Trevor Moody v C.T. Freight Pty Ltd
[2018] FWC 1033
•16 FEBRUARY 2018
| [2018] FWC 1033 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Trevor Moody
v
C.T. Freight Pty Ltd
(U2017/5297)
| Commissioner Gregory | MELBOURNE, 16 FEBRUARY 2018 |
Application for relief from unfair dismissal – application granted – decision as to remedy – compensation ordered.
Introduction
On 29 August 2017 the Commission handed down a decision in response to an unfair dismissal application made by Mr Trevor Moody.[1] The Commission found Mr Moody had been unfairly dismissed as his dismissal was harsh and unreasonable.
The Commission then turned to consider what remedy was appropriate. It initially concluded that reinstatement was not an appropriate remedy in all the circumstances. It then turned to consider whether it was appropriate to make an order of compensation having regard to the matters in s.392 of the Fair Work Act 2009 (Cth) (“the Act”), and the submissions of the parties. It came to various conclusions about those matters.
However, the Commission concluded by indicating (references omitted):
“[64] However, one factor which only emerged at the conclusion of the hearing is clearly significant in terms of any order for compensation that might be made. The evidence makes clear that Mr Moody has made two separate workers’ compensation claims in the recent past, and he provided correspondence at the conclusion of the hearing which indicates that the second of those claims has now been approved, and he is in receipt of additional workers’ compensation payments, which also appear to include some component of back pay. The decision in Sprigg, as affirmed by the Full Bench decision in Steggles Limited, makes clear that payments received in respect of workers’ compensation claims are to be considered in terms of any order for compensation that might be made. It is also noted that despite having been summarily dismissed Mr Moody did receive a payment equivalent to 5 weeks’ salary at the time of his termination.
[65] I therefore now request that Mr Moody to provide further confirmation to the Commission about the amount of any workers’ compensation payments that have been made to him since the date of his dismissal, whether he still continues to receive those payments and, if so, for how long is this likely to continue. This detail should include the amounts that have been or are now being provided on a weekly basis. He is also requested to confirm his salary details at the time of his termination, and any shortfall between that amount and the weekly workers’ compensation payments he has received since that time. These details should be provided to the Commission, if possible, within seven days of the date of this decision. The same information should also be forwarded to CT Freight. It will then have a further period of 7 days to provide any submissions about the accuracy or validity of the details provided by Mr Moody. I will then hand down a further decision in regard to any order for compensation.”[2]
The Commission has now received those additional submissions and now provides this decision in regard to remedy.
Mr Trevor Moody
Mr Moody provided details in his submissions about the workers’ compensation payments he has received since his dismissal on 4 May 2017. He initially indicated that those payments ended on 25 August last year following his recovery from a hernia operation.
He also provided various additional documents related to the compensation payments he received. This included payment summaries, dated 8 and 14 August 2017. He also attached his Group Certificate for the period of his employment with CT Freight, and details from its workers’ compensation Insurer relating to payments of compensation dated 23 August 2016, 1 May 2017, 12 July 2017 and 17 July 2017. The most recent weekly payment statement he attached indicates that the weekly payments he was receiving on the last date indicated on the statement were $1,419.00 per week.
He also submits that he received a 5 week termination payment, however, this does not appear on the PAYE summary he was provided with, and he would therefore include this payment in the tax return he lodges at the conclusion of the current financial year.
He also indicated that his age, the information contained on his separation certificate, and the lack of a satisfactory reference would all “likely adversely impact on my ability to gain future employment.”[3]
CT Freight
CT Freight submits that Mr Moody’s weekly salary at the time of his termination was $32.0511 or $1,217.94 per week. As Mr Moody indicated he was also paid an amount equivalent to 5 weeks’ salary in lieu of notice on termination, being a total gross amount of $6,089.70, which was paid in two instalments of $4,871.77 and $1,217.94.
It also notes that it was revealed at the conclusion of the previous hearing that Mr Moody had been back paid in regard to his workers’ compensation claim for the period 19 May 2017 – 18 August 2017. This payment amounted to $21,444.00. In addition, he has now disclosed a further payment of $1,419 for the period 19 August – 25 August 2017. These amounts in total are $28,952.70
However, CT Freight also indicated that it had since been informed by the Insurer that weekly payments were continuing to be paid to Mr Moody, and would continue until he obtains suitable alternative employment, or a medical clearance indicating he has recovered. The Commission therefore decided to seek clarification from Mr Moody about this. He indicated in response that at the time of the previous hearing he understood his workers’ compensation payments would cease following the hernia operation. However, he was continuing to receive those payments, and was still receiving them following a further independent medical examination in late 2017. He has also been unable to date to find suitable alternative employment, but is working with an occupational consultant to assist him to get back to work. He has also been advised by the Insurer that his claim is currently being reviewed, although at this stage he was uncertain about what the outcome of that review would be.
It continues to submit that s.392 of the Act makes clear that any order for compensation relates only to pecuniary loss, and Mr Moody’s loss post termination “is very little, if anything at all.”[4] It then makes reference to the well-established principles in Sprigg v Paul’s Licensed Festival Supermarket (‘Sprigg’)[5] and submits that any amount of compensation to be awarded requires deduction of monies received since termination, as well as taking account of relevant “contingencies.”[6]
It also refers to the decision of Commissioner Wilson in Martin v Beechworth Montessori Children’s Group Incorporated T/A Beechworth Montessori School[7] where it was found that the payments already made to the Applicant exceeded any possible compensation that could be awarded by the Commission. As a consequence no compensation was awarded.
CT Freight also submits that Mr Moody has provided little evidence of his attempts to mitigate his loss. It also submits he has his own trucking business, and has the potential to earn income via this source, and this again goes to the question of mitigation.
CT Freight submits, in conclusion, that no compensation should be awarded to Mr Moody.
Consideration
The previous decision of the Commission made reference to the relevant provisions in the Act in regard to making an order of compensation. Section 392 states:
“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.”[8]
The Commission also came to the following conclusions in that decision about each of the matters in s.392:
“(a) the effect of the order on the viability of the employer’s enterprise
Neither party suggested the effect of any order of compensation would impact on the viability of CT Freight.
(b) the length of the person’s service with the employer
Mr Moody was first employed 2011, and has been employed by CT Freight for more than five years. This is a significant period of service with one employer.
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed
Mr Moody provided information about his earnings in the 26 weeks prior to his dismissal. He indicated that his total earnings from 5 November 2016 to 5 May 2017 were $45,940.00. CT Freight did not take issue with this estimate.
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal
Mr Moody indicated that he has made attempts to find work elsewhere since being dismissed and has made eight job applications without being able to obtain other employment. However, he has also had a hernia operation recently and this has limited his ability to obtain other work in that he was, firstly, unable to look for work. In this context he was, firstly, unable to look for work while recuperating and, secondly, did not consider it appropriate to be looking for work when he would shortly be required to take time off to undergo an operation.
(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
The submissions set out above are also relevant to this consideration.
(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
The submissions set out above in regard to paragraph (d) are again relevant in this context.
(g) any other matter that the FWC considers relevant
While Mr Moody was summarily dismissed on grounds of serious misconduct, he was still provided with a payment of 5 weeks’ pay in lieu of notice. Neither party has made submissions about any other matters that might be relevant in this context, and the Commission is not aware of any other matters that should be taken into account.”
Conclusion as to Remedy
As indicated, in determining what amount of compensation, if any, should apply in this matter I have had regard to s.392 of the Act. I have had regard to the approach of the Full Bench in Sprigg.
While it is obviously impossible to be precise about how much longer an employee might be employed for, if not for their dismissal, I am satisfied Mr Moody had a reasonable expectation of being employed by CT Freight for a further period of at least 12 months, if not longer, at the time at the time he was dismissed. No issues were raised about his work performance during his six years of employment, and the evidence indicates he was generally regarded as a valued employee. In addition, the injuries he sustained at work, while serious, were not necessarily long-term or career ending.
Section 392(3) also makes clear that if the Commission is satisfied the employee’s misconduct contributed to the decision to dismiss then the Commission must reduce the amount that would otherwise be ordered. However, the evidence does not point to any misconduct on Mr Moody’s part that would warrant a reduction in the amount of compensation that might otherwise be ordered.
Previous Commission decisions have also made clear that any workers’ compensation payments received by the employee are to be deducted from the amount of any compensation order, as are payments made in lieu of notice.
The decision in Sprigg set out the following steps in determining an amount of compensation.
“1.Estimate the amount the employee would have received or would have been likely to receive if the employment had not been terminated,
2. Deduct monies earned since termination,
3. Deduction for contingencies,
4. Calculate any impact of taxation, and
5. Apply the legislative cap.”[9] (Set by s.392(5))
The amount of any adjustment to then be made on the basis of “contingencies” was also considered in Slifka v JW Sanders Pty Limited.[10] It concluded that some allowance should generally be made for contingencies on the basis that the Applicant may not have remained in employment for the whole of the anticipated employment period. Other issues might also arise, such as unexpected ill-health, lawful termination, voluntary resignation, redundancy, or the closure of the business. In addition, some allowance might be made for the fact that a substantial part of the compensation awarded will generally be received at an earlier point in time than if the Applicant had completed their anticipated employment period with the business. In Slifka the appropriate reduction on the basis of likely “contingencies” was deemed to be 25%, however, more recent Commission decisions have concluded that the relevant percentage amount should be determined on the basis of the circumstances existing in the particular matter.
As indicated, the approach in Sprigg firstly requires that an estimate be made of the amount Mr Moody would have received, or would likely have received, if his employment had not been terminated. This is generally done by estimating how long the person would have remained in employment, if not for their employment having been terminated. Leaving aside the incident, which was not work-related, which led to Mr Moody’s termination, he appears to have had an excellent work record during his employment with CT Freight. There was no evidence of him having been warned about any behavioural or work performance issues. He had also been employed for more than five years, which is a reasonable period of service with one employer. These considerations would suggest he would likely have remained in employment for a reasonable period of time if not for his termination.
However, it is also noted that Mr Moody had been through a difficult period in the last 12 months of his employment. On 8 July 2016 he reported a work-related injury and made a WorkCover claim on 18 July, which was approved by the Insurer. He was absent from work from 9 July until 23 August, and then returned on 24 August on restricted hours and with specific physical restrictions in place. Then in January 2017 he informed CT Freight that he would be making a further WorkCover claim in regard to a hernia condition. It was submitted on 21 April and he later underwent a hernia operation.
As noted in the previous decision the injuries Mr Moody sustained at work do not necessarily appear to be long-term or career ending. There is also no evidence that they were related. However, they do suggest that Mr Moody was becoming susceptible to some health issues. I am satisfied, on balance, that it is reasonable to conclude that he would have remained in employment for a further period of at least 12 months if not for his termination.
At the time of his termination Mr Moody’s ordinary time rate of pay was $32.05 per hour or $1,217.94 per week. However, he regularly received additional amounts of overtime and, in the six months prior to his termination, his evidence indicated that his total earnings were $45,940.00, being an average per week of $1,766.92. It is also noted that CT Freight’s Insurer estimated that his pre-injury average weekly earnings (PIAWE) were $1,774.00 when it stated in its correspondence to Mr Moody, “Based on the information provided by you and your employer, we calculate your PIAWE to be $1,774.00,”[11] noting also that this included an amount of $554.00 per week in respect of overtime. While CT Freight submits that there are no guarantees in regard to the availability of overtime hours Mr Moody’s employment history points to a consistent pattern of overtime being worked. I am satisfied, in conclusion, that his earnings over a 12 month period can be estimated to be $91,879.84, based on an average weekly earnings figure of $1,766.92.
The formula in Sprigg next requires that any monies earned since the date of termination be deducted from this total amount. Despite being dismissed on grounds of misconduct Mr Moody received five weeks’ pay in lieu of notice at the time of his termination. This was based on his ordinary time rates of pay of $1,217.94 per week and amounted to a total of $6,089.70. It is appropriate to deduct this amount from his estimated earnings over the future 12 month period:
$91,879.84 less $6,089.70 = $85,790.14
Mr Moody has also been in receipt of workers’ compensation payments since his termination. The documentation he provided from the Insurer indicates that for the 13 weeks prior to 29 July 2017 he received $1,685.00 gross per week, being 95% of his PIAWE. This payment over 13 weeks represents a total amount of $21,905.00.
However, from 29 July 2017 these weekly payments reduced to $1,419.00, being 80% of his PIAWE. The email correspondence received from Mr Moody on 12 February 2018 indicates that he is continuing to receive these weekly payments at this time, although his claim is going to be reviewed again at some point in the future. However, it can be assumed that for the balance of the 12 month period Mr Moody received weekly payments of $1,419.00 per week, being a total of $55,341.00 over that 39 week period. The total of these workers’ compensation payments, being an amount of $77,246.00, must also be deducted from his anticipated future earnings:
$85,790.14 less $77,246.00 = $8,544.00
The decision in Sprigg next requires that a deduction be made in respect of contingencies. There is obviously some uncertainty associated with the current assessments. For example, Mr Moody may or may not have remained in employment for a further period of 12 months. His overtime entitlements might have fluctuated. Further issues might have arisen in regard to his health. In all the circumstances I am satisfied that it is appropriate to deduct a further amount of 25% from the above figure in respect of contingencies:
$8,544.00 less $2,136.00 = $6,408.00
This amount is obviously to be taxed according to law.
Conclusion
In considering whether it is appropriate to make an order for payment of compensation to Mr Moody I have had regard to the provisions contained in s.392, and to the authorities that are relevant in this context. I am satisfied in all the circumstances that it is appropriate to make an order of compensation in the amount of $6,408.00.
I therefore order that CT Freight pay to Mr Trevor Moody an amount of $6,408.00, less applicable taxation. This amount is to be paid within 21 days of the date of this decision. An Order to this effect is issued in conjunction with this decision.
COMMISSIONER
Final written submissions:
Applicant’s final written submissions received 4 September 2017.
Respondent’s final written submissions received 12 September 2017.
<PR600482>
[1] Moody v C.T. Freight Pty Ltd[2017] FWC 4491.
[2] Ibid [64]-[65].
[3] Applicant’s submissions re remedy, dated 31 August 2017, p 2.
[4] Respondent’s submissions re remedy, dated 12 September 2017, [11].
[5] (1998) 88 IR 21.
[6] Ibid 29.
[7] [2017] FWC 3314.
[8] Fair Work Act 2009 (Cth) s 392.
[9] Sprigg (1998) 88 IR 21, 29.
[10] (1995) 67 IR 316.
[11] Applicant’s submission re remedy, 31 August 2017, Attachment letter from EML VIC Pty Ltd to Applicant, dated 23 August 2016.
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