Saso Miloskovski v The Castaway Paper Products Co Pty Ltd
[2023] FWC 3462
•22 DECEMBER 2023
| [2023] FWC 3462 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Saso Miloskovski
v
The Castaway Paper Products Co Pty Ltd
(U2023/6231)
| COMMISSIONER CRAWFORD | SYDNEY, 22 DECEMBER 2023 |
Application for relief from unfair dismissal – dismissal unfair – compensation ordered
Background
On 10 July 2023, Saso Miloskovski (Miloskovski) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that he had been unfairly dismissed from his employment with The Castaway Paper Products Co Pty Ltd (Castaway Paper).
Castaway Paper manufactures paper products and packaging. Mr Miloskovski commenced full-time employment with Castaway Paper on 16 August 2010. Mr Miloskovski was employed at Castaway Paper’s site in Arndell Park as a machine operator prior to being summarily dismissed on 28 June 2023 for serious misconduct.
Mr Miloskovski’s alleged serious misconduct occurred on 23 June 2023. Castaway Paper’s termination letter states:
“After careful consideration and investigation, we conclude you:
1.Breached policy statement No 7 about LUNCHEON BREAKS. This action is against our production goals and the company’s profit; your machine did not produce the expected cartons due to negligent judgement (sic) and performance.
2.Breached policy statement No 13 about THE USE OF MOBILE PHONES putting you and others safety at risk when walking through a forklift transit area.
3.Committed insubordination, as you refused to carry out lawful and reasonable instruction provided by the supervisors and is consistent with the employee’s contract. You were told to go to your workstation and run the machine, but you decided to remove others from their working stations to chat, wasting your and their production time. Another thing to consider is that you did not supervise the product, quality or packing when running the machine. These actions are against our production procedures of quality tests and the operator’s duties in your contract.
After careful consideration, we believe your actions constitute serious misconduct, warranting summary dismissal.
There being contested facts involved, the Commission is obliged by s.397 of the FW Act to conduct a conference or hold a hearing.
I issued directions for the filing material by both parties and listed the application for determinative conference/hearing on 20 December 2023.
Neither party sought to be legally represented for the determinative conference/hearing. Mr Miloskovski was assisted by his daughter, Iva Miloskovska. Castaway Paper was represented by James Camp (Factory Manager) and Gino Scaccabarrozzi (Production Supervisor).
At the beginning of the proceeding, I indicated my preliminary view was that a determinative conference should be held rather than a hearing, primarily so I could take an active role in trying to ensure the parties were able to present their respective cases. The parties consented to this approach, and I determined it was appropriate.
Material relied upon
Mr Miloskovski
In addition to his Form F2 application, Mr Miloskovski relied on the following evidence in support of his application:
· Mr Miloskovski’s termination letter dated 28 June 2023. I marked this Exhibit A1.
· A warning letter issued to Mr Miloskovski on 21 February 2023 for using his phone in the production area. I marked the warning letter Exhibit A2.
· An outline of argument dated 18 October 2023. This contained a mixture of evidence and submissions. I marked the outline Exhibit A3.
· Various medical certificates for the period of December 2022 to July 2023. The certificates confirm Mr Miloskovski’s vehicle was hit by a truck which merged into his lane on 29 November 2022. Mr Miloskovski suffered various injuries in the accident and had not recovered enough to return to full duties by the time of his dismissal on 28 June 2023. Mr Milokovski was restricted to working six to eight hours per day for three days per week for the period of 17 June 2022 to 15 July 2023 and had various limitations on the duties he could perform. I marked the certificates Exhibit A4.
· A response document dated 14 December 2023. This contained a mixture of evidence and submissions. I marked this document Exhibit A5.
Mr Miloskovski provided oral evidence during the determinative conference regarding his earnings since being dismissed. Mr Miloskovski confirmed he has been receiving payments pursuant to the truck driver’s compulsory third party insurance policy in relation to the accident on 29 November 2022. Mr Miloskovski was receiving make-up payments for his reduced earnings up until his dismissal, and has been receiving 80% of his regular wage from the insurance company since his dismissal.
Mr Miloskovski was not required for cross-examination in relation to any of his evidence.
Mr Miloskovski and Ms Miloskovska made oral submissions, and reply submissions, during the determinative conference.
Mr Miloskovski clarified during the course of the determinative conference that he was not seeking reinstatement to his position with Castaway Paper and was seeking compensation in lieu of reinstatement.
Castaway Paper
In addition to its Form F3 employer response, Castaway Paper relied on the following evidence in opposing Mr Miloskovski’s application:
· A letter from Castaway Paper to Dr Maya El Azzi dated 15 May 2023 and supporting documents. The letter sought further information about Mr Miloskovski’s recovery, which appeared to be deteriorating based on his restrictions. I marked the documents Exhibit R1.
· Various emails concerning issues with Mr Miloskovski exchanged between Mark Senior (Supervisor) and Mr Camp during 2023. I marked the emails and supporting documents Exhibit R2.
· A list of ‘Employee of the month’ recipients and a supporting document. Mr Miloskovski won this award for the month of June 2022. I marked the documents Exhibit R3.
· An ‘Internal Investigation Questionnaire’ document prepared based on answers given by Mr Miloskovski on 23 February 2023. I marked the documents Exhibit R4.
· A ‘One to One Questionnaire’ completed by Mr Miloskovski on 13 April 2023. I marked this document Exhibit R5.
· Records of various ‘Toolbox Talks’ which dealt with safety issues such as the use of mobile phones. I marked the documents Exhibit R6.
· A record of a verbal warning issued to Mr Miloskovski on 17 January 2023 for allegedly refusing to perform troubleshooting duties. The parties agreed Mr Miloskovski had not seen this document before it was filed in the Commission and Mr Miloskovski disputed the contents. I marked the letter Exhibit R7.
· Castaway Paper filed video footage of the relevant events on the factory floor on 23 June 2023. I marked the video footage Exhibit R8.
· A response document from Castaway Paper. This contained a mixture of evidence and submissions. I marked this document Exhibit R9.
· A further ‘Toolbox Talks’ document concerning the napkin section. I marked this document Exhibit R10.
· An email from Mr Senior to Mr Camp on 9 May 2023 concerning a disagreement between Mr Senior and Mr Miloskovski. I marked this Exhibit R11.
· A position description for the machine operator position. I marked this Exhibit R12.
· A policy document concerning breaks. I marked this Exhibit R13.
· A policy document concerning phone use. I marked this Exhibit R14.
· Screenshots showing training sessions were held by Castaway Paper in 2021 and 2022 concerning bullying and how to communicate complaints in the workplace. I marked the screenshots Exhibit R15.
· A warehouse operations log for 26 April 2023. I marked this Exhibit R16.
· A job description and person specification for the machine operator role. I marked this Exhibit R17.
· An excerpt of a spreadsheet containing work orders for napkins. I marked the excerpt Exhibit R18.
· An email from a customer raising concerns with packaging work by Castaway Paper on 17 May 2023. I marked the email Exhibit R19.
Mr Miloskovski did not require Mr Camp or Mr Scaccabarrozzi for cross-examination in relation to this evidence.
Mr Camp and Mr Scaccabarrozzi both made oral submissions during the determinative conference.
When can the Commission order a remedy for unfair dismissal?
Section 390 of the FW Act provides that the Commission may order a remedy if:
(a) Mr Miloskovski was protected from unfair dismissal at the time of being dismissed; and
(b) Mr Miloskovski has been unfairly dismissed.
Both limbs must be satisfied. I am therefore required to consider whether Mr Miloskovski was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that Mr Miloskovski was so protected, whether Mr Miloskovski has been unfairly dismissed.
When is a person protected from unfair dismissal?
Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:
(a)the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii)an enterprise agreement applies to the person in relation to the employment;
(iii)the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.
When has a person been unfairly dismissed?
Section 385 of the FW Act provides that a person has been unfairly dismissed if the Commission is satisfied that:
(a) the person has been dismissed;
(b) the dismissal was harsh, unjust or unreasonable;
(c)the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Was Mr Miloskovski dismissed?
There was no dispute and I find that Mr Miloskovski’s employment with Castaway Paper terminated at the initiative of Castaway Paper effective 28 June 2023.
I am therefore satisfied that Mr Miloskovski has been dismissed within the meaning of s.385 of the FW Act.
Initial matters
Under s.396 of the FW Act, the Commission is obliged to decide the following matters before considering the merits of the application:
(a)whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c)whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.
It is not dispute and I find that Mr Miloskovski’s application was filed within the relevant 21-day period, and he is protected from unfair dismissal. Mr Miloskovski was employed for over 13 years, his employment with Castaway Paper was covered by the Graphic Arts, Printing and Publishing Award 2020 (Award) and his earnings are well below the high-income threshold. Castaway Paper’s Form F3 response indicated it had around 30 employees and Castaway Paper did not argue the Small Business Fair Dismissal Code was relevant, or that Mr Miloskovski’s dismissal was a case of genuine redundancy.
Having considered each of the initial matters, I am required to consider the merits of Mr Miloskovski’s application.
Was the dismissal harsh, unjust or unreasonable?
Section 387 of the FW Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission 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.
I am required to consider each of these factors, to the extent they are relevant to the factual circumstances before me.[1]
I set out my findings on the evidence, and my consideration of each of the factors in s.387 of the FW Act, below.
Findings on the evidence
I do not consider there is significant factual dispute between the parties in relation to the key events in this case, particularly given Castaway Paper has provided video footage that captures many of the key events.
I consider the following is clear on the evidence provided by the parties:
(i)Mr Miloskovski was issued with a written warning on 21 February 2023 for breaching Castaway Paper’s policy regarding the use of mobile phones in the workplace.[2]
(ii)Mr Miloskovski was late to return from his lunch break on 23 June 2023 and did not have a reasonable excuse for being late.
(iii)Mr Miloskovski was initially holding his phone when he returned to the factory floor, but he had put it away by the time he commenced working on the machinery.
(iv)A discussion occurred between Mr Miloskovski, Mr Scaccabarrozzi and Mr Erler after Mr Miloskovski returned from his lunch break. Mr Miloskovski was reprimanded for being late and told he needed to attend a meeting with Mr Camp and his supervisors later that afternoon. The discussion upset Mr Miloskovski and an argument of some degree occurred between Mr Miloskovski and Mr Scaccabarrozzi. Having viewed the video footage, I do not consider either party deliberately attempted to threaten the other party physically.
(v)Mr Miloskovski did not comply with several directions from Mr Scaccabarrozzi to return to his work-station and instead spoke to other co-workers about the conflict and also about whether he could bring a support person to the meeting with Mr Camp and his supervisors. This conduct meant less productive work was performed by Mr Miloskovski and the other employees he spoke with, albeit for a reasonably brief period.
(vi)Mr Miloskovski had no documented performance or conduct issues prior to 2023 and he was recognized as an experienced and competent employee.
(vii)A meeting was held on 23 June 2023 between Mr Miloskovski, Mr Camp, Mr Scaccabarrozzi and Mr Erler to discuss Mr Miloskovski returning late from his lunch break. During this meeting, Mr Miloskovski raised concerns about Mr Scaccabarrozzi’s behaviour towards him earlier that day and alleged he felt threatened by Mr Scaccabarrozzi. Mr Miloskovski requested access to the video footage so he could review what had occurred. Mr Miloskovski was permitted to have a support person present at this meeting.
(viii)Castaway Paper did not intend to dismiss Mr Miloskovski for returning late from his lunch break but may have imposed some other punishment.
(ix)Mr Camp and others reviewed the footage of the events on the factory floor later that day. They did not identify any threatening conduct from Mr Scaccabarrozzi, but did observe:
· Mr Miloskovski holding his phone on the factory floor in breach of company policy;
· Mr Miloskovski was later than he had initially claimed; and
· Mr Miloskovski was away from his machine for a total of around 75 minutes comprising his break and the time he was talking to Mr Scaccabarrozzi and other employees.
(x)After becoming aware of the further issues, Mr Camp arranged a further meeting with Mr Miloskovski on 26 June 2023. Mr Miloskovski attended with a support person. During this meeting, Mr Camp and others outlined the further issues they had identified with Mr Miloskovski’s behaviour on 23 June 2023 after reviewing the video footage. Mr Camp and others also explained that the footage did not indicate Mr Scaccabarrozzi had physically threatened Mr Miloskovski.
(xi)Mr Miloskovski was not shown the video footage, despite his earlier request, and did not see the footage until it was filed by Castaway Paper as part of this case.
(xii)On 28 June 2023, Mr Miloskovski attended a further meeting with Mr Camp and others where he was summarily dismissed and provided with a termination letter. Mr Miloskovski did not bring a support person, but this was offered to him.
I do not consider it is clear whether Mr Miloskovski was verbally warned about not following directions on 17 January 2023. I suspect something occurred given Mr Senior and Mr Camp signed the record. However, the record was not shown to Mr Miloskovski at the time it was made, and he disputes the contents. In the circumstances, I do not consider I can afford the warning any significant weight. Further, it has limited relevance given Mr Miloskovski was summarily dismissed for alleged serious misconduct on 23 June 2023.
I do not have sufficient evidence to find that Castaway Paper was looking for reasons to dismiss Mr Miloskovski because of his work restrictions. Mr Camp presented as a credible manager during the determinative conference, and he strongly denied this had occurred. It also appears to me that Castaway Paper had been assisting Mr Miloskovski by allowing him to work reduced hours and modified duties since his accident.
I suspect a factor that did contribute to the dismissal decision was the dissatisfaction that arose from Mr Scaccabarrozzi being accused of threatening behaviour by Mr Miloskovski. However, as I indicated during the determinative conference, Mr Miloskovski obviously considered something untoward happened because he asked for access to the video footage to verify his complaint. He would not have logically made this request if he had concocted the allegation. As it turns out, Castaway reviewed the footage and considered it exonerated Mr Scaccabarrozzi but raised more conduct issues concerning Mr Miloskovski. I think it is clear Mr Miloskovski was upset about his conversation with Mr Scaccabarrozzi and that his behaviour afterwards, in not returning promptly to his workstation, must be viewed in that context. I accept Mr Miloskovski speaking English as a second language is likely to have contributed to how he described Mr Scaccabarrozzi’s conduct. I also consider it is clear from the video footage that Mr Scaccabarrozzi did not do anything that I would describe as physically intimidating towards Ms Miloskovski. I put the differing perceptions of the interaction down to human nature and the subjectivity that is often associated with interpreting another person’s behaviour.
Was there a valid reason for the dismissal related to Mr Miloskovski’s capacity or conduct?
In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”[3] and should not be “capricious, fanciful, spiteful or prejudiced.”[4] However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[5]
Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.[6] The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.[7]
Although Mr Miloskovski was summarily dismissed for serious misconduct, this does not alter the assessment of whether there was a valid reason for dismissal for the purposes of s.387(a) of the FW Act.[8] However, the fact that Mr Miloskovski was summarily dismissed can be considered as an other relevant factor under s.387(h) of the FW Act and a conclusion that summary dismissal was disproportionate to the gravity of the misconduct may support a conclusion the termination was harsh.[9]
I find there was a valid reason for Mr Miloskovski’s dismissal. He had previously been warned in writing about using his mobile phone on the factory floor and he should have made sure he was not carrying his phone when he returned to the factory floor on 23 June 2023. Mr Miloskovski was also late in returning from his lunch break and he did not comply with directions from a supervisor, Mr Scaccabarrozzi. I find this combined conduct by Mr Miloskovski provided a valid reason for his dismissal.
Was Mr Miloskovski notified of the reason for dismissal?
Proper consideration of s.387(b) requires a finding to be made as to whether Mr Miloskovski “was notified of that reason”. Contextually, the reference to “that reason” is the valid reason found to exist under s.387(a).[10] The notification of the reason must occur prior to when a decision to dismiss the employee is made.[11]
I find that Mr Miloskovski was notified of the reasons for his dismissal on 26 June 2023, and that this occurred before Castaway Paper made its decision to terminate his employment.
Was Mr Miloskovski given an opportunity to respond to any valid reason related to his capacity or conduct?
An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment.[12]
The opportunity to respond does not require formality and this factor is to be applied in a common-sense way to ensure the employee is treated fairly.[13] Where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements.[14]
I find Mr Miloskovski was provided with an opportunity to respond to the reasons for his dismissal during the meeting on 26 June 2023, and that this occurred before a final decision was made to terminate his employment. Mr Miloskovski had a support person at this meeting.
I consider Mr Miloskovski should have been provided with access to the video footage prior to being dismissed, but I will consider this as an “other relevant matter” below.
Did Castaway Paper unreasonably refuse to allow Mr Miloskovski to have a support person present to assist at discussions relating to the dismissal?
I find that Castaway Paper did not unreasonably refuse to allow Mr Miloskovski to have a support person at the meetings on 23 June 2023, 26 June 2023, and 28 June 2023. Mr Miloskovski had a support person present at the meetings on 23 and 26 June 2023. I accept Mr Camp’s evidence that he was offered an opportunity to bring a support person to the meeting on 28 June 2023.
Was Mr Miloskovski warned about unsatisfactory performance before the dismissal?
As the dismissal related to alleged misconduct rather than unsatisfactory performance, this factor is not relevant to the present circumstances.
To what degree would the size of Castaway Paper’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
Although Castaway Paper is a reasonably small business, I consider the procedures it followed in effecting the dismissal were generally appropriate. I consider this factor is neutral.
To what degree would the absence of dedicated human resource management specialists or expertise in Castaway Paper’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
Although Castaway Paper does not appear to have a dedicated human resources manager, I consider the procedures it followed in effecting the dismissal were generally appropriate. I consider this factor is neutral.
What other matters are relevant?
Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.
I find Mr Miloskovski’s service of over 13 years with Castaway Paper is a relevant factor. It also appears his service was unblemished for approximately the first 12 and a half years.
I consider Mr Miloskovski’s summary dismissal is a relevant matter. I do not consider Mr Miloskovski’s conduct on 23 June 2023 justified summary dismissal. I do not consider being late returning to work after lunch, carrying a mobile phone on the factory floor, and talking to other employees about a conflict in the workplace justified summary dismissal for an employee with over 13 years of service. I consider the loss of production issues raised by Castaway Paper to be exaggerated when the time period involved is considered in the context of Mr Miloskovski’s lengthy service to the company. I also consider it is difficult for Castaway Paper to claim Mr Miloskovski’s conduct was serious enough to justify summary dismissal when they allowed him to perform work as usual on 26 June 2023 despite being aware of his conduct.
I consider Mr Miloskovski’s age and that he speaks English as a second language to be relevant matters.
I also consider Castaway Paper’s failure to provide Mr Miloskovski with an opportunity to view the video footage before he was dismissed to be a relevant matter.
Is the Commission satisfied that the dismissal of Mr Miloskovski was harsh, unjust or unreasonable?
I have made findings in relation to each matter specified in s.387. I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable.[15]
Having considered each of the matters specified in s.387 of the FW Act, I am satisfied that the dismissal of Mr Miloskovski was harsh.
Although I have found there was a valid reason for dismissal and that procedural fairness was generally provided to Mr Miloskovski, I consider the other factors identified above mean that the dismissal was harsh in all the circumstances.
Conclusion
I am therefore satisfied that Mr Miloskovski was unfairly dismissed within the meaning of s.385 of the FW Act.
Remedy
Being satisfied that Mr Miloskovski:
· made an application for an order granting a remedy under s.394;
· was a person protected from unfair dismissal; and
· was unfairly dismissed within the meaning of s.385 of the FW Act,
I may, subject to the FW Act, order Mr Miloskovski’s reinstatement, or the payment of compensation to Mr Miloskovski.
Under s.390(3) of the FW Act, I must not order the payment of compensation to Mr Miloskovski unless:
(a) I am satisfied that reinstatement of Mr Miloskovski is inappropriate; and
(b)I consider an order for payment of compensation is appropriate in all the circumstances of the case.
Is reinstatement of Mr Miloskovski inappropriate?
Mr Miloskovski does not seek reinstatement. I consider that reinstatement is inappropriate in this case.
Is an order for payment of compensation appropriate in all the circumstances of the case?
Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, “[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…”[16]
Where an applicant has suffered financial loss as a result of the dismissal, this may be a relevant consideration in the exercise of this discretion.[17]
Mr Miloskovski has suffered financial loss in circumstances where I have found that his dismissal was harsh. In all the circumstances, I consider that an order for payment of compensation is appropriate.
Compensation – what must be taken into account in determining an amount?
Section 392(2) of the FW Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to Mr Miloskovski in lieu of reinstatement including:
(a) the effect of the order on the viability of Castaway Paper’s enterprise;
(b) the length of Mr Miloskovski’s service;
(c)the remuneration that Mr Miloskovski would have received, or would have been likely to receive, if Mr Miloskovski had not been dismissed;
(d)the efforts of Mr Miloskovski (if any) to mitigate the loss suffered by Mr Miloskovski because of the dismissal;
(e)the amount of any remuneration earned by Mr Miloskovski from employment or other work during the period between the dismissal and the making of the order for compensation;
(f)the amount of any income reasonably likely to be so earned by Mr Miloskovski during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the Commission considers relevant.
I consider all the circumstances of the case below.
Effect of the order on the viability of Castaway Paper’s enterprise
I raised this issue with Mr Camp during the determinative conference. When I explained to Mr Camp that the compensation cap would mean the maximum amount that could be awarded to Mr Miloskovski is around $30,000, Mr Camp suggested an order in that vicinity would have “some adverse affects”. Mr Camp also referred to some cash flow issues. I have no evidence about Castaway Paper’s overall financial position.
Based on the limited evidence before me, I am satisfied that an order for compensation would not have any significant effect on Castaway Paper’s viability.
Length of Mr Miloskovski’s service
Mr Miloskovski’s length of service was over 13 years. I consider this is clearly a long term of employment.
I consider that Mr Miloskovski’s length of service may support increasing the amount of compensation ordered.
Remuneration that Mr Miloskovski would have received, or would have been likely to receive, if Mr Miloskovski had not been dismissed
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.”[18]
Mr Miloskovski worked at Castaway Paper for over 13 years and indicated he planned to work there until retirement. However, there is evidence of him having increasing issues with superiors during 2023. If Mr Miloskovski was not dismissed on 28 June 2023, a lesser punishment would likely have been imposed. Given Mr Miloskovski was already on a written warning, I suspect a final written warning would have been issued. I consider it reasonably likely Mr Miloskovski would have continued clashing with superiors after 28 June 2023 and that his employment was likely to end within approximately the next six months. I find Mr Miloskovski’s employment was likely to continue until 28 December 2023.
Mr Miloskovski’s annual salary rate was $64,451.21.[19] Although he was working reduced hours at the time of his dismissal, he gave evidence he was receiving top-up payments from a compulsory third-party insurance business following his accident on 29 November 2022. I consider this means his full salary rate should be used for the remuneration calculations.
I calculate the remuneration Mr Miloskovski would have been likely to receive from 28 June 2023 to 28 December 2023 to be $32,225.61 plus superannuation.
Efforts of Mr Miloskovski to mitigate his loss
Mr Miloskovski must provide evidence that he has taken reasonable steps to minimise the impact of the dismissal.[20] What is reasonable depends on the circumstances of the case.[21]
Mr Miloskovski has not provided any evidence about steps he has taken to find other work after being dismissed. That would normally justify a deduction to the compensation amount. However, Mr Miloskovski has not fully recovered from his injuries and has been receiving 80% of his regular wage via motor vehicle insurance payments.
Given Mr Miloskovski’s unfortunate and blameless accident driving to work at night on 29 November 2022, and the substantial impact it has had on his life, I do not consider a deduction for failing to mitigate his loss to be appropriate based on all the circumstances. That is particularly the case given I have formed the view the insurance payments should be taken into account in assessing his remuneration earned, as explained below.
Amount of remuneration earned by Mr Miloskovski from employment or other work during the period between the dismissal and the making of the order for compensation
Mr Miloskovski’s evidence was that he has been paid 80% of his regular wage with Castaway Paper since his dismissal on 28 June 2023 and he indicated he thinks these payments will continue until May 2024.
I was unable to locate any authorities on the issue of whether payments made by an insurance company following a motor vehicle accident fall within the meaning of “remuneration”.
It is well established that workers’ compensation payments are considered remuneration and social security payments are not.[22] The logic behind these respective positions was explained in the following terms by Justice Moore in Brown v Power: [23]
“In my opinion, it is appropriate to take into account payments made to an employee under the Compensation Act. The payments are paid notionally by the employer though it may be accepted, and is the fact in this case, that they are almost always paid by an insurance company acting on behalf of the employer. The scheme of the Compensation Act dictates that result. However it is, as I earlier noted, in satisfaction of an obligation of the employer. In this respect payments under the workers compensation legislation are in a quite different position to payments under the Social Security Act 1991 (Cth). Such payments are not to be treated as remuneration for the purposes of s170EE(3) and are thus not to be taken into account in any calculation of compensation under s170EE(3): see Janicek v ICI Dulux Australia, 4 September 1995, unreported, per Wilcox CJ.”
The difficulty in applying that logic to this case is that it appears Mr Miloskovski is receiving compulsory third party insurance payments as a result of a policy that was not paid for by Castaway Paper. I consider that weighs in favour of finding the payments do not constitute remuneration. However, there is a link between the payments and Mr Miloskovski’s former employment because the payments are paid at a rate of 80% of his earnings with Castaway Paper.
On balance, I consider the insurance payments made to Mr Miloskovski do constitute “remuneration” from “employment or other work” for the purposes of s.392 of the FW Act. I consider the payments are closer to workers’ compensation payments given they are linked to Mr Miloskovski’s salary rate and are being provided as compensation for income lost for work that is not being performed. I also consider there would be an element of double-dipping for Mr Miloskovski if the payments already made at 80% of his salary rate are not taken into account.
During the approximate period of 25 weeks between Mr Miloskovski’s dismissal and the making of the compensation order, I calculate Mr Miloskovski has been paid $24,788.93.
Amount of income reasonably likely to be so earned by Mr Miloskovski during the period between the making of the order for compensation and the actual compensation
Given I have determined the end of the anticipated period of employment is 28 December 2023, I calculate Mr Miloskovski will receive an additional payment of $991.56 during this period.
Other relevant matters
Neither party submitted that there were any other relevant matters.
I consider there are other relevant matters but will deal with those below when assessing whether the compensation order is appropriate.
Compensation – how is the amount to be calculated?
As noted by the Full Bench, “[t]he well-established approach to the assessment of compensation under s.392 of the FW Act… is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).[24] This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages[25].”[26]
The approach in Sprigg is as follows:
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. 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 that the employee receives the actual amount he or she would have received if they had continued in their employment.
Step 1
I have estimated that Mr Miloskovski would have remained employed by Castaway Paper until 28 December 2023. This is the “anticipated period of employment”.[27]
The remuneration Mr Miloskovski would have received, or would have been likely to have received, from his dismissal on 28 June 2023 until 28 December 2033 is $32,225.61 plus superannuation.
Step 2
Only monies earned since termination for the anticipated period of employment are to be deducted.[28] Given I have determined Mr Miloskovski’s insurance payments are “remuneration”, he has earned $24,788.93 since his dismissal.
For the reasons outlined above, I have not applied a discount for failure to mitigate loss. That leaves a figure of $7,436.68 plus superannuation.
Step 3
I now need to consider the impact of contingencies on the amounts likely to be earned by Mr Miloskovski for the remainder of the anticipated period of employment.[29]
I will make a deduction of $991.56 based on the additional insurance payment Mr Miloskovski will receive between the making of the compensation order and the end of the anticipated period of employment. I will not make any further deductions given I know Mr Miloskovski’s earnings during the anticipated period of employment. That leaves an amount of $6,445.12 plus superannuation.
Step 4
I have considered the impact of taxation but have elected to settle on a gross amount of $6,445.12 plus superannuation and leave taxation for determination.
Compensation – is the amount to be reduced on account of misconduct?
If I am satisfied that misconduct of Mr Miloskovski contributed to the employer’s decision to dismiss, I am obliged by s.392(3) of the FW Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.
Given I have found there was a valid reason for dismissal based on Mr Miloskovski’s misconduct, I will reduce the compensation amount by 5%. That leaves a figure of $6,122.86 plus superannuation.
Compensation – how does the compensation cap apply?
Section 392(5) of the FW Act provides that the amount of compensation ordered by the Commission must not exceed the lesser of:
(a) the amount worked out under s.392(6); and
(b)half the amount of the high income threshold immediately before the dismissal.
Section 392(6) of the FW Act provides:
(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…
Given Mr Miloskovski’s gross weekly wage rate of $1,239.45, a compensation cap of $32,225.61 plus superannuation applies in accordance with s.392(6) of the FW Act.
Is the level of compensation appropriate?
Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case.”[30]
The application of the Sprigg formula has resulted in an outcome where Mr Miloskovski would be awarded compensation of $6,122.86 plus superannuation, which is $673.51 at the current rate of 11%. That equates to around less than five weeks of wages for Mr Miloskovski, plus superannuation.
Given I have found that Mr Miloskovski should not have been summarily dismissed, the effect of the proposed order would be that Mr Miloskovski would not even receive an amount equivalent to the payment in lieu of notice that I think he should have already been paid.
I consider a compensation order of $6,122.86 plus superannuation is too low in all the circumstances of this case. I am particularly conscious of Mr Miloskovski’s length of service, age and that I consider he should have already received a payment in lieu of notice equating to five weeks. I also consider it is fair to increase the amount given Mr Miloskovski’s insurance payments have been taken into account in circumstances when the premiums for the compulsory third party insurance have not been paid by Castaway Paper.
I have decided for these reasons to increase the compensation order to $10,000 gross plus superannuation of $1,100.
I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the FW Act.
Compensation order
Given my findings above, I will make an order that Castaway Paper must pay Mr Miloskovski $10,000 less taxation as required by law, plus superannuation of $1,100.00 to be paid into Mr Miloskovski’s nominated fund, with both payments to be made within 14 days of the date of this decision.
COMMISSIONER
Appearances:
Mr Miloskovski on behalf of himself, assisted by Ms Miloskovska.
Mr Camp and Mr Scaccabarrozzi on behalf of the Respondent.
Hearing details:
2023.
Sydney (in person);
20 December 2023.
[1] Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].
[2] Exhibit A2.
[3] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
[4] Ibid.
[5] Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.
[6] Edwards v Justice Giudice [1999] FCA 1836, [7].
[7] King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000), [23]-[24].
[8] Thomas Brian Potter v WorkCover Corporation Print948009 (AIRCFB Ross VP, Williams SDP and Foggo C, 15 June 2004), [48].
[9] Ibid at [55].
[10] Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].
[11] Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].
[12] Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].
[13] RMIT v Asher (2010) 194 IR 1, 14-15.
[14] Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.
[15] ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7].
[16] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].
[17] Vennix v Mayfield Childcare Ltd [2020] FWCFB 550, [20]; Jeffrey v IBM Australia Ltd [2015] FWCFB 4171, [5]-[7].
[18] He v Lewin [2004] FCAFC 161, [58].
[19] Form F3 employer response at p 22 of the Hearing Book.
[20] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].
[21] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.
[22] Sprigg at [26] citing Ross VP’s decision in Shorten v Australian Meat Holdings (1996) 70 IR 360.
[23] (1996) 66 IR 1.
[24] (1998) 88 IR 21.
[25] [2013] FWCFB 431.
[26] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [16].
[27] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].
[28] Ibid.
[29] Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].
[30] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].
Printed by authority of the Commonwealth Government Printer
<PR769780>
1
14
0