Tran v Macquarie University (No.3)
[2020] FCCA 1010
•6 May 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TRAN v MACQUARIE UNIVERSITY (No.3) | [2020] FCCA 1010 |
| Catchwords: INDUSTRIAL LAW –Contravention under s.340 of the Fair Work Act 2009 (Cth) – response to the Respondent’s final submissions re remedy (RFS) – application for reinstatement – approach to compensation – Applicant exercised a workplace right – where the Respondent contravened the Enterprise Agreement – whether or not the breaches were deliberate – orders made. |
| Legislation: Crimes Act 1914 (Cth) s.4AA Fair Work Act 2009 (Cth), ss.50, 340, 360, 545, 546, 557, 570 Federal Circuit Court Act 1999 (Cth), s.76 |
| Cases cited: Australian Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (2011) 193 FCR 526 Dafallah v Fair Work Commission [2014] FCA 328 Fair Work Ombudsman v Nobrace Centre Pty Ltd (in Liquidation) (ACN 121 556 447) & ORS (No.2) [2019] FCCA 2970 Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301 Flavel v Railpro Services Pty Ltd. (No 2) [2013] FCCA 1449 Independent Education Union v Geelong Grammar School [2000] FCA 557 Maritime Union of Australia v Fair Work Ombudsman [2015] FCAFC 120 Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221 National Tertiary Education Union v Royal Melbourne Institute of Technology (2013) 234 IR 139 Port Kembla Coal Terminal Ltd v Construction, Forestry Mining and Energy Union (2016) 248 FCR 18 Quinn v Overland (2010) 199 IR 40 Ridd v James Cook University (No 2) [2019] FCCA 2489 Ryan v Primesafe (2015) 323 ALR 107 |
| Applicant: | HEIN MINH TRAN |
| Respondent: | MACQUARIE UNIVERSITY |
| File Number: | SYG 3084 of 2017 |
| Judgment of: | Judge Humphreys |
| Hearing date: | 23 January 2020 – 24 January 2020 |
| Date of Last Submission: | 23 January 2020 – 24 January 2020 |
| Delivered at: | Parramatta |
| Delivered on: | 6 May 2020 |
REPRESENTATION
| Counsel for the Applicant: | Ms Doust |
| Solicitors for the Applicant: | Hall Payne Lawyers |
| Counsel for the Respondent: | Mr Brotherson |
| Solicitors for the Respondent: | HWL Ebsworth |
ORDERS
The Respondent pay pecuniary penalties as follows:
(a)$20,000.00 for the two breaches under the s.50 of the Fair Work Act 2009 (Cth). Each breach being $10,000.00.
(b)$15,000.00 for the breach under s.340 of the Fair Work Act 2009 (Cth), in refusing to redeploy the Applicant.
(c)$10,000.00 for the breach under s.340 of the Fair Work Act 2009 (Cth), in dismissing the Applicant.
Being a total of $45,000.00. Pursuant to s.546(3)(c) of the Fair Work Act 2009 (Cth), the Court orders that the penalties be paid to the Applicant.
The Court declines to order reinstatement.
The Respondent is to pay the sum of $221,163.45 as compensation for lost wages.
The Respondent is to pay the sum of $55,156.19 in lost superannuation payments.
The Applicant and Respondent are to confer and approach the relevant superannuation fund to ascertain the benefit lost from that having not been invested in, over the relevant period. The amount of $55,156.19 and any amount lost in investment return is to be paid to the Applicant’s superannuation fund.
The Respondent to pay a sum fixed in the amount $278,282.00, as compensation for future economic loss.
The Respondent to pay a sum fixed in the amount of $15,000.00, as compensation for non-economic loss. Interest at the applicable Court rate is to be paid on this amount.
The Court declines to make an order as to costs.
Liberty to restore on 2 days’ notice.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
SYG 3084 of 2017
| HEIN MINH TRAN |
Applicant
And
| MACQUARIE UNIVERSITY |
Respondent
REASONS FOR JUDGMENT
(As Corrected)
Introduction
This matter concerns an application under the Fair Work Act 2009 (FW Act) following the termination of Ms Tran’s employment from Macquarie University as a Systems Accountant HEW8 on 19 June 2017.
On 31 July 2019, the Court made the following orders in Tran v Macquarie University (No 2) [2019] FCCA 2049:
1)A declaration that the Respondent has contravened s 340 of the Fair Work Act 2009 by dismissing the Applicant because of, or because she exercised, her workplace right(s).
2)A declaration that the Respondent has contravened s 340 of the Fair Work Act 2009 by refusing to redeploy the Applicant to a positon for which she had the necessary skills causing injury in her employment.
3)A declaration that the Respondent contravened s 50 of the Fair Work Act by contravening clause 6.2.8 of the Macquarie University Professional Staff Enterprise Agreement 2015.
4)A declaration that the Respondent contravened s 50 of the Fair Work Act 2009 by contravening clause 6.2.9 of the Macquarie University Professional Staff Enterprise Agreement 2015.
Having made those declarations, it is now necessary for the Court to determine the appropriate orders as remedies. The Applicant seeks the following relief:
a)Orders for the imposition of pecuniary penalties on the Respondent pursuant to s.546(1) of the FW Act.
b)An order for the reinstatement of her position as a Systems Accountant or alternatively an order appointing the Applicant to an equivalent position with the Respondent pursuant to s.545(2) of the FW Act.
c)Orders for the Respondent to pay the Applicant compensation for wages lost between in the period between termination of her employment and reinstatement or alternatively, for the Respondent to pay the Applicant compensation for lost wages and future economic loss pursuant to s.545(2) of the FW Act.
d)Orders for the Respondent to pay the Applicant compensation for non-economic loss and damage suffered by the Applicant as a consequence of the contraventions; and
e)Costs pursuant to s.570(2) of the FW Act.
It is convenient to deal with the reinstatement question, after the issue of pecuniary penalties, as any order in relation to reinstatement will affect the majority of the subsequent orders.
Pecuniary Penalties
The Court has a broad discretion as to penalty. Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301 at [36], summarised how the discretion is to be approached as follows:
1. Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.
2. Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of the course of conduct, noting that s.557 of the FW Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person.
3. Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each Respondent did.
4. Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.
5. Consider the overall penalties arrived at, including by reference to those which may be proposed by the Fair Work Ombudsman and what is proposed by the Respondents, and apply the totality principle, to ensure that the penalties for each Respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary.
The Court will now consider each of those five steps.
Step one
The following are the contraventions identified:
a)The Respondent contravened s.340 of the FW Act by dismissing the Applicant because of, or because she exercised, her workplace right(s).
b)The Respondent contravened s.340 of the FW Act by refusing to redeploy the Applicant to a position for which she had the necessary skills causing injury to her employment.
c)The Respondent contravened s.50 of the FW Act by contravening clause 6.2.8 of the Macquarie University Professional Staff Enterprise Agreement 2015 (“Enterprise Agreement”).
d)The Respondent contravened s.50 of the FW Act by contravening clause 6.2.9 of the Macquarie University Professional Staff Enterprise Agreement 2015.
Steps 2 and 3
Each of the above contraventions arises out of a termination on a redundancy basis that followed a restructure of the Applicant’s workplace. The Court found the Applicant was terminated for a substantial and operative part due to complaints she made to her employer. Further, in breach of the relevant Enterprise Agreement, the Applicant was not given the right to be priority interviewed for positions that she considered as being a potential redeployment opportunity within the University.
The Court is satisfied that overall, there are three separate contraventions arising out of conduct by the Respondent, as the two contraventions under .s50 of the FW Act can be dealt with together. The maximum penalties for a body corporate for a contravention, pursuant to s.340 of the FW Act, is 300 penalty units. The penalty is the same for contraventions under s.50 of the FW Act. A penalty unit, as at the time of the contraventions, pursuant to s.4AA of the Crimes Act 1914 (Cth), was $180.00. Accordingly, the maximum penalty in relation to each contravention is $54,000.00.
Step 4
The purpose of a civil penalty is primarily, if not wholly, promoting the public interest in compliance with the laws that have been contravened and it does not engage principles of retribution or rehabilitation (see Fair Work Ombudsman v Nobrace Centre Pty Ltd (in Liquidation) [2019] FCCA 2970 (“Nobrace”) per Kelly J at [65]). As these principles of retribution or rehabilitation are not involved in the determination of a civil penalty, this intensifies the focus of a civil penalty determination to issues of specific and general deterrence (see Nobrace at [66]).
In Mason v Harrington Corporation Pty Ltdt/as Pangaea Restaurant & Bar [2007] FMCA 7, Mowbray FM at [26] – [52], set out what is now a well settled set of non-exclusive factors, relevant in assessing a pecuniary penalty. They are as follows:
a)Nature and extent of the conduct which led to the breaches
This is set out in detail in the liability decision.
b)Circumstances in which the conduct took place
The conduct took place over a period of time and involved employees of the Respondent at lower to middle management level. The conduct targeted the Respondent and another employee who were seen as troublesome.
c)Nature and extent of any loss sustained as a result of the breaches
It is submitted that the conduct has had a profound effect on the Applicant personally and financially. The Applicant maintained she had been targeted due to the complaints she made about Ms Chellappah. This was repeatedly denied by the Respondent’s officers.
d)Whether there has been similar previous conduct by the Respondent
The Court is satisfied there is no history of previous breaches by the Respondent. This mitigates in its favour.
e)Whether the breaches were properly distinct or arose out of one course of conduct
The breaches arose out of one course of conduct that was sustained over a period of time.
f)The size of the business enterprise involved
The Respondent is a large organisation with a highly developed Human Resources Department. This should have ensured the contraventions did not occur. The University has the capacity to pay any penalty the Court might set.
g)Whether or not the breaches were deliberate
The Court is satisfied that the breaches were deliberate in relation to Mr Lovelace and Ms Chellappah. The Court is not satisfied that the actions of these two employees were known to senior management within the Respondent’s organisation. The decision of Mr Nick Crowley, a senior manager, to deny the Applicant the opportunity for a priority interview was also deliberate.
h)Whether senior management was involved in the breaches
Mr Lovelace was a manager of an area in the middle to upper middle level of management within the Respondent’s organisation. Ms Chellappah was a first level Manager only. Mr Nick Crowley was a Senior Manager.
i)Whether the party committing the breach had exhibited contrition
By strongly defending the matter in the manner it did, the Respondent has not shown any contrition. The Respondent has not taken any action, save a payment into Court at the suggestion of the Court, to make amends to the Applicant. Material has been provided to the Court by way of affidavits expressing regret. The Court notes this regret was only expressed after the liability determination went against the Respondent.
j)Whether the party committing the breach had taken corrective action
The Court accepts that the Respondent has taken corrective action to ensure that it’s restructuring and redeployment processes are improved. The Court accepts these assurances.
k)Whether the party committing the breach had cooperated with enforcement authorities
Not applicable.
l)The need to ensure compliance with minimum standards by provision of an effective means for the investigation and enforcement of employee entitlements.
Not applicable.
m)The need for specific and general deterrence
The Respondent submits that in the circumstances there is no need for specific deterrence. Any need for general deterrence should be set at the lower end of the range.
The Respondent submits that the aggregate penalty should be no more than the maximum penalty for a single contravention, being $54,000.00. The penalty for the two breaches of s.50 of the FW Act should be $10,000.00 in total. The penalty for the breach of s.340 of the FW Act for refusing to redeploy the Applicant should be at the lower end and not more than $10,000.00. The breach of s.340 of the FW Act in dismissing the Applicant should also be at the lower end and not more than $20,000.00. This makes a total of $40,000.00.
The Court accepts these submissions except the Court considers the breach of s.340 of the FW Act involving the failure to redeploy, to be deserving of a higher penalty than that submitted. The Court does so as it involved Mr Nick Crowley, a Senior Manager, in refusing the Applicant a priority interview for two positions she identified as potential redeployment opportunities.
The penalties the Court imposes are as follows:
a)For the two breaches of s.50 of the FW Act, a total of $20,000.00;
b)For the breach of s.340 of the FW Act in refusing to redeploy the Applicant $15,000.00;
c)For the breach of s.340 of the FW Act in dismissing the Applicant $10,000.00.
This makes a total of $45,000.00. Pursuant to s.546(3)(c) of the FW Act, the Court orders that these penalties be paid to the Applicant.
Reinstatement
The Applicant seeks reinstatement pursuant to s.545(2)(c) of the FW Act. The Court is empowered under this section to make “any order the court considers appropriate” and this includes reinstatement. It is submitted that any concerns about the relationship of mutual confidence between employer and employee are no longer regarded as relevant in contemporary context (see Quinn v Overland (2010) 199 IR 40 at page 59 per Bromberg J).
The Court should not be hesitant in granting such a remedy in an appropriate case (see Independent Education Union v Geelong Grammar School [2000] FCA 557 at [34]) (“Geelong Grammar”). The evidence before the Court that the Respondent has continued to recruit for positions for which the Applicant is qualified and experienced, would satisfy the Court that the Respondent is in a position to comply with an order for reinstatement.
The fact that the position that was occupied by the Applicant has been abolished by a restructure is no barrier. The power to order reinstatement is not limited to the precise position previously occupied by a terminated employee (see Port Kembla Coal Terminal Ltd v Construction, Forestry Mining and Energy Union (2016) 248 FCR 18 per Jessup J). The Federal Court made orders for reinstatement in a very similar case in National Tertiary Education Union v Royal Melbourne Institute of Technology (2013) 234 IR 139 (“NTEU v Royal Melbourne”) per Gray J.
The Respondent notes that while the abolition of the Systems Accountant role does not in itself, preclude the making of a reinstatement order, it is the Applicant who “bears the burden of proving such a remedy is appropriate” (see Dafallah v Fair Work Commission [2014] FCA 328 at [145]). Reinstatement in these proceedings is a possible remedy, but there is no binding authority that elevates status to above that. In Slonim v Fellows (1984) 154 CLR 505 (“Slonim”) at page 515, the Court said:
However, it will always be a power to be exercised with caution having regard to the circumstances of the case. There will be many cases where the working relationship of employer and employee is so close that to impose such a relationship by an award would be quite destructive of industrial harmony.
The Respondent notes that the further restructuring of the Systems Team of the Office of Financial Services, effective as of 11 June 2018, means that the entire team the Applicant was previously part of no longer exists, including the two positions she was interviewed for in late 2016. Even if the Applicant been redeployed to one of the two positions she was interviewed for, her employment in all probability (subject to any further redeployment process) would have only continued at most for approximately a further 12 months and she would have been lawfully terminated effective 4 December 2018. Further, contrary to the claims of the Applicant, there is currently no other available role for which the Applicant is considered suitable by relevant staff of the Respondent.
The Respondent submits that there is a significant disconnect between the Applicant’s views of herself as “a super performer” and the assessment of her capabilities by others. It is informative of this disconnect that the Applicant has unsuccessfully applied for over 86 positions since her employment ended. It is submitted by the Respondent that the Court will not accept the Applicant’s claim that this is only due to her time working on the Finance One Accounting System and/or her redundancy.
The Respondent submits there is ample evidence that Mr Lovelace formed his own view that the Applicant was a difficult employee, who had certain performance issues. This included the Applicant treating Mr Lovelace in a rude manner when she turned her back on him at a meeting on 19 December 2016.
The Respondent concedes that they could have (and should have) embarked on a performance management process with the Applicant. The Applicant’s likely reaction to such a process, is a factor strongly militating against reinstatement. This is notwithstanding the Applicant’s claim that she does “not think she would have any difficulty working with any other employee… and taking direction from any manager”. The Respondent submits this claim should not be accepted.
Evidence was presented during the penalty phase of the hearing from Ms Vandhana Rup, a former employee of the Systems Team and now a Senior Business System Analyst in the Office of Information Technology, who described the Applicant’s antisocial and uncooperative behaviour and told the Court she would not want to work with the Applicant again. The Heesom Report, an exhibit in the liability phase of the hearing, records a strained relationship with another employee, Mr Syed, who had reported to the Applicant and found her very difficult to get on with.
The Respondent submitted that it was also clear from the Applicant’s evidence that she was verbose and gave excessive detail in answer to questions during cross examination that was not always relevant to the issue in question. The Respondent submits that this shows the potential to create disharmony and conflict in the workplace.
It was submitted that the Court should be properly concerned that if the Applicant was restored to the workplace, further conflict with other employees and resistance to reasonable management action would be very likely. It was submitted that it cannot be accepted that there is a sufficient basis (if any at all) to restore an employment relationship.
The Respondent drew the Court to the attention of the report from Dr Patrick Morris, Consultant Psychiatrist, who reported that;
… she has developed emotional behavioural symptoms which are clinically significant as indicated by marked distress that is out of proportion to the severity and intensity of the stressor and significant impairment in her social and occupational functioning… Ms Tran is fit for her preinjury duties as a Systems Accountant initially on a part-time basis. She could not return back to her previous occupation for Macquarie University because of the stressors involved in that workplace but could work for another employer.
Whilst the Court acknowledges that the Applicant’s desired outcome is reinstatement, there is considerable discretion vested in the Court and it should only do so when reinstatement is appropriate. The Court accepts that the Applicant was viewed as an under performer and a difficult person. The Court accepts the evidence of the Applicant’s work colleagues in this regard. At paragraph 113 of the liability decision, the Court found that the University actively sought to manage the Applicant out of her employment by the use of redundancy, rather than engaging in a performance management process. The Court accepted that the Applicant’s supervisor, Ms Chellappah described the Applicant as a difficult individual who was ‘poisonous to the team environment’. This mitigates against reinstatement.
Further, as outlined above, Dr Morris is of the view that while the Applicant may be fit for employment on a part-time basis as a Systems Accountant, she could not return to Macquarie University because of the stressors involved in that workplace. The Court is satisfied that this applies to the workplace as a whole and not simply the Applicant’s previous role within the finance systems team.
The Court accepts the evidence that was provided by Ms Gower in the penalty phase, that during the latter half of 2019 the University has undergone a significant restructure and downsizing of its workforce in response to difficulties it was facing meeting the budget. Of course since the penalty hearing, the economy and in particular the tertiary education sector has been affected by the current pandemic. This is a matter which the Court is satisfied is entitled to take into account in considering whether or not to order reinstatement.
Weighing up the submissions from both the Applicant and the Respondent, together with the evidence before the Court, the Court is not convinced that reinstatement is an appropriate outcome. The Court cannot be satisfied that the necessary employer/employee relationship could be restored. Further, given the particular personality of the Applicant, the Court is reasonably satisfied that the Applicant would be unable to cope with the stresses of being reemployed at Macquarie University. The appropriate remedy therefore is that of compensation.
Compensation for Loss of Wages
The parties agree for the period 20 June 2017 until 6 May 2020, the Applicant will have lost the sum of $328,041.39 ($324,448.18 in salary plus $3593.21 in leave loading).
From that amount, the Court should deduct the amount paid by way of a termination payment of $54,657.00 for salary and $1752.94 leave loading. The balance is thus $273,631.45. The Court further notes the Applicant has already been paid by way of advance on any settlement $50,000.00. This should be deducted from any payment and leaves a balance payable of $221,163.45. The Court does not accept the Respondent’s submission that the Applicant should be treated as if she had been on unpaid leave from 31 July 2019, on the basis of a failure to mitigate her loss. The Court is satisfied the Applicant has made significant efforts to mitigate her loss. There is no evidence the Applicant had not made further job applications since 1 July 2019 to date.
For the period 20 June 2017 to 6 May 2020, the Court is satisfied that the Applicant will have lost $55,156.19 in superannuation payments. The parties agreed on that figure. The Applicant seeks that the Court order the parties to confer and approach the relevant superannuation fund to ascertain the benefit lost from that amount having been invested over the relevant period and that this amount together with the contributions set out above be paid to her superannuation fund. The Court proposes to make such an order.
Lastly, the Applicant submits that the Respondent should pay an additional amount so that the Applicant does not suffer a detriment of receiving the amount as a lump sum with consequent higher taxation rates. The Court proposes to order again that the parties confer to agree on such an amount.
The Respondent broadly agrees to the above approach subject to certain reservations. The Respondent does not accept any claim should include any allowance for salary sacrifice arrangements or negative gearing that the Applicant claimed in respect to an investment property. The Court agrees with this. The Applicant’s personal financial affairs are not a matter appropriate for consideration in respect to lost wages.
The Respondent submits the Applicant indicated she would have pursued a PhD and this would have impacted upon her capacity to work full time. It is submitted that her plan was at some time to leave the professional stream of employment within the University and transition to the academic stream.
It is also submitted that the further restructuring and effective disbanding of the Systems Team within which the Applicant was employed as of 11 June 2018, is such that the Applicant would have been subject to redundancy and termination of employment with effect being 4 December 2018. It is noted that this restructure resulted in the redundancy and termination of Ms Chellappah and a number of the Applicant’s colleagues.
The Court notes that Mr Lovelace has subsequently left his employment with the Respondent. The Respondent submits that any compensation for economic loss should be further adjusted downwards for non-disclosure of her cancer illness and the effect this may have had on her capacity to work, the limits on the Applicant’s attempts to mitigate her loss of employment and the probable effect of her study plan on her ongoing employment.
Dealing first with the Applicant’s plans to pursue a PhD, the Court notes that the Applicant has amassed a considerable number of tertiary qualifications in a variety of fields, many of which have been undertaken while the Applicant was working full time. Tertiary study appears to be the Applicant’s main non-work activity. Options exist for a PhD to be studied either part or full time. The Court is satisfied the Applicant would have undertaken her study part time. Given the Applicant has various leave options, including annual and extended leave, the Court is not satisfied that any adjustment downward in compensation should be made for this issue.
The next issue is that of the non-disclosure of the Applicant’s cancer. This required medical treatment in the form of surgery followed by chemotherapy. Many women continue working while undergoing chemotherapy for the type of cancer the Applicant suffered from. The Applicant’s General Practitioner, Dr Mihaljevic gave evidence that, if required, the Applicant could have scheduled her chemotherapy on a Friday afternoon and so use Saturday as a recovery day, meaning she would not have been required to take a day off work following chemotherapy. It is submitted on behalf of the Applicant that the total time off work required for treatment of her illness, including recovery from surgery would not have exhausted the Applicants entitlement to personal leave. In the absence of medical evidence to the contrary, the Court accepts the Applicant’s submissions that the Court should award compensation on the basis that the Applicant’s personal leave balance would have been sufficient to cover any treatment and recovery time in respect of her cancer.
The last issue concerns the subsequent restructure of the area within which the Applicant worked with the proposition that she would have been made redundant and terminated anyway as of 4 December 2018. No evidence has been provided as to whether Ms Chellappah or the others in her work area took voluntary redundancies or were either successful or unsuccessful in seeking redeployment within the University. No evidence has been provided as to the number within the work area that were successfully redeployed. It is referred to in the Respondent’s submissions, but not in any evidence.
What is clear from the totality of the evidence, is that the Applicant was very keen to continue with her employment with the Respondent. The contraventions pursuant to s.340 of the FW Act that have been found, concern first, using a restructure to dismiss the Applicant because of, or because she exercised her workplace rights to make complaints. Second, the Respondent refused to redeploy the Applicant for positions she had the necessary skills.
The evidence and findings is that the Respondent, except on one occasion, did not seek to redeploy the Applicant (see paragraphs 109-113 of the liability decision). The Court considers it entirely speculative as to what would have occurred if the Respondent had meaningfully engaged with the Applicant, in redeployment and retraining process, as she was entitled to under the relevant enterprise agreement. The Applicant may have been redeployed to an area not subject to subsequent restructuring. In these circumstances it is not appropriate to suggest that any damages should be reduced by what might have subsequently happened. Having acted in the manner it did, the Respondent bears the full responsibility for the economic damage suffered by the Applicant during the period up to 06 May 2020. Considerations as to future economic loss have taken a number of considerations into account. This is the appropriate area for such considerations.
Compensation for Future Economic Loss
The relevant approach for determining compensation for future economic loss is set out in Ridd v James Cook University (No 2) [2019] FCCA 2489 at [26]. This involves:
a)Decide the period that should be covered by future economic loss; that is, decide how long the Applicant would have continued working and what she would have earned.
b)Decide what the Applicant would actually earn during this period.
c)Subtract the latter some from the former.
d)Consider the vicissitudes of life and apply an appropriate discount.
e)Look at the question of mitigation and what, if any discounts should be applied because of any failure to mitigate the loss.
f)Finally, settle upon a figure that is just, fair and reasonable in all the circumstances.
In addition to any compensation for lost salary and entitlements to the date of the Court’s decision, it was submitted on behalf of the Applicant that she would have continued employment with the Respondent until her retirement at age 70. Compensation should be calculated on that basis.
It was submitted that the Applicant’s institutional ties to the Respondent extended well beyond her employment as a Systems Accountant. The Applicant’s husband enrolled to study at the University and she carried out some lecturing and marking work for the University.
It was also submitted on behalf of the Applicant that the Applicant’s capacity to find alternative work outside the University is adversely affected by her age and the fact that she worked for many years with the Finance One system which is not used in any other universities in Sydney.
It was also submitted that the Court should be satisfied that the Applicant has sought to mitigate her loss by making numerous job applications and updating and developing her professional skills in information technology.
The Respondent submits that in considering the issue of the vicissitudes of life in respect of appropriate discounting, the Court needs to assess how long the Applicant would have worked full-time and possibly part-time and then consider other contingencies that might have prevented goals being achieved. This could include consideration of health, family circumstances, retirement options the likelihood of future restructuring, performance management, the impact of career aspirations and recognising that compensation only arises because of the contravention.
The discount for the vicissitudes of life turns on the circumstances of the case. For example in Maritime Union of Australia v Fair Work Ombudsman [2015] FCAFC 120 at [143] – [146] the Full Federal Court determined the discount should be 50%. It was submitted that in an appropriate case, the discount could be 100%.
The Respondent notes the Applicant is currently 56 years of age. The Applicant’s stated plan was to pursue a PhD and move into academia. It was submitted by the Respondent that the age profile of the Respondent’s professional and academic workforces shows reduced numbers in full-time employment from certainly age 60 and even more so beyond age 65 with not all such employees being full-time. The Applicant has access to superannuation or alternatively an aged pension well before age 70.
It was submitted by the Respondent that given the likelihood that the Applicant would be involved in further conflict in the workplace and the University could embark on performance management of her or other grounds of dismissal may arise, together with the Applicants difficulties in relation to health and resilience, the Respondent submits that the discount to be applied should be 100%, alternatively 75% but under no circumstances less than 50%. Such discount should be applied to a period of part-time employment of no more than six years from 1 March 2017.
The Court has evidence before it that the Applicant intended to continue her studies and work towards the conferral of a PhD. There was substantial evidence of the capacity of the Applicant to work full time as well as study, given the number of tertiary qualifications she has amassed over the years. The Applicant has no children and her life seems to revolve around her husband, work and study. The Court is satisfied that but for the redundancy, the Applicant would have worked full time for a period of 4 years until reaching the age of around 60. Applicable salary rates are from 26 March 2020 being $117,167.00 and from 25 March 2021, $119,510.00. In addition, the Applicant was entitled to an amount of 17% of earnings as superannuation. This amounts to $19,918.39 for the year commencing 26 March 2020 and $20,316.70 in the following years.
In the current economic circumstances, the Court is not satisfied that any additional salary amounts by way of annual increases can be expected following the end of the current applicable Enterprise Agreement. Allowing four years of full time work, this amounts to a loss of salary and superannuation of $556,565.49.
The Court is not satisfied that the Applicant would have continued to work past the age of around 60 years, due to her health and resilience and the likelihood of job loss through no fault of her own. The Court is also not satisfied the Applicant would have continued working in a part time capacity.
The final issue to be determined is the appropriate discount for the vicissitudes of life. The Applicant submits this should be 3%. The Respondent submits the discount should be 100%, or alternatively 75% but under no circumstances less than 50%. In determining an appropriate figure, the Court has considered the Applicant’s age and overall health and the fact that she has been recovering from cancer. That recovery has been good to date. The Court has considered the difficulty of a person of the Applicant’s age, finding new employment after a considerable period of time out of the workforce. The Court has considered the major restructuring that has taken place at the Respondent’s organisation and the impact of the current pandemic on the economy as a whole, but in particular the tertiary education sector. The Court has taken into account the Applicant’s attempts to find alternative work. The Court is not satisfied the Applicant has been prepared to consider a wider range of alternative jobs other than those in a relatively small field, including with the Respondent.
The Court is satisfied that a discount of 50% is appropriate in all of the circumstances. Compensation for future economic loss will be set at $278,282.00
Compensation for Non-Economic Loss
The Applicant submits that she has suffered considerable distress and humiliation as a consequence of being made redundant from a position she had occupied for nearly 10 years in an institution where she had deep connections.
The Court is satisfied that the Applicant is entitled to be considered for an award of compensation in respect of such loss (see Australian Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (2011) 193 FCR 526 at 594 [441]) (“ALAEA”).
Evidence has been given to the Court, on behalf of the Applicant, that she suffered from trouble sleeping, anxiety and depressed mood. The Applicant was diagnosed unfit for work with “mixed anxiety and depressed mood” from 27 April 2017. The Applicant’s unfitness continued until the end of October 2017. The Applicant was referred to a consultant psychiatrist, Dr Patrick Morris. Dr Morris endorsed the earlier diagnosis and concluded the Applicant suffered from Adjustment Disorder with depressed mood as a result of workplace stressors, particularly the Applicant’s working relationship with her immediate supervisor Ms Chellappah. Dr Morris however, did note the following:
… she has developed emotional behavioural symptoms which are clinically significant as indicated by marked distress is out of proportion to the severity and intensity of the stressor and significant impairment in her social and occupational functioning.
It was submitted that in ALAEA, the Court awarded $7,500.00 for the distress, hurt and humiliation suffered by the Applicant as a consequence of contraventions, even in the absence of medical evidence as to the impact of the conduct upon him. It was submitted that the Court would award at least that amount in the present matter. In Flavel v Railpro Services Pty Ltd. (No 2) [2013] FCCA 1449, the Court ordered $25,000.00 by way of compensation for non-economic loss. The Applicant in that case allegedly caused a train accident. The incident left the Applicant with severe PTSD. On the Applicant’s first shift back as a train driver, he had a panic attack and had to withdraw. The Applicant’s employment was terminated without giving him a chance to fully recover.
The Respondent submits that the Applicant’s reaction has been disproportionate. Redundancy is not an uncommon incident in employment and had previously occurred to the Applicant in her career. While the Applicant has not found alternative work, she has no particular public professional (nor academic) reputation that has been shown to be impacted by the redundancy in her role. Further, the Applicant’s desire to pursue further academic study was aspirational on her part and not a requirement of the Respondent. That option is still open to the Applicant if she wants to pursue it. It is submitted that the Applicant took limited steps to mitigate her loss and failed to disclose that she was suffering from cancer. Accordingly, it is submitted on behalf of the Respondent that any compensation for non-economic loss should be minimal, if any.
The Court is satisfied that the Applicant has been deeply distressed and hurt by the actions of the Respondent. The Court rejects the Respondent’s claim that there should be either no award or a minimal award of compensation for non-economic loss. The fact that the Applicant’s reaction may have been disproportionate to what occurred does not mean that the Respondent can escape any blame for the Applicant’s adjustment disorder and depressed mood. Further, the Applicant was subject to intense cross examination during the course of the hearing, in relation to liability and also during the penalty hearing. The Court has no doubt this was an intensely uncomfortable experience. Taking into account the medical evidence that the Applicant did suffer from a mental health issue as a result of her termination, the Court is satisfied that an award of $15,000.00 for non-economic loss is appropriate.
Interest
The Applicant has applied for an order for the payment of interest on any order for general compensation or past economic loss up to the date of judgement pursuant to s.76 of the Federal Circuit Court Act 1999 (Cth).
The Respondent submits that no interest should be payable. It relies upon National Tertiary Education Unionv Royal Melbourne Institute of Technology (2013) 234 IR 139 at [154], where Gary J said the following:
.. I do not think it would be appropriate to order our RMIT to pay interest on that sum. In effect, Professor Bessant will already have received early payment of a significant part of the remuneration to which she would have been entitled if she had remained in employment. It would not be fair to allow her to claim interest on the remainder of her arrears of salary without bringing to account interest on what she has was already received early. In any event, when it comes to such matters as salary, the calculation of interest is inherently difficult.
In this matter, the Applicant has already received a payment on termination that will need to be deducted from any compensation for economic loss. Further, the Applicant has received a payment of $50,000.00 as part payment of compensation from the Respondent in early 2020. The calculation of interest on the Applicant’s economic loss would be inherently difficult, given that she would have received salary over time and that the amount of interest will vary accordingly.
Whilst the above applies to salary, the Court sees no reason why interest should not be payable on the damages for noneconomic loss of $15,000.00 detailed above. Interest is to be paid on that amount, but not on any compensation for economic loss.
Costs
Orders for the payment of costs are subject to s.570 of the FW Act, which is relevantly as follows:
Section 570(2)
The party may be ordered to pay costs only if:
a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
b) the court is satisfied that the parties unreasonable act or omission caused the other party to incur the costs; or
c) the court is satisfied of both of the following:
i. the party unreasonably refused to participate in a matter before the FWA;
ii.the matter arose from the same facts as the proceedings
In Ryan v Primesafe (2015) 323 ALR 107, Mortimer J stated at [64]:
The discretion conferred by the confined terms of s 570(2) should the exercised cautiously, and the case for its exercise should be clear: see Saxena v PPF Management Ltd [2011] FCA 395 at [6] per Bromberg J.
In Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221, the Full Federal Court stated at [166] that
It is well-established that a failure to accept a reasonable offer of compromise may constitute an unreasonable act for the purposes of s 570(2) and its predecessors: see, for example, McDonald v Parnell Laboratories (Aust) (No 2) (2007) 164 FCR 591 at 598-9 (Buchanan J).
It was submitted to the Court on behalf of the Applicant that the actions of the Respondent had been unreasonable including:
a)The Respondents defence to the proceedings;
b)The Respondents decision not to call any member of the panel who interviewed the Applicant on 19 December 2016;
c)The Respondent’s decision not to call Ms Chellappah or any other member of the executive group;
d)The Respondents filing and reading of the Affidavit of David Lovelace in its case.
The Applicant submitted that it should have been apparent from the facts in the matter that the Respondent’s defence of the proceedings could not succeed. Alternatively, having regard to the onus on the Respondent pursuant to s.360 of the FW Act, it should have been apparent to the Respondent that its defence of the matter, relying upon the evidence of Mr Lovelace, Ms Gower and Ms McLeay, could never succeed.
In terms of the filing and serving and reading of the affidavit of Mr Lovelace, in so far is it concerned the employer’s reasons and the development of the Workplace Change Proposal, the employer’s reasons and the development of the proposal was an unreasonable act because:
a)The Respondent was aware (or alternatively was constructively aware or should have been aware) of the existence of the 30 October email from Ms Chellappah. That email laid bare the fact that Ms Chellappah was intent on getting rid of the Applicant because she had exercised her workplace right to make complaints.
b)The Respondent was also aware of the history of the development of the Workplace Change Proposal, which included that Ms Chellappah had drafted the reasons for the disestablishment of the Applicant’s position and played a pivotal role in its development, liaising with Human Resources about the proposal over the course of many drafts.
c)Notwithstanding such knowledge, the Respondent filed, served and read the affidavit of Mr Lovelace, including paragraphs 121-124. In those paragraphs, Mr Lovelace refers first to those whom he “discussed my ideas” (Mr Gorman, Ms Chellappah and Human Resources) and then identifies those with whom he “worked on” the proposal – “Human Resources and I worked on my ideas over a number of months”. Ms Chellappah was not included in the category of those who Mr Lovelace worked on his ideas, despite the emails between them about the content of the documents showing they worked closely on them, and despite Mr Lovelace’s concessions in cross examination about the importance of including her in the process
It is submitted, that in short, the Respondent sought to defend the matter on the basis of an affidavit with a misleading account of the process by which the Applicant’s position was made redundant, by representing that Mr Lovelace was the decision-maker, when it was clear he held no such power under the Respondents delegations register. In order to disclose the real position, the Applicant incurred costs of:
a)Making applications to the Court for disclosure pursuant to the Rules, which applications were opposed by the Respondent;
b)Issuing a Notice to Produce for the production of documents;
c)Carrying out an analysis of the metadata of the Workplace Change Proposals;
d)Compiling those documents to tender them in evidence; and
e)Preparing and conducting a lengthy cross examination of Mr Lovelace to expose the true position.
The Respondent rejects that there is a basis for costs in the proceedings. In the Australian Workers Union v Leighton Contractors Pty Ltd (No 2) (2013) 232 FCR 428 at [7], the Full Federal Court confirmed that a party will rarely be ordered to pay the costs of a proceedings under the FW Act.
The Respondent notes that it made a number of attempts to resolve the matter on a commercial basis, including a revised monetary offer of 20 June 2019, following the identification of what became Exhibit X and no offer of settlement ever being made by the Applicant.
The Respondent submitted the Applicant was not willing to entertain any offer of settlement that did not involve a return to work at the University. The Respondent submitted there was an element of unreality in the Applicant’s position. This is because of both a disconnect in the Applicant’s own assessment of her performance and abilities set out in the evidence and also her aspirations of a career in academia. Further, the Applicant had developed and was being treated for cancer. The Applicant must be taken to have understood that any future employment with the Respondent would require a medical assessment, given the state of her health at the time her employment ended.
The Respondent submits that the nondisclosure as to the Applicant’s state of health goes to the requirement of trust and confidence in an employment relationship. The Respondent notes the Applicant pursued the discovery application before the Court in May 2019, in circumstances where such a process is not standard in the Court and had been rejected by Judge Street on 20 February 2019. It is submitted that the Respondent was a cooperative participant in a more refined process facilitated by notices to produce. It was submitted that the Respondent was entitled to defend the proceedings. That the liability decision ultimately made findings against the Respondent and all the circumstances of this matter mean that the threshold for an award of costs is not met.
The starting point for consideration of whether or not costs should be awarded is that the Court must be satisfied that the Respondent’s unreasonable acts or omissions caused the Applicant to incur the costs. It will be a rare case where costs will be awarded. The evidence justifying such an award would need to be very clear.
While there is no doubt that this matter was hard fought, but ultimately resulted in declarations in the Applicant’s favour, the Court is reasonably satisfied that the Applicant was not prepared to engage in any settlement negotiations which did not include her reinstatement to either the same position or similar position within the University. As against this, the offers of settlement made by the Respondent up to and including the offer of June 2019, after the publication of the decision on liability, are significantly less than the compensation that has been ordered above for both non-economic and economic loss. Further, it should have been apparent to the Respondent that the failure to call Ms Chellappah would be a serious obstacle to the successful defence of the case. No adequate reason has ever been given by the Respondent as to why Ms Chellappah was unavailable to give evidence
My assessment is that it was unreasonable for the Applicant, for the reasons the Court has set out above, to insist on any settlement including reinstatement. The Court does not consider that the applications for discovery by the Applicant, certainly on the second occasion, were reasonable bearing in mind the usual processes of the Court.
In these circumstances, the Court is not satisfied that the Respondent’s actions in the matter have been so unreasonable or that there have been omissions such as to warrant an order for costs. The Court considers the matters referred to by the Applicant, as to there being additional costs incurred, are simply the costs one would normally expect with the preparation and conduct of contested litigation.
Accordingly, the application for costs is denied.
I certify that the preceding eighty-three (83) paragraphs are a true copy of the reasons for judgment of Judge Humphreys
Associate:
Date: 6 May 2020
Corrections
Paragraphs [10](g) and [10](h) and [13] contained typographical errors by referring to Ms Gower. These paragraphs have been amended to correctly refer to Mr Nick Crowley.
0
19
4