Rebecca Shearer v Cerrone Jewellers Pty Ltd T/A Cerrone Jewellers

[2020] FWC 5265

[2020] FWC 5265

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Rebecca Shearer
v
Cerrone Jewellers Pty Ltd T/A Cerrone Jewellers
(U2020/7059)

COMMISSIONER BISSETT MELBOURNE, 2 OCTOBER 2020

Application for an unfair dismissal remedy - compensation.

[1] On 31 August 2020 I issued a decision 1 in relation to an application of Ms Rebecca Shearer in which she sought a remedy for unfair dismissal.

[2] In my decision I found that Ms Shearer had been unfairly dismissed. In considering remedy I noted that Ms Shearer did not seek reinstatement and I was satisfied, for that reason, reinstatement was not appropriate. I therefore determined that I should consider compensation. I did not have submissions or evidence necessary to enable me to determine compensation at the time of making that decision. I therefore issued further direction to the parties on 31 August 2020 for the filing of submissions and evidence in relation to compensation.

[3] This decision is in relation to that remedy.

LEGISLATION

[4] Section 392 of the Fair Work Act 2009 (FW Act) sets out those matters to be taken into account in determining compensation.

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.

[5] The parties were asked to provide submissions addressing these matters. Submissions were received from each of the parties.

[6] I have taken into account the submissions of the parties in relation to each of these matters.

CONSIDERATION

[7] Ms Shearer gave uncontested evidence in relation to her application for unfair dismissal that, had her employment not been terminated, she would have remained employed by the Respondent for another two years on a full-time basis after which she would have sought to move to part-time employment to concentrate more on her jewellery design as her own business developed. Ms Shearer says in her submissions that she would not have resigned her position until such time as she could support herself.

[8] Cerrone Jewellers Pty Ltd T/A Cerrone Jewellers (Respondent) submits that it would have reviewed Ms Shearer’s employment at the end of September 2020 as it assessed the viability of the business and its ability to continue to afford to pay Ms Shearer. It suggests that if the business was not viable at that time Ms Shearer may have been dismissed.

[9] Ms Shearer was employed by the Respondent for a little over 3 years.

[10] Whilst assessment of how long a person may have remained employed if that person had not been dismissed must be determined, the circumstances of that employment and determination of the length of that employment is made more difficult by the COVID-19 restrictions currently in place in metropolitan Melbourne and the effect of those restrictions on most businesses. At the time of writing this decision non-essential retail activity (beyond “click and collect”) remain closed. Stores such as that of the Respondent will not re-open before mid to late October 2020. Many employers continue to access JobKeeper payments for employees. JobKeeper payments themselves reduced from 29 September 2020 which may have a flow on effect not yet seen with respect to employment.

[11] Further, it is possible, given the experience in April of opening from restrictions, that the hours of operation of retail business will be restricted to a degree for a period of time. Certainly it cannot be expected that any business will bounce back to pre-COVID trading levels in the near future.

[12] However, these issues do no more than add another layer of complexity to the necessary determination of how long Ms Shearer may have remained employed and, given such employment, her lost remuneration.

[13] The Respondent indicated that it intended to review its on-going operations at the end of September 2020. The Respondent filed it submissions on 21 and 23 September 2020 but, despite submissions as to the review of its operations, gave no indication of the likely course of such a review so close to its declared decision timeframe.

[14] I have therefore assumed that the Respondent will continue to trade and will re-open for business in accordance with decisions from the Victorian Government and will, in doing so, maintain its workforce.

[15] Taking all of the above factors into account, in particular the uncertainty associated with the economy opening up, I consider that Ms Shearer would have remained employed for a further 6 months from the date her employment was terminated.

[16] Ms Shearer’s employment was terminated on 19 May 2020. I am therefore satisfied that she would have remained employed for 26 weeks beyond this date (i.e. 18 November 2020).

[17] Ms Shearer’s lost earnings over that period of time would have been the JobKeeper payments. At the time of her dismissal Ms Shearer would have been working 2 to 3 days per week as part of the limited re-opening of Melbourne retail following the first Coronavirus wave. At the time of writing this decision the date for re-opening general retail (beyond essential retail such as pharmacies, supermarkets etc) has not been determined although it might be expected to be mid to late October 2020. In any event I consider that, had Ms Shearer still been employed when the store does re-open she would be on similar shifts to those she was on prior to the current shut down in Victoria. For this reason I am prepared to assume that Ms Shearer’s wages would have been at the JobKeeper rate of $1,500 per fortnight until 27 September 2020 and $1,200 per fortnight from 28 September 2020 until 17 November 2020.

[18] I do not accept that Ms Shearer would have been working full-time had her employment not been terminated. Evidence of store rosters with staff rostered full-time following her dismissal only show how the roster was to be populated with Ms Shearer no longer employed and prior to anyone else being employed. There is no evidence to suggest any substantial change in hours likely to have been worked by Ms Shearer.

[19] Ms Shearer was in receipt of JobKeeper payments at the time her employment was terminated. Her lost earnings are therefore (19 weeks @ $750 per week + 7 weeks @ $600 per week) $18,450. She would have been eligible for superannuation of 9.5% on this amount (s.392(2)(c)).

[20] I do not deduct anything from this amount for contingencies. As will be seen Ms Shearer has been and remains fit for work with no indication that she would not have been available for work for the period from her dismissal until the date of issue of this decision. There is no basis to consider this might change over the limited period between the issue of this decision and the end of the period I consider Ms Shearer would have remained employed.

[21] Since her dismissal Ms Shearer has sought and gained further work. Ms Shearer had a work trial (for which she was paid) with one potential employer and then secured part-time work in Ballarat (s.392(2)(d)).

[22] Ms Shearer had earned, from the trial and her employment which commenced on 30 July 2020 $2,015.21 until 2 September 2020. On request from my chambers Ms Shearer advised that she earned a further $1,042 from 3 to 29 September 2020. Ms Shearer said that her hours have varied depending on the work available but is currently working on average 11 hours per week. On this basis I am satisfied that Ms Shearer would earn a further $2,036.65 ($290.95 per week for 7 weeks) until 17 November 2020.

[23] Ms Shearer’s total earnings until 17 November 2020 is $4,051.86. Ms Shearer would also have received 9.5% superannuation in relation to these earnings.

[24] Ms Shearer also runs her own jewellery business. Whilst Ms Shearer has earned money from this business in the time since she was dismissed I am satisfied that she would have earned that money in any event had her employment not been terminated. For this reason I do not consider that I should take that income into account.

[25] I have reached this conclusion on the money earned from Ms Shearer’s jewellery making as, had she remained employed by the Respondent she would not, for most of the period, have been at work because of the restrictions in Melbourne such that she would have had the time to put into her own business. The business is not something Ms Shearer has established in response to her dismissal but has been a venture of hers for many years (and was the basis of the reason for dismissal). Her earnings from the business since May 2020 would likely have occurred regardless of the status of her employment with the Respondent. It would, therefore, be incorrect to consider this as earnings unless I also took it into account in determining the earnings she would have made had her employment not been terminated.

[26] I have not made any deduction for a failure to take steps to mitigate her loss. Ms Shearer has sought and obtained employment. She travels from Melbourne to Ballarat twice a week for work. She is clearly motivated to work and took active steps to find alternative employment.

[27] Ms Shearer’s lost earnings arising from her dismissal is therefore ($18,450 – $4,051.86) $14,398.14 plus 9.5% superannuation.

[28] The Respondent submits that any order for compensation should take into account that the Respondent has been detrimentally affected by COVID-19 generally, but specifically in Melbourne where Ms Shearer worked and where there has been an extended lockdown. The Respondent submits that Ms Shearer’s wages were being subsidised by JobKeeper payments and this should be considered in determining the capacity of the Respondent to pay any compensation. The Respondent has failed to provide any substantive material that would allow me to reach any conclusion as to the effect of the order I intend to make on the viability of the business (s.392(2)(a)). I will, however, allow the Respondent to seek a variation on the order I intend to make as to whether the amount ordered should be paid in 3 equal instalments.

[29] Ms Shearer did not engage in any misconduct in relation to her employment. I do not deduct any amount for such a purpose (s.392(3)).

[30] I have not included any amount for shock, distress or humiliation, or other analogous hurt, caused (s.392(4)).

[31] The amount I intend to order does not exceed the statutory limits. Ms Shearer was earning $55,000 per annum at the time of the termination of her employment (s.392(6)).

CONCLUSION

[32] For the reasons given above I will order that the Respondent pay to Ms Shearer the amount of $14,398.14 taxed according to law, plus 9.5% superannuation in compensation. The amount is to be paid within 14 days of the making of the order. The order 2 will be issued in conjunction with this decision.

[33] Should the Respondent wish to pay the amount in 3 equal instalments because it has limited capacity to pay it in 1 instalment it is required to advise my chambers, and copy to Ms Shearer, such a request within 7 days of the making of this order. Should the request be made, an amended order will be issued which will still require the first payment to be made within 14 days of the date of the original order.

COMMISSIONER

<PR723242>

 1   [2020] FWC 4535.

 2   PR722188.

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