of COVID-19 on the fitness industry had abated.

[81] The Applicant was employed on an annual base salary of $57,000.00 per annum with the possibility of earning incentive payments. However at or around the time the Applicant was dismissed, the Respondent was eligible for JobKeeper subsidies and accordingly the Applicant would have earned $750 per week for the period from his dismissal on 9 April 2020 to 28 September 2020. I am of the view that by 28 September 2020 the Respondent’s gyms had reopened and that thereafter, until 31 October 2020, the Applicant would have earned his usual weekly rate of $1,096.00.

[82] The Applicant provided no evidence in relation to any additional earnings he may have received by way of bonus or incentive payments provided for in his contract of employment. The Applicant was represented by an experienced lawyer and I have assumed that if there were such additional earnings evidence of them would have been tendered. Further, I consider it unlikely in the present economic circumstances that the Applicant would have earned any bonus or incentive in the period when JobKeeper payments concluded.

[83] Accordingly, I have calculated that the Applicant would have earned the amount of $18,000.00 for the 24 week period between his dismissal on 9 April 2020 and the period of JobKeeper payments at the rate of $750 per week ending on 28 September 2020. Thereafter, the Applicant would have earned an amount $5,480.00 based on 5 further weeks of employment at his weekly rate of $1,096.00.

[84] The Applicant was unable to work for a three week period and had exhausted his personal leave and other leave accruals. As a result the Applicant would not have been paid for that period. I have decided to deduct an amount of 3 weeks in respect of the Applicant’s knee surgery – a total of $2,250.00.

[85] I am satisfied that the remuneration that the Applicant would have received, or would have been likely to receive, if he had not been dismissed is $21,230.00.

Remuneration earned (s 392(2)(e)) and income reasonably likely to be earned (s 392(2)(f))

[86] At the point the matter was heard the Applicant had earned no income from other employment and I make no deduction on this basis.

Viability (s 392(2)(a))

[87] No submission was made on behalf of the Respondent that any particular amount of compensation would affect the viability of the Respondent’s business. My view is that no adjustment will be made on this account.

Length of service (s 392(2)(b))

[88] The Applicant’s length of service with the Respondent (less than 12 months) does not justify any adjustment to the amount of compensation.

Mitigation efforts (s 392(2)(d))

[89] The evidence establishes that the Applicant made reasonable efforts to obtain alternative employment following his dismissal. The Applicant states that he applied for numerous positions but, unsurprisingly in the current environment, he has not been able to obtain alternative employment.

[90] In all the circumstances, my view is that the Applicant acted reasonably to mitigate the loss suffered by him because of the dismissal and I do not consider it appropriate to reduce the compensation on this account.

Any other relevant matter (s 392(2)(g))

[91] It is necessary to consider whether to discount the amount ($5,480.00) for “contingencies”. This step is a means of taking into account the possibility that the occurrence of contingencies to which the Applicant was subject might have brought about some change in earning capacity or earnings. 33 Positive considerations which might have resulted in advancement and increased earnings are also taken into account.

[92] The discount for contingencies should only be applied in respect to an “anticipated period of employment” that is not actually known, that is a period that is prospective to the date of the decision. 34

[93] Because I am considering an anticipated period of employment which does not extend beyond the date the application was heard, there is no uncertainty about the Applicant’s earnings, capacity or any other matters during that period of time. Accordingly, I make no deduction for contingencies. I do not intend make any deduction for wages paid to the Applicant in lieu of notice, on the basis that those wages would have been required to be paid in any event if the Applicant’s employment had continued for the period I have estimated that he would have remained in employment. Further, had he remained employed for the anticipated period and was then made redundant, the Applicant would have been entitled to severance payments in addition to notice.

[94] After considering the fact that the Applicant was paid JobSeeker amounts for the period over which I have assessed compensation, I have decided not to make any deduction on this basis. JobSeeker payments are essentially unemployment benefits or social security payments – albeit at an increased rate during the COVID-19 Pandemic. The manner in which such payments are treated in awards of compensation is well established and I see no basis to depart from that approach. That approach, set out in a Decision of a Full Bench of the Commission in McCullough v Calvary Health Care Adelaide³⁵ is that deductions for social security payments are not made on the basis that such payments do not constitute remuneration earned from employment or other work for the purposes of s.392(2)(e). If any amount is required to be repaid by the Applicant that is a matter between the Applicant and Centrelink.

[95] I have considered the impact of taxation, but my view is that I prefer to determine compensation as a gross amount and leave taxation for determination.

Misconduct (s 392(3))

[96] The Applicant did not engage in any misconduct, so my view is that this has no relevance to the assessment of compensation.

Shock, distress or humiliation, or other analogous hurt (s 392(4))

[97] I note that in accordance with s 392(4) of the Act, the amount of compensation calculated does not include a component for shock, humiliation or distress.

Compensation cap (s 392(5)-(6))

[98] The amount of $21,230.00 is less than half the amount of the high income threshold immediately before the dismissal and is less than the total amount of remuneration to which the Applicant was entitled in his employment with the Respondent during the 26 weeks immediately before his dismissal calculated on the basis of his weekly base rate of $1,096.00 - $28,496. There is no requirement that I reduce the amount of compensation I have calculated by reason of s 392(5) of the Act.

Instalments (s 393)

[99] No application has been made to date by the Respondent for any amount of compensation awarded to be paid in the form of instalments. I have determined that the amount of compensation should be paid within 21 days of the date of this Decision.

Conclusion on compensation

[100] In my view, the application of the Sprigg formula does not, in this case, yield an amount that is clearly excessive or clearly inadequate. Accordingly, my view is that there is no basis for me to reassess the assumptions made in reaching the amount of $21,230. 36

[1] For the reasons I have given, I have decided that a remedy of compensation in the sum of $21,230.00 (less taxation as required by law) to be paid to the Applicant and superannuation contributions of $2,016.85 to be paid into the Applicant’s nominated superannuation fund, in three instalments over a three month period, is appropriate in the circumstances of this case. An Order to that effect has been issued.

DEPUTY PRESIDENT

Appearances:

Ms E Bassingthwaighte of Hall Payne Lawyers on behalf of the Applicant.

Mr T Howard on behalf of the Respondent.

Hearing Details:

2020.

10 September.

Brisbane.

Printed by authority of the Commonwealth Government Printer

<PR725393>

 1   Initially the application was made against Todd Howard – The Trustee for Cleveland 24/7 Unit Trust. At the hearing permission was granted for the Applicant to amend his application so that it was made against The Cleveland 24/7 Unit Trust.

 2   Exhibit R3Witness Statement of Todd Howard dated 2 September 2020.

 3   Transcript at PN114.

 4   Transcript at 116-117.

 5   Exhibit A2 Witness statement of Mr Rhayne Cooper dated 27 July 2020.

 6   Transcript PN352.

 7   Transcript PN45 – 49.

 8   Transcript PN55.

 9   Transcript PN62.

 10   Transcript PN66 – 68.

 11   Transcript PN69 – 74.

 12   Transcript PN77.

 13   Transcript PN79 – 85.

 14   Transcript PN86 – 88.

 15   Transcript at PN278 and 279, PN286.

 16   Transcript at PN258.

 17   Transcript PN311, PN319 – PN320, PN333.

 18   Transcript PN159.

 19   Transcript PN377.

 20   Transcript PN221

 21   Transcript PN192.

 22   Transcript PN388.

 23   Transcript PN126.

 24   Transcript PN93.

 25   Transcript PN630.

 26   PN492, PN503.

 27   Transcript PN502-503.

 28   Transcript PN586.

 29   Kable v Bozelle, Michael Keith T/A Matilda Greenbank [2015] FWCFB 3512 at [17]

 30 (1998) 88 IR 21

 31   Tabro Meat Pty Ltd v Heffernan [2011] FWAFB 1080; Read v Golden Square Child Care Centre [2013] FWCFB 762; Bowden v Ottrey Homes Cobram [2013] FWCFB 431

 32   Double N Equipment Hire Pty Ltd v Humphries[2016] FWCFB 7206 at [16]-[17]

 33   Ellawala v Australian Postal Corporation Print S5109 at [36]

 34   Enhance Systems Pty Ltd v Cox PR910779 at [39]

35 [2015] FWCFB 2267

 36   Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32]