Mr Trevor McLeanvLatrobe Regional Hospital

[2012] FWA 5688

[2012] FWA 5688

FAIR WORK AUSTRALIA

FURTHER DECISION IN REGARD

TO REMEDY

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

Mr Trevor McLean
v
Latrobe Regional Hospital
(U2011/13996)

COMMISSIONER CRIBB MELBOURNE, 6 JULY 2012

Application for unfair dismissal remedy - remedy.

[1] This decision concerns determination of the amount of compensation to be ordered by the Tribunal. It follows the decision 1 issued on 13 June 2012 in which the Tribunal found that Mr McLean (the applicant) had been unfairly dismissed.

[2] As the respondent, if these circumstances arose, sought to be heard and to make further submissions, the respondent was directed to provide written submissions addressing the criteria set out in section 392(2) of the Fair Work Act 2009 (the Act) by 26 June 2012. The applicant was given the opportunity to file any submissions in reply by 3 July 2012. Accordingly, the Latrobe Regional Hospital (the Hospital) filed their submissions on 26 June 2012 and the applicant on 2 July 2012.

SUBMISSIONS

Latrobe Regional Hospital

[3] It was submitted on behalf of the Hospital that the circumstances of this case are unique and unusual and that the question of compensation should be viewed through the prism of the unique circumstances. It was contended that the main reasons for the Tribunal’s finding that the direction to return the Trend Care sheets, whilst lawful, was not reasonable were not known to the Hospital or were not made known to the Hospital by Mr McLean at the time of his dismissal. The Hospital dismissed the applicant based on facts known to it. 2

[4] The Hospital contended that Mr McLean’s conduct, in the period leading up to his dismissal, cannot be ignored. This conduct included not telling the Hospital about the legal advice he had received or that he was unable to return the documents because of his medical condition. As well, the Hospital was in a difficult position as it had an employee whom it believed had engaged in serious misconduct, away on sick leave. Further, the Tribunal found that Mr McLean showed a lack of judgement and was misguided and it did not condone what appeared to the Hospital to be happening. 3

[5] It was also argued that the issue of compensation should be considered in light of the “fair go all round” requirement in section 381(2) of the Act. The respondent submitted that there is no compulsion on the Tribunal to order compensation merely because reinstatement has been determined to be inappropriate. 4

s.392 (2) (a) - effect on the viability of the employer's enterprise

[6] No submission was made in relation to this matter. 5

s.392 (2) (b) - length of service

[7] Mr McLean was employed from 16 December 2002 until 3 November 2011 (8 years, 10 months and 13 days). He worked 32 hours per week plus a full weekend once a month and was on-call every eighth week. 6

[8] The Hospital submitted that the argument that Mr McLean has been denied long service leave is misplaced. It was stated that this entitlement arose after 10 years service and that the Tribunal can have no confidence that Mr McLean would have remained in employment until such time. 7

s.392(2)(c) - remuneration would have received or would have been likely to receive if not dismissed

[9] At the time of his dismissal, Mr McLean was earning $64,878 per annum or $1,227.36 per week. 8

[10] It was argued that it was open to the Tribunal to conclude that Mr McLean would not have continued in employment for more than about three months. If Mr McLean’s employment had continued for three months, he would have earned $16,219.50. 9

[11] The Tribunal was reminded that, on 15 March 2011, Mr McLean was placed on a formal performance management plan over a period of three months. However, due to the leave taken by Mr McLean and his supervisor, it was not possible to conclude the performance assessment within the three month period. Further, it was stated that Mr McLean’s performance did not improve and fell well below expectations. He was advised by letter, on 24 August 2011, that he had failed to meet the relevant performance criteria but he was unable to attend the meeting to discuss the performance issues. 10

[12] The Hospital also submitted that it is open to the Tribunal to find that Mr McLean’s conduct would have justified the termination of his employment on four weeks’ notice. 11

s.392 (2) (d) - efforts to mitigate loss

[13] The Hospital submitted that it is a question of fact as to whether or not an employee has taken reasonable steps to mitigate their loss. A dismissed employee is expected to use diligence to find other employment. It was argued that Mr McLean’s efforts to seek alternative employment had been less than extensive and certainly not diligent. The respondent also stated that there are pharmacies at Wonthaggi, Bairnsdale and Casey but that Mr McLean had not made enquiries there. As well, there are 32 community pharmacies across the western part of Gippsland and Sale Hospital currently has a position advertised on the SHPA website. 12

[14] It was contended that the principal reason that Mr McLean has not applied for other jobs is his decision to act as a carer for his wife. His evidence was also said to be that he will not secure alternative employment in those circumstances. It was argued that his decision to care for his wife was a decision that Mr McLean is entitled to make. However, it is not a decision which has been caused by his dismissal or forced upon him by the Hospital. Therefore, Mr McLean has not mitigated his loss by pursuing other employment and the Tribunal can conclude that Mr McLean has made little effort to seek alternative employment. Accordingly, any award of compensation should be reduced by the amount that Mr McLean would have earned had he applied himself diligently to obtaining alternative work. 13

s.392(2)(e) and (f) - remuneration earned between dismissal/making the order and order and compensation

[15] The Hospital argued that Mr McLean’s social security payments should be taken into account in this case because he has chosen to pursue a role of carer and therefore chosen not to apply for other work for that reason. It was also contended that the social security benefit that Mrs McLean receives, if it has only been paid since Mr McLean has been dismissed, should also be taken into account as remuneration earned. 14

s.392(2(g) - any other matters

[16] It was submitted that the circumstances of this case are very unusual and that, a “fair go all round” will not be achieved if account is not taken of the applicant’s conduct and the contribution that conduct made to the dismissal. The Hospital should not be punished for having been placed between a “rock and a hard place” by Mr McLean and the frustration which led to his dismissal which was largely of his own making. 15

[17] Further, it was argued that it is open to the Tribunal to discount the amount of compensation to take account of any misconduct on the part of Mr McLean which led to the dismissal. Whilst the Tribunal found that Mr McLean did not engage in serious misconduct, this does not preclude a finding that he engaged in misconduct which can be taken into account in the assessment of any compensation. It was submitted that the discount should be 50% which would result in compensation, taking all matters into account, of an amount in the range of $5,000 to $10,000. 16

Mr McLean

[18] It was Mr McLean’s written evidence that, for the 2010/2011 financial year, his total remuneration was $63,824. As the respondent has submitted that, at the time of his dismissal, Mr McLean was earning $64,878 per annum, the applicant is content to proceed on the basis of $1,227.38 being the correct weekly figure. Therefore, the compensation to be applied in accordance with section 392(5) of the Act is $31,911.88. 17

s.392(2)(a) - effect on the viability of the respondent

[19] As it is not contended by the Hospital that an order of compensation would have any effect on its viability, there is no basis to discount compensation on this ground. 18

s.392 (2) (b) - length of service

[20] As Mr McLean had nearly 9 years service with the Hospital, this was stated to support a substantial order for compensation. 19

s.392 (2) (c) - likely remuneration had he not being dismissed

[21] It was submitted that there is no basis to conclude that Mr McLean would not have continued in employment for more than three months. The respondent, in making this claim, was said to rely upon the contention that Mr McLean’s performance was well below expectations. The figures used by the Hospital are disputed by Mr McLean and they were not challenged in the hearing because they were not relevant to the dismissal. 20

[22] Further, the applicant submitted that, given the Tribunal’s decision, it does not follow that, had the termination been affected on notice, it would have been “fair”. As well, the respondent has ignored the Tribunal finding as to the procedural flaws regarding Mr McLean’s opportunity to respond. 21

[23] Rather, as a long term employee, it was submitted that Mr McLean’s employment would have continued for some time. Therefore, there was no basis to presume ongoing employment of less than six months. 22

s.392 (2) (d) - mitigation

[24] It was argued on behalf of the applicant that he made appropriate attempts to mitigate his loss. Mr McLean was said to have travelled to the West Gippsland Hospital (60 kms from his home) and personally delivered his resume and covering letter. He could not be criticised for the relevant officer not being able to speak with him. In addition, the Hospital has criticised Mr McLean for not attempting to contact other Hospital pharmacies in Wonthaggi, Bairnsdale and Casey. These were said to range in distance from 110 – 120 km from Mr McLean’s home. Further, it was not put to Mr McLean that he had not made enquiries of various other community pharmacies. Therefore, he was unable to address the specific details of what attempts he had made regarding community pharmacies. Finally, there is no evidence that the current vacancy at Sale Hospital was being advertised at the time of the hearing. 23

[25] With respect to the Hospital’s proposition that the principal reason Mr McLean has not applied for other jobs is the decision to act as a carer for his wife, it was submitted that this is without foundation. Mr McLean’s evidence was said to have been that he had been actively pursuing further employment. When asked as to whether he had applied for any “other” jobs, his response was said to have been - at the moment, no, because he has been acting as a carer for his wife. It was argued that there was nothing in Mr McLean’s answer to suggest a decision to act as a carer for his wife rather than to continue his career as a pharmacist. 24

[26] Therefore, it was contended that Mr McLean took appropriate steps to mitigate his loss and that there should be no discount of compensation paid to him on this basis. It was noted that, in doing so, Mr McLean was significantly disadvantaged by having been summarily dismissed by his previous long-term employer. 25

s.392(2)(e) and (f) - remuneration since dismissal and likely income between the making of the order and compensation

[27] It was submitted that it is not appropriate that the carer’s benefit paid to Mr McLean be counted as remuneration. The Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarkets (Spriggs) 26 was said to have provided the general rule about the role of social security payments, namely, they are not deducted. The respondent appeared to be seeking a departure from this approach on the grounds that Mr McLean has chosen to pursue a role as carer and not to apply for other work for that reason. As Mr McLean has not made any such choice, the Tribunal should reject the respondent’s submission.27

[28] With respect to the social security benefit received by Mr McLean’s wife, it was stated that the evidence is clear that this is something that his wife receives. Further, Mr McLean was not cross-examined on the basis of this being part of his income. Therefore, it was submitted that the income received by Mr McLean since his dismissal is zero. 28

s.392(2)(g) - other relevant matters

[29] The following matters were submitted as being relevant:

• The Hospital’s failure to pay Mr McLean notice of termination and his lost opportunity to attain his long service leave entitlement at 10 years.



• Mr McLean has suffered considerable professional reputation and damage and has been, and it is continuing to be, the subject of an investigation by the Australian Health Practitioners Regulation Agency (AHPRA). This is as a result of the Hospital purporting to comply with the mandatory notification requirements. This was said to add both to the consequences of the dismissal and to a reduction in Mr McLean’s chances of obtaining alternative employment in the near future. 29

s.392(4) - misconduct

[30] As the Tribunal made no finding of misconduct against Mr McLean, there is no basis for the respondent to seek that any award of compensation be discounted. 30

[31] Finally, it was submitted on behalf of Mr McLean that the criteria under section 392(2) and the principle of according a “fair go all round” support making a substantial order of compensation. In the circumstances, Mr McLean was said to be seeking an order of compensation in the amount of $31,911.88. 31

CONCLUSIONS

[32] In addressing the requirements of section 392(2) and following, I have carefully considered the written submissions of the parties.

s.392(2)(a) - viability of employer’s enterprise

[33] There was no material before me that any order would affect the viability of the respondent. Therefore, I am satisfied that the order I intend to make will not impact in this regard.

s.392 (2) (b) - length of applicant’s service

[34] Mr McLean was employed for 8 years, 10 months and 13 days. Given the length of his service, this criteria will be taken into account.

s.392(2)(c) - remuneration would have been likely to receive

[35] It was submitted, on behalf of Mr McLean, that there were no grounds on which to presume that his continued employment would have been for less than six months. This was on the basis that it did not follow that, had the dismissal been affected on notice, it would have been fair.

[36] For the Hospital’s part, it was argued that Mr McLean would not have continued in employment for more than about three months. This was because Mr McLean was on a three-month formal performance management plan and that he had been notified on 24 August 2011, that he had failed to meet the relevant performance criteria.

[37] As the main focus of the material before the Tribunal concerns Mr McLean’s summary dismissal for serious misconduct, there is insufficient evidence to support the view, essentially put by the Hospital that, had Mr McLean not been summarily dismissed for serious misconduct, he would have been dismissed with notice for poor performance. It was common ground between the parties that Mr McLean was on a formal performance management plan and that, as he was away on sick leave, these processes were put on hold. Therefore, I have formed the view that it is likely that, in the absence of dismissal, Mr McLean would have continued with the Hospital for a period of six months.

[38] The Hospital’s weekly salary figure of $1,227.36 was accepted by the applicant. Therefore, the provisional compensation amount is $31,911.36.

s.392(2)(d) - efforts to mitigate the loss

[39] It was argued by the Hospital that Mr McLean has not mitigated his loss by pursuing other employment nor made little effort nor applied himself diligently to seeking alternative work. The reasons for this were said to include that he had not made extensive enough efforts to find other work and essentially, had not tried hard enough. The principal ground for the respondent’s contention was that Mr McLean had made a choice to be a full time carer and so, therefore, the Hospital should not be responsible for the economic loss resulting from his decision.

[40] On the other hand, it was contended on behalf of Mr McLean that the applicant had given evidence as to his extensive efforts to find alternative employment. When asked as to whether he had applied for any other jobs, it had been the applicant’s evidence that he had not, at the moment, because he was acting as a carer for his wife. It was also argued that Mr McLean was significantly disadvantaged by having been summarily dismissed by his previous long-term employer in obtaining alternative employment.

[41] I have carefully considered the submissions of the parties and I find that Mr McLean has made efforts to mitigate his loss due to his dismissal. If it was a perfect world, Mr McLean would have found alternative employment. However, factors such as his summary dismissal, his geographical location and the need to care for his wife have affected the extent and the success of his efforts to find another job.

s.392(2)(e) and (f) - the amount earned between dismissal and the order and between the order and receipt of the compensation

[42] It was submitted by Mr McLean that he had not earned anything since his dismissal and that the social security payments that both he and also his wife were in receipt of, should not be taken account of, in terms of the amount earned.

[43] The Hospital argued, however, that the carer’s benefit paid to Mr McLean should be taken account of as he has chosen to pursue a role of carer and therefore, not to apply for other work for that reason. In addition, if the social security benefit paid to Mr McLean’s wife, only commenced following his dismissal, then it should also be taken account of in determining the amount earned.

[44] On the basis of the material before me, I have not been persuaded to do other than follow the principle established by the Spriggs Full Bench regarding the treatment of social security payments. Accordingly, account will not be taken of the carer’s benefit that has been paid to Mr McLean nor the benefit paid to his wife. In addition, it appears from the evidence that Mr McLean’s wife is in receipt of the social security payment in her own right.

[45] Accordingly, the amount earned by Mr McLean, between his dismissal and the making of the order for compensation and the amount reasonably likely to be earned between the making of the order and the actual compensation is nil.

s.392(2)(g) - any other matters

[46] It was submitted by Mr McLean that account should be taken of:

• The failure to pay notice of termination and his lost opportunity to attain long service leave after 10 years service.



• The considerable professional reputational damage which has also affected his prospects of obtaining alternative employment.

[47] On the other hand, the Hospital contended that relevant other matters were:

• The very unusual circumstances of this case.



• The applicant’s conduct and the contribution it made to the dismissal.



• A “fair go all round” is to be achieved.



• The Hospital should not be punished for being between a “rock and a hard place”.



• A 50% discount should be applied.

[48] Account will be taken of the damage to Mr McLean’s reputation which has affected his prospects of obtaining alternative employment. Section 381(2) of the Act is noted.

s.392(3) - misconduct

[49] It was submitted by the Hospital that it was open to the Tribunal to discount the amount of compensation on the basis of a finding that Mr McLean engaged in misconduct for purpose of the assessment of any compensation.

[50] For the applicant’s part, it was contended that, as the Tribunal made no finding of misconduct against Mr McLean, there is no basis for a discounting of any award of compensation for misconduct.

[51] As the Tribunal did not make a finding of misconduct on the part of Mr McLean, there is no basis for discounting the amount of compensation.

[52] Therefore, there is no deduction from the provisional compensation amount of $31,911.36 for amounts earned (s.392(2)(e) and (f)) nor for misconduct (s.392(3)).

Contingencies

[53] With respect to contingencies, I propose to make a small adjustment of 5% as, given the circumstances of this case, there are very few “unknowns”. This results in an adjustment of $1,595.56. The provisional amount is therefore $30,315.80.

Section 392(4)

[54] No part of the provisional compensation amount relates to any shock or distress suffered by Mr McLean.

[55] As the provisional amount of $30,315.80 is less than the compensation cap (as set out in section 392(5) of the Act), no adjustment in this regard is necessary.

[56] Accordingly, I determine that Latrobe Regional Hospital is to pay to Mr McLean the amount of $30,315.80 as compensation, taxed according to law, within 14 days of this decision.

[57] An Order 32 to this effect will be issued separately.

COMMISSIONER

 1   [2012] FWA 3337

 2   Respondent's submissions on compensation dated 26 June 2012 at paragraphs 7 - 9 and 11

 3   Ibid at paragraph 10

 4   Ibid at paragraphs 12 - 13

 5   Ibid at paragraph 15

 6   Ibid at paragraph 16 - 18

 7   Ibid at paragraph 19

 8   Ibid at paragraph 20

 9   Ibid at paragraphs 25 and 27 - 28

 10   Ibid at paragraph 25

 11   Ibid at paragraph 26

 12   Ibid at paragraphs 29 - 34

 13   Ibid at paragraphs 35 - 39

 14   Ibid at paragraphs 40 - 42

 15   Ibid at paragraphs 44 - 46

 16   Ibid at paragraphs 47 - 49

 17   Applicant’s outline of submissions on compensation, 2 July 2012 at paragraph 3

 18   Ibid at paragraph 4

 19   Ibid at paragraph 5

 20   Ibid at paragraphs 6 - 8

 21   Ibid at paragraphs 10 - 11

 22   Ibid at paragraphs 12 - 13

 23   Ibid at paragraphs 14 - 18

 24   Ibid at paragraphs 19 - 20

 25   Ibid at paragraph 21

 26 (1998) 88 IR 21

 27   Applicant’s outline of submissions on compensation, 2 July 2012 at paragraphs 22- 23

 28   Ibid at paragraphs 24 - 25

 29   Ibid at paragraphs 27 - 29

 30   Ibid at paragraph 31

 31   Ibid at paragraph 32

 32   PR524945

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