Wai Kam Mok v Lau and Order T/A Middlefield Group

[2019] FWC 4434

[2019] FWC 4434

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Wai Kam Mok
v
LAU AND ORDER T/A MIDDLEFIELD GROUP
(U2019/2122)

DEPUTY PRESIDENT CLANCY MELBOURNE, 27 JUNE 2019

Application for an unfair dismissal remedy – total failure by the Respondent to engage with the application, directions or hearing processes – application granted – compensation in the amount of $42,503.76 awarded.

Procedural Background

[1] On 26 February 2019, Mr Wai Kam Mok applied under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy (unfair dismissal application). In his Form F2 – Unfair dismissal application (Form F2), Mr Mok identifies the Respondent to his application as the entity Lau and Order T/A Middlefield Group (the Respondent). Mr Mok seeks compensation in lieu of reinstatement.

[2] Mr Eddie Lau was listed as the contact person for and Director of the Respondent in the Form F2 and contact details for him were provided by Mr Mok. These included a telephone landline, a mobile phone number, Mr Lau’s email address and a postal address.

[3] The Respondent has completely ignored the unfair dismissal application since the first correspondence sent from the Commission dated 4 March 2019. This initial correspondence enclosed:

•  a Notice of Listing advising that a conciliation by telephone before a Fair Work Commission conciliator was to take place at 11.15am on 28 March 2019;

•  the Form F2; and

•  a Form F3 – Employer response to unfair dismissal application (Form F3).

[4] The telephone conciliation was subsequently re-listed for 8 April 2019. The respondent was notified of this through a Notice of Listing dated 2 April 2019, which was sent to Mr Lau’s email address. A letter sent to Mr Lau via email on 3 April 2019 also advised of the new time and date of the telephone conciliation. There was no one in attendance for the Respondent at the telephone conciliation. On 8 April 2019, the Commission wrote to the parties and invited them to request a re-listed conciliation by telephone. No response was received from the Respondent, while Mr Mok requested that his unfair dismissal application proceed to arbitration in an email to the Commission on 10 April 2019.

[5] Accordingly, Directions were issued in a Notice of Listing dated 15 April 2019 requiring the parties to file material ahead of the Arbitration Conference/Hearing listed to commence on 20 June 2019. The Notice of Listing was sent to both Mr Lau’s email address and the Respondent’s postal address on 15 April 2019, although the latter was returned to the Commission on 30 April 2019 marked “return to sender”.

[6] In compliance with the Directions, Mr Mok filed his material on 6 May 2019 and it was sent to Mr Lau’s email address on 7 May 2019. On 31 May 2019, additional material Mr Mok intended to rely upon was sent to Mr Lau’s email address.

[7] The Respondent’s outline of argument, statement(s) of evidence and document list were due by no later than noon on 27 May 2019. At 3.29pm on 27 May 2019, the Commission attempted to contact the Respondent via Mr Lau’s mobile phone number. It was apparent that this phone number had been disconnected. At 3.30pm, the Commission attempted to contact the Respondent via its landline but the call could not be completed. At 3.36pm, the Commission sent Mr Lau an email reminding him that the Respondent’s material was due to be filed and warning him that if he did not respond and did not attend the Arbitration Conference/Hearing listed to commence on 20 June 2019, the unfair dismissal application would still proceed and be heard in the Respondent’s absence. Mr Lau was cautioned that this might result in orders being made against the Respondent.

[8] On 30 May 2019, a Notice of Listing was sent to the parties confirming the Arbitration Conference/Hearing was to proceed on 20 June 2019 and confirming that the Respondent’s outline of argument, statement(s) of evidence and document list had been due by no later than noon on 27 May 2019. This was sent to Mr Lau’s email address and the Respondent’s postal address.

[9] Despite three requests in writing from the Commission that it complete a Form F3 as well as the Notices of Listing, correspondence and attempted phone calls from the Commission, there was no material filed on behalf of the Respondent at any stage.

Arbitration Conference/Hearing on 20 June 2019

[10] The Arbitration Conference/Hearing was listed for 20 June 2019 before me. Mr Mok attended and gave evidence in support of his unfair dismissal application.

[11] There was no one in attendance from the Respondent. At the appointed commencement time of 10.00am, there was no representative from the Respondent present in the hearing room. Two attempts were then made to contact Mr Lau on his mobile phone number. This phone number was engaged on both occasions and there was no facility to leave a voicemail message. An attempt was then made to contact Mr Lau on the Respondent’s landline but the number had been disconnected and a phone call could not be completed. Contact was then made with the Commission’s Melbourne Registry to enquire as to whether any representative from the Respondent had attended the registry counter. The advice received was that no one had done so. Finally, my Associate inspected the foyer areas outside the hearing room and announced the matter but it became apparent there was no one from the Respondent present.

[12] In these circumstances, and having regard to the Commission’s prior attempts to contact the Respondent and the correspondence I have outlined above, I considered I had no option but to proceed in the absence of a representative from the Respondent. Mr Mok wanted to proceed with a hearing of the matter and having considered the requirements of s.399(1) of the Act and the circumstances before me, I determined that it was appropriate for the matter to be dealt with by way of a hearing. I considered this would be the most effective and efficient way to resolve this particular matter.

Factual Background

[13] Mr Mok says that he commenced employment with the Respondent on or about 31 July 2017 on a part time basis, initially working three days per week. This increased to four days per week from 2018 and in September 2018, Mr Mok was made practice manager. By the time his employment was terminated, Mr Mok’s payslips indicated he was to be paid 76 hours per fortnight. 1

[14] During October and November 2018, it became apparent to Mr Mok that although he was being issued with payslips outlining payments of salary and superannuation, the funds for his salary payments were not being deposited into his bank account. What followed was a series of requests by Mr Mok that he be paid which were met with a combination of excuses (“a system error”), promises to pay (which did not materialise), deflection between various members of the Respondent’s staff and management and silence.

[15] By February 2019, Mr Mok said he had still not been paid and he had discovered that other employees had also been experiencing delays in getting paid, albeit not to the same extent. Mr Mok said he was continuing to perform his duties for the Respondent despite not having been paid for at least three months and having been forced to live off his bank savings.

[16] On 5 February 2019, Mr Mok said he was called to a meeting by Mr Lau and Mr David Abbas (Chief Financial Officer) of the Respondent. At the meeting, Mr Mok said he enquired about his unpaid salary and was told that the Respondent could not do anything about it and further, that it would have to let him go. Mr Mok said he asked whether his employment was being terminated and was told the Respondent had to let him go “for redundancy reasons due to a slowdown in business”. Mr Mok said he was told his termination was not related to his performance. Mr Mok also said he was told that he would receive his unpaid salary and that other employees of the Respondent were to be “let go” as well.

[17] Mr Mok requested confirmation of his termination in writing and the arrangements for the payment of his outstanding salary, accrued annual leave and superannuation payments (which had not been paid since December 2017). He said he was told to draft an email himself. Mr Mok did this and sent it to Mr Lau and Mr Abbas on 5 February 2019. 2 At no stage did either Mr Lau or Mr Abbas dispute the details outlined in the email drafted by Mr Mok.

[18] Mr Mok said he was told that the Respondent could not pay him immediately and that he would have to wait a further three weeks. There was further email correspondence but the promises of final payment were not honoured by the Respondent. Consequently, Mr Mok instructed solicitors to send the Respondent a letter of demand dated 28 February 2019, in which he outlined his allegations that the Respondent had failed to pay him $22,045.39 in wages and $7831.87 in superannuation. 3

[19] The evidence from Mr Mok was unchallenged. He presented as a witness of credit, giving his evidence in a consistent and authentic manner. I have no reason to doubt the veracity of Mr Mok’s evidence.

Initial matters to be considered

[20] I will deal with the four matters referred to in ss.396(a)-(d) of the Act, as follows.

[21] Firstly, Mr Mok’s application was made within the 21 day period required by s.394(2) of the Act (s.396(a) of the Act).

[22] Secondly, Mr Mok is a person protected from unfair dismissal, as he had completed the minimum employment period. Mr Mok commenced part time employment with the Respondent on 31 July 2017 and his employment continued until his termination on 5 February 2019. Further, at the time of his dismissal, Mr Mok’s annual rate of earnings ($85,000 per annum plus superannuation) was less than the high income threshold (s.396(b) of the Act).

[23] Thirdly, s.396(c) of the Act requires me to consider whether the dismissal was consistent with the Small Business Fair Dismissal Code (the Code) before turning to deal with the issue of whether the dismissal was unfair. 4

[24] The Code is also referred to in s.385(c) of the Act and the Note to s.385 states, “For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[25] Section 388 of the Act then provides:

“388 The Small Business Fair Dismissal Code

(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.

(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.” (emphasis added)

[26] The definition of a “small business employer” for the purpose of the Act is in s.23, with s.23(1) providing that “A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.”

[27] At the hearing, Mr Mok gave evidence that the Respondent employed less than 15 employees at the time of his dismissal. There is nothing before me to dispute that the Respondent was a “small business employer” at the time of Mr Mok’s dismissal.

[28] The Code declared by the Minister pursuant to s.388(1) is as follows:

“Summary dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee's conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee's response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer's job expectations.

Procedural matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”

[29] Mr Mok denies engaging in any form of behaviour that could be considered sufficiently serious to justify his immediate dismissal and says there were no issues relating to his capacity or conduct for which he received a warning that he was at risk of being dismissed. Mr Mok’s evidence was convincing and unchallenged. There was no material submitted or evidence lead on behalf of the Respondent contradicting it.

[30] Specifically, the Respondent at no stage submitted or asserted that it complied with the Code. The email from Mr Mok to Mr Lau and Mr Abbas dated 5 February 2019 5 was unchallenged, so I am satisfied that the Respondent did not hold the belief that either Mr Mok’s conduct during his employment was at any time sufficiently serious to justify his immediate dismissal or there was a valid reason for his dismissal related to his capacity or conduct. As such I am unable to determine, based on the material and evidence before me, that the Respondent could have held the requisite belief for either form of dismissal contemplated by the Code that was, objectively speaking, based on reasonable grounds.6

[31] Having considered whether the dismissal of Mr Mok was consistent with the Code, I am not satisfied it was (s.396(c) of the Act).

[32] Fourthly, as this case involves a question as to whether or not the circumstances involved a genuine redundancy, I must make a finding as to whether or not I find this to be the case on the facts before me (s.396(d) of the Act).

[33] Section 389 of the Act sets out the meaning of genuine redundancy:

“389 Meaning of genuine redundancy

(1) A person's dismissal was a case of genuine redundancy if:

(a) the person's employer no longer required the person's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person's dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer's enterprise; or

(b) the enterprise of an associated entity of the employer.”

[34] Mr Mok said that in the meeting on 5 February 2019, he was advised that the Respondent no longer required his job to be performed by anyone because of a downturn in its business and further, that it would also be letting other employees go. However, the unchallenged evidence of Mr Mok was that he had been gainfully employed on a range of matters and as things have transpired, no other employee has been retrenched. He also said the Respondent has active projects totalling approximately $600,000.00 that warranted his continued employment and that Mr Lau has more recently communicated an optimistic outlook for the Respondent’s future. 7 Further, Mr Mok gave unchallenged evidence that:

•  there was no consultation with him about the redundancy and he was simply advised that it was to take effect immediately;

•  he could have reasonably been redeployed with the business of the Respondent as a project architect or in the administration side of the business;

•  it was never put to him that he might take a reduction in pay as an alternative to redundancy; and

•  the Respondent has multiple entities but no options for redeployment into one of them were ever canvassed or offered.

[35] Having regard to the unchallenged and convincing evidence of Mr Mok, I am satisfied on the facts before me that his dismissal was not a case of genuine redundancy within the meaning of s.389 of the Act or any form of redundancy.

Section 385 – was Ms Mok’s dismissal unfair?

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

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

Section 385(a) – was Mr Mok dismissed?

[37] There was no dispute and I am satisfied that Mr Mok was dismissed within the meaning of s.386(1) of the Act.

Section 385(c) – Small Business Fair Dismissal Code

[38] As concluded in paragraph [31] above, I am satisfied the dismissal was not consistent with the Code.

Section 385(d) – Genuine redundancy

[39] As outlined in paragraph [35] above, I am satisfied the dismissal was not a case of genuine redundancy.

Section 385(b) – Harsh, unjust or unreasonable

[40] The criteria I must take into account when required to assess whether a dismissal was harsh, unjust or unreasonable, within the meaning of s.385(b) of the Act, are set out in s.387 of the Act.

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.”

[41] I am under a duty to consider each of these criteria in reaching my conclusion and will do so below. 8

Was there a valid reason for dismissal relating to Mr Mok’s capacity or conduct? (s.387(a))

[42] In considering whether the dismissal of Mr Mok was harsh, unjust or unreasonable, I am required to take into account whether there was a valid reason for the dismissal related to his capacity or conduct (including its effect on the safety and welfare of other employees).

[43] A valid reason need not be the reason given to Mr Mok at the time of the dismissal. 9 The reason or reasons should be “sound, defensible and well founded”10 and should not be “capricious, fanciful, spiteful or prejudiced”.11

[44] The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer. 12 The question the Commission must address is whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees). Where conduct of an employee is relied upon to justify the decision to terminate employment, the Commission needs to be satisfied that the conduct as alleged, occurred.13 A mere suspicion of conduct does not amount to a valid reason.14

[45] Mr Mok’s account was convincing and unchallenged and there has been no evidence lead on behalf of the Respondent contradicting Mr Mok’s testimony.

[46] I am not persuaded there was a valid reason for the dismissal related to Mr Mok’s capacity or conduct. I am satisfied the reason given to Mr Mok was that he was being made redundant and he was told his termination was not related to his performance.

Notification of the valid reason – s.385(b)

[47] Based on the evidence before me, Mr Mok could not have been notified of a valid reason for his dismissal related to his capacity or conduct because there was none.

Opportunity to respond to any reason related to capacity or conduct – s.387(c)

[48] As I have not found there was a valid reason for Mr Mok’s dismissal that was related to his capacity or conduct, this factor is not a relevant consideration in this case.

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

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

[50] There is no positive obligation on an employer to offer an employee the opportunity to have a support person:

“This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.” 15

[51] Mr Mok did not ask about having a support person for the meeting on 5 February 2019 and I consider this factor to be a neutral consideration in this case.

Warnings regarding unsatisfactory performance – s.387(e)

[52] As Mr Mok was not terminated on the basis of unsatisfactory performance, this factor is not a relevant consideration in this case.

Impact of the size of the Respondent on procedures followed – s.387(f) and Absence of dedicated human resources management specialist/expertise on procedures followed – s.387(g)

[53] As the Respondent did not file any material or make submissions addressing these factors, I am not persuaded its size (s.387(f)) nor the absence of dedicated human resource management specialists or expertise (s.387(g)), if any, are relevant factors in this case.

Other relevant matters – s.387(h)

[54] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.

[55] Mr Mok worked for the Respondent for approximately eighteen months. He said he had been loyal and had worked hard for the business and was considered a good worker. There is nothing before me to dispute this.

[56] Mr Mok endured what no employee should have to endure. Despite working diligently for his employer, he was not paid for approximately three months prior to his dismissal. The Respondent deflected and ignored Mr Mok’s repeated, lawful requests for payment. It was callously indifferent to Mr Mok’s financial well-being and acted solely in its own interests in its attempt to make its obligations to Mr Mok “disappear” by terminating his employment. It did not and has not, since the termination, addressed the non-payment of Mr Mok’s wages, superannuation and annual leave entitlements. I regard the behaviour of the Respondent and in particular, Mr Lau, as duplicitous and utterly disgraceful.

Consideration

[57] Having considered each of the matters specified in s.387 of the Act, I am satisfied the dismissal of Mr Mok was harsh because the Respondent singled him out amongst all of its employees and the termination was effected in order to avoid the payment of Mr Mok’s outstanding salary, superannuation and annual leave entitlement, after having denied him his salary for three months and his superannuation entitlements for over a year.

[58] Further, I am satisfied on the material and evidence before me that the dismissal was unjust and unreasonable because it had no sound, defensible or well-found basis. I am not satisfied Mr Mok’s dismissal was consistent with the Code or that it was a case of genuine redundancy within the meaning of s.389 of the Act, or indeed due to any form of redundancy. There was no valid reason for the dismissal related to Mr Mok’s capacity or conduct and nor was the dismissal related to unsatisfactory performance.

[59] Accordingly, I find that Mr Mok’s dismissal was unfair. Mr Mok’s application for unfair dismissal remedy is therefore granted.

Remedy

[60] In the circumstances where I have found Mr Mok was protected from unfair dismissal at the time of being dismissed and that he has been unfairly dismissed, s.390 of the Act prescribes that a remedy is available. Accordingly, I am required to determine whether to order the reinstatement of Mr Mok or, in the circumstances where reinstatement is inappropriate, an order for compensation if I am satisfied that such an order is appropriate in all the circumstances. 16

[61] The primary remedy under the Act is reinstatement, however Mr Mok does not seek reinstatement. In the circumstances of this case, particularly where Mr Mok was not paid either salary for three months of his employment or superannuation for over twelve months of his employment, I am satisfied it is inappropriate to order reinstatement (s.390(3)(a)).

[62] I must therefore consider whether it is appropriate in all the circumstances to make an order for payment of compensation (s.390(3)(b)).

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

[64] In considering each of the criteria in s.392 of the Act, it is useful to refer to the helpful restatement of principles to be applied in the assessment of compensation in Johnson
v North West Supermarkets T/A Castlemaine IGA: 17

“[9] The well-established approach to the assessment of compensation under s 392 is to apply the ‘Sprigg formula’, derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket. This approach was articulated in the context of the current legislative framework in Bowden v Ottrey Homes Cobram and District Retirement Villages. Under that approach, the first step to be taken in assessing compensation is to consider s.392(2)(c), that is, to determine what the applicant would have received, or would have been likely to receive, if the person had not been dismissed. In Bowden this was described in the following way:

“[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:

‘... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.’

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the ‘anticipated period of employment’...”

[10]The identification of this starting point amount ‘necessarily involves assessments as to future events that will often be problematic,’ but, as the Full Bench observed in McCulloch v Calvary Health Care Adelaide, ‘while the task of determining an anticipated period of employment can be difficult, it must be done.’

[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.” (references omitted)

[65] The Sprigg formula was discussed and refined in Ellawala v Australian Postal Corporation 18as follows:

“[31] The principles applicable to determining an amount to be ordered in lieu of reinstatement are dealt with in Sprigg. In that case the Full Bench endorsed the following approach:

Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).

Step 2: Deduct monies earned since termination.

Step 3: Discount the remaining amount for contingencies.

Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.

[32] Any amount provisionally arrived at by application of these steps is subject to whether offsetting weight is given to other circumstances, including those that need now to be taken into account under paragraphs 170CH(7)(a), (b) and (c). The legislative cap on the amount able to be ordered is then applied pursuant to ss.170CH(8) and (9).

[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:

“...we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.”

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the "anticipated period of employment". This amount is then reduced by deducting monies earned since termination. Only monies earned during the period from termination until the end of the "anticipated period of employment" are deducted. An example may assist to illustrate the approach to be taken.

[35] In a particular case the Commission estimates that if the applicant had not been terminated then he or she would have remained in employment for a further 12 months. The applicant has earned $3,000 a month for the 18 months since termination, that is $54,000. Only the money earned in the first twelve months after termination - that is $36,000 - is deducted from the Commission's estimate of the applicant's lost remuneration. Monies earned after the end of the "anticipated period of employment", 12 months after termination in this example, are not deducted. This is because the calculation is intended to put the applicant in the financial position he or she would have been in but for the termination of their employment.

[36] The next step is to discount the remaining amount for "contingencies". This step is a means of taking into account the possibility that the occurrence of contingencies to which the applicant was subject might have brought about some change in earning capacity or earnings.

…

[45] In relation to the fourth step set out in Sprigg we note that the usual practice is to settle a gross amount and leave taxation for determination.” (my emphasis, references omitted)

[66] In Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Darren Nurcombe, 19 the Full Bench stated that in quantifying compensation, it is necessary to set out with some precision the way in which the various matters required to be taken into account under s.392(2) (and s.392(3) if relevant), and the steps in the Sprigg formula, have been assessed and quantified. The Full Bench also proffered that the way in which a final compensation amount has been arrived at should be readily apparent and explicable from the reasons of the decision-maker.

[67] I will assess compensation having regard to these matters.

Remuneration that would have been received if the dismissal had not occurred– s.392(2)(c)

[68] The payslips Mr Mok submitted confirm that his gross earnings were $3,269.52 per fortnight. This equates to gross earnings of $1,634.76 per week.

[69] Mr Mok’s intention and expectation was to stay in the employ of the Respondent on an ongoing basis. He had no intention of moving on. Mr Mok gave account of what he characterised as the good standing in which he had been held by the Respondent during his employment. Mr Mok also gave evidence that while the Respondent had been experiencing some issues, he had been playing his part in helping it to ride them out and remaining with the business. In this respect, he proffered that there would be sufficient ongoing work for the business due to the active projects it had and has.

[70] There was no evidence before me to contradict Mr Mok’s version of what occurred during or subsequent to his employment. Mr Mok did not convey that the delays in him receiving his salary were such that, had he not been dismissed, he was going to voluntarily leave his employment in the near future. Even though it seemed to eventually bring about his termination, I consider Mr Mok was well within his rights to raise the issues he had about not being paid, even if the Respondent was continually evasive and may not have welcomed the regular enquiries and scrutiny. Mr Mok’s evidence was that no other colleague of his from his employment with the Respondent has been made redundant in the period since his termination, and I have noted unchallenged material submitted by Mr Mok that suggests there are projects on the books of the Respondent totalling multiple hundreds of thousands of dollars, 20 and that it has entered into a lease for new business premises.21

[71] Having regard to these factors, I am satisfied that Mr Mok would have remained in employment with the Respondent for a further period of at least 12 months. Any longer period than this starts to drift into the unduly speculative. Based on the rate of earnings Mr Mok was receiving at the date of his dismissal, the remuneration he would have received during that period would have been $85,000.00 (gross). This is the starting point.

Remuneration earned – s.392(2)(e) and income reasonably likely to be earned – s.392(2)(f) and (g)

[72] Remuneration earned from the date of dismissal to the date of any compensation order is required to be taken into account under s.392(2)(e) of the Act. Remuneration reasonably likely to be earned from the date of any compensation order to the date the compensation is paid is to be taken into account under s.392(2)(f) of the Act. Any remuneration likely to be earned after that date to the end of the period of anticipated employment determined for the purpose of s.392(2)(c) is a relevant amount to be taken into account under s.392(2)(g) in accordance with the Sprigg formula. 22

[73] Mr Mok stated that he did not earn any additional remuneration until he commenced some casual employment in May 2019. His new employment is teaching at tertiary level at Chisholm on a casual basis. He stated that he has been engaged earning $70.81 per hour gross for a 21 hour week, equating to gross ordinary weekly earnings of $1,487.01.

[74] To the date of the hearing, Mr Mok had therefore earned approximately $10,409.07 gross in the period from the date of his dismissal to date, from the seven week’s work in this teaching role.

[75] Mr Mok gave evidence that he would earn a further $1,487.01 gross for a further week of work up until 28 June 2018 before there is a mid-year break from classes for students. The $1,487.01 gross earnings for such a period would also need to be deducted.

[76] As Mr Mok commenced receiving remuneration from his new job from May 2019 and this is beforethe time when his employment would, in my view, have ended, these earnings should reduce the amount of compensation ordered.

[77] Continuing in this role during the 32-week balance of the 52 week period I have determined that Mr Mok would have remained in employment with the Respondent would see Mr Mok earning $1,487.01 gross per week for at least 13 weeks of teaching during Semester Two of 2019. This equates to an additional total of $19,331.13 over that period.

[78] In mathematical terms, deducting the actual and likely income for Mr Mok for the twelve month period from the date of his dismissal ($31,227.21) 23 from the amount calculated for the purpose of s.392(2)(c) ($85,000),24 leaves $53,772.79 gross in compensation.

Length of service – s.392(2)(b) and any other matters – s.392(2)(g)

[79] Mr Mok had been employed for approximately one and a half years at the time of his dismissal. He had served conscientiously and diligently but was opportunistically dismissed for reason of an alleged redundancy, which I am not satisfied occurred, without payment for his preceding three months’ work or his entitlement for two weeks’ notice pursuant to s.117(3) of the Act.

[80] I do not consider there is any basis for any deduction for contingencies in this matter and it will be left to the Respondent to deduct taxation required by law.

Viability – s.392(2)(a)

[81] There was no evidence before me that would support a finding that an order for compensation will affect the viability of the Respondent in any material way and there will be no deduction made having regard to this factor.

Mitigation efforts – s.392(2)(d)

[82] In considering whether Mr Mok has taken steps to mitigate the loss suffered as a result of the dismissal, I should take into account whether he acted reasonably in the circumstances. 25 I find that Mr Mok’s securing of a new teaching role since his termination, together with his evidence that he is in dialogue with recruiters in relation to applying for new employment and his preparedness to undertake private architectural work, warrant no adjustment on account of this factor.

Misconduct – s.392(3)

[83] There is no basis for me to conclude there was misconduct on the part of Mr Mok that contributed to the decision of the Respondent to dismiss him and I therefore do not make any reduction on account of this factor in the proposed compensation.

Compensation cap: s.392(5)&(6)

[84] The amount of compensation I order must not exceed the lesser of:

1) the amount Mr Mok received, or was entitled to receive, during the 26 weeks immediately prior to his dismissal (in this case $1,634.76 gross x 26 weeks = $42,503.76); and

2) half the amount of the high income threshold immediately before the dismissal (in this case $145,440 ÷ 2 = $72,700.00).

[85] As such, the compensation cap in this matter is $42,503.76 gross and the amount of compensation proposed must not and does not exceed this.

Instalments: s.393

[86] I do not consider that there is any reason for compensation to be made by way of instalments. The conduct of the Respondent most certainly weighs against this.

Shock, Distress: s.392(4)

[87] The amount of compensation calculated must not and will not include a component for shock, distress, humiliation or other analogous hurt caused to Mr Mok by the manner of his dismissal.

Conclusion

[88] I am satisfied that Mr Mok was protected from unfair dismissal, that the dismissal was unfair and that order for compensation equating to $42,503.76, less taxation as required by law, is appropriate having regard to all the circumstances of the case.

[89] An order requiring the payment of this amount within 7 days will be issued with this decision.

[90] Finally, I intend to take the necessary steps required for the conduct of the Respondent and Mr Lau to be considered for referral to the Australian Taxation Office and the Fair Work Ombudsman Office for investigation.

DEPUTY PRESIDENT

Appearances:

Mr Wai Kam Mok, on his own behalf.

Hearing details:

2019.

Melbourne.

20 June.

Printed by authority of the Commonwealth Government Printer

<PR709725>

 1   Exhibit A7.

 2   Exhibit A4.

 3   Exhibit A10.

 4   TIOBE Pty Ltd T/A TIOBE v Chen [2018] FWCFB 5726 at [24].

 5   Exhibit A4.

 6   Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services[2015] FWCFB 5264 at [39]-[42]; Grandbridge Limited v Wiburd[2017] FWCFB 6732 at [14].

 7   Exhibits A17 and A18.

 8   Sayer v Melsteel Pty Ltd[2011] FWAFB 7498.

 9   Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-378.

 10   Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.

 11   Ibid.

 12   Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685.

 13   King v Freshmore (Vic) Pty Ltd (AIRC, Full Bench, 17 March 2000), Dec 283/00 M Print S4213 at [23]–[26].

 14   Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1.

 15   Explanatory Memorandum, Fair Work Bill 2008 (Cth) at [1542].

 16   Section 390(3) of the Act.

 17   [2018] FWC 679.

 18   Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000).

 19   [2017] FWCFB 429 at [43].

 20   Exhibit 15.

 21   Exhibit 16.

 22   Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206 at [31].

 23   Arrived at by adding the highlighted amounts in paragraphs [74], [75] and [77] above.

 24 See above at paragraph [71].

 25   Biviano v Suji Kim Collection PR915963 at [34].