Zac Mahoney v Bechtel Construction (Australia) Pty Ltd

[2014] FWC 6294

[2014] FWC 6294

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Zac Mahoney
v
Bechtel Construction (Australia) Pty Ltd
(U2013/2468)

COMMISSIONER BOOTH BRISBANE, 10 SEPTEMBER 2014

Application for relief from unfair dismissal - compensation

[1] Earlier this year I held the dismissal of Mr Zac Mahoney from his job as a crane driver with Bechtel Constructions (Australia) Pty Ltd (Bechtel), in all the circumstances, to be unfair. 1 At the time of the decision Mr Mahoney had obtained other employment and did not seek reinstatement. He instead sought compensation.

[2] The Fair Work Act 2009 (Act) sets out certain criteria for deciding the amount of compensation in s. 392(2), although all circumstances are to be taken into account. A cap is legislated in s. 392(5) and (6), and the Commission is obliged by s. 392(3) to reduce compensation for misconduct.

[3] Haigh v Bradken Resources Pty Ltd 2 recently reaffirmed the use of the approach in Sprigg v Paul Licensed Festival Supermarket3 and clarified that deductions on account of misconduct are applied before application of the legislative cap.

Submissions

[4] Mr Mahoney submits in terms of s. 392(2):

● he was employed by Bechtel from early 2012 until the dismissal on 4 July 2013 (some 14 months); 4

●earnings at the time he was dismissed averaged $3,500 per week;

●he obtained alternative full-time employment on 10 March 2014;

●he was likely to work out the balance of the project;

●projected earnings from dismissal to alternate employment are $124,950; 5

● earnings from the date of dismissal until his alternative employment were $41,507; 6

●only a very small reduction for misconduct should be applied, “perhaps in the order of $8,400”, about 10%; 7

●yielding compensation of $75,040;

●which (before tax) 8 must be reduced to the legislated cap of $64,650.9

[5] Payslips were exhibited for some for the period post-dismissal and evidence of estimated earning for a period he was employed but had no payslips.

[6] In Bechtel’s submissions:

● participation in unlawful industrial action warranted dismissal either of itself or in combination with other misconduct;
● Mr Mahoney’s other misconduct included flying a CFMEU flag on his crane in breach of site rules, failing a drug test, resulting in a first and final warning, abandoning his crane on the day of the unlawful industrial action, and leaving the site other than by appropriate procedures;
● an appropriate discount for misconduct is 50% given the seriousness of participation in unlawful industrial action;
● Mr Mahoney was liable to be dismissed lawfully for his conduct on 3 July 2013 and would have remained in employment for only two weeks (yielding compensation of $7,000);
● alternatively given his pattern of behaviour he would not have been employed for more than four months, yielding $16,090.04 “taking into account the Applicant’s alternative income, notice already paid, misconduct and contingencies”. 10

[7] There appears to be no disagreement about Mr Mahoney’s average weekly earnings with Bechtel or with the amount earned after his dismissal. Bechtel makes suggestions about how, in the absence of specific evidence as to the timing of Mr Mahoney’s post-dismissal earnings, the Commission should distribute sums for the purposes of its alternative four-month period.

Consideration

[8] The parties diverge considerably on the appropriate amount of compensation. Mr Mahoney says he is entitled to the legislated maximum of $64,650. Bechtel says he should receive (subject to tax) either 2 weeks’ pay being $7,000 or alternatively 16 weeks pay ($56,000), adjusted for other matters to $16,090.04.

[9] The divergence arises from two issues:

● how long Mr Mahoney was likely to have remained in Bechtel’s employment after 3 July; 11 and

●the amount that should be deducted for misconduct. 12

[10] Before considering those in detail, the following observations are made.

● There are no issues as to s. 392(2)(a).
● Section 392(2)(b): Mr Mahoney had only been employed by Bechtel for 14 months. However in the life of a construction project, relatively short tenure is common. No discount is necessary on this basis. 13
● Section 392(2)(d): no submissions were made about mitigation. Mr Mahoney obtained other employment from 31 July 2013, albeit on a casual basis at lower pay. No discount is there allowed for this factor.
● Section 392(2)(f): this factor is not relevant in Mr Mahoney’s circumstances.
● No allowance needs to be made for contingencies, as the facts are known for all relevant periods. 14

Likely continued employment: s.392(2)(c)

[11] The Act requires the Commission to take into account “the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed”. In this case, that amount depends on how long Mr Mahoney would have remained in Bechtel’s employment after the day of the unlawful industrial action.

[12] I accept Bechtel’s submissions that Mr Mahoney’s appointment was not “for the duration of the project” but “until released from the Project”. 15

[13] I also accept that Mr Mahoney:

● had breached site rules by flying a CFMEU flag on his crane for a couple of hours and removed it after being required to do so by a supervisor; 16

●had previously failed a drug test and been placed on a first and final warning; 17

●was efficient and well considered by supervisors.

[14] I also find that on the day of the unlawful industrial action, the day before he was dismissed, Mr Mahoney:

● ceased work before his allotted lunch break;
● participated willingly in unlawful industrial action albeit not knowing the action was being taken until after he joined in;
● failed to complete his shift;
● did not attend properly to his crane once ceasing work. 18

[15] Bechtel further submits that Mr Mahoney was unlikely to remain long in its employment because of his general conduct: “his behaviour in other respects shows a tendency to commit rash, spur-of-the-moment actions”; 19 and “repeated precipitous behaviour and attitude”.20

[16] Mr Mahoney did not show contrition during the interview of 4 July or in these proceedings. Rather, he expressed anger and denial, 21 indicating lack of the insight required to remain in employment, given his history that included over 14 months several formal and informal disciplinary issues.

[17] I do not agree that his employment would have been terminated within two weeks: that simply does not flow from, and would be inconsistent with my earlier decision. However, based on Mr Mahoney’s past behaviour detailed above I find that it is more likely that Bechtel would have terminated Mr Mahoney’s employment well before the project ended. The period of four months submitted by Bechtel in the alternative seems to me longer than Mr Mahoney’s employment may have continued given his prior conduct and the likelihood of a further incident given his lack of insight and tendency to act out. I none-the-less accept it as reasonable. I find therefore that Mr Mahoney’s employment at Curtis Island would have ceased four months after the incident.

[18] Bechtel’s calculation for earnings over that period were not objected to by the Applicant. Having examined the payslips in evidence and the submissions made, I conclude that it is a reasonable basis. I find Mr Mahoney, had he not been dismissed on 3 July, would have earned $56,000 being 16 weeks at $3,500 per week. His post-dismissal earnings on his own evidence and the assumptions put forward by Bechtel, and unchallenged by the Applicant, amount to $16,819.92. Two weeks were paid by way of notice. That yields $32,180.08 subject to consideration of misconduct and taxes.

Reduction for misconduct: s. 392(3)

[19] Mr Mahoney’s misconduct includes:

● a prior “first and final warning” for failing a drug test;
● flying a flag on his crane contrary to site rules;
● participation in unlawful industrial action;
● subsequent conduct on 3 July detailed above.

[20] The requirement for reduction is found in s. 392(3):

(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.

[21] While I treat the conduct above as a whole, Bechtel argued forcefully that Mr Mahoney’s willing participation in unlawful industrial action is a very serious matter. I agree. The fact that he was subject to a “first and final” warning at the time (albeit on an unrelated matter and some 9 months old) is important and taken into consideration.

[22] The Parties were unable to assist me with any useful precedents for how the amount of reduction should be calculated other than by reference to principle. I note that in Cowan v Sargeant Transport Pty Ltd 22 Bissett C reduced the quantum by 30% for an act of public urination. Incorrect forklift operation and swearing reduced compensation by 15% in Tabro Meat Pty Ltd v Heffernan, 23 and in Van Den Enden v Bechtel Construction (Australia) Pty Ltd24SDP Richards reduced compensation by 50% even though the wide-ranging misconduct did not warrant summary dismissal. Other recent examples include Bowden v Ottrey Homes - Cobram & District Retirement Village Inc T/A Ottrey Lodge:25 inappropriate Facebook use, breach of confidentiality of workplace investigation (20% reduction); Walsh v Ambulance Victoria:26 failure to discharge duties (50% reduction); Mora v QUBE Pty Ltd:27 injury suffered on account of work health and safety breach (50% reduction); Cronin v Choice Homes (Qld) Pty Ltd:28 inappropriate language and misuse of email (20%). This is by no means a comprehensive review, but indicative of the range of reductions for misconduct of varying types and seriousness.

[23] Mr Mahoney’s conduct, including all matters listed in paragraph [19], contributed significantly to Bechtel’s decision to dismiss him from its employment. The misconduct, in total, was serious. I also take into account the fact that Mr Mahoney was unfairly dismissed and reduce the reduction accordingly.

[24] The amount of compensation to be ordered is reduced by 40% because of the Applicant’s misconduct. Compensation is ordered in the sum of $19,308.05 taxed according to law.

COMMISSIONER

 1   Mahoney v Bechtel Construction (Australia) Pty Ltd[2014] FWC 2756

 2   [2014] FWCFB 236

 3 (1998) 88 IR 21 as adapted in Ellawala v Australian Postal Commission[2000] AIRC 1151. See also Smith v Moore Paragon Australia Ltd[2004] AIRC 57 (Full Bench), [32]: “it should be borne in mind that the result yielded by an application of the Sprigg guidelines may vary greatly depending upon particular findings in relation to the various steps including, in particular, step one, which necessarily involves assessments as to future events that will often be problematic.”

 4   s. 392(2)(b)

 5   s. 392(2)(c)

 6   Mr Mahoney submits this is the proper measure for s. 392(2)(e) as the amount exceeds the legislative cap

 7   Applicant’s Outline of Submissions as to Compensation

 8   Shorten v Australian Meat Holdings Pty Ltd (1996) 70 IR 360, 378 (VP Ross)

 9   s. 392(5)(b)

 10   Respondent’s outline of Submissions as to Compensation

 11   s. 392(2)(c)

 12   s. 392(3)

 13   Varani v Independent Advocacy in the Tropics Incorporated T/A Independent Advocacy Townsville [2011] FWA 1633

 14   Ellawala; Enhance Systems Pty Ltd v Cox[2001] AIRC 1138

 15   Offer of Employment letter from Bechtel to Mr Mahoney dated 27/4/2012 (Exhibit R1)

 16   Transcript PN225-PN 227

 17   some 9 months earlier. No subsequent similar conduct was in evidence

 18   these are all related to the unlawful industrial action: Applicant’s Outline of Submissions in Reply as to Compensation [3]

 19   Respondent’s Outline of Submissions as to Compensation [25]; the Applicant’s Outline of Submissions in Reply as to Compensation assert he was entitled to be angry in the circumstances [4]

 20   ibid [28]

 21   Applicant’s Outline of Submissions in Reply as to Compensation

 22   [2014] FWC 5330

 23 (2011) 208 IR 101: work health and safety breach and swearing

 24   [ 2013] FWC 4377; appeal dismissed: Bechtel Australia Pty Ltd [2013] FWCFB 8053

 25   [2012] FWA 6468: affd on appeal [2013] FWCFB 431

 26   [2014] FWC 2351 (the employer argued for a 90% reduction)

 27   [2014] FWC 1042 (employer argued for 75% reduction)

 28   [2013] FWC 10240

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