Mr Shaun Kinnane v DP World Brisbane Pty Limited

[2014] FWC 7774

[2014] FWC 7774

FAIR WORK COMMISSION

DECISION

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

Mr Shaun Kinnane
v
DP World Brisbane Pty Limited
(U2013/2129)

DEPUTY PRESIDENT ASBURY BRISBANE, 30 OCTOBER 2014

Application for unfair dismissal remedy - application granted - compensation and reinstatement.

Background

[1] In a Decision released on 9 July 2014 I found that Mr Shaun Kinnane was unfairly dismissed by DP World Brisbane Pty Limited and that he should have a remedy for his unfair dismissal. 1 Mr Kinnane seeks reinstatement to his former position and Orders to maintain the continuity of his employment and for lost remuneration in the period between the dismissal and reinstatement.

[2] At the conclusion of the hearing in relation to whether Mr Kinanne’s dismissal was unfair, I determined that prima facie there was no impediment to reinstatement but that given the time that had elapsed between the dismissal and Decision and that DP World had reserved its right to make further submissions in relation to remedy, it would be appropriate to give Mr Kinnane an opportunity to provide current evidence about his loss and attempts to mitigate that loss and to give DP World an opportunity to make further submissions in relation to remedy.

[3] I also indicated that I did not intend to give DP World an opportunity to call additional evidence in relation to remedy given that Mr Kinnane had given evidence about remedy during the hearing of the substantive application and DP World had failed to call evidence in response or in relation to remedy during the hearing. Directions were issued requiring Mr Kinnane to provide a statement of evidence in relation to loss since the termination of his employment and his attempts to mitigate that loss. Directions were also issued giving DP world the opportunity to provide further written submissions in relation to remedy and to indicate whether Mr Kinnane was required for cross-examination.

[4] In its written submissions, DP World contended that Mr Kinnane had put on substantial further evidence in relation to remedy and that DP World had not been afforded an opportunity to respond to that evidence regarding a number of matters including:

● Significant changes at the Brisbane terminal since Mr Kinnane’s dismissal resulting in redundancies;
● Mr Kinnane’s application for voluntary redundancy and the likelihood of it being accommodated;
● Mr Kinnane’s income had he remained in employment at DP World including overtime; and
● The effect the potential reinstatement of Mr Kinnane would have on the workplace.

[5] DP World also indicated that Mr Kinnane was required for cross-examination. At the hearing for this purpose, DP World pressed the argument that it should be permitted to call additional evidence in relation to what would have happened to Mr Kinnane had he not been dismissed in terms of redundancy and to provide an update about the current circumstances at the terminal. DP World further indicated that it did not seek to enlarge upon the evidence that it was capable of putting before the Commission in the substantive hearing and acknowledged that the Company was bound by the way that it ran its case. Rather DP World sought the same opportunity to tell the Commission what had happened since the hearing, that had been afforded to Mr Kinnane.

[6] In light of this submission, and over an objection on behalf of Mr Kinnane, DP World was permitted to put in further statements of evidence in relation to these matters and Mr Kinnane was provided with an opportunity to make further submissions in reply and/or to cross-examine with respect to the additional evidence from DP World. Mr Kinnane’s legal representative did not seek to cross-examine in relation to this material but instead provided a submission in response and a further witness statement from Mr Munday. DP World has raised no objection to that statement and has not sought to cross-examine in relation to it.

[7] Both parties are represented by experienced legal practitioners and in the absence of any indication to the contrary, I assume that they are now content for the matter of remedy to be determined on the basis of this additional material, subject to objections contained in written submissions about whether it should be received.

[8] The central issue in dispute is whether Mr Kinnane should be reinstated and on what terms or whether he should receive compensation for his unfair dismissal. There is a related issue about the calculation of any financial amounts which may be ordered to be paid to Mr Kinnane either for lost remuneration if he is reinstated, or compensation if reinstatement is found to be inappropriate. This related issue arises on the basis that at the point of his dismissal, Mr Kinnane had expressed an interest in redundancy as part of a process that was to be implemented at DP World Brisbane, and the effect that this should have on any order for lost pay or compensation. There is also a question as to whether Mr Kinnane took reasonable steps to mitigate the loss of his employment.

Legislation

[9] Relevant legislative provisions are as follows:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC 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) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC 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 the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC 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 the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC 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), the FWC 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), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

Approach to determining remedy

[10] The main provision in relation to remedy is s.390 of the Act. Reinstatement is the primary remedy provided for unfair dismissals in the sense that there must be a finding that reinstatement is inappropriate before any order for compensation can be made,  2 and that compensation must not be considered or ordered unless/until the Commission is satisfied that reinstatement is inappropriate.3 It may be accepted that the word “impracticable” in previous versions of the statute is interchangeable with “inappropriate”.4

[11] The approach to assessing impracticality (and inappropriateness) in relation to reinstatement was set out by the Full Court of the Federal Court in Perkins v Grace Worldwide 5 as follows:

“Each case must be decided on its own merits. There may be cases where any ripple on the surface of the employment relationship will destroy its viability. For example the life of the employer, or some other person or persons, might depend on the reliability of the terminated employee, and the employer has a reasonable doubt about that reliability. There may be a case where there is a question about the discretion of an employee who is required to handle highly confidential information. But those are relatively uncommon situations. In most cases, the employment relationship is capable of withstanding some friction and doubts. Trust and confidence are concepts of degree. It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether that standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party.

It may be difficult or embarrassing for an employer to be required to re-employ a person the employer believed to have been guilty of wrongdoing. The requirement may cause inconvenience to the employer. But if there is such a requirement, it will be because the employee's employment was earlier terminated without a valid reason or without extending procedural fairness to the employee. The problems will be of the employer's own making. If the employer is of even average fair-mindedness, they are likely to prove short-lived. Problems such as this do not necessarily indicate such a loss of confidence as to make the restoration of the employment relationship impracticable.”

[12] It is also the case that a generalised statement from management about the impracticability or inappropriateness of reinstatement is of itself, not a basis for the Commission to refuse to order reinstatement. As a Full Bench of the Commission observed in Regional Express Holdings Limited trading as REX Airlines v Richards: 6

“Whenever an employer dismisses an employee for misconduct, assuming that the employer is acting honestly, there is an implied lack of trust and confidence in the employee. If it is found that the termination was harsh, unjust or unreasonable, it is appropriate to consider whether the employment relationship can be restored if the employee is reinstated. That question cannot be answered solely by reference to the views of the management witnesses. All of the circumstances should be taken into account.”

[13] Further, as Vice President Hatcher observed in Browne v Coles Group Supply Chain Pty Ltd 7 the contention of an employer that an employment relationship cannot be re-established needs to be carefully considered and there must be a sound and reasonable basis for such a proposition. It is not sufficient that management subjectively holds that view, however strongly it may be held.8 In Balfours Bakery v Cooper9 a Full Bench of the Commission considered an appeal against a decision to reinstate an employee who was dismissed for dishonesty, in circumstances where at first instance the Commission had declined to make a finding of dishonesty, stating:

“...the submission that the Senior Deputy President failed to take into account the appellant’s loss of trust and confidence in the respondent arising from his dishonesty can be dealt with quite briefly. The decision did not include a finding of deliberate dishonesty and we have found no error in this regard. Accordingly it was open to the Senior Deputy President to proceed on the basis that trust and confidence had not broken down in the relevant sense.” 10

[14] In short, the fact that an employer has asserted dishonesty on the part of a dismissed employee and continues to hold a belief that the employee acted dishonestly, is no barrier to reinstatement in circumstances where the Commission has found that the employee did not engage in dishonesty. In such a case, the belief of the employer is mistaken and will generally not be a reasonable basis for a finding that reinstatement is inappropriate.

[15] Australian Meat Holdings Pty Ltd v McLauchlan 11was also a case where an employee who had been dismissed for serious misconduct was found not to have engaged in that misconduct. In that case, the Full Bench said:

“The appellant contends that the Commissioner fell into error in approaching the question of reinstatement on the basis of fairness not practicability. We do not agree. The appellant’s submissions do not have sufficient regard to the change in terminology referred to above. The question of whether the reinstatement of an employee is impracticable is no longer the focal point of the Commission’s consideration of the remedy to be granted. In considering whether to order reinstatement the Commission is not confined to an assessment of the practicability of such an order but rather must decide whether such an order is appropriate.

We accept that the question of whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate. It is one factor to be taken into account, but it is not necessarily conclusive.”

[16] The fact that a position formerly occupied by a dismissed employee no longer exists or is not available, would rarely, on its own, justify a conclusion that an order for reinstatement is not appropriate, and to adopt such an approach would defeat the remedial purpose of the legislation. The unavailability of a job is one factor to be taken into account in deciding whether an order for reinstatement is inappropriate. 12 Other considerations relevant to whether reinstatement is inappropriate are:

● The financial position of the employer; 13
● Impact on other employees; 14 and
● Incapacity of the employee. 15

[17] With respect to orders to maintain continuity of employment and service and in relation to restoring lost remuneration, s.391(2) and (3) of the Act provide discretion to the Commission about whether such orders should be made and terms of any such orders. In Aurora Energy Pty Ltd v Davison 16a Full Bench of the Australian Industrial Relations Commission considered that a provision under previous legislation that was not materially different, provided a discretion to make orders. To adapt the formulation set out by the Full Bench in Davison, the discretion is exercisable if the Commission thinks it appropriate and:

● is to be exercised in the context of the Objects of the Division of the Act dealing with unfair dismissal;
● is conditional on an order for reinstatement;
● allows the making of any order the Commission thinks appropriate to maintain continuity; and
● allows the making of any order the Commission thinks appropriate to restore remuneration lost or likely to be lost.

[18] That Full Bench also noted, that as is presently the case, the discretion to make such orders is conditioned by the intention to ensure that a “fair go all round” is afforded to both the employer and the employee. 17

[19] In my view the discretionary nature of such orders allows the Commission to consider, in determining an amount to be ordered for restoring lost remuneration, to consider whether the amount should be reduced because of matters such as failure to take reasonable steps to mitigate the loss of employment and any misconduct which contributed to the dismissal.

Submissions and evidence in relation to remedy

Mr Kinnane

[20] Mr Kinnane provided two witness statements for the proceedings in relation to remedy. At the request of DP World, Mr Kinnane made himself available for cross-examination. A further statement was also made by Mr Munday, who was not required for cross-examination.

[21] In relation to the appropriateness of reinstement, Mr Kinnane stated that he seeks reinstatement and remuneration lost in the period following his dismissal and an order in relation to continuity of service. Mr Kinnane said that since the hearing Mr Hulme, who was involved in his case has been promoted and is no longer in Brisbane. Mr Wayne, who is now filling the role formerly held by Hulme, was the Operations Manager at the time of Mr Kinnane’s dismissal and had no role in the events surrounding it. Mr Kinnane also states that he had contact with Mr Wayne in his role as a Delegate and had a good relationship with him. Further, Mr Kinnane states that there is no obstacle to him returning to the workplace on account of difficulties with personal relationships.

[22] Mr Kinnane said that the only impediment to his immediate return to work if an order for reinstatement is made, is the need for him to obtain a Maritime Security Identity Clearance. This can take between four and eight weeks to obtain, and Mr Kinnane is not sure whether DP World assists employees is this regard.

[23] Mr Kinnane said that at the date of his dismissal he was a Tradesperson - Leading Hand paid in accordance with the DP World Enterprise Agreement 2011. As at 13 June 2013 Mr Kinnane’s rate of pay was $129,807.00 per annum and at 1 July 2013 increased to $134,999.00. Mr Kinnane also asserted that he would have attended meetings in his capacity as a Delegate of the MUA, for which he would have received overtime payments totalling $9,456.38. Mr Kinnane did not receive payment for notice on termination of his employment and was paid only his accrued entitlements for annual and long service leave. Further, Mr Kinnane stated that he has not received any income in the period from termination of his employment or Centrelink payments. Mr Kinnane’s superannuation fund provides for an accident or injury payment, however he was not eligible for this as he could perform functions working at Rapid Fabrications.

[24] Mr Kinnane did not receive periodic payments from WorkCover for lost time since his dismissal but did receive a lump sum payment of $15,104.85 for permanent impairment following his injury, less $3,300 for legal fees paid to the firm that represented him with respect to his WorkCover claim.

[25] After the termination of his employment, Mr Kinnane attempted to build up his business, Rapid Fabrications. Mr Kinnane stated that despite his efforts the business has not generated any income and is unlikely to do so in the foreseeable future. Mr Kinnane also stated that he attempted to gain alternative employment and did this by using the SEEK website. Mr Kinnane initially applied for jobs on the wharves and applied for two such positions. He was unsuccessful in both applications and said that this was because he disclosed the reason for leaving his position with DP World or the positions were filled internally. Later Mr Kinnane expanded his search to look for positions as a forklift driver but said that these positions paid less than he had earned while working for DP World. Mr Kinnane also said that he was restricted in the positions he could apply for because of his neck injury.

[26] Further, Mr Kinnane was also impacted by ongoing medical issues in the period following the termination of his employment. He required back surgery from which there would have been a relatively short recovery period, but was unable to have that surgery due to financial constraints, caused by the fact that he did not have employment. Mr Kinnane said that his WorkCover claim was still in progress and there was an issue about whether his private health provider would cover the cost of the operation if it was covered by WorkCover.

[27] Mr Kinnane was unable to rely on his private health cover to pay for the operation in any event because his lack of employment meant that he could not afford to pay any gap with respect to the cost of the operation and the amount he would have received via his private health cover. Mr Kinnane maintained that had he been employed by DP World at the time and entitled to sick leave and suitable duties following the surgery, he would have been able to afford to pay for the surgery himself pending finalisation of his WorkCover claim.

[28] WorkCover ultimately decided that Mr Kinnane’s neck injury was primarily due to natural degeneration. His surgeon offered to perform surgery without charging for the gap above his private health insurance refund and as the hospitalisation would only cost $1,000.00 Mr Kinnane decided to go ahead with the surgery. Mr Kinnane had surgery on 1 July 2014 and tendered a medical certificate issued on 3 September 2014 by his orthopaedic surgeon Dr Simon Gatehouse, stating that Mr Kinnane is fit to return to normal duties from 4 September 2014 although he still requires medical follow-up and that Mr Kinnane will be reviewed again on 29 October 2014. There are no restrictions of any kind included on the certificate in respect of matters such as: lifting; bending; twisting; squatting; standing; sitting; right or left handed work; driving or operating machinery; pushing or pulling.

[29] In relation to Rapid Fabrications, Mr Kinnane said that his decision to build up that business meant that he was not entitled to receive assistance in the form of Centrelink payments. He further stated that he has not drawn an income from that business since the termination of his employment and it did not make a profit. Rapid Fabriations made a loss in the financial year ending 30 June 2014 of around $16,000.00 and a loss of $14,000.00 in the 2013 financial year. Mr Kinnane calculates that he has loaned the business $56,000.00 over the past six or seven years and took $6,000.00 from the business for payment of those loans last year. Of that mount, Mr Kinnane was required to put $3,000.00 to $4,000.00 back into the business.

[30] The business turnover was $200,000.00 for the financial year ended 30 June 2014, and Mr Kinnane states that there is nothing left over after he has paid expenses for wages, rent and parts and some of the money he has contributed has been required to make up wages. Mr Kinnane has been restricted as to the work he can perform in the business due to his physical limitations and has been restricting his activities to office and administrative work, off-siding to the full time employee and doing the “running about”. Mr Kinnane estimates that it will take ten years before Rapid Fabrications earns an income for him but it will never match his earnings as an employee of DP World. Mr Kinnane provided a letter from his
Accountant confirming his evidence about Rapid Fabrications. The letter concludes as follows:

“In my opinion the business is in a state of infancy and has not been operated with a view to providing substantial income for you, rather it was a side project that you now have to rely on for a source of income. I don’t see the business providing you with an income of $134,999, however if a steady stream of repeat clientele was to be maintained through operational efficiency and capacity improvements, the required income could be achieved by 4 years. The turnover for the required income would be achieved by 4 years. The turnover for the required income would be about $540,000.”

[31] Mr Kinnane also gave evidence about the impact of the loss of his employment on his family. In this regard, Mr Kinnane has three children, aged 18, 17 and 15. Two are at school and the oldest at university and all live at home. Mr Kinnane’s wife suffers from a medical condition and works as a Teachers’ Aide. She requires regular medical treatment.

[32] Under cross-examination, Mr Kinnane agreed that he is a fitter and turner by trade and that there are positions of employment in other industries for persons with that qualification. Mr Kinnane further agreed that in the 15 month period since his dismissal he has made two job applications and that these were only for jobs in the stevedoring industry. Mr Kinnane also agreed that his estimation that it would take him ten years to build up Rapid Fabrications to the point that he could earn an income from the business, was at odds with the view of his accountant that Mr Kinnane could achieve an annual income of $134,999.00 in four years.

[33] Mr Kinnane said that his witness statement was prepared prior to receiving the letter from the Accountant and that this discrepancy was an oversight and rejected the proposition that he was trying to make the situation look as bad as possible. Mr Kinnane agreed that he had engaged a sub-contractor to perform work for Rapid Fabrications and had subsequently employed that person. Mr Kinnane said that he could not have done this work himself because he was injured.

[34] In response to the proposition that he wanted to be made redundant and would have accepted redundancy in March 2014, Mr Kinnane said that he had put in a non-binding expression of interest to find out how much his redundancy payment would be. Mr Kinnane agreed that he was told that amount but maintained that he was denied the opportunity to decide whether to accept it or not, because of his dismissal. Mr Kinnane further agreed that if he had accepted redundancy in March 2014, his base earnings would have been $30,000.00 less than the estimate of the amount of his loss up to the date of the hearing in relation to remedy.

[35] In relation to overtime, Mr Kinnane agreed that outside the overtime he was paid during the time that he was participating in enterprise agreement negotiations, he was paid little or no overtime. It was also put to Mr Kinnane that he had failed to disclose money received from his former co-workers who had “passed around the hat” on his behalf and that he may also have loaned money from family and friends. Mr Kinnane said that he did not think that this was noteworthy and denied that he had given untruthful evidence on this point when asked in cross-examination whether he had received money from any other source since he left DP World. Mr Kinnane was not asked how much that amount was. Mr Kinnane also said that this money was a gift from those employees and that he did not believe he was required to disclose it.

[36] Mr Trevor Munday, Deputy Branch Secretary of the Maritime Union of Australia, gave evidence on behalf of Mr Kinnane, in response to the evidence of Mr Muscat. Mr Munday’s evidence was that the form signed by Mr Kinnane and said by Mr Muscat to be a binding nomination form for voluntary redundancy, was not treated as binding by DP World with respect to other employees who also signed that form. According to Mr Munday, a non- binding expression of interest was circulated to employees in April 2013 with DP World maintaining the right to select which employees would be made redundant. Following disputation between the MUA and DP World there was a further letter sent to employees inviting them to again confirm an interest in voluntary redundancy, even if an interest had previously been registered. That letter also indicated that after nominations were submitted, DP World would be able to confirm if redundancy applications would be accepted.

[37] Mr Munday also gave evidence that in early 2014 DP World agreed that despite the process for nomination, employees with the same “skill set” who elected to apply for voluntary redundancy would be allowed to change their election by swapping with an employee who had previously not nominated. This arrangement was advertised to employees in February or March 2014. Further, Mr Munday said that after the October 2013 nomination process, there was an oversubscription for redundancies among the maintenance fitters who had been Mr Kinnane’s workgroup so that three of the group who had elected to take redundancy were not given the opportunity to do so. One of those three employees resigned prior to the redundancies taking effect, and the role was filled by an internal candidate.

[38] Mr Munday disputed Mr Muscat’s evidence that there are no vacant roster slots, and that Mr Kinnane could not be reinstated without adding seven additional employees to the roster to balance it. According to Mr Munday, Brisbane currently operates a 42 hour week roster with four shifts on and four shifts off, with eight fitters. The same coverage and total spread of hours could be achieved by rostering ten fitters on a four on and six off roster which equates to a 34 hour week. This roster has been in place for DP World’s Fremantle operations. Other roster patterns have also been agreed at both Brisbane and other ports at various times. There is currently a 42 hour day shift roster for maintenance tradespersons in the 2011 Agreement that has no maintenance tradespersons on it. Further, the MUA is currently engaged in negotiations for a new enterprise agreement with DP World, and has a claim for additional maintenance fitter roles.

[39] Mr Munday also said that on the basis of the 2011 Agreement and a Deed of Agreement between the MUA and DP World entered into in August 2012, Mr Kinnane would have received an amount of $166,183.77 as a redundancy payment.

[40] It was submitted on behalf of Mr Kinnane that the circumstances of this case favour reinstatement including the following:

● The impact of not being reinstated will consign Mr Kinnane and his family to a continuation of a difficult financial situation which has seen him sell assets to pay bills;
● Mr Kinnane and his wife raise and support a family and his wife has health problems;
● Mr Kinnane has attempted to make a go of his business but the prospect of this being viable is at least four years off and dependent on a number of other matters;
● He has worked for DP World for 22 years;
● His prospects of obtaining alternative work are poor, particularly work commensurate with what he has lost;
● Mr Kinnane’s considerable financial loss will not be remedied by compensation;
● The options provided by reinstatement are not available through a compensation order;
● Mr Kinnane’s work history instils confidence that he will be a safe, reliable and contributing employee;
● Mr Hulme’s evidence was that he had no difficulty with Mr Kinnane as an employee and that the only issue was his perceptions of Mr Kinnane’s misconduct which should be removed by the Commission’s finding that Mr Kinnane did not engage in misconduct.

[41] It was submitted that Mr Kinnane has acted sensibly and reasonably to mitigate his loss and that there was no other sensible course to address his medical issues. The submissions of DP World in relation to redundancy should be rejected. In this regard, reference was made to the decision in Vallette v Graincorp Operations Limited 18where it was held that:

“None of the changes instituted by the respondent persuade me that it would not possible for the applicant to return to work. If there is an oversupply of pest control officers or persons who were once pest control offsiders as a result of the applicant’s return to work, and other persons positions are likely to be considered redundant, then that is not a matter that by itself weighs against the applicant’s return. The applicant’s termination of employment was harsh, unjust and unreasonable. He was entitled to have been there at the time that these organisational changes were considered and to have been part of the pool from which those positions were filled. Nothing in this decision affects the entitlement of the respondent to give consideration to those organisational matters upon the applicant’s return so long as these proceedings are not held against him in that process and any examination of the positions is fair and open in all the circumstances.”

[42] It was further submitted that Mr Kinnane should be paid the entire remuneration he has lost over the period prior to his reinstatement, with no discounting factors. In the alternative it was submitted that Mr Kinnane should be compensated to the maximum allowed and that amounts received as a result of Mr Kinnane making an election to receive a lump sum amount in lieu of seeking damages for his injury, should not be taken into account as that amount is not of the same character as compensation for an unfair dismissal.

[43] In relation to redundancy, it is submitted that Mr Kinnane was entitled to be at DP World at the time of the redundancies and in consequence, to be part of the pool of employees to be considered. The actions of DP World in unfairly dismissing Mr Kinnane have denied him that opportunity. It is further submitted that the interest in redundancy expressed by Mr Kinnane cannot be considered in isolation from the conditioning factor of the redundancy payment of $166,183.77 with very advantageous tax concessions. Interest in redundancy confirms a desire to remain in employment as current employment is a condition of eligibility.

[44] It was also submitted that the evidence of Mr Munday demonstrated that there was no certainty that Mr Kinnane’s application for redundancy would have been accepted and that there were other contingencies which may or may not have occurred so that Mr Kinnane being made redundant was not certain. There is no basis to deduct an entitlement that Mr Kinnane did not receive, or to adjust amounts ordered for lost pay or compensation on the basis that Mr Kinnane may have been made redundant in March 2014.

DP World

[45] DP World submits that reinstatement of Mr Kinnane is inappropriate because:

● DP World has lost trust and confidence in Mr Kinnane;
● Given that Mr Kinnane had volunteered for redundancy Mr Kinnane would have been retrenched in March 2014;
● In the time since Mr Kinnane’s dismissal, DP World has significantly downsized its workforce at the Brisbane terminal such that there is no role for Mr Kinnane;
● DP World has concerns for Mr Kinnane’s fitness to perform his previous role; and
● The impact on other employees at the workplace who still remain.

[46] It is also submitted that when Mr Kinnane was dismissed a new employee was not recruited to fill his role. Since Mr Kinnane’s dismissal there have been 96 redundancies at the Brisbane terminal, including seven mechanical tradespersons - the role in which Mr Kinnane was previously employed - and total numbers of employees at the terminal covered by the DP World Brisbane Enterprise Agreement 2011 have reduced from 302 to 188.

[47] The rostering system for employees is also said to be complex with employees assigned to a roster panel. There are two mechanical tradespersons per panel. Rosters are not flexible and are part of the Enterprise Agreement. Any changes to rosters must go through the consultation and change processes set out in the Agreement. There are no vacant slots in the roster such that an addition to the workforce could easily be given work. The evidence at the hearing is that there are no current vacancies and the size of the workforce and rostering arrangements at the present time are such that there are no additional roles available and no work to be performed which is not already being performed by the Respondent’s current employees.

[48] If Mr Kinnane was reinstated, DP World would be faced with excess labour which would leave the Company with two options:

● Make Mr Kinnane or another employee’s position redundant; or
● Attempt to change rostering arrangements such that other employees would lose work hours and therefore income, as a result of placing an additional employee on the roster.

[49] These options are inappropriate and would impose an unreasonable burden on DP World employees who may be faced with reductions in their working hours or redundancy. It was also submitted that the desire of a dismissed employee to work for the former employer is relevant to the discretion to reinstate that person, and that in volunteering for redundancy, Mr Kinnane had indicated that he did not wish to work for DP World.

[50] Mr Muscat, the Human Resources Manager at DP World Brisbane Pty Ltd gave evidence about the process followed by the Company to reduce its workforce at the Brisbane Terminal. According to Mr Muscat, DP World called for voluntary redundancies on or around February/March 2013. At first, all Brisbane employees were invited to indicate on a non-binding expression of interest form, whether they were interested in taking voluntary redundancy. Binding redundancy forms were then issued to those who expressed an interest.

Mr Kinnane completed a redundancy form dated 11 May 2013 requesting that he take a voluntary redundancy and his preference in this regard was binding. Mr Kinnane did not seek to be redeployed to another terminal. Mr Muscat tendered the form signed by Mr Kinnane.

[51] At the bottom of the form the following appears:

“By signing this document I understand:

1. That this is now a binding request seeking voluntary redundancy should it be available...”

[52] According to Mr Muscat, if Mr Kinnane had remained employed at the time the redundancies were effected on 27 March 2014, he would have been made redundant. In relation to rostering arrangements, Mr Muscat gave evidence in line with submissions made by DP World. Mr Muscat said that if additional employees are added to the roster, it will cause an imbalance and DP World is unable to sustain additional positions on this roster. Employees are assigned to panels on the basis of their skill set and currently there is one mechanical tradesperson assigned to each of the eight roster panels that rotates daily. There are currently no vacant slots in the roster due to the need to balance the skill mix on each roster panel.

[53] If Mr Kinnane is reinstated, he cannot simply be inserted back into the roster. Instead, DP World would be required to add approximately seven other employees to balance the roster resulting in the Company being required to engage additional unnecessary labour. Further, if Mr Kinnane is reinstated, there will be no work for him to perform that is not already being performed by another employee.

CONSIDERATION

[54] The principle basis of the finding that Mr Kinnane was unfairly dismissed was that there was no valid reason for the dismissal and that Mr Kinnane was not guilty of the misconduct alleged against him. DP World asserts that it has lost trust and confidence in Mr Kinnane. There is no evidentiary basis for this assertion. To the contrary, Mr Hulme accepted that he had no difficulty with Mr Kinnane as an employee and that the only issue was his belief that Mr Kinnane had engaged in misconduct. In circumstances where Mr Kinnane has been found not to have engaged in misconduct, the assertion that DP World has lost trust and confidence in Mr Kinnane is not soundly or reasonably based and is not a basis for a finding that reinstatement would be inappropriate.

[55] I do not accept that the fact that Mr Kinnane had volunteered for redundancy and would have been retrenched in March 2014 has any bearing on the appropriateness of reinstatement. It is clear that Mr Kinnane’s expression of interest was not binding and at best, put Mr Kinnane in a pool of employees that were entitled to be considered. Even if Mr Kinnane had made a binding election, my view about the relevance of this matter would not change.

[56] Had Mr Kinnane’s election been a binding one, but for his unfair dismissal, he would have remained employed until March 2014 and received a significant payment of $166,183.77 with very advantageous tax concessions given his 22 years of service. Even if Mr Kinnane wanted to leave at that time, his dismissal denied him the opportunity to cease employment of his own volition and to avail himself of benefits to which he would have been entitled pursuant to the enterprise agreement covering his employment and the enhanced arrangements negotiated by the MUA.

[57] It is also the case that downsizing and a reduction in the workforce at the Brisbane operations of DP World, is not of itself determinative of the inappropriateness of reinstatement. There is evidence that there will be operational difficulties for DP World if Mr Kinnane is reinstated but these are not insurmountable as evidenced by Mr Munday’s statement. It is also not determinative that Mr Kinnane may be made redundant after being reinstated or that some other employee may be made redundant as a result of Mr Kinnane’s reinstatement.

[58] Mr Kinnane has sought reinstatement from the outset. DP World had ample opportunity at the original hearing to put evidence about the appropriateness of reinstatement. The Company has had a further opportunity to call evidence to update its position. There is no evidence that any other employees of DP World would be adversely impacted if Mr Kinnane was reinstated. Indeed, Mr Munday’s evidence was that the March 2014 redundancy round was over-subscribed with respect to maintenance fitters.

[59] It is also the case that Mr Kinnane’s treating orthopaedic surgeon has cleared him to return to full duties. Mr Kinnane requires a security clearance. He was not cross-examined about this matter and in particular there is no evidence that he should have taken steps to obtain this in advance of reinstatement, in his own time and at his own expense. In the circumstances, that is not a matter that makes reinstatement inappropriate.

[60] I am also of the view that an order for compensation is not appropriate in all of the circumstances. Such an order could not properly compensate Mr Kinnane for the unfairness of his dismissal and the significant impact it has had upon him and his financial situation. In this regard I accept the submissions advanced on behalf of Mr Kinnane and agree that the circumstances detailed in those submissions favour reinstatement. For the reasons set out above, I also consider that the factors advanced on behalf of Mr Kinnane outweigh those advanced in opposition by DP World.

[61] Accordingly, I consider that an order for reinstatement is not inappropriate. I also consider that the order should require DP World to reappoint Mr Kinnane to the position he held immediately before his dismissal. In all of the circumstances of this case, I also consider that it is appropriate to make an order under s.391(2) of the Act to maintain the continuity of Mr Kinnane’s employment and his service with DP World. I have reached this conclusion on the basis that Mr Kinnane has a lengthy and otherwise unblemished work record; was not guilty of misconduct; did not contribute in any way to his dismissal by reason of his conduct; and but for his unfair dismissal would have had ongoing employment other than in circumstances where he accepted an offer of redundancy. For the reasons also set out above, I do not consider that the fact that Mr Kinnane might have been made redundant in March 2014 is a basis for declining to make an order for continuity of service and employment.

[62] Further, I consider that it is appropriate to make an order under s.391(3) of the Act to cause DP World to pay to Mr Kinnane an amount for remuneration lost or likely to have been lost because of the dismissal. There is no basis for reducing the amount ordered on the basis of misconduct.

[63] However, there is a question as to whether an amount for remuneration lost should be reduced to reflect the prospect that Mr Kinnane would have ceased employment in March 2014 on account of redundancy or whether he has failed to take reasonable steps to mitigate the loss of his employment.

[64] I do not think it appropriate to reduce the amount of lost remuneration I intend to order to be paid to Mr Kinnane on the basis of the likelihood that he would have been made redundant in March 2014. Mr Kinnane’s unfair dismissal deprived him of the opportunity to accept an offer of redundancy which would have included the benefits of a significant redundancy payment; favourable taxation treatment of that payment; and the ability to cease employment on a neutral basis. Instead, Mr Kinnane was summarily dismissed for serious misconduct and carried the stigma of his dismissal on those grounds, in circumstances where he was not guilty of serious misconduct, or indeed, any misconduct.

[65] In those circumstances it would not result in a fair go all round if DP World to obtain a benefit from the fact that Mr Kinnane would have likely accepted a redundancy had it been available, in circumstances where Mr Kinnane was deprived of any benefit arising from redundancy because DP World unfairly dismissed him. There is no basis for deductions to be made from the amount of lost remuneration ordered because of donations received from Mr Kinnane’s colleagues, the lump sum payment for permanent impairment resulting from Mr Kinnane’s Workers Compensation Claim or for amounts raised by selling his assets. Those amounts are not remuneration earned from employment or other work.

[66] However, I do think it appropriate to make some deduction on the basis that Mr Kinnane did not take reasonable steps to mitigate the loss of his employment. While I accept that Mr Kinnane was injured and that he would have had difficulty obtaining other employment because of the circumstances of his dismissal, and that he chose to attempt to build up Rapid Fabrications, the fact remains that Mr Kinnane applied for only two positions, and largely limited his job search to the stevedoring industry. Mr Kinnane’s reasons for limiting his search were that the rate that he would be paid in that industry is higher than in other industries. Mr Kinnane is a fitter and turner by trade and has significant experience. I do not accept that it was reasonable for him to apply for only two positions and to limit his search to the stevedoring industry, or at least to limit his search in this way for a significant period after his dismissal.

[67] While it is the case that Mr Kinnane was injured for a significant part of the period which would be covered by an order for lost remuneration, this did not prevent him from applying for two positions. It is also the case that Mr Kinnane was fully cleared to return to his former duties with effect from September 2014. In all of the circumstances I think it appropriate to reduce the amount of lost remuneration by 25%.

[68] Further, I am of the view that the calculation of lost remuneration should not include the overtime component claimed by Mr Kinnane. That payment would have been contingent on Mr Kinnane taking part in enterprise bargaining negotiations, and I cannot see a basis for finding that he would have done so simply on the basis that he participated in negotiations for a previous agreement. Mr Kinnane’s lost remuneration should be calculated on the basis of his base salary as set out in the enterprise agreement covering his employment.

CONCLUSION

[69] There is an issue to be resolved in relation to Mr Kinnane obtaining a security clearance to return to work. No submissions were made by DP World in relation to this matter. Mr Kinnane estimates that it will take between four to eight weeks in order for him to obtain that clearance. While no explanation was provided by Mr Kinnane as to why he has not undertaken this on his own behalf, this matter was not dealt with in cross-examination or in the submissions advanced by DP World. Accordingly I have no basis for delaying the effective date of Mr Kinnane’s reinstatement.

[70] Mr Kinnane is to be reinstated with immediate effect to the position he held immediately before his dismissal and with continuity of employment and service. Mr Kinnane is also to receive lost remuneration between the date of his dismissal and the date of his reinstatement, less a deduction of 25%. An Order to that effect will issue with this Decision.

DEPUTY PRESIDENT

Appearances:

Mr R.S. Reidy of Counsel on behalf of the Applicant.

Mr D. Perry and Ms J. Bloomfield on behalf of the Respondent.

Hearing details:

2014.

Brisbane:

September 5.

Final written submissions:

23 September 2014.

 1   [2014] FWC 4541

 2   Browne v Coles Group Supply Chain Pty Ltd [2014] FWC 3670 at [74] per Hatcher VP.

 3   Regional Express Holdings Limited trading as REX Airlines v R Richards [2010] FWAFB 8753 at [23]; Holcim (Australia) Pty Ltd v Serafini [2011] FWAFB 7794 at [24].

 4   Lambley v DP World Sydney Limited T/A DP World Sydney [2012] FWA 1250 at

 5 (1997) 72 IR 186 at 191-192.

 6   [2010] FWAFB 8753.

 7   [2014] FWC 3670

 8 Ibid at [77].

 9   [2011] FWAFB 8032.

 10 Ibid at [12].

 11 (1998) 84 IR 1.

 12   Smith v Moore Paragon Australia Ltd (2004) 13 IR 446 at 452.

 13   Worth v Sunshine Pty Ltd Trading as The Big Pineapple [2010] FWA 9332.

 14   Sulemanovski v Aperio Group (Australia)

 15   Arthur Smith and Brett Kimball v Moore Paragon Australia Ltd [2004] AIRC 57 at [51].

 16   Aurora Energy v Davison AIRC PR902108.

 17   Ibid at [23] and [24].

 18   PR905033, 7 June 2001 per Redmond C.

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