Mr Teng Ge v GT Construction Group Pty Ltd
[2024] FWC 2657
•30 SEPTEMBER 2024
| [2024] FWC 2657 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Teng Ge
v
GT Construction Group Pty Ltd
(U2024/5271)
| COMMISSIONER WILSON | MELBOURNE, 30 SEPTEMBER 2024 |
Application for an unfair dismissal remedy. Merits considered. Dismissal found to be unfair. Compensation appropriate.
This decision concerns an application for an unfair dismissal remedy made by Mr Teng Ge (the Applicant) pursuant to s.394 of the Fair Work Act 2009 (the FW Act). The application was filed in the Fair Work Commission (the Commission) on 9 May 2024, after Mr Teng Ge was dismissed by GT Construction Group Pty Ltd (GT Construction Group, or the Respondent), with effect from 22 April 2024.
For the reasons set out below, I find Mr Ge was unfairly dismissed and that, while reinstatement is inappropriate, an award of compensation is appropriate.
PRELIMINARIES
Section 396 of the FW Act requires the determination of four initial matters before consideration of the merits of the application. Those matters are, whether the application was made within the period required in s.394(2), whether the person was protected from unfair dismissal, whether the dismissal was consistent with the Small Business Fair Dismissal Code, and whether the dismissal was a case of genuine redundancy. In relation to the elements within s.396, I find that Mr Ge’s application was lodged with the Commission within the 21-day period for making such applications and that, at the relevant time he was dismissed, he was a person protected from unfair dismissal.
It is necessary though to consider whether Mr Ge’s dismissal was a genuine redundancy and, because of the Respondent’s size, whether his dismissal was consistent with the Small Business Fair Dismissal Code.
Having had regard to ss.397 – 399 of the FW Act and having consulted with the parties, I conducted a determinative conference about these matters on 28 August 2024, at which Mr Ge appeared and gave evidence for himself. Mr Tong Lin, the Respondent’s Director, appeared and gave evidence for GT Construction Group. Both parties required their evidence and submissions to be provided through a Mandarin interpreter.
BACKGROUND
Between 12 October 2022 and 22 April 2024, Mr Ge was employed by GT Construction Group as a construction estimator.
Mr Ge’s employment with GT Construction Group was marked by a series of complaints about payments due to be made to him. In April 2023, he requested payslips for the previous three months and asserted that his March wages had not been paid. In May 2023, he complained to Mr Lin that his April wages had not been paid and that his superannuation payments had not been paid at all. Further, Mr Ge asserts that, for the whole of his employment between October 2022 to April 2024, no superannuation payments were made on his behalf. He made several complaints to the Australian Taxation Office who established a debt against the Respondent and informed the company of this in November 2022. Mr Ge proceeds in his application to the Commission to state the following, both about the superannuation payments as well as what occurred around the time of his dismissal.[1]
1. During my employment for the business from October 2022 to April 2024, I was not paid any superannuation. I filed several complaints to ATO. And ATO has established a debt against the employer and informed the employer in November 2024. The director been contacted by ATO, then he threatened me if I do not withdraw my complaint from ATO, he will get rid of me.
Due to this became an ongoing issue, ATO staff who is investigating my superannuation complaint rang me on 5th April 2024. They informed me both on the phone and in written email, that they has established accumulated debt against my employer. And the employer has been informed too. On 8th April 2024, the director of the business rang me, and told me I was fired.
2. During my employment, my wage is constantly paid late. Sometimes they do not provide me payslips even if I request in written.
My final pay slips, and final pay are overdued and not paid. I requested these on the phone and in emails. The director simply ignored.
3. Before I was informed the termination, the director removed my access to company IT system, which is crucial for my works. I complaint verbally and in written. The director simply ignored.
4. During my employment, I requested many times on the phone and in emails, to call for a meeting to discuss the issues of this employment and I feel this termination is unfair. But the director has never met me.
5. My position was construction estimator. Three months before my termination, the employer has requested office administrator to post an advertisement hiring new estimator due to business expanding rapidly.
Mr Ge also says that on three occasions he was threatened by Mr Lin with dismissal if he pursued his complaints. The first time this occurred was in May 2023, when he first complained to the ATO. The second time was when he made his second complaint to the ATO in November 2023 and the third occasion was on Friday, 5 April 2024.[2] Mr Ge’s evidence on the subject included the following;
“MR GE: So here's what happened. So all these three times they are quite similar. So what happened was I lodged my complaint to authorities first and then - meanwhile I emailed or just told my former employer, Mr Lin about this. But Mr Lin either just talked to me, threatened me with dismissal orally or by the phone call.”[3]
Mr Ge’s evidence is also that Mr Lin called him and “he said, 'I need you to go because our company is not going well, the business is not going well'”.[4] Mr Ge contended the discussion was threatening and elaborated in later evidence;
“MR GE: So my employer told me that it's useless for me to lodge a complaint to ATO or Fair Work, it won't work, and the business is going down and they will let me go. It really depends on how you understand this. So it might be a threaten or not, but to me it's definitely - it made me feel threaten.”[5]
On the following Monday, Mr Ge was given notice by Mr Lin that his employment was to end on 22 April 2024, with him giving this evidence;
“MR GE: Okay. So it was 8 April, so it was a Monday and Mr Lin called me. He told me that he no longer - that the company no longer needs my service and I said, 'Okay, I accept that if that's proper, if he does everything properly'. So it needs to be notice, a formal notice of dismissal and he needs to do everything by law and he needs to pay all the late payment of super. So Mr Lin said, 'No problem, I'll pay everything'. But when it comes to details the details - Mr Lin said, 'Everything - there's no problem', so he would pay me all those payments I was supposed to get before, but he didn't do it in the end. I think that's just a lie.”[6]
Mr Lin provided Mr Ge with a written employment termination notice which sets out the following;
“Employment Termination Notice
Dear Mr Teng Ge
I am writing to inform you, with regret, of the termination of your employment with GT Construction Group Pty Ltd, effective 22nd April 2024.
As you are aware, GT Construction Group Pty Ltd has been experiencing significant financial difficulties. Despite our efforts to navigate through these challenges, we find ourselves in a position where we must undergo restructuring to ensure the company's sustainability. Unfortunately, this restructuring means that your current position is no longer necessary.
We want to express our sincere appreciation for the contributions you have made during your tenure with GT Construction Group Pty Ltd. We are grateful for the time you have spent with us.
We understand that this news may come as a shock, and we assure you that this decision was not made lightly. We have explored all possible avenues to avoid this outcome, but regrettably, it is necessary for the long-term viability of the company.
We want to wish you all the best in your future endeavours. We are confident that your skills and talents will lead you to success in your next chapter. Thank you once again for your dedication and service to GT Construction Group Pty Ltd.
Sincerely,
Tony Lin
Director
GT Construction Group Pty Ltd”[7]
The letter was provided to Mr Ge entirely in English, and he did not receive a Mandarin version.[8] Mr Lin says that his bookkeeper helped him to write the letter.[9]
After being dismissed, Mr Ge says that he saw an advertisement on a Chinese language website advertising jobs within GT Construction Group. The advertisement was apparently placed by another employee of the group, ‘L’, and shows the website address of the Respondent. The English version of the advertisement (provided by the Applicant) says that it was published on 12 April 2024 and updated on 29 April 2024, and puts forward that the company is looking for an estimator and;
“An established Melbourne company doing Plastering and Metal ceiling. Currently, the company is in a rising stage with many projects. The company already has two estimators, but due to the busy business, it needs to recruit one more person to be responsible for the estimation and quotation of new projects to meet the company's increased business volume.
Estimator: More than one year of experience in building budgeting, indoor building estimating. proficient in operating indoor budgeting software, strong learning ability, careful and responsible.
The company has a good team atmosphere, pays attention to cooperation and hard work, and is serious and responsible for work.”[10]
Mr Ge denies there were any discussions between himself and Mr Lin that might be regarded as consultation about an impending redundancy and that he was just told by Mr Lin of the decision.[11]
Mr Ge was fortunate enough to obtain alternative employment starting on 29 April 2024, that is, a week after his termination of employment took effect. However, his salary with his new employer is substantially lower than it was with GT Construction Group. His employment with the Respondent attracted a salary of $135,000 per year, with superannuation to be paid in addition, whereas his new employer provides him with a salary of $70,000 per year, again with superannuation to be paid in addition.[12]
Mr Lin’s response to these matters is that Mr Ge’s dismissal was necessitated by the Respondent being unable to afford his salary at the time of making the decision on the subject, around 3 or 4 April 2024.[13] In relation to his reasoning on the subject, Mr Lin put forward the following, as well as that he did not consult with Mr Ge about the redundancy of his position;
“THE COMMISSIONER: Did you speak with Mr Ge, that is, to consult with him about, 'I'm thinking of making your position redundant, what views do you have about the subject?'.
PN1
MR LIN: So our conversation was mainly about I told Mr Ge that the business is quite difficult at the moment and I can't afford his salary and because he need to rely on the salary to support his family as well so he can't just work for me for free so I need him to go.
PN2
THE COMMISSIONER: When did you tell him that?
PN3
MR LIN: Either on the 5th or 8 April.
PN4
THE COMMISSIONER: What was it about that week that caused you to say that you can't afford his salary anymore?
PN5
MR LIN: So because what happened during that time was the builder, I was carrying out a project with the builder and the builder didn't pay me my quote, so I - so that's why I can't afford it.”[14]
At the time of Mr Ge’s termination, the Respondent employed three full-time employees and another two part-time. Of the full-time employees, two are site supervisors and a third was an estimator, being Mr Ge.[15]
In support of his case, Mr Lin tabled several business documents;
One page from a letter between two lawyers referring to the dispute between the Respondent and another company. How that document is said to assist the Respondent’s case is unclear, other than it perhaps evidencing one of the things set by Mr Lin in his oral evidence, to the effect that there was such a dispute on foot;
A bank statement from Westpac bank showing various transactions; with the statement opening balance on 17 May 2024 being $2500.65 and a closing balance on 19 August 2024 showing a balance of $3.64. The statement records three overdraft fees of $15 each.
A tax invoice from Aston Commercial Pty Ltd, apparently being moneys owing to it from GT Construction Group associated with rental of its premises. The invoice shows a payment required of $18,016.96.
A payroll screenshot provided to the Commission on 28 August 2024 at 1:13 PM noting that the Commission’s decision in the matter was reserved on the same day at 11:25 AM. The screenshot shows 17 transactions, one of which was for the amount of $5553.25 and all other transactions being $8104.00. The description of the payments is in most cases similar to “WITHDRAWAL MOBILE 1912637 PYMT Tom Ge” or “WITHDRAWAL-QSKQ PAYMENT 1358326_tom Ge_June Wages”.
LEGISLATION
The material received by the Commission from the Respondent asserts that it objects to the continuation of Mr Ge’s application, based on the ground that the dismissal was a case of genuine redundancy, as well as that the employer is a small business employer and that it complied with the small business fair dismissal code.
It is unnecessary to consider to any degree whether the dismissal was consistent with the Small Business Fair Dismissal Code as the code does not deal with the circumstance of redundancy, instead dealing only with the two categories of “Summary Dismissal” and “Other Dismissal”, neither of which have application to the circumstances of this matter.
The circumstances of this matter however require consideration of whether Mr Ge’s termination of employment was for reason of genuine redundancy and, if it was not, whether the dismissal was otherwise an unfair dismissal.
Genuine redundancy
In this case, GT Construction Group argue Mr Ge was dismissed for reason of genuine redundancy and does not say that Mr Ge’s capacity or conduct was the reason for his dismissal. With that being the case, s.396 of the FW Act requires determination of whether the dismissal was a case of genuine redundancy, “before considering the merits of the application”.
The FW Act defines a genuine redundancy in the way set out in s.389:
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.
Whether an unfair dismissal
In the event of a finding that Mr Ge’s termination of employment was not a “genuine redundancy” as defined, the Commission’s consideration turns to whether her dismissal was otherwise unfair. The legislative provisions relevant to this matter are set out in s.387 of the FW Act, which is as follows:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.”
CONSIDERATION
Whether Genuine Redundancy
As set out above, s.389 of the FW Act provides that a dismissal is a “genuine redundancy” in the event of three considerations;
that the job in question is no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;
that the employer has complied with any obligation of an applicable modern award or enterprise agreement to consult about the redundancy; and
and a termination cannot be a genuine redundancy if redeployment would have been reasonable in the circumstances.
Given the nature of Mr Ge’s evidence about the complaints he made about lack of payment and the responses he received from Mr Lin, a finding can be made that the job performed by Mr Ge was no longer required to be performed by anyone because of changes in the operational requirements of GT Construction Group becomes questionable. There was, on Mr Ge’s evidence, a history of complaints made by him about his employment and in particular, that wages were not paid on occasion, as well as that superannuation payments were not made at all in the course of his employment. Mr Lin did not demonstrate that these contentions were wrong, and the payroll screenshot sent after the proceedings had finished does not rebut Mr Ge’s contention there were payments not made to him. That the business was small and susceptible to financial constraints is not in doubt; however the likelihood is that the driver of GT Construction Group’s decision to dismiss Mr Ge was likely the complaints he made.
Mr Ge says there were complaints, which I accept. He also says that in response to those complaints he was threatened on multiple occasions by Mr Lin with the end of his employment. Mr Ge’s recollection of the occasions was mainly clear and precise and I accept that he viewed the communications as a threat, with it being reasonable for him to do so. To connect a discussion about the utility of an ATO complaint with the possible end of employment, as Mr Ge says Mr Lin is reasonably to be viewed as threatening. Mr Lin did not directly say that he had not threatened Mr Ge. The evidence as a whole suggests it to be reasonable that I accept Mr Ge was likely threatened by Mr Lin with the end of his employment if he maintained his payment complaints.
Further, it is relevant to take into account the job advertisement for an estimator which was placed shortly after Mr Ge was dismissed. Advertising for a new estimator so soon after Mr Ge was let go, ostensibly for reasons that the company could no longer afford to employ him, as well as saying to the Commission that at the time of the hearing it has not needed one because the company did not have any new projects,[16] lacks plausibility. The advertisement must be viewed as having some purpose when it was framed and posted online, with that purpose likely being an assumption in April 2024 that its expected forward contracts likely required it have access to an estimator. At best, the Respondent found as time went by to the date of the determinative conference, that it did not have new projects and did not need an estimator, however that is a different situation to what it likely anticipated would be the case when it advertised for one in late April 2024.
The overall circumstances suggest that on 8 April 2024, Mr Lin’s threats came to fruition, with Mr Ge being dismissed at least partly in retaliation for having made the complaints that he did. It is possible, even likely, that GT Construction Group is in a difficult trading position. The fragments of material provided to the Commission by the Respondent would suggest that that is indeed the case. However cogent, plausible evidence has not been put forward by Mr Lin as to why Mr Ge’s position needed to finish either at all or when it did.
In relation to the question of an applicable award, it is unclear whether any award applied to Mr Ge’s employment. His was not an on-site job and so the Building and Construction General On-site Award 2020 does not apply to the employment, and the Professional Employees Award 2020 does not include a classification of estimator. I make no finding then as to whether GT Construction Group was obligated to consult with Mr Ge about its decision to dismiss him for reason of redundancy. Certainly, it did not do so.
As the evidence does not suggest that there was a position into which Mr Ge could be redeployed, I do not make a finding in the circumstances that redeployment would have been reasonable in all the circumstances.
It follows from this analysis that Mr Ge’s dismissal was not a genuine redundancy.
WAS MR GE UNFAIRLY DISMISSED?
So far as it is relevant to the circumstances of this case, a dismissal is unfair, in the case of a person protected from unfair dismissal, when that person is dismissed in a manner that was harsh unjust or unreasonable, taking into account the criteria within s.387 of the FW Act. I will deal with each of the criteria within s.387 in turn.
(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)
Valid reason – general principles
To be a valid reason, the reason must be “… sound, defensible or well-founded.” A reason which is “… capricious, fanciful, spiteful or prejudiced …” cannot be a valid reason.[17] The reason for termination must be defensible or justifiable on an objective analysis of the relevant facts.[18] The valid reason for termination is not to be judged by legal entitlement to terminate an employee, “… but [by] the existence of a reason for the exercise of that right” related to the facts of the matter.[19] Ascertainment of a valid reason involves a consideration of the overall context of the “practical sphere” of the employment relationship.[20]
The reason relied upon by GT Construction Group for Mr Ge’s termination is redundancy, however the core element of redundancy, being that the job performed by Mr Ge is no longer required to be performed by anyone because of changes in the operational requirements of the Respondent’s business, has not been met. In particular, I am not satisfied that the changes made to Mr Ge’s job came about because of changes in the operational requirements of the Respondent’s business.
For the same reasons set out above in relation to a consideration of genuine redundancy, I consider that at least a partial operative reason for the termination of Mr Ge was that he maintained his payment complaints, both in respect of wages as well as superannuation. The fact that an estimator position was advertised shortly after Mr Ge’s employment ended reinforces that the termination was substantially motivated by factors other than the trading position of the Respondent.
On this basis, I am not satisfied that the Respondent held, at the time it dismissed Mr Ge, a valid reason for his dismissal.
(b) whether the person was notified of that reason
It is well established that consideration of s.387(b) of the FW Act is directed to whether or not the dismissed person was notified of the valid reason for their termination, before the decision to dismiss them was made, with it being expected that the notification of the valid reason is in explicit terms.
Mr Ge was notified that his termination of employment came about because of redundancy, whereas at least a significant part of the Respondent’s decision-making was associated with Mr Ge maintaining his payment complaints.
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
For the Commission to have regard to whether an employee has been given an opportunity to respond to the reason for dismissal, there needs to be a finding that there is a valid reason for dismissal.[21] While so, it is also accepted that “an opportunity to respond” amounts to an opportunity to provide reasoning to a decision maker that would, all things being equal, allow a reasoned explanation to cause the decision maker to accept what is proffered and to change from their foreshadowed path.[22]
A provision in predecessor legislation, requiring there not be dismissal until “the employee has been given an opportunity to defend himself or herself against the allegations made”, has been held to be a requirement not needing any particular formality, being “intended to be applied in a practical, common sense way so as to ensure that the affected employee is treated fairly.[23] Where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements of the section”.[24]
Mr Ge’s dismissal was not motivated by matters of his capacity or conduct and so consideration of this criterion is a neutral factor in my overall determination.
(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
Mr Ge did not seek and neither did Mr Lin offer a support person to assist Mr Ge in the discussions which took place on 5 and 8 April 2024. Consideration of this criterion is a neutral matter in my determination as to whether Mr Ge was unfairly dismissed.
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal
Consideration of this criterion is also a neutral factor in my decision as there is no evidence that Mr Ge was dismissed because of unsatisfactory performance on his part.
(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
The Respondent is demonstrably a small business. There is no direct evidence before the Commission as to how the Respondent’s size may have affected its decision-making about Mr Ge’s termination of employment.
(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
The Respondent is a small business employer, however there is no evidence before the Commission about the degree, if any, to which the absence of dedicated human resource management specialists or expertise available to it may have impacted upon the procedures it followed in effecting Mr Ge’s dismissal.
(h) any other matters that the FWC considers relevant
The evidence before me does not raise any other matters that I consider to be relevant to forming an opinion as to whether Mr Ge was unfairly dismissed.
CONCLUSION ON WHETHER AN UNFAIR DISMISSAL
After considering each of the criteria within s.387, I am not satisfied there was a valid reason for GT Construction Group’s dismissal of Mr Ge. Consideration of none of the other statutory criteria would cause me to the view that notwithstanding the absence of a valid reason for Mr Ge’s termination of employment that termination should be regarded as fair.
The FW Act requires the Commission to consider whether a dismissal was harsh, unjust or unreasonable, by taking into account the matters at ss.387 (a) to (h). The meaning of the term “harsh, unjust or unreasonable” was considered by the High Court in the matter of Byrne and Frew v Australian Airlines Limited:
“It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”[25]
It has been further held that a dismissal may be unjust, because the employee was not guilty of the misconduct on which the employer acted; unreasonable, because it was decided on inferences which could not reasonably have been drawn from the material before the employer; and/or harsh, because of its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct.[26]
I find that Mr Ge’s dismissal was harsh, unjust and unreasonable. It was harsh since the termination did not need to take place when it did, even viewed through a prism that the Respondent faced financial pressures which required addressing. It was unjust as it was implemented without regard to Mr Ge’s workplace rights in respect of payment of superannuation. His dismissal was unreasonable since, to the extent that the Respondent’s finances played any operative part in the decision to dismiss, there was no attempt to discuss any alternatives with Mr Ge.
Accordingly, I find that Mr Ge’s dismissal was an unfair dismissal.
REMEDY
The sections of the FW Act dealing with remedy once a finding of unfair dismissal has been made are set out in ss.390 – 393.
Pursuant to sub-s.390(3), an order for the payment of compensation to a person must not be made unless the Commission “is satisfied that reinstatement of a person is inappropriate” and the Commission “considers an order for payment of compensation is appropriate in all the circumstances of the case.”
Neither party argues that reinstatement should be considered by the Commission in the event of a finding of unfair dismissal.
After reviewing the evidence and other material before the Commission, and taking into account the size of the enterprise and the now strained relationship of Mr Lin and Mr Ge, I concur that in this case, reinstatement would be inappropriate. In making that finding, I also take into account that there is some evidence to the effect that the trading position of the Respondent has deteriorated since Mr Ge left, and that if such is the case reinstatement could not reasonably occur in any event.
Compensation – what must be taken into account in determining an amount?
Having determined that reinstatement is inappropriate, compensation may only be ordered if the Commission considers an order for payment of compensation is appropriate in the circumstances of the case (s.390(3)(b)). That is, an order for compensation is not automatic if reinstatement is found to be inappropriate, and is instead a discretion to be exercised, subject to certain further consideration. In this regard, s.392(2) of the FW Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement, including:
“(a) the effect of the order on the viability of the Respondent’s enterprise;
(b) the length of the Applicant’s service;
(c) the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;
(d) the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant because of the dismissal;
(e) the amount of any remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation;
(f) the amount of any income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the Commission considers relevant.”
I consider all the circumstances of the case below.
Effect of the order on the viability of the Respondent’s enterprise
There is no evidence before me about the effect of an order for compensation on the viability of the employer’s enterprise.
Length of the Applicant’s service
Mr Ge was employed by the Respondent between 12 October 2022 and 22 April 2024 period of slightly more than 19 months.
Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed
Assessment of the remuneration an Applicant would have received, had it not been for their dismissal is both an essential and difficult task.
As stated by a majority of the Full Court of the Federal Court, “in determining the remuneration that the Applicant would have received, or would have been likely to receive… the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.”[27]
In the circumstances, even if it could be established that GT Construction Groups trading position was parlous and Mr Lin had a final conversation with Mr Ge about his capacity to pay wages and superannuation on time and that he needed some assistance from Mr Ge in that respect, (in the sense of establishing a payment program) I doubt that the employment relationship would have continued for long. On the Respondent side there appears to be some adverse events after Mr Ge left, which may well have made continuing employment problematic. On the applicant side, Mr Ge may likely have given up on the possibility of the payments due to him actually being made and then elected to obtain employment elsewhere.
In the overall circumstances, I set the anticipated period of employment at six weeks, from the date of termination, 22 April 2024.
Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal
The Applicant must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal.[28] What is reasonable depends on the circumstances of the case.[29]
The evidence shows that Mr Ge rapidly sought and obtained alternative employment.
Amount of remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation
As related above, Mr Ge was fortunate enough to obtain alternative employment within a week of leaving GT Construction Group albeit that his annual salary, excluding superannuation reduced from $135,000 per year to $70,000 per year.
Amount of income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation
It may be assumed that the applicant continues to work in his alternative employment and that between the date of publication of this decision and the payment of the compensation order that he will continue to be paid at his new salary level. However, given the very substantial difference between the rates of pay I do not consider it necessary to make a deduction to the overall amount of compensation for this purpose or for the purpose of “contingencies”.
Other relevant matters
I discern no other relevant matters which require to be taken into account.
Compensation – how is the amount to be calculated?
The well-established approach to the assessment of compensation in unfair dismissal matters is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).[30] The approach and Sprigg reasoning has been confirmed several times in Full Bench decisions, including in ERGT Australia Pty Ltd v Kevin Govender.[31]
The approach in Sprigg is as follows:
Step 1: Estimate the remuneration the Applicant 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 1
At the time of Mr Ge’s dismissal, he was in receipt of a salary of $135,000 per year.
It follows that my estimate of the remuneration Ms Wright would have received, or have been likely to have received, if his employment had not been terminated is $15,577.
Added to that amount is $1,713, being the amount of statutory superannuation contributions Mr Ge would have received for the anticipated period of employment, calculated on the basis of a statutory employer contribution rate of 11% which applied until 30 June 2024.
Step 2
The second step in Sprigg requires the deduction of monies earned since termination, with the only exclusions being moneys received from other sources and unrelated to work done. There is no need to take into account payments made by GT Construction Group after the date of termination as Mr Ge was given notice in advance of the actual termination date. However it is necessary to take into account the payments attributable to the employment Mr Ge obtained on 29 April 2024 for the five week balance of the anticipated period of employment, which I calculate to be.$7,211 in wages and $793 in superannuation,.
Step 3
It is necessary to consider the impact of both favourable and unfavourable contingencies on the amounts likely to be earned by the Applicant for the remainder of the anticipated period of employment,[32] noting that it may not be appropriate to deduct contingencies if all of the projected period of continued employment has passed.[33] In Mr Ge’s case, I find there are none that ought to be taken into account in this matter, since the whole of the anticipated period of employment has passed.
Step 4
I have considered the impact of taxation, but have elected to settle a gross amount as set out in the table below and the compensation to be ordered will be subject to taxation according to law.
Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case.”[34] In this case, I consider there is a need to take into account that Mr Ge’s new employment is at a rate of pay considerably lower than with GT Construction Group. While noting that, I have also for the reasons explained above formed the view that the anticipated period of employment with the Respondent would have been relatively short.
Because of this I am satisfied that the compensation to be ordered by me is proportionate to the circumstances of the case. In this regard, I consider the total quantum to be appropriate, with no deductions either for efforts to obtain further employment, or post-termination earnings.
Compensation –Is the amount to be reduced on account of misconduct?
If I am satisfied that misconduct of the Applicant contributed to the employer’s decision to dismiss, I am obliged by s.392(3) of the FW Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.
I have not identified misconduct on the part of Mr Ge therefore no deduction is made for that purpose.
My calculation of the amount payable to Mr Ge is set out in the following table:
| 1. Estimate the amount the employee would have received or would have been likely to receive if the employment had not been terminated, | 6 weeks projected lost income at the rate of $2,596 per week/$135,000 per year. | $15,577 |
| Employer superannuation contribution – 11% | + $1,713 | |
| Subtotal | $17,290 | |
| Deduction attributable to mitigation efforts | $0 | |
| Deduction for misconduct | $0 | |
| 2. Deduct monies earned since termination, | $7,211 (wages) and $793 (superannuation) | |
| 3. Deductions for contingencies, | $0 | |
| TOTAL | $8,366 (wages) and $920 (superannuation) | |
| 4. Calculate any impact of taxation, | To be taxed according to law | |
| 5. Apply the legislative cap. | Does not exceed the compensation cap. |
An order for compensation consistent with the above table will be issued by me at the same time as this decision. The order will require a payment of wages in the amount of $8,366, to be taxed according to law, and of superannuation in the amount of $920, to be paid into Mr Ge’s nominated superannuation fund, each to be paid within 14 days of the date of this decision.
Mr Ge’s application is determined accordingly.
COMMISSIONER
Appearances:
Mr T. Ge, for the Applicant.
Mr T. Lin, for the Respondent.
Hearing details:
28 August.
2024.
[1] Applicant’s Form F2; Digital Hearing Book, p.4.
[2] PN 37.
[3] PN 43.
[4] PN 66,
[5] PN 68.
[6] PN 95.
[7] Attachment to Applicant’s form F2, Digital Hearing Book, p.5.
[8] PN 110 – 115.
[9] PN 210.
[10] Attachment to Applicant’s form F2, Digital Hearing Book, p.9.
[11] PN 122 – 123.
[12] PN 132 – 139.
[13] PN 147 – 149
[14] PN 150 – 155.
[15] PN 164 – 182.
[16] Trasncript, PN 193 – 196.
[17] Selvachandran v Peteron Plastics (1995) 62 IR 371, 373.
[18] Robe v Burwood Mitsubishi Print R4471 (AIRCFB, Ross VP, Polites SDP, Foggo C, 11 May 1999).
[19] Miller v UNSW [2003] FCAFC 180 (Gray J), [13].
[20] Selvachandran v Peteron Plastics (1995) 62 IR 371, 373.
[21] Chubb Security Australia Pty Ltd v Thomas (unreported, AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) Print S2679 [41].
[22] Wadey v YMCA Canberra [1996] IRCA 568 cited in Dover-Ray v Real Insurance Pty Ltd[2010] FWA 8544; (2010) 204 IR 399 at [85].
[23] Royal Melbourne Institute of Technology v Asher (2010) 194 IR 1; [2010] FWAFB 1200 at [26] citing Gibson v Bosmac Pty Ltd [1995] IRCA 222; (1995) 60 IR 1 at 7 (Wilcox CJ).
[24] Gibson v Bosmac Pty Ltd [1995] IRCA 222 (5 May 1995); (1995) 60 IR 1 at 7 (Wilcox CJ).
[25] [1995] HCA 24 (McHugh and Gummow JJ), [128].
[26] Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1,10 citing Byrne v Australian Airlines Ltd [1995] HCA 24 (McHugh and Gummow JJ), [128].
[27] He v Lewin [2004] FCAFC 161, [58].
[28] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].
[29] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.
[30] (1998) 88 IR 21.
[31] [2021] FWCFB 5389, [35].
[32] Enhance Systems Pty Ltd v Cox[2001] AIRC 1138, [39]
[33] Bowden v Ottrey Homes[2013] FWCFB 431, [54].
[34] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].
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