[2021] FWC 1634

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Robinson & Rockell
v
The Trustee for the Darrouzet Property Trust
(U2020/1293; U2020/1296)

DEPUTY PRESIDENT LAKE

BRISBANE, 25 MARCH 2021

Applications for relief from unfair dismissal remedy – applications for unfair dismissal successful – determination of remedy – compensation ordered.

[1] Further to my decision of 3 December 2020, 1 having found that Mr Robinson and Ms Rockell (the Applicants) were persons protected from unfair dismissal and that they were unfairly dismissed within the meaning of s.385 of the Act, I must now consider what, if any, remedy should be granted to the Applicants.

[2] The Applicants are not seeking reinstatement to their positions. They submit that reinstatement would be an illogical and unworkable remedy, and wholly inappropriate in all of the circumstances of the case, including that their positions have now been filled. The Applicants seek compensation to the full jurisdictional limit under the Act.

SUBMISSIONS AS TO REMEDY

Applicant’s submissions

[3] The Applicants noted that they were unfairly dismissed, with their employment ending on 28 January 2020. The Applicants submitted that until that point, their service was entirely unblemished and there has been evidence provided that they loved their work and were committed to their jobs.

[4] At the date of termination, the Applicants were paid gross annual salary of $90,000 each, being $1,730.77 gross per week, per person.

[5] As to seeking alternative employment, the Applicants stated that they presented evidence at arbitration that they had actively pursued alternative employment locally, interstate and overseas, but remained out of work for a period in excess of 26 weeks (being the statutory maximum period for compensation). The Applicants relied on evidence primarily given by Ms Rockell, of the Applicants’ job search efforts. The Applicants stated they took extensive efforts to obtain work interstate and internationally, by contacting recruitment agencies and submitting applications for advertised vacancies. Mr Robinson also completed a number of training courses over his period out of work, in order to enhance his employability.

[6] In further submissions of 7 January 2021, the Applicants confirmed their evidence that they remained out of work for a period in excess of 26 weeks, and had only ‘recently’ gained employment.

[7] The Applicants submitted that there was evidence at the hearing that the deduction of six (6) weeks (or 30 days) being a sum of $10,384.62 from each of the Applicant’s accrued annual leave balances which were paid upon termination significantly exacerbated the harshness of the termination. The Applicants submitted that they ought to have had access to these entitlements to support themselves through any period out of work. The Applicants further submitted that the unauthorised deduction of the six (6) weeks of accrued annual leave and the further loss of the accrued Time-Off-In-Lieu (TOIL) “appear to be blatantly punitive in nature, and the decision to authorise such deductions was notably wholly improper”.

[8] The Applicants submitted that there was also evidence in this matter that they were both short-paid an amount of $1,038.45 gross from their owed salary in lieu of notice entitlement of three weeks’ pay per the National Employment Standards.

[9] The Applicants submitted that on the proper approach, being the Spriggs test, compensation should be calculated as follows:

Loss by reason of the termination per Applicant:
12 months’ gross income	$ 90,000
Less income earned post-termination by each Applicant	($ 0)
Contingencies – 10% Impact of taxation Net loss	($ 9,000) 0 $81,000

[10] Via foot notes, the Applicants noted that as to the contingencies at 10%, given the period of service without performance issues, no more than 10% contingencies should be factored in. Regarding taxation, the Applicants noted that any sum payable will be taxable in the Applicant’s hands.

[11] Further to the above calculation, the Applicants noted that the net loss is in excess of the 26-week statutory cap of $45,000, and that the compensation payable would be $45,000 gross per Applicant, being 26 weeks at $1,730.77.

[12] The Applicants also addressed the other matters contained under s.392 of the Act as follows.

The effect of the order on the viability of the employer’s enterprise (section 392(2)(a))

[13] The Applicants submitted that while a distinction can be made between Mr Darrouzet’s personal staff and employees of the other operations owned by Mr Darrouzet, there can be no doubt the Respondent is a sizeable employer and, on the evidence before the Commission, any order for compensation would not have any impact upon the viability of the business.

The length of the person’s service with the employer (section 392(2)(b))

[14] The Applicants were both employed for a period in excess of three years of service. The Applicants noted that while this is not a vastly long period of service, the period of service was unblemished for both Applicants.

The efforts of the person to mitigate the loss (section 392(2)(d))

[15] The Applicants’ evidence is that they continued to apply for any available work locally, interstate and overseas in the period post the termination of employment.

The amount of any remuneration earned by the person from employment or other work (section 392(2)(e))

[16] The Applicants’ evidence is that there has been no other remuneration received within the 26-week statutory maximum period for either Applicant.

The amount of any income reasonably likely to be earned (section 392(2)(f))

[17] The Applicants stated there is no evidence of them being likely to earn any income from alternative sources and no discount should be applied for this factor.

Any other matter that the Commission considers relevant (section 392(2)(g))

[18] Further to the deductions and underpayment as outlined above, the Applicants submitted that they seek for the Commission to specifically address this issue in the decision on remedy. The Applicants state that they seek that payment of these clear entitlements can be pursued in another jurisdiction if unable to be remedied by the Commission in the course of the current application.

[19] On the basis of the above matters, the Applicants request the Commission to award the maximum compensation in light of the finding of the manifestly harsh and unjust terminations of employment, and the extent of the Applicants’ demonstrable losses which have flowed from the termination of their employment.

[20] Regarding the Respondent’s reliance on the COVID-19 pandemic impacting its business, the Applicants submitted that while the Respondent states the Applicants may have been stood down without pay for some period in light of the pandemic, this claim is inconsistent with the actual usage of the ‘Norseman’ vessel over the relevant period. The Applicants state that the Marina Traffic Arrivals and Departures Report from February to December 2020 shows regular usage of the vessel. The Applicants state that the usage is similar to that examined at the hearing for the three-year period of their employment with the Respondent, and therefore there was no significant change to the vessel’s usage over the Covid-19 pandemic period.

[21] The Applicants dispute the claim by the Respondent that “…the Vessel was under-utilised and remained berthed at Coral Sea Marina for substantial periods of time”, stating that evidence has been brought by the Applicants and the Respondent that the Norseman was utilised in “April, May, June, July – and each month prior to and after these dates (although it is noted that handwritten log book records were not produced for these dates).” The Applicants submit however, the quantum of usage is irrelevant as there was no evidence of any “substantial period” when the Vessel was not utilised, and no evidence that the current Captain was stood down for any significant period during the twenty-six week period following termination.

[22] The Applicants do not deny that the pandemic has impacted the tourism industry, but rely on the use of the vessel and the employment of their replacement Captain to state that if not for their dismissal, they would have remained ‘gainfully’ employed throughout 2020.

[23] The Applicants further submit that regarding the unlawful deduction of 6 weeks of accrued annual leave, this should be taken into account regarding any deductions for contingencies. The Applicants state that any deduction for contingencies should be reduced to 0% in light of the Respondent’s unlawful action in depriving them of this financial assistance.

Respondent’s submissions

[24] The Respondent submits that there is a dispute regarding the Applicants’ steps to seek alternative employment and to mitigate their losses. The Respondent states that on the evidence before the Commission, only Ms Rockell has provided “albeit brief in nature and unsupported by documentary evidence” evidence as to unsuccessful attempts at mitigating her loss of earnings for the entire 26 weeks’ period following her dismissal. The Respondent says in contrast, there is a complete absence of evidence led from Mr Robinson about him seeking or obtaining alternate employment from 11 weeks after his dismissal.

The effect of the order on the viability of the employer’s enterprise (section 392(2)(a))

[25] The Respondent does not contend that the making of a compensation order in favour of each Applicant will adversely impact on the viability of its business enterprise.

The length of the person’s service with the employer (section 392(2)(b))

[26] The Respondent submitted that as at the date of dismissal, Mr Robinson had been employed for just over three years and Ms Rockell for approximately two years and nine months. It says therefore the Applicants’ length of service is relatively short and does not warrant an adjustment of compensation upwards in their favour.

Section 392(2)(c) of FW Act and Formula One of Sprigg: The Remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed.

[27] The Respondent submitted as follows:

As to Ms Rockell, the Respondent submits the compensation of her putative loss of earnings might be assessed over the statutory maximum 26 weeks’ period, subject to the Commission’s overall discretion and appropriate discounting for various contingencies “(an upper limit of $45,000.00 less a deduction for contingencies)”.

However as to Mr Robinson, the Respondent submits the compensation for his putative loss of earnings should be limited to the period of 11 weeks’ after his dismissal, subject to the Commission’s overall discretion and appropriate discounting for various contingencies “(an upper limit of $19,038.47 less a deduction for contingencies)”.

The efforts of the person to mitigate the loss (section 392(2)(d))

[28] The Respondent made no submissions as to Ms Rockell’s steps, but stated as to Mr Robinson there is a lack of evidence regarding attempts to mitigate his loss, and that any compensation awarded to him should be reduced accordingly.

The amount of any remuneration earned by the person from employment or other work (section 392(2)(e))

[29] The Respondent submitted that there is a paucity of evidence addressing these matters in terms of Mr Robinson.

The amount of any income reasonably likely to be earned (section 392(2)(f))

[30] The Respondent submitted this factor is not applicable in the present case.

Any other matter that the Commission considers relevant (section 392(2)(g))

[31] The Respondent submits that the Commission should recognise the impacts of the COVID-19 pandemic over the relevant period from 29 January to 29 June 2020. The Respondent submits that its business enterprise suffered a 32% decline in revenue and qualified for the Commonwealth Government’s JobKeeper Payment scheme. In addition, staff at the Marina took 20% to 30% salary reductions according to their level of seniority and earnings. It submits that as a result of quarantine periods, and other public health directives, there were significant limitations in relation to events that the Respondent was able to host on the Vessel; the Vessel was under-utilised and remained berthed at Coral Sea Marina for substantial periods of time; and there was substantially less maintenance work requirements and reduced skippering duties due to the Vessel remaining berthed for these periods of time.

[32] In further submissions of 22 January 2021, and further clarified in correspondence to the Commission of 27 January 2021, the Respondent stated there were only seven voyages of substance over the COVID-19 period, and only three were overnight trips. It said in contrast, there were ten voyages of substance with five overnight trips made by the Norseman over the corresponding period in the previous calendar year. The Respondent relied on a supplementary statement by the Norseman’s current Captain, Ms Kim Latimer, who stated that she inspected the Voyage Records which showed, as amended and clarified in the correspondence of 27 January 2021:

a) April 2019: two overnight trips;

b) May 2019: three day trips;

c) June 2019: two day trips and one overnight trip; and

d) July 2019: two overnight trips

[33] The Respondent submits that for these reasons, major changes to the Applicants’ employment affecting their putative earnings were likely to have occurred, during the relevant period, such as:

(a) a stand down on no pay, due to a stoppage of work for which the employer cannot be held responsible, pursuant to s524 of the FW Act; and/or

(b) a reduction in hours of work and pay, pursuant to a JobKeeper enabling stand down direction given under s.789GDC of the FW Act.

Reductions for contingencies

[34] The Respondent therefore submits that any award of compensation should be appropriately discounted to reflect these pandemic related contingencies.

[35] The Respondent referred to the decision in Arthur Robinson (Grafton) Pty Ltd v Carter, whereBarwick CJ identified that daily vicissitudes of life constitute a relevant consideration for the purposes of calculating future economic loss that may impact on earning capacity. 2 The Respondent submits a “modest deduction for daily vicissitudes of life of 10% to 15% should be applied to putative earnings prior to 1 April 2020”.

[36] The Respondent submits that deductions for contingencies to be applied after 1 April 2020 should include the following matters:

(a) the specialised nature and variable hours pertaining to the Applicants’ employment and the fact that any work was largely dependent on whether Mr Darrouzet personally required the Vessel for use; and

(b) the COVID-19 pandemic and its restrictions which resulted in substantial limitations to the use of the Vessel, and consequently the Applicants’ duties and responsibilities being substantially reduced or even ceased entirely for periods of time.

[37] The Respondent submits a deduction for all contingencies of 30% to 50% should be applied from 1 April 2020 onwards of the Relevant Period.

Formula Four of Sprigg: Consider the impact of taxation and adjust the figure accordingly.

[38] The Respondent submits that: “The compensation payable to each of the Applicants will be subject to withholding tax in accordance with the Respondent’s statutory obligations. No adjustment will be necessary”.

Other matters

[39] The Respondent notes that pursuant to s392(4) of the Act, any shock, distress and humiliation caused by the manner of the dismissal to the Applicants, must be disregarded for the purposes of making an order under section 392(1) of the Act.

[40] Further, pursuant to s392(5)(a) of the Act, the applicable compensation cap for each Applicant is $45,000.

Annual Leave Deduction

[41] The Respondent relied on its Closing Submissions filed on or about 8 July 2020, regarding the annual leave deduction.

[42] The Respondent stated that the Commission is confined by s.390 of the Act, regarding what remedy it may order, and for compensation any order must be made strictly in accordance with s.392 of the Act.

[43] The Respondent submits that any dispute between the parties in relation to “non-payment of a minimum safety net entitlement under the National Employment Standards, such as annual leave, being a civil remedy provision by virtue of s44(1) of the FW Act, can only be resolved by a Court exercising judicial power in accordance with Part 4-1 of the FW Act.”

Respondent’s Rejoinder Submissions

[44] The Respondent objected to the filing of fresh evidence by the Applicant in their reply submissions of 7 January 2021. I have determined it is appropriate to admit that evidence, but have given it less weight due to its untested character.

[45] It is appropriate to treat the supplementary witness statement of Ms Latimer, filed by the Respondent on 22 January 2021, in the same way.

Reinstatement

[46] Given the facts of the current case, I am satisfied that the relationship has deteriorated to a point where reinstatement is not a viable option. 3

Assessment of Compensation

[47] Section 390(3)(b) of the Act provides that the Commission may only issue an order for compensation if it is appropriate in all the circumstances. Compensation as a remedy is designed to compensate an unfairly dismissed employee, in lieu of reinstatement, for losses reasonably attributable to the unfair dismissal, within the bounds of the statutory cap on compensation that is to be applied. 4

[48] Having regard to all the circumstances of the case, including that Mr Robinson and Ms Rockell have suffered financial loss as a result of their unfair dismissals, I consider that an order for payment of compensation to the Applicants is appropriate.

[49] It is therefore necessary for me to assess the amount of compensation that should be ordered to be paid to the Applicants, having regard to the criteria under section 392(2) of the Act.

[50] The established approach to assessing compensation in unfair dismissal cases was set out in Sprigg v Paul Licensed Festival Supermarket 5 and applied and elaborated upon in the context of the current Act by Full Benches of the Commission in a number of cases. The recent Full Bench decision in Alison Thurston v Bunbury Medical Imaging,6 noted that as to the Sprigg formula:

“[32] The well-established approach to the assessment of compensation under s.392 is to apply the ‘Sprigg Formula’, derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket. This approach was articulated in the context of the current legislative framework in Bowden v Ottrey Homes Cobram and District Retirement Villages (Bowden). Under that approach, the first step to be taken in assessing compensation is to consider s.392(2)(c), that is, to determine what the applicant would have received, or would have been likely to receive, if the person had not been dismissed (the Anticipated Period of Employment). In Bowden this was described in the following way:

“[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:

‘... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.’

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the ‘anticipated period of employment’...”

[51] In Bowden, the Full Bench stated:

“[23] Section 392(2) of the FW Act is similar to s.170CH(7) of the WR Act, prior to the Work Choices amendments, and s.654(8) of the WR Act. However, s.170CH(7) and s.654(8) did not contain terms similar to ss.392(2)(e) and (f). Nonetheless, under the WR Act post dismissal remuneration of the dismissed employee was usually had regard to by the Australian Industrial Relations Commission (AIRC) in determining an amount of compensation.

[24] As much is apparent from the decision in Ellawala v Australian Postal Corporation. 9 In Ellawala a Full Bench of the AIRC said in respect of s.170CH(7) of the WR Act, prior to the Work Choices amendments:

“[31] The principles applicable to determining an amount to be ordered in lieu of reinstatement are dealt with in Sprigg. In that case the Full Bench endorsed the following approach:

Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).

Step 2: Deduct monies earned since termination.

Step 3: Discount the remaining amount for contingencies.

Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.

[32] Any amount provisionally arrived at by application of these steps is subject to whether offsetting weight is given to other circumstances, including those that need now to be taken into account under paragraphs 170CH(7)(a), (b) and (c) [sic]. The legislative cap on the amount able to be ordered is then applied pursuant to ss.170CH(8) and (9).

…

[35] In a particular case the Commission estimates that if the applicant had not been terminated then he or she would have remained in employment for a further 12 months. The applicant has earned $3,000 a month for the 18 months since termination, that is $54,000. Only the money earned in the first twelve months after termination - that is $36,000 - is deducted from the Commission’s estimate of the applicant’s lost remuneration. Monies earned after the end of the ‘anticipated period of employment’, 12 months after termination in this example, are not deducted. This is because the calculation is intended to put the applicant in the financial position he or she would have been in but for the termination of their employment.

[36] The next step is to discount the remaining amount for ‘contingencies’. This step is a means of taking into account the possibility that the occurrence of contingencies to which the applicant was subject might have brought about some change in earning capacity or earnings…

[43] We note that in Slifka North J only applied the deduction for contingencies to prospective loss, that is loss occasioned after the date of the hearing. This approach has also been adopted in a number of first instance arbitrations by members of the Commission. As a matter of logic this approach has some appeal. A discount for contingencies is a means of taking account of the various probabilities that might otherwise affect earning capacity. At the time of hearing any such impact on an applicant’s earning capacity between the date of termination and the hearing will be known. It will not be a matter of assessing prospective probabilities but of making a finding on the basis of whether the applicant’s earning capacity has in fact been affected during the relevant period. But this matter was not raised before us and we were not directed to any evidence upon which we could make a finding as to whether Ms Ellawala’s earning capacity was adversely effected by some event which took place in the period between her termination and the hearing of the matter at first instance…

[45] In relation to the fourth step set out in Sprigg we note that the usual practice is to settle a gross amount and leave taxation for determination.” [Endnotes omitted]” 7

(Emphasis added)

[52] In light of the authorities and in accordance with the Sprigg formula, I have considered as follows, noting that s 392(2)(f) is not relevant in this matter.

Remuneration the Applicants would have received, or would likely have received, if they had not been dismissed (s 392(2)(c))

[53] As with any calculation of damages or compensation, this involves an element of speculation in determining an employee’s anticipated period of employment, because the task involves an assessment of what would have been likely to happen in the future had the employee not been dismissed. 8

[54] The Applicants have submitted that their service with the Respondent was unblemished, and they loved their work and were committed to their jobs.

[55] At the hearing of the merits the Respondent presented numerous allegations regarding the Applicants’ performance, however, none were found to be a valid reason. In these submissions regarding compensation, the Respondent has not made any submissions to the effect that the Applicants’ performance was such that employment would not have continued if not for the dismissal events. It is clear that the Respondent required another Captain, having hired one promptly following the dismissal of the Applicants. As there were no well-founded performance issues with the Applicants, it is an open inference that their role would have remained for the 12 month period and that they would have continued to perform their roles proficiently.

[56] In all the circumstances and weighing up the likelihood of the various possibilities, I find that the Applicants would have remained employed by the Respondent for a period of 12 months, if they had not been dismissed on 28 January 2020.

[57] The Respondent has stated as to Ms Rockell that the compensation of her loss of earnings might be assessed “over the statutory maximum 26 weeks’ period”, being an upper limit of $45,000, less a deduction for contingencies. However as to Mr Robinson, the Respondent states in light of the lack of evidence as to his steps to mitigate his loss, his loss of earnings should be limited to the period of 11 weeks’ after his dismissal, being an upper limit of $19,038.47 less a deduction for contingencies.

[58] I address the mitigation steps of the Applicants below, and having determined for the purposes of the first step of the Sprigg formula that the Applicants would have remained in employment for 12 months, which is equivalent to an amount of $90,000 for each Applicant.

Remuneration earned (s 392(2)(e))

[59] The Applicants’ evidence is that they did not earn any remuneration from any source since the termination of their employment, up until recently. Directions were issued to the parties to provide submissions, which should have, but did not, reduce the need for assumption. 9 I therefore called for the Applicants to provide clarity around the date they found employment and their respective earnings.

[60] The Applicants found other employment commencing 30 October 2020. In further submissions received 22 March 2021, their rate of pay was disclosed to be €5,250 per month, per person. Within the anticipated period, they were employed for 90 days (from 30 October 2020 until 28 January 2021), or 12.8 weeks. They earned $2018 AUD per week. 10

[61] Only monies earned since termination for the anticipated period of employment are to be deducted. 11 I find that for the relevant period for any award of compensation, that each Applicant earned approximately $25,830.12 Accordingly, the sum of $90,000 is adjusted to be $64,170 for each Applicant. This amount reflects what remuneration the Applicants would likely have earned had they not been dismissed. This calculation is intended to put the Applicants in the position they would have been in but for the termination of their employment.13

Viability (s 392(2)(a))

[62] The Respondent does not contend that the making of a compensation order in favour of each Applicant will adversely impact on the viability of its business enterprise. Accordingly, no adjustment will be made on account of this.

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

[63] The Respondent has noted that Mr Robinson had been employed for just over three years and Ms Rockell for approximately two years and nine months. This length of service does not justify any adjustment to the mount of compensation.

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

[64] The Respondent raises no concerns regarding the evidence of Ms Rockell to mitigate her loss.

[65] However, the Respondent submits that there is a lack of evidence regarding Mr Robinson’s steps to mitigate his loss and accordingly seeks that the Commission make a reduction in any award of compensation to him.

[66] The Respondent in their submissions draw on the transcript of the hearing, where Ms Rockell relevantly stated: 14

Can I ask you if you have found alternative employment to date? No, I haven’t, and I find it quite strange that, you know, this is a small industry over here and I’m worried because some of the recruitment agencies are not getting back to us over here, they’re not talking to us, and I’m worried that our names have been tarnished because of that, because of these accusations.

And you have been actively applying for work here and overseas? Yes, everywhere - everywhere.

(emphasis added)

[67] Despite a lack of documentary evidence in support, I am satisfied by the evidence given at the hearing. It seems abundantly clear from that extract that both Applicants were applying, as was the case during their employment with the Respondent, for jobs where they could work together. Ms Rockell’s evidence indicates a joint endeavour to find work and I am satisfied that both were attempting to gain other employment.

[68] Notably, Mr Robinson undertook a number of training courses during that period, to increase his employability. 15 As a Captain, his skills are of paramount importance and this is a significant step towards mitigation, in making him more employable.

[69] Mr Robinson also indicated that due to the specialist nature of the work that it is not unusual to be out of work for up to 6 months between positions. 16 Given the effects of COVID-19, that period can be expected to elongate. Traditionally, the Applicants’ attempts were not limited to Australia and included overseas options (as was the case with the Applicants’ employment prior to the Respondent).17 It is a clear inference open to me that overseas opportunities would have been more difficult for the Applicants to obtain during COVID-19, if for no other reason than difficulty travelling internationally.

[70] I am satisfied that both Applicants made reasonable attempts to mitigate their loss and that no reduction is necessary.

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

[71] I now need to consider the impact of contingencies on the amounts likely to be earned by the Applicant for the remainder of the anticipated period of employment. 18

[72] It submitted also that the Norseman vessel had undertaken significantly less voyages of substances when compared to the previous calendar year.

[73] The Applicants have disputed this evidence, stating that evidence was brought that the Norseman was utilised in “April, May, June, July – and each month prior to and after these dates (although it is noted that handwritten log book records were not produced for these dates)”, and further that the quantum of usage is irrelevant as there was no evidence of any “substantial period” when the Vessel was not utilised, and no evidence that the current Captain was stood down for any significant period during the twenty-six week period following termination.

[74] The Respondent has also made submissions regarding a downturn in its business in light of the COVID-19 pandemic. It states that it suffered a 32% decline in revenue and qualified for the Commonwealth Government’s JobKeeper Payment scheme, and that staff at the Marina took 20% to 30% salary reductions according to their level of seniority and earnings. The period of this reduction is not specified.

[75] The Respondent has made various other submissions regarding deductions for daily vicissitudes of life, and the fact that any work was largely dependent on whether Mr Darrouzet personally required the Vessel for use, stating a deduction for all contingencies of 30% to 50% should be applied from 1 April 2020 onwards of the Relevant Period.

[76] As to the salary reductions, it is unclear whether all staff took this reduction and whether it would have applied to the Applicants if they had remained employed; in this regard, it is appropriate to make a reduction as a contingency, as opposed to reduce the likely remuneration the Applicants would have earned under s 392(2)(c).

[77] It is an inference open to me, given the evidence led at hearing, that the Norseman involved much more than merely conducting trips. The Vessel required significant maintenance and upkeep. I am satisfied this upkeep would not have significantly decreased over that period, especially given that larger projects were usually undertaken in periods of low usage. 19 As stated previously:20

The Respondent’s requirements were such that work clearly had to be done to maintain the vessel in a guest ready condition when it was not being used – the use of the ship movement logs merely showed the vessel usage and it did not provide an accurate insight into the work maintenance and other activities needed to keep the vessel ready to receive guests and go to sea on short notice. There was work required to be done constantly, not just when the boat was out at sea:

Two days on which the boat went out? -See, boat usage is only one element of a super yacht. There is a lot more going on on a super yacht than just taking the guests out, and it’s a difference - when the guests are off the vessel it’s in sort of maintenance mode and getting work done. There’s usually, you know, covers put on things and it’s repair and maintain and so on, and then you get it ready for guests. So there’s always work carrying on the boat. Just because the boat is somewhere and the owner isn’t using it doesn’t mean there’s no work going on. There’s always lots of work happening.

[78] There is no evidence presented that the current Captain was stood down or impacted significantly in her employment. In the absence of evidence to the contrary, I will follow the evidence presented at the hearing.

[79] The Applicants have made submissions as to the Respondent’s deduction of 6 weeks accrued annual leave from the balanced paid on termination, being a sum of 10,384.62 each. The Applicants have also submitted that they were short-paid an amount of $1,038.45 gross. Regarding these underpayment matters, the Applicants seek that any deduction for contingencies should be reduced to 0% in light of the Respondent’s action.

[80] In light of the above arguments of the Respondent, and attempting to account for the general vicissitudes of life, I am satisfied a deduction for contingencies of 30% is appropriate. 21 Marina staff took salary reductions, and it appears that usage of the Norseman decreased to some extent. Without evidence that the Norseman’s current Captain was stood down and that the boat went entirely unused, a further reduction is not appropriate.

[81] Applying the 30% discount to $64,170, each Applicant would be entitled to $44,919.

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

Misconduct (s 392(3))

[83] The Applicants did not commit any misconduct, so this has no relevance to the assessment of compensation.

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

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

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

[85] As I have previously noted, the Applicants each earned below the high income threshold and therefore the compensation cap is 26 weeks’ compensation, or $45,000.

Instalments (s 393)

[86] No application has been made to date by the Respondent for any amount of compensation awarded to be paid in the form of instalments.

Conclusion on compensation

[87] In my view, the application of the Sprigg formula does not, in this case, yield an amount that is clearly excessive or clearly inadequate. Accordingly, there is no basis for me to reassess the assumptions made in reaching the amount of compensation to be awarded to each of the Applicants. 22 A table reflecting the calculations in this decision is as follows:

Loss by reason of the termination per Applicant:

12 months’ gross income

Less: income earned post-termination by each Applicant

Net lost income $ 64,170

$ 90,000

($ 25,830)

Less: Contingencies – 10%

Compensation to be awarded

($ 19,251)

$44,919

[88] For the reasons I have given, my view is that a remedy of compensation in the sum of $44,919.00 (less taxation as required by law) to be paid to each Applicant, plus the appropriate superannuation contributions to be paid into each Applicant’s superannuation account. An Order to that effect will issue with this Decision. This amount must be paid within 14 days.

[89] As to withholding the Applicants’ annual leave balance, the Respondent correctly points out that I am unable to make an award for this figure. What is evident from my Decision of 3 December 2020 is that I was not satisfied that the Applicant’s use of the TOIL system was improper, nor was it a valid reason for termination. It follows that the deduction of a statutory entitlement – enshrined as fundamental, a “National Employment Standard”, within our Act – on this basis is questionable. 23 Ultimately, however, this is not a question I can arbitrate on.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

1 Robinson & Rockell v The Trustee for the Darrouzet Property Trust[2020] FWC 6525.

2 Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649, 659.

3 Nguyen v Vietnamese Community in Australia[2014] FWCFB 7198.

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

5 (1998) 88 IR 21.

6 [2021] FWCFB 280.

7 [2013] FWCFB 431.

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

9 Gloria Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge [2021] FWCFB 431, [46].

10 This amount was calculated based on the most recent exchange rate published by the Reserve Bank of Australia on 22 March 2021: The Applicants’ each received €5,250 per month. This was calculated at the relevant exchange rate (0.6505€ to $1AUD) to be $8,070 per month, or $2018 per week. All figures rounded.

11 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [16].

12 Calculated as $2018 AUD x 12.8 weeks.

13 Bowden at [24], cinting Ellawala v Australian Postal Corporation Print S5109 at [35].

14 Transcript, PN1021 – 1022 (Lucy Rockell).

15 Applicant’s Reply Submissions Re Remedy, dated 7 January 2021, [9].

16 Witness Statement of Ben Robinson, dated 15 April 2020, [104].

17 Transcript, PN1032 (Lucy Rockell).

18 Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].

19 Transcript, PN1072 – 1083 (Lucy Rockell).

20 Robinson & Rockell v The Trustee for the Darrouzet Property Trust[2020] FWC 6525, [73].

21 Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649, 659.

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

23 Fair Work Act 2009, Part 2-2, Division 6 – Annual Leave, sections 86 – 94.