Sean Steele v St Vincent's Hospital (Melbourne) Limited

[2016] FWC 7450

[2016] FWC 7450

FAIR WORK COMMISSION

FURTHER DECISION IN REGARD

TO REMEDY

Fair Work Act 2009
s.394—Unfair dismissal

Sean Steele
v
St Vincent’s Hospital (Melbourne) Limited
(U2014/6445)

COMMISSIONER CRIBB MELBOURNE, 14 OCTOBER 2016

Application for relief from unfair dismissal - compensation in lieu of reinstatement.

[1] This decision concerns final determination of an amount of compensation, in lieu of reinstatement, to be ordered by the Fair Work Commission, pursuant to section 392 of the Fair Work Act 2009 (the Act). It follows the decision 1 issued on 19 July 2016 in which the Commission found that Mr Steele was unfairly dismissed. In that decision, the Commission was unable to determine an amount of compensation as there was insufficient material before the Commission at that time.2

[2] Accordingly, the parties were requested to provide the Commission with an agreed figure for one year’s pay for Mr Steele. 3 Further, Mr Steele was required to provide the total remuneration earned whilst he was in Western Australia including the appropriate documentation.4

[3] Submissions in relation to remedy, together with documentation relating to Mr Steele’s time in Western Australia, were filed on behalf of Mr Steele on 11 August 2016. The Respondent’s submissions in respect of remedy were filed on 24 August 2016.

[4] As the Commission is now in receipt of all of the necessary information, final determination of an amount of compensation can now be made.

1. Agreed figure for one year’s pay for Mr Steele

[5] Unfortunately, the parties were unable to agree the remuneration that would have been received by Mr Steele had he continued to work for a further year (section 392(2)(c)). The disagreement goes to a number of the elements involved in calculating the remuneration that Mr Steele would have received if he had not been dismissed. I will deal with each of them in turn.

(a) What are the applicable enterprise agreement wage rates and allowances and other issues?

[6] The dispute between the parties concerned whether the wage rate and allowances should be calculated on the basis of the current rates in the Victorian Public Mental Health Services Enterprise Agreement 2012-2016 5 (the Agreement) or the rates that applied during the anticipated one year of employment.

[7] It was argued by Mr Steele that, had he not been dismissed, the current Agreement wage rate would have been applicable to him – $1,523.60 gross per week. 6 It was stated that the wage rate that was applicable to Mr Steele at the time of the dismissal, from 30 March 2014, was $1,456.60 gross per week.7

[8] On the other hand, the Respondent contended that, given Mr Steele’s anticipated period of employment was for one year following his dismissal on 25 March 2014, the remuneration should be calculated according to the applicable Agreement rates for that year (2014) – $1,486.40 per week. 8

[9] In relation to any applicable allowances, it was common ground that laundry and qualification allowances and annual leave loading should be included in the calculation of remuneration that would have been received. However, the basis for the calculation of these items was not agreed. The Applicant based their calculations on the current Agreement allowance rates. 9 On the other hand, the Respondent used the applicable allowance rates for 2014.10

[10] Further, in calculating the allowances, overtime and penalties for the period of anticipated employment, the Respondent took an average of these items over a two year period rather than only the last year of the Applicant’s employment when he was on leave for a substantial amount of it. 11 This resulted in figures of $1040.00 (annual leave loading); $20,654.51 (overtime, allowances and penalties) and $2,367.04 (laundry and qualification allowances).12

[11] It was argued, on behalf of Mr Steele, that Mr Steele worked substantial amounts of overtime whilst employed by the Respondent. An amount of $11,837.01 was stated to represent the amount of overtime that Mr Steele would have earned. A figure of $9,278.64 was proffered as the amount which Mr Steele would have received in relation to penalty payments. Allowances were said to amount to $6,503.40. 13 The basis for the calculation of these amounts is unclear.

[12] It was agreed between the parties that superannuation should be included but the parties differed on whether the calculation should be based on the current Agreement wage rate or on the applicable wage rate in 2014 (the period of anticipated employment). The Applicant’s amount for superannuation was $7,129.94 14 whilst the Respondent’s figure was $6, 956.35.15

[13] The total of each of these amounts, respectively, is $113,976.19 for the Applicant 16 and $108,221.18 on behalf of the Respondent.17

[14] In addition, the Applicant argued that, as he was terminated on the basis of misconduct, he lost the entitlement to portable sick leave within the public health system. As the basis of the dismissal has now been determined to be incorrect, the loss of the sick leave credits was said to be illegitimate. 18

[15] By way of response, the Respondent contended that Mr Steele’s entitlement to personal leave was contingent on him moving to another employer covered by the Agreement. As Mr Steele did not move to another employer covered by the Agreement, Mr Steele’s entitlement to his personal leave did not accrue. 19

[16] Finally, a further issue was raised by Mr Steele whereby it was sought to crystallise into dollar amounts a number of entitlements that would have accrued over the course of the year of further anticipated employment. These were annual leave (five weeks), sick leave (five weeks) and long service leave and public holidays which were paid but not worked. 20 It was the Respondent’s view that these leave accruals are not to be added to the annual salary figure for the purposes of the calculation of a year’s salary for Mr Steele.21

(i) Conclusions in regard to applicable Agreement rates and calculations

[17] I have carefully considered the submissions of the parties in relation to the issues set out in paragraphs [6] - [11] above and find the following:

• The applicable Agreement wage rates and allowances are those that applied during the one year anticipated period of employment, namely those effective from the first pay period on or after 31 March 2014. These remained in force until the first pay period on or after 31 March 2015. This results in a weekly rate of pay of $1,486.40 (gross); a weekly laundry allowance of $2.02, qualification allowance of $43.50 per week and meal allowances of $11.20 and $8.90.



• Annual leave loading is at the rate of 17.5 % on four weeks annual leave. The Respondent’s figure of $1,040.48 is accepted.



• Superannuation of $6,956.35 (based on the Respondent’s figure 22). This figure is accepted as it was calculated on the 2014 Agreement wage rate rather than on the 2015 rate.

[18] In relation to establishing the remuneration likely to have been received regarding overtime and penalties, consistent with the findings in the paragraph above, I find that these components should be calculated on the basis of the wage rates that were applicable during the year of further employment (2014).

[19] As indicated above, the Respondent, in its calculations, averaged the amount that Mr Steele had earned in relation to overtime, penalties and allowances over 2012/2013 and 2013/2014. This was on the basis that it would have been unfair to simply use the figures for the last year of Mr Steele’s employment, as he was on extended leave during that time. 23 As noted above, there were no details provided by the Applicant in relation to the basis of their calculations. In the absence of such information, the Respondent’s approach in this regard is accepted.

[20] Therefore, the relevant amounts are:

• overtime and penalties - $20,564.51



• allowances - $2,367.04



• annual leave loading - $1,040.48

(ii) Inclusion of accrued entitlements

[21] The Applicant has sought recognition of accrued entitlements (annual leave, sick leave, long service leave) in terms of dollar amounts being included in calculating the amount of remuneration that Mr Steele would have received. I have not been persuaded to include an amount for accrued entitlements. Section 392(2)(c) specifically requires determination of remuneration that Mr Steele would have received or have been likely to receive. Mr Steele would have accrued these entitlements during the year of further employment but they would not have been paid to him as part of his remuneration.

[22] Obviously, if Mr Steele took any of these forms of leave, Mr Steele would have received payment (whilst on leave) and his leave balance would have been reduced. At the end of employment, Mr Steele would have been paid those accrued entitlements. This is the point at which these entitlements crystallise into a monetary amount. They do not form part of an employee’s weekly or fortnightly pay and Mr Steele would not have been paid those entitlements if he had actually (compared with nominally) remained an employee until 25 March 2015.

(iii) Portability of sick leave

[23] Finally, it was argued on behalf of the Applicant that, because his dismissal has been found to be incorrect, Mr Steele’s sick leave credits should be restored. In relation to this claim, it is my view that the Commission does not have jurisdiction, in relation to determination of compensation in lieu of reinstatement, to deal with this matter.

(iv) Summary of findings

[24] Therefore, I find that the remuneration that Mr Steele would have received would have been likely to receive during the year of further employment (section 392(2)(c)) is:

Base salary	$77,292.80
Overtime and penalties	$20,564.51
Allowances	$2,367.04
Annual leave loading	$1,040.48
Superannuation	$6,956.35
TOTAL	$108,221.18

2. Remuneration earned and income reasonably likely to be earned (section 392(2)(e) and (f)

[25] It is clear from the evidence that Mr Steele mitigated his loss and obtained employment in Western Australia (WA). It was stated by the Applicant that he commenced employment in late May 2014 in WA, on a series of fixed term contracts, having been unemployed for two months. Two fixed term contracts of employment were provided with the Applicant’s submissions. The Applicant contended that he was also unemployed between the end of the first contract (17 November 2014) and the commencement of the next contract on 15 December 2014. 24 It was argued that Mr Steele, therefore, was unemployed for 38 weeks, during the year of anticipated employment.25

[26] Poor documentation was provided by the Applicant to support these contentions. What has been provided are two fixed term contracts from 18 August 2014 to 17 November 2014 and from 15 December 2014 until 27 February 2015, and payslips dated 27 July 2014, 11 January 2015 and 25 January 2015. 26

[27] It was further submitted that Mr Steele’s full-time salary during his employment in WA was $105,450 per annum. 27 It appears also from the payslips that Mr Steele was paid a district allowance of $90.25 per fortnight and annual leave loading of $141.50.

[28] Given the lack of supporting documentation, necessity requires acceptance of the Applicant’s submissions in this regard. Therefore, on the basis of 38 weeks employment during the relevant period, at an annual rate of $105,450 per annum, Mr Steele’s base salary was $77,059.62 (gross). In addition, Mr Steele received a district allowance of $90.25 per fortnight. This amounts to $1,714.75, based on 19 fortnights x $90.25 over the relevant period of employment. Annual leave loading of $141.50 was also received. These amounts come to a total $78,915.87 of remuneration earned during the one year of anticipated further employment (s.392(2)(e) and (f)).

[29] In making these calculations, the Commission has formed a view in relation to the costs to Mr Steele of taking up employment in WA. It was submitted on behalf of Mr Steele that account should be taken of the cost of housing and utilities that were deducted by the W.A. Country Health Service (Mr Steele was situated in Kalgoorlie). In addition, it was argued that, due to Mr Steele being forced to relocate interstate to work, a deduction of travel costs of $2, 500 was also appropriate. 28

[30] These submissions were challenged by the Respondent on the basis that these costs were part of the costs of living and working in the place where the job was located. Further, it was argued that, regardless of Mr Steele’s dismissal, these costs would have been incurred by Mr Steele. In addition, it was contended that Mr Steele was not required to relocate to WA to mitigate his loss. 29

[31] I am inclined to accept the Respondent submissions in relation to this issue. In addition, no authorities have been provided which support the Applicant’s proposition. Therefore, none of these expenses have been deducted from the amount of remuneration received by Mr Steele whilst he was working in WA.

[32] Account is required to be taken, however, that Mr Steele was paid five weeks in lieu of notice at the time of his dismissal. This was an amount of $7,432.00.

[33] Therefore, taking all of the findings above into account, I find that the remuneration that Mr Steele received during the relevant period (one year) was $78,915 .87 + $7,432.00. This comes to a total of $86, 347.87.

[34] The loss suffered by Mr Steele is $108,221.18 (remuneration would have received) less $86,347.87 (amount of remuneration earned). This results in a provisional amount of $21,873.31.

3. Section 392(2)(g) - other matters

[35] The matter of the amount to be deducted for contingencies was discussed in the previous decision 30 where it was said that no submissions had been made by either party on this issue.31 This is incorrect as it had been submitted by Mr Steele that the deduction for contingencies should be no more than 25% for the prospective period.32 In the Respondent’s submissions on remedy, the Respondent argued that the amount to be deducted for contingencies should be in the order of 25%.33

[36] In light of this oversight, and the parties’ submissions, the Commission has reviewed the situation in relation to contingencies. Taking into account the submissions of the parties, it is my view that it would be appropriate for only a nominal amount to be deducted for contingencies -5%. This results in a provisional amount of $20,779.65.

4. Section 392(3) - misconduct

[37] The Commission has previously found that the amount that would otherwise be ordered will be reduced by 50%. 34 This results in a provisional amount of $10, 389.83 (gross).

5. Section 392(5) - compensation cap

[38] Since the provisional amount of compensation ($10, 389.83) is less than the amount provided for in section 392(5), I make no further reduction for that reason.

6. Conclusion

[39] Therefore, it is considered appropriate to make an order that St Vincent’s Hospital (Melbourne) Limited pay $10,389.83 (gross), less taxation is required by law, in compensation to Mr Steele, in lieu of reinstatement, within 21 days of the date of this decision.

[40] An order 35 to this effect will be issued separately.

 1   [2016] FWC 4569

 2   Ibid at [139], [145] and [155]

 3   Ibid at [140]

 4   Ibid at [146]

 5   AE898577

 6   Remedy Submissions on behalf of the Applicant, dated 11 August 2016, at paragraph 1

 7   Ibid

 8   Respondent’s Submissions on Remedy Issues raised by Commission, dated 24 August 2016, at paragraph 4

 9   Remedy Submissions on behalf of the Applicant, dated 11 August 2016, at paragraphs 2 and 5

 10   Respondent’s Submissions on Remedy Issues raised by Commission, dated 24 August 2016, at paragraph 5

 11   Ibid at paragraph 8

 12   Ibid at paragraphs 8 and 9

 13   Remedy Submissions on behalf of the Applicant, dated 11 August 2016, at paragraph 5

 14   Ibid

 15   Respondent’s Submissions on Remedy Issues raised by Commission, dated 24 August 2016, at paragraph 9

 16   Remedy Submissions on behalf of the Applicant, dated 11 August 2016, at paragraph 5

 17   Respondent’s Submissions on Remedy Issues raised by Commission, dated 24 August 2016, at paragraph 12

 18   Remedy Submissions on behalf of the Applicant, dated 11 August 2016, at paragraph 6

 19   Respondent’s Submissions on Remedy Issues raised by Commission, dated 24 August 2016, at paragraph 11

 20   Remedy Submissions on behalf of the Applicant, dated 11 August 2016, at paragraphs 4 - 5

 21   Respondent’s Submissions on Remedy Issues raised by Commission, dated 24 August 2016, at paragraph 7

 22   Ibid at paragraph 9

 23   Ibid at paragraph 8

 24   Remedy Submissions on behalf of the Applicant, dated 11 August 2016, at paragraph 9

 25   Ibid at paragraphs 7 and 10

 26   Ibid at Attachments

 27   Ibid at paragraphs 7 - 11

 28   Ibid at paragraph 7

 29   Respondent’s Submissions on Remedy Issues raised by Commission, dated 24 August 2016, at paragraph 15

 30   [2016] FWC 4569 at [148] - [149]

 31   Ibid at [152]

 32   Ibid at [148]

 33   Respondent’s Submissions on Remedy Issues raised by Commission, dated 24 August 2016, at paragraphs 22 - 24

 34   [2016] FWC 4569 at [151]

 35   PR586504

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