Sander Toonen v Veem Limited
[2024] FWC 855
•8 APRIL 2024
| [2024] FWC 855 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Sander Toonen
v
Veem Limited
(U2023/9212)
| COMMISSIONER LIM | PERTH, 8 APRIL 2024 |
Application for an unfair dismissal remedy – no valid reason – no procedural fairness – dismissal unfair – compensation awarded
On 22 September 2023, Mr Sander Toonen applied to the Fair Work Commission alleging that he was unfairly dismissed from his employment with Veem Limited (Veem or Respondent).
Mr Toonen’s employment as an After Sales Manager with Veem commenced on 30 January 2023 and ended by way of dismissal on 1 September 2023. Veem dismissed Mr Toonen for failing to obey lawful and reasonable instructions regarding performance of his job. Mr Toonen denies all the allegations and contends that he was unfairly dismissed pursuant to s 385 of the Fair Work Act 2009 (Cth) (Act).
Veem raised a jurisdictional objection to Mr Toonen’s application on the basis that Mr Toonen was not protected from unfair dismissal under s 382 of the Fair Work Act 2009 (Act). This was dealt with in my decision Sander Toonen v Veem Limited[2024] FWC 234 (Jurisdictional Decision).
In the Jurisdictional Decision, I found that:
a) Mr Toonen had completed the minimum employment period in s 383 of the Act and was covered by the Manufacturing and Associated Industries and Occupations Award 2020. Mr Toonen was thus protected from unfair dismissal pursuant to s 382 of the Act.
b) Mr Toonen’s unfair dismissal application was made within the time prescribed in s 394(2) of the Act; and
c) The Respondent was not a small-business employer within the meaning of the Act and so the Small Business Fair Dismissal Code did not apply.
The matter was subsequently programmed for a merits hearing on 21 March 2023. At the hearing I granted permission to Mr Patrick Mullally to represent Mr Toonen. Mr Toonen gave evidence in support of his case. Mr Mark Miocevich, Managing Director for Veem, represented Veem and gave sworn evidence.
Prior to the hearing of the matter, my chambers constructed a paginated court book consisting of submissions and evidence of the parties. References to evidence are by way of the relevant page number in the court book.
Having considered the relevant evidence and submissions of the parties, I find that Mr Toonen’s dismissal was harsh, unjust or unreasonable. I find that he was unfairly dismissed. I also find that it is appropriate to award Mr Toonen a remedy of $50,192.36.
My detailed reasons follow.
Evidence
2.1 Background
By way of background, I adopt paragraphs [11] – [29] of the Jurisdictional Decision, which can be summarised as follows:
(a)Veem is an engineering and manufacturing business that designs, manufactures and installs propulsion and stabilisation systems for luxury yachts; ferries; workboats; and the defence industry. In particular, they specialise in the development and sale of gyrostabilisers.
(b)Mr Toonen’s job title was After Sales and Support Manager. He commenced this role on 30 January 2023. He reported to the Gyros Production Manager.
(c)Mr Toonen’s job description relevantly provided his responsibilities as:
RESPONSIBILITY
Manager – After Sale & Support is responsible for co-ordinating all aspects of Gyro Projects post sale (from acceptance at FAT) through to delivery, installation and commissioning including warrant and service for the life of the Gyros.
This includes development and continuous improvement of the support and after sales Management Systems.
Development and continuous improvement of documentation to support approved subcontractors and VEEM technicians in troubleshooting, servicing and repair.
Recruitment, development and continuous improvement of team members within the After Sales group, to ensure customer requirements are met and VEEM Ltd develops and grows at a rate commensurate with market demand.
(d)Mr Toonen’s role could not be done without technical qualifications and/or experience in engineering.
2.2 Toonen’s dismissal
It is convenient to address the circumstances of Mr Toonen’s dismissal first. Mr Miocevich dismissed Mr Toonen 1 September 2023.
Mr Toonen’s unchallenged evidence is that:
(a)On Wednesday, 30 August 2023, Mr Brad Miocevich, Mr Miocevich’s brother and another owner and director of the company visited Mr Miocevich at work. Mr Miocevich and Mr Brad Miocevich had a long and heated argument in Mr Miocevich’s office. Mr Toonen says that Mr Miocevich’s office is made of glass and not soundproof, and his desk was in the open office area outside Mr Miocevich’s office, so he could hear parts of the conversation.[1]
(b)The meeting lasted several hours. Both Mr Miocevich and Mr Brad Miocevich were visibly angry and were swearing. Mr Toonen’s impression is that Mr Brad Miocevich was berating Mr Miocevich.[2]
(c)When Mr Brad Miocevich left the meeting and the office, he was friendly and courteous to the staff.[3]
(d)On Thursday, 31 August 2023, Mr Miocevich was irritable. Mr Miocevich told Mr Toonen that his performance was not good enough, because Mr Toonen “couldn’t deal with clients”.[4] There was no other contact between Mr Miocevich and Mr Toonen that day other than incidental contact as they passed each other in the office.[5]
(e)On Friday, 1 September 2023 at approximately 5:30pm, Mr Miocevich called Mr Toonen into his office. Mr Miocevich told Mr Toonen a list of things he was doing wrong; that he thinks Mr Toonen was a clerk, not a manager; and said that Mr Toonen could no longer work at Veem.[6]
(f)Mr Toonen did not argue with Mr Miocevich and went to his desk. Mr Miocevich followed him and asked for Mr Toonen’s work laptop, phone and access card. Mr Toonen was then required to leave the premises.[7]
Mr Toonen did not receive a letter of termination or written reasons for dismissal.
I accept Mr Toonen’s evidence of how his dismissal eventuated.
Mr Miocevich’s evidence is that during the meeting on 1 September 2023, he outlined the following issues with Mr Toonen’s performance:[8]
(a)Mr Toonen lacked a coherent strategy for technicians in the field, resulting in inconsistent travel practices and incomplete tasks.
(b)There was no clear plan for addressing recurring issues with specific boats, leading to multiple visits, parts shortages and time wastage.
(c)Inadequate handling of challenging customers, evidenced by Mr Toonen’s tendency to defer difficult interactions to management.
(d)There were instances of incorrect job invoicing, indicating a failure to adhere to established procedures.
(e)Mr Toonen had neglected to develop a training regimen for overseas technicians scheduled to undergo training at Veem facilities in Perth.
(f)Mr Toonen had failed to complete monthly work in progress calculations, compromising the accuracy of end-of-month financial reports.
(g)Delays in invoicing tasks by month-end, resulting in cash flow disruptions and accounting complications.
Mr Miocevich tendered into evidence a document titled “Exit Interview” (Exit Interview Record) which records that Mr Toonen was terminated on an involuntary basis as he “can’t do the job”.[9] The Exit Interview Record lists the seven issues outlined at [14].
During his cross-examination, Mr Miocevich gave evidence that:
(a)The meeting on 1 September 2023 took place at the end of the workday and went for approximately 30 minutes.[10]
(b)He had made the decision to terminate Mr Toonen during the day, and that his mind was made up before the meeting.[11]
(c)He did not give Mr Toonen advance notice of the meeting, nor did he tell Mr Toonen what the meeting was going to be about. Further, he did not tell Mr Toonen that he was potentially going to be dismissed.[12]
(d)He filled out the Exit Interview Record before the meeting with Mr Toonen. He also did not provide a copy of the Exit Interview Record to Mr Toonen.[13]
In his evidence-in-chief, Mr Miocevich says that he made the decision to terminate Mr Toonen in such a way as it is uncommon for senior managers to be subject to a lengthy disciplinary process. Mr Toonen’s poor performance posed a significant risk to Veem’s reputation and financial performance, so prompt action was required.[14] I accept Mr Miocevich’s evidence as outlined above.
2.3 The reason for dismissal
Mr Miocevich says that Mr Toonen failed to fulfil his management responsibilities, despite regular feedback from himself and the Senior Production Manager at the time.[15]
In July 2023, Mr Miocevich assumed the role of Senior Production Manager of the Gyro Division. Mr Miocevich says that he closely monitored Mr Toonen’s performance and was aware of concerns raised by the former Senior Production Manager, Mr Angelo Chiapini, about Mr Toonen’s performance.[16] Mr Miocevich decided against terminating Mr Toonen during his probationary period until he could personally evaluate Mr Toonen.[17]
Mr Miocevich says that after observing Mr Toonen’s performance throughout the end of July and through August, it was evidence to him that Mr Toonen was incapable of fulfilling the job requirements.[18] Further, Mr Miocevich’s evidence is that he’d had regular discussions with Mr Toonen across his employment regarding targets and tasks that Mr Toonen needed to carry out.
Mr Toonen says that Mr Chiapini never brought up any performance issues with him.[19] Further, he denies that he had conduct or performance issues.
Mr Miocevich says that Mr Toonen was aware of the following shortcomings in his performance:
(a)Invoicing issues: Mr Miocevich says invoices were not raised for some months after the job was complete.[20] Mr Toonen acknowledges that there were invoicing issues. However he says that these are due to Veem’s software system, which was designed in-house and was designed around foundry products which have a different nature. There is no manual for this software, and no specific training was provided. Mr Toonen also says that the task of invoicing was not actually his but was performed by his subordinate. Veem recently made this subordinate redundant.[21]
(b)Inadequate management of work in progress: Mr Miocevich says that individual jobs were not assessed each month, so the parts allocations were incorrect, and some paying jobs were classified as warranty and vice versa.[22] Mr Toonen says that Mr Miocevich is the person who decides what is classified as warranty or paid work, and that Mr Miocevich would often go against contrary opinions from himself and the field service engineers.[23]
(c)Contractor controls: Mr Miocevich’s evidence is that contractors would leave site before the completion of jobs. Further, that Mr Toonen would fail to minimise the travel costs. Mr Toonen says that contractors are not employees. Additionally, the contractors in question work on the other side of the work and are the only field technicians Veem has. Mr Toonen says these contractors regularly work 12-hour days, often for weeks on end.
(d)Staff organisation: Mr Miocevich’s account is that Mr Toonen did not engage staff and contractors to meet Veem’s needs.[24] Mr Toonen’s evidence is that he did source staff and contractors, but Mr Miocevich unreasonably deemed them as unsuitable. Mr Toonen listed examples of Mr Miocevich dismissing a contractor that Mr Toonen sourced on the basis that the contractor charged too much; Mr Miocevich saying that a US-based contractor with a back injury was a liability; and Mr Miocevich saying to a EU-based contractor that he is overpaid and does not work hard enough.[25]
(e)Warranty liability estimations: Mr Miocevich says that Mr Toonen’s warranty liability estimations were inaccurate and needed to be re-evaluated each month.[26] Mr Toonen’s account is that Mr Miocevich would instruct Mr Toonen to minimise the warranty liability estimations as Mr Miocevich was concerned about presenting the numbers to the Veem board. Mr Toonen’s evidence is that Mr Miocevich would often shout at him, “you cost the company thousands of dollars”, when discussing the estimations.[27]
During the hearing I put to Mr Miocevich that his evidence did not appear to contain any details or supporting evidence regarding his discussions with Mr Toonen. Mr Miocevich said that the discussions with Mr Toonen were conducted in the office as they worked, and that he does not keep records of his meetings.[28] Mr Miocevich further gave evidence that it is not his practice to offend or upset a senior manager by telling them that they are being performance managed, so he “gently encourage[s]” them.[29]
Mr Miocevich’s evidence of the issues with Mr Toonen’s performance also lacked details. There were no dates or names provided, and no supporting documentary or witness evidence was tendered. Veem also did not challenge Mr Toonen’s evidence as outlined above.
Mr Toonen’s evidence is that Mr Miocevich was a difficult person to work for with unrealistic expectations of people. Mr Toonen says that Mr Miocevich was regularly angry at work[30] and would often denigrate other current and past employees and contractors.
Mr Toonen gave evidence that he was the fifth person to perform the role of After Sales Manager in four years. Mr Miocevich confirmed that other than one person, who resigned after 18 months, the other three employees who were engaged in the role of After Sales Manager only lasted between three to six months. Mr Miocevich did not challenge Mr Toonen’s evidence that his three immediate predecessors were dismissed from their role.[31]
Relevant legislation
Section 385 of the Act provides that:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a)the person has been dismissed; and
(b)the dismissal was harsh, unjust or unreasonable; and
(c)the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d)the dismissal was not a case of genuine redundancy.”
Section 387 of the Act requires me to take into account the below matters in determining whether Mr Toonen’s dismissal was harsh unjust or unreasonable:
“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 of the above criteria is mandatory.[32] I set out my consideration below.
4. Submissions and consideration
4.1 Section 387(a) – was there a valid reason for the dismissal related to Toonen’s capacity or conduct?
A valid reason is one that is “sound, defensible or well-founded”[33] and should not be “capricious, fanciful, spiteful or prejudiced”.[34]
Where the reason for dismissal relates to conduct, the Commission must find that the conduct occurred and that the conduct justified dismissal. Whether the conduct relied upon as a reason for dismissal actually occurred is to be determined based on the evidence,[35] and it is to be assessed on the balance of probabilities[36] taking into account the gravity of the allegations.[37] Where the reason for dismissal relates to capacity, the appropriate test is not whether the employee was working to their personal best, but whether the work was performed satisfactorily when looked at objectively.[38]
Mr Toonen submits that there was no valid reason for his dismissal. Mr Toonen contends that Mr Miocevich’s evidence regarding sub-par performance lacks detail and specifics and is based on an assertion that Mr Toonen should have known what his shortcomings were as he was a senior manager. Veem submits that there was a valid reason for Mr Toonen’s dismissal – misconduct and poor work performance. Veem relies on the evidence provided by Mr Miocevich.
On balance, I am not persuaded that there were performance issues sufficiently serious enough to justify termination. I accept that Mr Miocevich was dissatisfied with Mr Toonen’s work performance. However, it is not enough that a director or manager be unhappy with an employee’s performance – the performance must objectively be sub-par or lacking.
Veem did not bring any supporting evidence with sufficient particularity to ground its contention that Mr Toonen’s performance was unsatisfactory. Veem also did not challenge Mr Toonen’s evidence in response to Mr Miocevich’s issues, as outlined in [22]. Based on Mr Toonen’s evidence and the lack of detail from Veem, I simply cannot be satisfied that misconduct or deficiencies in performance actually occurred.
Mr Toonen provided credible evidence about the operational demands and restrictions on the performance of his role. I accept his evidence that Mr Miocevich had unrealistic expectations of his role. This is supported by the high turnover of staff in the After Sales Manager role. Indeed, Mr Miocevich gave evidence that after Mr Toonen’s dismissal, the role of After Sales Manager was broken up and redistributed to specialised employees.[39] This supports a finding that it was unrealistic for one person to do the role in the way Mr Miocevich wanted.
I find that on the evidence there was no valid reason for Mr Toonen’s dismissal.
4.2 Section 387(b) and (c) – notification of valid reason and opportunity to respond
An employee protected from unfair dismissal should be notified of the reason to terminate their employment before the decision to dismiss.[40] Failure to do so impacts on their ability to respond to that reason before the decision to terminate is made.[41]
Mr Toonen submits that Veem did not notify him for the reason of his dismissal prior to the event, nor was he given the opportunity to respond. Veem submits that Mr Miocevich informed Mr Toonen of the reasons for dismissal at the meeting on 1 September 2023. Veem concedes that Mr Toonen was not given an opportunity to respond to the reasons for dismissal.
It is clear that there was no procedural fairness afforded to Mr Toonen in his dismissal. Veem did not give him advance notice of the meeting; did not tell him what the meeting would be about; and did not give Mr Toonen the chance to address Mr Miocevich’s reasons for dismissing him before Mr Miocevich decided to terminate his employment.
4.3 Section 387(d) – any unreasonable refusal by the Respondent to allow a support person
Mr Toonen submits that Veem did not refuse a request for a support person, but that he was not alerted to the fact that the meeting on 1 September 2023 was to end his employment. I find that this is a neutral consideration in this case.
4.4 Section 387(e) – warnings concerning performance
Mr Toonen submits that this criterion is not relevant or is at least neutral. Veem submits that Mr Toonen received regular feedback over his employment.
I find that Mr Toonen was not given any verbal or written warnings regarding his performance. I find that the discussions Mr Miocevich had with Mr Toonen are best characterised as regular work discussions about the work and what needed to be done on a day-to-day basis. Mr Miocevich’s evidence that he “gently encourage[d]” Mr Toonen about shortcomings cannot be said to rise to the bar of warnings. I agree with Mr Toonen that this is a neutral consideration.
4.5 Section 387(f) and (g) – size of the Respondent’s enterprise and whether the absence of dedicated human resource management specialists or enterprise would be likely to impact on the procedures followed
Veem is a large company with approximately 210 employees.[42] Veem submits that it does have human resources management, and that the size of the business did not have any impact on the procedures followed in dismissing Mr Toonen. I accept this submission and find that this is a neutral consideration.
4.6 Section 387(h) – any other matters the Commission considers relevant
Neither party brought any other matters to my attention. I am satisfied that there are no other relevant matters for me to consider.
4.7 Is the Commission satisfied that Toonen’s dismissal was harsh, unjust or unreasonable?
I have made findings in relation to each matter in s 387 as relevant to this case. The considerations in s 387(a), (b) and (c) weigh in favour of a finding that the dismissal was unfair. The other considerations in s 387 are neutral.
The absence of a valid reason or procedural fairness in Mr Toonen’s dismissal leads to my conclusion that his dismissal was harsh, unjust and unreasonable. It is unjust because the alleged conduct was not shown to have occurred. It is unreasonable because Veem dismissed Mr Toonen with no procedural fairness. Even if I had been satisfied that Mr Toonen was guilty of sub-standard performance, I still would have found dismissal to be disproportionate, and thus harsh.
Remedy
I now turn to the issue the remedy, if any, that should be ordered in the circumstances. Section 390 of the Act sets out the circumstances in which an order for reinstatement or compensation may be made:
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.”
I am satisfied pursuant to s 390(1) and (2) that Mr Toonen made an application for unfair dismissal, is a person protected from unfair dismissal and was unfairly dismissed.
Mr Toonen does not seek reinstatement. Since his dismissal, Mr Toonen has moved to the Netherlands and is in new employment. I am satisfied that reinstatement is not appropriate in the circumstances.
I turn now to consider s 390(3)(b). As stated by the Full Bench in Nguyen v Vietnamese Community in Australia T/A Vietnamese Community Ethnic School South Australia Chapter[43] (Nguyen), the question of whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one.[44] Section 390(3)(b) requires that all circumstances of the case to be taken into consideration. As to what this consideration requires, I respectfully adopt the reasoning of the Full Bench in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge[45](Bowden) at [40]:
“As to whether an order for the payment of compensation by Ottrey to Ms Bowden is appropriate in all the circumstances of the case, we note that the phrase “all the circumstances of the case” in s.390(3)(b) of the FW Act is also contained in s.392(2). However, in s.392(2) the phrase is followed by a reference to the matters in ss.392(2)(a) to (g) and s.392(2)(g) concerns “any other matter that the FWC considers relevant.” In this case, we think the matters in ss.392(2)(a) to (g) embrace all the circumstances of the case relevant to our consideration of whether a compensation order is appropriate. In Henderson v Department of Defence it was recognised that the same matters may serve different purposes in s.170CH of the WR Act, as it was prior to the Work Choices amendments…”
In this regard, it is necessary to take into account all the circumstances of the case, including the specific matters identified in ss 392(2)(a) – (g) and to consider the order relevant requirements of s 392.
The well-established approach to the assessment of compensation under s 392 is to apply the “Sprigg Formula”, derived from the decision of the Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).[46] This approach was articulated in the context of the current legislative framework in Bowden. I adopt the Bowden methodology but observe that Bowden and the formulation in Sprigg serve as a guide, rather than a decision rule.
The approach in Sprigg can be summarised as follows:
Step 1: Estimate the remuneration the employee would have received, or would have been likely to receive, if the employer had not terminated the employment.
Step 2: Deduct monies earned since termination. Workers’ compensation payments are deducted but not social security payments. The failure to mitigate loss may lead to a reduction in the amount of compensation ordered.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure the employee receives the actual amount he or she would have received if they had continued in their employment.
Step 5: Apply the legislative cap on compensation.
5.1 Remuneration that Toonen would have received, or would have been likely to receive, if he had not been dismissed: s 392(2)(c)
As stated by a majority of the Full Court of the Federal Court, “[i]n determining the remuneration that the employee 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.”[47]
Mr Toonen’s salary with Veem was $180,000 per annum, plus superannuation. Mr Toonen submits that he saw his role with Veem as a career job and estimates that he would have continued in the role for another 12 months. Veem did not make any submissions on this point.
I disagree. Based on the evidence of Veem’s structure and the high turnover of staff in the After Sales Manager role, it is clear that the role had structural problems. I find that Mr Toonen would have continued in the role for no more than a further six months. This is the “anticipated period of employment”.[48]
I calculate the remuneration that Mr Toonen would have been likely to receive working for Veem from 1 September 2023 to 1 March 2024 to be $90,000 gross plus superannuation.
5.2 Remuneration earned and remuneration likely to be earned: s 392(2)(e)-(f)
Mr Toonen earns $150,000 per annum (or $2,884.61 per week gross) in his new role. He will continue to earn this between the making of the order for compensation and the actual compensation. Mr Toonen did not earn any income in between his dismissal on 1 September 2023 and the start of his new role on 1 January 2024.[49]
In the nine weeks between 1 January 2024 and 1 March 2024, I estimate that Mr Toonen earned $25,961.49 gross. I also note that he was paid $13,846.15 in lieu of notice.[50]
Deducting $25,961.49 and $13,846.15 from $90,000 leaves $50,192.36.
5.3 Length of Toonen’s service: s 392(2)(b)
Mr Toonen was employed for nine months. This is not a lengthy period of time. However, in the circumstances, I am not persuaded that any deduction should be made for this.
5.4 Other matters: s 392(2)(g)
As was said in the Full Bench decision in McCulloch v Calvary Health Care Adelaide (McCulloch),[51] it is important to appreciate that a deduction for contingencies is applied to prospective losses, that is loss occasioned after the date of the hearing. Referring to Ellawala v Australian Postal Corporation,[52] the Full Bench in McCulloch stated that a discount for contingencies is a means of taking account of the various probabilities that might otherwise affect earning capacity. Of course, 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 an applicant’s earning capacity has in fact been affected during the relevant period.
In this case, I know Mr Toonen’s earnings during the anticipated period of employment. I therefore do not need to make a deduction for contingencies.
5.5 Effect of the order on the viability of Veem’s enterprise: s 392(2)(a)
Mr Toonen’s evidence is that Veem is a large corporation with an annual revenue of $59 million for the financial year ending 30 June 2023. Veem’s net profit is slightly over $4 million[53] and there is no evidence that it cannot meet a compensation payment. Veem did not challenge this. I accept Mr Toonen’s submissions and find that a compensation order is unlikely to impact on Veem’s viability.
5.6 Efforts of Toonen to mitigate the loss because of the dismissal: s 392(2)(d)
Mr Toonen led considerable evidence of his efforts to find other employment. Mr Toonen tendered seven cover letters he sent to various employers across September and November 2023. Mr Toonen also gave evidence that he contacted recruiters and used his personal network to make contact directly with companies.[54] Mr Toonen started his new role with Oceanco on 1 January 2024. I am satisfied that Mr Toonen made efforts to mitigate the loss of his dismissal and no deduction should be made in this respect.
5.7 Misconduct: s 392(3)
As I have made a finding that Mr Toonen did not engage in misconduct, there is no deduction to be made in respect of s 392(3).
5.8 No component for shock, distress, humiliation or other analogous hurt: s 392(4)
I confirm that the compensation amount assessed contains no component for any shock, distress, humiliation, or analogous hurt Mr Toonen suffered as a result of his dismissal.
5.9 Compensation cap: s 392(5)
The amount of compensation the Commission may order is capped. If the quantum of compensation initially assessed exceeds that cap, then the Commission must reduce the compensation amount to the cap. The Act stipulates that the compensation cap is the lesser of:
(a)The amount of remuneration received by the person, or that he or she was entitled to receive (whichever is higher) in the 26 weeks before the dismissal (in this case, $90,000); and
(b)Half the amount of the high-income threshold immediately before dismissal ($83,750).
In this matter I am satisfied that the amount for s 392(5) of the Act is $83,750 and a reduction is not required.
5.10 Instalments: s 393
Veem did not make any submissions regarding the payment of compensation in instalments.
5.11 Conclusion on compensation
Having regard to all the circumstances of this matter applied to the considerations in s 392 of the Act, I consider it is appropriate to make an award of compensation to Mr Toonen as summarised below:
Consideration Calculation Gross Amount Anticipated employment period 6 months (1 September 2024 TO 1 March 2024).
$180,000 per annum/2.
$90,000 Deduct monies earned since termination Payment in lieu of notice = $13,846.15
New job from 1 January 2024, weekly gross earnings of $2,884.61.
1 January 2024 to 1 March 2024 = 9 weeks
9 weeks x $2,884.61 = $25,961.49
$39,807.64 TOTAL $50,192.36
Given my findings above, I am satisfied in the circumstances that reinstatement is inappropriate, but a remedy is appropriate. In my view, the application of the Sprigg formula does not lead to an amount that is excessive or clearly inadequate, and I am satisfied that the level of compensation is an amount that is appropriate having regard to all the circumstances of the case.[55] Accordingly, I order that Veem pay to Mr Toonen compensation in the amount of $50,192.36 to be taxed by law, plus make a 11% contribution to Mr Toonen’s nominated superannuation account.
The compensation payment is to be made within 14 days of this decision. An order to this effect will issue separately.
COMMISSIONER
Appearances:
P Mullally, Applicant
M Miocevich for the Respondent
Hearing details:
2024.
Perth.
January 29.
[1] Digital Court Book (DCB), page 21, [25]; Transcript PN255- PN257.
[2] DCB, page 21, [26].
[3] Ibid, [27].
[4] Ibid [28].
[5] Transcript PN264.
[6] DCB, page 22, [30].
[7] Ibid, [31].
[8] Ibid, page 85.
[9] Ibid, page 104.
[10] Transcript, PN303-PN304.
[11] Ibid, PN306-PN307.
[12] Ibid PN308.
[13] Ibid PN316; PN320.
[14] DCB, page 102, [10].
[15] Ibid, page 100, [7].
[16] Ibid, page 102, [8].
[17] Ibid.
[18] Ibid, [9].
[19] Ibid, page 63, [18].
[20] Ibid, page 102, [12.1].
[21] Ibid, page 66, [32].
[22] Ibid, page 103, [12.2].
[23] Ibid, page 66, [33].
[24] Ibid, page 103, [12.4].
[25] Ibid, page 66, [35].
[26] Ibid, page 103, [12.5].
[27] Ibid, page 67, [36].
[28] Transcript, PN335.
[29] Ibid.
[30] DCB, page 21, [22].
[31] Ibid, page 68; Transcript, PN338-PN351.
[32] Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14].
[33] Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333, (1995) 62 IR 371, [373].
[34] Ibid.
[35] King v Freshmore (Vic) Pty Ltd Print S4213, [24].
[36] Edwards v Justice Giudice [1999] FCA 1836, [6] – [7].
[37] Briginshaw v Briginshaw [1938] 60 CLR 336.
[38] Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport, Print S5897, [62], [(2000) 98 IR 137].
[39] Transcript, PN355.
[40] Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport Print S5897, [70] – [73], [(2000) 98 IR 137].
[41] Ibid, [75].
[42] DCB, page 87, [3i].
[43] [2014] FWC 3574.
[44] Ibid at [9].
[45] [2013] FWCFB 431.
[46] (1998) 99 IR 21.
[47] He v Lewin [2004] FCAFC 161, [58].
[48] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].
[49] DCB, page 23, [42].
[50] DCB, page 29.
[51] [2015] FWCFB 2267.
[52] [2000] AIRC 1151 (Ellawala)
[53] DCB, page 22, [33].
[54] DCB, pages 22- 23, [35] – [39].
[55] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].
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