Shiralee Read v Paskov CWF Pty Ltd

[2020] FWC 3138

[2020] FWC 3138

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Shiralee Read
v
Paskov CWF Pty Ltd
(U2020/721)

DEPUTY PRESIDENT BEAUMONT PERTH, 30 JULY 2020

Application for an unfair dismissal remedy – consideration of remedy – compensation ordered

[1] On 29 May 2020, 1 I determined that Ms Read had been unfairly dismissed by Paskov CWF Pty Ltd (Classic Windows). The parties had been directed to address the issue of remedy at the hearing. Regrettably, a conclusion as to the appropriate remedy could not be reached, because of the paucity of evidence and submissions on the subject. Consequently, directions were issued in anticipation that the parties might just turn their attention to the issue. Perhaps such optimism was misplaced.

[2] Ms Read provided submissions on 1 June 2020, and a pay slip in support on 5 June 2020. Her submissions were relatively succinct. Predictably, Classic Windows continued to engage in the non-responsive conduct it demonstrated leading up to the merits hearing. It did not make any submissions in response on 9 June 2020, as directed. This was despite having received a reminder email from my Chambers to do so.

[3] A follow-up email was sent to Classic Windows on 15 June 2020. A voice message left with Classic Windows on that same date, stated that its representative, Ms Violeta Paskov, Director of Classic Windows, should contact the Commission urgently if it wished to make any submissions regarding remedy. Classic Windows was clearly informed that the matter of remedy would be determined based on the materials received from the Applicant, on 8 June 2020. There has been nothing forthcoming from Classic Windows, apart from its silence. Ms Read consented to the matter being determined on the papers.

Remedy

[4] Section 390(3) of the Act provides that the Commission must not order the payment of compensation unless it is satisfied both that reinstatement of the person is not appropriate, and that it considers an order for the payment of compensation to be appropriate in all the circumstances of the case.

[5] Regarding the first of these issues, I do not consider reinstatement appropriate considering the conduct of Classic Windows. While reinstatement is the ‘presumptive’ remedy, it is not appropriate in all the circumstances to order it, 2 and I am reassured that there is no right to reinstatement consequent upon a finding that a person has been unfairly dismissed.3

[6] In the circumstances before me, Classic Windows has repeatedly shown a disregard for the directions of this Commission, and at hearing, Ms Paskov demonstrated a dearth of knowledge when it came to the laws that regulate employment. In good conscience, I would find it extraordinarily difficult to reinstate Ms Read into a position where her former employer shows such disregard for the authority of this Commission, has acted during the dismissal process absent a modicum of courteousness, and appears unfamiliar with the obligations concerning employment regulation.

[7] As it is, Ms Read presses that she is not seeking reinstatement as a remedy because of the hostility within her former workplace, and the inability to work harmoniously in a business where there are only five employees, inclusive of Ms Paskov.

[8] With respect to the second issue, concerning whether an order for compensation is appropriate, I note that compensation is intended to provide a person who has been unfairly dismissed with reparation for losses reasonably attributable to the unfair dismissal. It is not intended to be punitive. 4 The amount of compensation ordered by the Commission must not include a component for shock, distress or humiliation, or other analogous hurt, caused to the person by the dismissal.5

[9] In my assessment, this is a case in which an order for compensation is appropriate.

[10] Section 392 of the Act sets out the criteria to which regard must be had in determining any amount of compensation ordered. It states:

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.

[11] In determining the amount, all the circumstances are to be considered, including those prescribed by s 392(2) of the Act. The ‘Sprigg’ formula is to be applied to arrive at an appropriate amount. 6 The method for calculating compensation under s 392 is also informed by the decision of the Full Bench in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc.7

[12] In Haigh v Bradken Resources, 8 the Full Bench reaffirmed the principles set out within Sprigg, and, in particular, the steps needed to be taken in assessing compensation. The first of those steps is to estimate the amount the employee would have received, or would have been likely to receive, if the employment had not been terminated; the second step being to deduct moneys earned since termination; the third, to make deductions for contingencies; fourth, to calculate any impact of taxation; and fifth, to apply the legislative cap.9

[13] The Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Alan Humphries 10 stated:

The identification of this starting point amount ‘necessarily involves assessments as to future events that will often be problematic’ 11. Once this first step has been undertaken, various adjustments are made in accordance with s.392 and the formula for matters including monies earned since dismissal, contingencies, any reduction on account of the employee’s misconduct and the application of the cap of six months’ pay. This approach is however subject to the overarching requirement to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case.

[14] The notion of ‘taking into account’ a matter (such as those described in s 392 of the Act) connotes a genuine consideration of the relevant provision and the apportionment of the appropriate weight in the circumstances. 12 In Construction, Forestry, Mining and Energy Union v Hamberger and Another,13 Katzmann J pointed out that ‘[t]o take a matter into account means to evaluate it and give it due weight’14 and that ‘mere advertence will not be enough.’15

Remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[15] Ms Read gave evidence that she received $25.00 per hour, worked a 78 hour fortnight, and therefore received $1,950.00 a fortnight. In respect of her annual income, Ms Read stated that it was $51,427.00. Ms Read noted that she received overtime for working Saturday morning (paid time in lieu).

[16] On or around 5 January 2020, prior to Ms Read’s dismissal, Ms Read was informed of the reduction of her work days to two days per week. The reason provided for the reduction was that Ms Paskov’s health had necessitated her return to work in the office on a permanent basis. However, at the meeting on 9 January 2020, after Ms Read informed Ms Paskov that it was not the case that she had said to Ms Paskov she could not make her position redundant, but rather there was an obligation to consult, Ms Paskov instructed Ms Read to leave the premises and that the part-time position was no longer available to her.

[17] The question of the anticipated period of employment can be a particularly vexed issue requiring an exercise of judgment on what would be reasonable considering all the circumstances. There was no evidence before me to suggest that there was a performance issue plaguing Ms Read, or that she had a history of misconduct.

[18] However, it was apparent from the evidence that subsequent to the meeting on 5 January 2020, there was a heightened level of animosity between the two, which may have impacted upon the continuation of the employment relationship. Yet, before this point, it appeared that Ms Paskov was content to have Ms Read work within the business for two days a week, and that the business required her for those days.

[19] Ms Read contends that she would have held her position at Classic Windows for several years to come if she had not been unfairly dismissed. I am persuaded, in part, by her contention regarding the duration of anticipated period of employment. But, am unconvinced that the engagement would have been on a full-time basis in light of the evidence about the reduction and Ms Read’s days of work

[20] Based upon the evidence before me and having regard to Ms Paskov’s evidence, concerning the necessity to reduce office hours so as to enable her to work in the office, I have reached the conclusion that Ms Read’s employment would have continued for the six months of the maximum compensation period. However, the arrangement would have been on a part-time basis for two days a week. The anticipated period of employment is set accordingly

The effect of the order on the viability of the employer’s enterprise

[21] The effect of the order on the viability Classic Windows is unable to be assessed because no evidence has been given regarding this factor.

Length of the person’s service with the employer

[22] Ms Read had been in the employment for just under two years. I consider this a neutral factor, when considering an order for compensation.

The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[23] There is limited evidence concerning this factor. However, it can be inferred from the information provided by Ms Read that efforts were made to secure new employment, given she obtained employment in late May 2020. Further, Ms Read submitted she had been actively applying for jobs online through ‘Seek’, ‘Jora’, ‘Indeed’ and ‘Job Active’. There was no reason to disbelieve Ms Read, particularly given she appeared to be obliged to search for jobs because of her receipt of Centrelink payments.

The amount of remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation

[24] Ms Read gave evidence that she was unable to secure new employment until 27 May 2020. Since 27 May 2020, Ms Read has been receiving $544.00 (gross) a week. This amounts to $4352.00 (gross), calculated on the basis that there are approximately eight weeks between the dismissal and the making of the order for compensation in which Ms Read has generated an income.

Any amount of income reasonably likely to be earned during the period between the making of the order and the actual compensation

[25] I am satisfied that between the making of the order and the actual compensation, Ms Read is reasonably likely to have earned $1088.00 (gross) – based on fourteen days being the requisite period between making the order and the actual compensation.

Misconduct and shock, distress or humiliation

[26] I do not consider there has been any misconduct which would require me to reduce the amount of compensation. I do not include any component by way of compensation for shock, distress or humiliation caused by the manner of the dismissal.

Compensatory cap

[27] The amount of compensation the Commission may order is capped. If the appropriate quantum of compensation initially assessed exceeds that cap, then the Commission must reduce the amount to the amount of the cap.

[28] The Act stipulates that the compensation cap is the lesser of:

•  the amount of remuneration received by the person, or that he or she was entitled to receive (whichever is higher) in the 26 weeks before dismissal;

•  half the amount of the high income threshold immediately before dismissal. 16

[29] The high income threshold is defined in s 333 of the Act as an amount prescribed by, or worked out in the manner prescribed by, the Regulations. Regulation 2.13 sets out the manner in which the high income threshold is to be worked out. The steps in Regulation 2.13(3), particularly Step 1 and Step 2, refer to ‘ordinary time earnings’. The Act defines ‘earnings’ such that they exclude contributions to superannuation fund. 17

[30] Under s 392(5) of the Act, I am obliged to determine the amount worked out under s 392(6) of the Act. The amount is calculated by reference to the ‘total amount of remuneration’ received by the person or to which the person was entitled (whichever is higher) for any period of employment with the employer during the 26 weeks immediately before dismissal. ‘Remuneration’ is not defined in the Act.

[31] Both ss 392(6) and 392(2) of the Act refer to ‘remuneration’ under Part 3-2. The meaning of ‘remuneration’ has been considered in various iterations of what is now the Act and regarding differing legislative provisions. What appears clear from the decisions is that the term ‘remuneration’ has been given a consistent meaning whereby superannuation is included.

[32] For the purpose of s 392(5) of the Act, I am satisfied the amount is $25,713.50. I have considered that under the Applicant’s employment contract she was entitled to superannuation contributions at 9.5%.

Any other matter that the Commission considers relevant

[33] I have considered the circumstances of the case and note the difficulty in ascertaining whether Ms Read received payment in lieu of notice. The ‘Employment Separation Certificate’ refers to a payment of ‘Other,’ amounting to $2350.00 (gross), which constitutes payment for 94 hours of work. Ms Read provided her final payslip for the period 3 January 2020 until 16 January 2020. That payslip refers to an amount of $2350.00 (gross) for ‘Base hourly’ of 94.00 hours. It also provides for holiday pay for 65.45 hours, amounting to $1,636.25 (gross). It is however, not evident from the materials if a payment in lieu of notice was made.

CONCLUSION AND ORDERS

[34] Reinstatement is not an appropriate remedy in this case and therefore I find that compensation is appropriate. The calculation for compensation is set out in the following table.

Compensation	Calculation	Gross	Total Gross Amount (inclusive superannuation)
Anticipated employment period	24 weeks x 15.6 hours a week x $25 (gross) = $9,360.00 Superannuation @ 9.5% = $889.20	$9,360.00	$10,249.20
Notice period	Nil	$0.00	$0.00
Deduct monies for misconduct	$0.00	$0.00	$0.00
Deduct monies earned since termination	$4,352.00 + $1,088.00	$0.00	$5,440.00
Deduction for contingencies	0% as no significant element of future economic loss (no basis for any deduction for contingencies)	$0.00	$0.00
Calculate any impact of taxation	To be taxed according to law
Apply the compensation cap	Last six months amount of remuneration received by Ms Read $ 25,713.50 Half the amount of the high income threshold = $74,350.00	$25,713.50
TOTAL	$4,809.20

[35] For the reasons I have given earlier, and based on the calculations completed, I observe that Classic Windows is required to make the compensatory payment to Ms Read in the amount of $4809.20 (gross). In determining the amount for the purpose of the order, I have considered all of the circumstances of the case including the criteria set out in s 392(2) of the Act.

[36] The total amount does not exceed the compensation cap applying at the time of dismissal.

[37] The amount ordered to be paid must be subject to ordinary taxation.

[38] The compensation is to be paid within 14 days from the date of the accompanying Order 18, as issued simultaneously with this decision.

DEPUTY PRESIDENT

On the Papers

Final Submissions Received

2020:
Perth;
June 5.

Printed by authority of the Commonwealth Government Printer

<PR720225>

 1   [2020] FWC 2509.

 2   Michael Hatwell v Esso Australia Pty Ltd[2019] FWC 931 [28].

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

 4   Kable v Matilda Greenbank[2015] FWCFB 3512 [17].

 5   Fair Work Act 2009 (Cth) s 394(4).

 6   See Ellawala v Australian Postal Corporation (AIRCFB, Print S5109, 17 April 2000), [33]; and see Bowden v Ottrey Homes Cobram and District Retirement Villages Inc.[2013] FWCFB 431.

 7   [2013] FWCFB 431.

 8   [2014] FWCFB 236.

 9 Ibid [10].

 10   [2016] FWCFB 7206, [17].

 11   Smith, Arthur and Kimball, Brett v Moore Paragon Australia Ltd PR942856, [32].

 12   Ms Diane Lewis v Glendale RV Syndication Pty Ltd T/A Glendale Care Bundaberg [2014] FWC 1086.

 13 (2011) 195 FCR 74.

 14 Ibid [103].

 15   Ibid.

 16   Fair Work Act 2009 (Cth) ss 392(5), (6).

 17   Fair Work Act 2009 (Cth) ss 332(2)(c), (4); Craig Ablett v Gemco Rail Pty Ltd [2010] FWA 8124.

 18   PR721338.