Scott Cordingly v Griffith Corporation Pty Ltd

[2015] FWC 1067

[2015] FWC 1067

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Scott Cordingly
v
Griffith Corporation Pty Ltd
(U2014/7575)

DEPUTY PRESIDENT LAWRENCE SYDNEY, 17 FEBRUARY 2015

Application for relief from unfair dismissal.

Introduction

[1] An application pursuant to s.394 of the Fair Work Act 2009 (the Act) for a remedy for unfair dismissal was lodged with the Fair Work Commission (the Commission) by Mr Scott Cordingly (the Applicant) against his former employer Griffith Corporation Pty Ltd (the Respondent) on 27 May 2014.

[2] The application was lodged by the Applicant’s union, the Transport Workers’ Union of Australia (TWU).

[3] The Applicant was employed by the Respondent on 18 March 2013 as a truck driver. He was notified of his dismissal on 9 May 2014 and it took effect on the same day.

[4] In his F2 form, the Applicant sought reinstatement and/or monetary compensation of 26 weeks at $2,181.97 totalling $56,731.22. The alleged reasons for the dismissal were “failure to manage fatigue and to meet delivery deadlines”. The Applicant was employed as a casual change-over driver between Eastern Creek, Western Sydney and Clybucca on the far-north coast of New South Wales. He would usually meet trucks coming from Queensland.

[5] The Applicant was granted leave to attend a family funeral in Goulburn on 9 May. On his return, he was dismissed by the Respondent’s Manager, Mr Roy Petersen. He was advised that he “could not manage his fatigue” and that, as a casual, he could be dismissed. He was also advised that he was not a “team player”.

[6] The Respondent, in its F3 response provides the following information:

● The Applicant was covered by the Road Transport (Long Distance Operations) Award 2010 [MA000036]

● As a casual employee, the Applicant earned on average $1,800 per week.

● The Respondent had 51 employees.

[7] The Respondent stated that the Applicant had received three prior written warnings. These were attached:

● 20 November 2013 - driving in excess of 110 kph but less than 115 kph during the week ending 10 November 2013;

● 3 December 2013 - failing to apply the hand brake causing $5,500 damage to the truck on 3 December 2013;

● 21 March - driving in excess of 105 kph but less than 110 kph during the week ending 9 March 2014.

[8] The Respondent formed the view, after these warnings that the Applicant started taking excessive breaks and arriving late to his destination. The Respondent then decided to terminate the Applicant.

[9] I conducted a telephone programming conference on 4 November 2014.

[10] The hearing took place in Sydney on 11 November 2015. The Applicant was represented by Mr A. Guy and Mr A. Arjonilla of the TWU. The Respondent was represented by Mr G. Christodoulou. Mr Christodoulou was granted permission to appear pursuant to s.596.

[11] As well as oral submissions and evidence the Applicant relied on:

● Submissions filed on 3 October 2014;

● His witness statement (Exhibit G1);

● Statement of Neal Harper, TWU official (Exhibit G2).

[12] As well as oral submissions and evidence the Respondent relied on:

● Submissions filed on 27 October 2014;

● Statement of Roy Petersen (Exhibit C1)

[13] At my direction, the following written submission were filed after the hearing:

● Applicant - 26 November 2014;

● Respondent - 3 December 2014.

Protection from Unfair Dismissal

[14] An order for reinstatement or compensation may only be issued where I am satisfied the applicant was protected from unfair dismissal at the time of the dismissal.

[15] Section 382 sets out the circumstances that must exist for the applicant to be protected from unfair dismissal:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(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.

[16] There was no dispute that the Applicant was covered by a modern award, the Road Transport (Long Distance Operations) Award 2010 (MA000039) in compliance with s.382(b) nor that the Applicant was below the high income threshold. However, because of the Applicant’s casual status I need to be satisfied that the Applicant was a person protected from unfair dismissal in accordance with s.382(a). I should note that the Respondent did not take this point.

[17] Section 396 provides that certain matters must be determined by the Commission before proceeding to deal with the merits of a matter. It provides:

“396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 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.”

[18] The “minimum employment period” is defined in s.383 of the Act as follows:

“383 Meaning of minimum employment period

The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;
(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year ending at that time.”

[19] In order for a casual employee to satisfy the minimum period of employment they must come within the provisions of s.384 which relevantly provide:

“384 Period of employment

(1) An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.

(2) However:

(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:

(i) the employment as a casual employee was on a regular and systematic basis; and
(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

(b) if:

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and
(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and
(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee’s period of employment with the new employer.”

[20] The Applicant was employed for a little over 12 months and appears to have worked shifts of at least 11 hours. His evidence (PN165-PN168) was that he worked an average of 60 hours per week. There was no doubt that he was employed on a regular and systematic basis and had a reasonable expectation of continuing employment on a regular and systematic basis within s.384.

[21] I conclude that the Applicant’s minimum employment period was well in excess of the minimum defined by s.383 and that he was therefore protected from unfair dismissal pursuant to s.382.

Was the dismissal unfair?

[22] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

“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.

Was the Applicant dismissed?

[23] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for purposes of Part 3–2 of the Act. Section 386 of the Act provides that:

“386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

(2) However, a person has not been dismissed if:

(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or

(b) the person was an employee:

(i) to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;
and the employment has terminated at the end of the training arrangement; or

(c) the person was demoted in employment but:

(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and
(ii) he or she remains employed with the employer that effected the demotion.

(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.”

[24] There was no submission that the Applicant was not dismissed and I am satisfied that he was. It is also clear that s.385(c) and (d) have no application.

Harsh, Unjust or Unreasonable

[25] Having dealt with each of s.385(a), (c) and (d) of the Act, I must consider whether I am satisfied the dismissal was harsh, unjust or unreasonable. The criteria I must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the Act:

“387 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.

Approach of the Commission

[26] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:

“... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”

[27] Vice President Ross, as he then was, in B Rose v Telstra Corporation Limited (1998) Q9292 (Rose) restated the above proposition and also stated:

“In my view whether there has been a `fair go all round’ is a matter which I think is relevant and hence I am to have regard to it determining whether the termination was harsh, unjust or unreasonable. It is not necessarily determinative but it is a factor to be taken into account.”

[28] The Applicant submits the dismissal was harsh, unjust and unreasonable because:

● The maximum number of hours that can be worked under a Basic Fatigue Management System in New South Wales is 14 in a 24 hour period. The Applicant was instructed by Mr Petersen to falsify his work diary at a location short of Eastern Creek so that he did not appear to breach this maximum hour limit. He was also discouraged from taking breaks between Sydney and Clybucca.

● The Applicant does not deny receiving the three warnings but says that he immediately reported the damage to the vehicle which was the subject of the second warning. He also says that the Respondent’s representatives never followed up the warnings for speeding and that they were relatively minor in any event.

● The dismissal on 9 May was without reason and natural justice.

● The Applicant was not notified of the reason for the dismissal or given an opportunity to respond. By the Applicant’s account, in Exhibit G1, he was given no reason for the dismissal by Mr Petersen, even during the meeting.

● Even if there were issues that justified some sanction by the Respondent, the summary nature of the dismissal was completely inappropriate.

● The Applicant seeks compensation up to the statutory maximum. He obtained casual work after the dismissal but earned less than half his former take-home pay with the Respondent. It appeared that by late September his earnings had increased to approximately pre-dismissal levels but this was from two jobs and their future was uncertain.

[29] The Respondent submits the dismissal was not harsh, unjust and unreasonable because:

● There was a valid reason for the dismissal based on the three warnings;

● There was also evidence of the Applicant deliberately delaying his arrival to his destination.

● The Applicant was notified of the reason and provided an opportunity to respond in respect of the warnings. The Respondent concedes that this did not occur with respect to the delayed arrival allegation.

● The Respondent concedes that there were some procedural fairness deficiencies in the process followed.

● Given the Applicant’s casual employment and the issues with his performance, the Respondent submits that his employment would not have lasted much more than one week.

● Mr Petersen, in Exhibit C1, denied the Applicant’s allegation of falsification of work diary.

● Mr Petersen’s evidence was that his monitoring of the Applicant revealed that he appeared to stop at the same place each day for an excessive period, thus causing late arrivals.

Valid Reason - s.387(a)

[30] In Container Terminals Australia Limited v Toby [2000] Print S8434, a Full Bench said ‘In our view, the consideration of whether there was a valid reason for termination is a separate issue from the determination of whether a termination was harsh, unjust or unreasonable’.

[31] Northrop J in Selvachandranv Peteron Plastics Pty Ltd (1995) 62 IR 371 said:

“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct, or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, commonsense way to ensure that the employer and employee are each treated fairly ...”

[32] In Parmalat Food Products Pty Ltd v Wililo, [2011] FWAFB 1166, the Full Bench held:

“The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair. The finding of a valid reason is a very important consideration in establishing the fairness of a termination. Having found a valid reason for termination amounting to serious misconduct and compliance with the statutory requirements for procedural fairness it would only be if significant mitigating factors are present that a conclusion of harshness is open.”

[33] The Full Bench majority in B, C and D v Australian Postal Corporation T/A Australia Post [2013] FWCFB 6191 provides a useful summary of the approach to be taken by the Commission in weighing the factors to be considered under s.387:

“[20] Northrop J’s reasoning anticipated the reasoning of the High Court in Victoria v Commonwealth – that s.170DE(2) by its operation could render invalid a reason that would otherwise have been a valid reason. The fact that some dismissals are “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason” means that the class of dismissals that are “harsh, unjust or unreasonable” is greater than the class of dismissals where there is no “valid reason” for the dismissal.

[21] Section 387 specifies a range of matters that must be considered in each case. Section 387(h) requires consideration of “any other matters that FWA considers relevant”. In any given case, there will be a range of matters, beyond those specified in s.387(a) to (g), that rationally bear upon whether the dismissal is “harsh, unjust or unreasonable” and thus are “relevant matters” that must be considered pursuant to s.387(h).

[22] Often it will not make any difference to the ultimate outcome whether a particular circumstance is considered pursuant to s.387(a) in determining whether there is a valid reason, or as a relevant matter pursuant to s.387(h), leading to the ultimate determination of whether the dismissal was “harsh, unjust or unreasonable”. However, in some cases it may matter greatly. That will tend to be so when the particular misconduct, shorn of the personal circumstances of the employee and the broader context beyond the particular acts or omissions that are said to constitute the misconduct, is clearly a matter that a reasonable employer is entitled to take seriously. This is such a case.

...

[34] In considering whether there was a valid reason for a dismissal under s.387(a), the reason(s) being considered are the employer’s reason(s). In a misconduct case, the Commission is concerned with whether the misconduct in fact occurred, not with whether the employer has reasonable grounds to believe that it occurred (eg. Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201, Sherman v Peabody Coal Ltd (1998) 88 IR 408; Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1). ”

[35] Subject to that, as indicated by Northrop J in Selvachandran, “valid reason” is assessed from the perspective of the employer and by reference to the acts or omissions that constitute the alleged misconduct on which the employer relied, considered in isolation from the broader context in which they occurred. It is the reason of the employer, assessed from the perspective of the employer, that must be a “valid reason” where “valid” has its ordinary meaning of “sound, defensible or well founded”. As Northrop J noted, the requirement for a valid reason “should not impose a severe barrier to the right of an employer to dismiss an employee”.

[36] A failure to comply with a lawful and reasonable policy is a breach of the fundamental term of the contract of employment that obliges employees to comply with the lawful and reasonable directions of the employer. In this way, a substantial and wilful breach of a policy will often, if not usually, constitute a “valid reason” for dismissal.
. . .

[58] Reaching an overall determination of whether a given dismissal was “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason” involves a weighing process. The Commission is required to consider all of the circumstances of the case, having particular regard to the matters specified in s.387, and then weigh:

(i) the gravity of the misconduct and other circumstances weighing in favour of the dismissal not being harsh, unjust or unreasonable;

against

(ii) the mitigating circumstances and other relevant matters that may properly be brought to account as weighing against a finding that dismissal was a fair and proportionate response to the particular misconduct.”

[34] I respectfully adopt this approach.

Finding as to Valid Reason

[35] It seems to me that the Respondent acted appropriately with respect to the warnings given for exceeding the speed limit. Its vehicles were fitted with GPS satellite tracking devices so that the drivers’ speeds were consistently monitored. There was a Clear Speed Compliance Policy and the Applicant had been provided with induction training. (Exhibit C2) After the hearing detailed Excel spreadsheets were provided to the Commission of the Applicant’s total driving records and speed limit compliance. They were then dealt with in the subsequent written submissions lodged by the parties.

[36] The spreadsheets revealed that there were over 10,000 instances in which the Applicant exceeded the 100 kilometre per hour speed limit. In summary, however, 1.7 percent of the breaches were punishable under the Respondent’s Speed Compliance Policy. There was lot of debate about the Respondent’s consistent enforcement of this policy. However, the point is that the Applicant clearly breached the policy on a number of occasions. He was appropriately warned and the Respondent was entitled to take these breaches into account.

[37] Similarly the warning of 3 December 2013 for damage to a vehicle as a result of the Applicant not properly securing the hand-brake of a vehicle was, in my view, appropriate. The facts were not challenged by the Applicant. Some $6,000 damage was caused to the Respondent’s vehicle.

[38] I am not satisfied that the allegation of the Applicant taking an excessive time for the trip and excessive breaks is made out. There was no direct evidence of this. The Applicant alleged that the work diary had been falsified. This allegation was not substantiated either. Given the well known issues around long haul driver fatigue and its implications for safety, I am prepared to give the Applicant the benefit of the doubt on this aspect.

[39] Because of the three warnings, I find that there was a valid reason for dismissal of the Applicant.

Notification of a Valid Reason - s.387(b)

[40] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made. See Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41] in explicit terms, Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151 and in plain and clear terms, Previsic v Australian Quarantine Inspection Services Print Q3730. In Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 a Full Bench of the Australian Industrial Relations Commission dealing with a similar provision of the Workplace Relations Act 1996 stated the following:

“[73] As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”

[41] In a relevant passage from Previsic at page 34 Holmes C articulates the requirement for the reasons for the dismissal to be put to the Applicant:

“True it is that Mr. Previsic was made aware of those three grounds as part of a range of other possible grounds prior to her determination, but at no stage were those grounds put explicitly to Mr. Previsic by the delegate who was to make the determination in the terms specified in the final determination until after she had made her determination.

Finally an examination of the text of the first two grounds cited leads to the conclusion that they are not specific. It is not clear on the plain meaning of the words what actions Ms. Lawrence is referring to in each of those grounds. Again true it is that by sifting through the letters and attachments sent to Mr. Presivic by Mr. Prothero in the first instance and later by Ms. Lawrence it is possible to come to an understanding of what those grounds meant to Mr. Prothero but it is not clear and explicit that Mr. Lawrence accepted and adopted those interpretations unconditionally and fully as the basis of her own deliberations and determination.”

[42] I accept Mr Guy’s submission that no real reason was given to the Applicant by Mr Petersen for his dismissal. The warnings were not followed through by the Respondent. It is clear from Mr Petersen’s evidence that he was instructed to dismiss the Applicant by the owner of the business based on the reports that the owner had received. Because he was a casual it was not thought necessary to engage in any explanation to the Applicant. Accordingly no reason was provided to the Applicant on 9 May for his dismissal.

[43] I find that the Applicant was not notified in accordance with s.387(b).

Opportunity to respond - s.387(c)

[44] An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality see RMIT v Asher (2010) 194 IR 1, 14-15.

[45] Obviously the Applicant was aware of the three warnings that had been given to him. There is no evidence that these resulted in any process of attempted re-training nor was it made clear what the consequences might be. I find that the Applicant had no opportunity to respond to the reason for dismissal.

Unreasonable refusal by the employer to allow a support person - s.387(d)

[46] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present.

[47] There was no breach of this section but the Applicant had no opportunity to seek assistance given the nature of the dismissal.

Warnings regarding unsatisfactory performance - s.387(e)

[48] I have already noted the warnings that the Applicant received.

Impact of the size of the Respondent on procedures followed - s.387(f)

[49] The Respondent is not a small business and should have had appropriate procedures and practices in place.

Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(g)

[50] No human resources specialists were involved.

Any other matter that the FWC considers relevant

[51] Section 387(h) allows the Commission to consider any other matters it considers relevant. These must be considered in the context of the object of Part 3-2 of the Act contained in s.381(2) to “ensure that a ‘fair go all round’ is accorded to both the employer and the employee concerned”.

[52] I have decided to take into account the Applicant’s personal circumstances. He is the father of a young family whose partner is not in the workforce. He has only been able to obtain limited casual work since the dismissal.

[53] In the circumstances of this case, notwithstanding that I have found the Respondent had a valid reason to dismiss the Applicant, I find that the dismissal was harsh, unjust or unreasonable. The Applicant was not accorded “a fair go” in the procedures adopted by the Respondent. Accordingly I find that the dismissal was unfair within the terms of s.385.

Compensation

[54] Having found that the dismissal was unfair, I now turn to the appropriate remedy.

[55] Section 390 of the Act sets out the circumstances in which I may make an order for reinstatement or compensation.

“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.”

[56] The Applicant does not seek reinstatement and it would not be appropriate given the casual nature of his employment.

[57] Section 390(3)(b) provides that I may only issue an order for compensation to the Applicant if it is appropriate in all the circumstances.

[58] I have found that the applicant has been unfairly dismissed and that reinstatement is not appropriate in all the circumstances. I am satisfied that an order for compensation should be made.

[59] Section 392 of the Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered provides:

“392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. Disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

[60] The method for calculating compensation under s.392 of the Act was dealt with by a Full Bench of the Commission in Bowden, G v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge,[2013] FWCFB 431 (Bowden). In that decision the Full Bench set out the order in which the criteria and other factors should be applied, taking into account authority under the Workplace Relations Act 1996 in Sprigg v Paul’s Licensed Festival Supermarket, (1998) 88 IR 21 and Ellawala v Australian Postal Corporation, Print S5109 (Ellawala). I have adopted the methodology utilised in Bowden in determining the amount of a payment of compensation.

[61] I will now consider each of the criteria in s.392 of the Act.

Remuneration that would have been received: - s.392(2)(c)

[62] The evidence as to the Applicant’s earnings was a bit confused. The Applicant, in his application, asserted that his income averaged $2,181.97 per week. Mr Petersen agreed, in response to questioning by me, that this was a reasonable estimate (see PN 389-396). However, it is apparent that this includes the overnight allowance which is about $400 per week (see PN 402-408).

[63] The Applicant submits that any award of compensation should be based on the Applicant’s total remuneration including any allowances. In its written submission of 3 December 2014, the Respondent accepted that the allowance should be considered as “remuneration”.

[64] I have therefore decided to use the figure of $2,181.97 per week for the purpose of compensation calculation.

[65] I now determine the period of time the Applicant would have remained employed by the Respondent, or would have likely remained employed with the Respondent, had he not been dismissed.

[66] Given the casual nature of his employment I find that three months would have been a reasonable estimate. The remuneration he would have received is therefore $26,183.64.

Remuneration Earned: - s.392(2)(e)

[67] The Applicant stated that he obtained casual work which reduced his income to less than half his former earnings. I am satisfied that a discount to $15,000 is appropriate.

Income likely to be earned: - s.392(2)(f)

[68] This matter is not relevant.

Other matters: - s.392(2)(g)

[69] There are no other matters that I consider appropriate to consider.

Viability: - s.392(2)(a)

[70] This issue was raised by the Respondent but no evidence presented which would justify it being taken into consideration.

Length of Service: - s.392(2)(b)

[71] This was not a factor in this case.

Mitigating efforts: - s.392(2)(b)

[72] In considering whether the Applicant has taken steps to mitigate the loss suffered as a result of the dismissal I should take into account whether the Applicant acted reasonably in the circumstances, (Ellawala).

[73] I find that the Applicant has made efforts to mitigate his loss suffered as a result of the dismissal.

Misconduct: s.392(3)

[74] I find that there should be a further deduction because of the Applicant’s conduct which provided a valid reason for the dismissal. I reduce the compensation to $12,000 as a result of this factor.

Shock, Distress: s.392(4)

[75] I note that the amount of compensation calculated does not include a component for shock, humiliation or distress.

Compensation cap: s.392(5)

[76] I must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the Applicant, or to which the Applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or half the amount of the high income threshold immediately prior to the dismissal.

[77] The high income threshold component is $66,500.

[78] The amount of compensation I will order does not exceed the compensation cap.

[79] I will order the Respondent to pay to the Applicant an amount of $12,000.

Conclusion

[80] I am satisfied that the Applicant was protected from unfair dismissal, and that the dismissal was unfair and a remedy of compensation is appropriate. In accordance with s.381(2) of the Act, I am further satisfied that each party has been accorded a ‘fair go all round’.

[81] An order [PR561126] will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

A. Guy and H. Arjonilla for the Applicant;

G. Christodoulou for the Respondent.

Hearing details:

2014

Sydney:

November 4, 11.

Further written submission

2014

Applicant: November 26;

Respondent: December 3.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR561036>