Zoe Zelman v Billboard Media

[2020] FWC 647

[2020] FWC 647

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Zoe Zelman
v
Billboard Media
(U2019/9862)

DEPUTY PRESIDENT MASSON MELBOURNE, 24 FEBRUARY 2020

Application for an unfair dismissal remedy.

[1] On 3 September 2019, Ms Zoe Zelman (Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that she had been unfairly dismissed from her employment with Billboard Media (Respondent) on 13 August 2019. The matter was subsequently programmed and was heard on 20 December 2020.

[2] In a decision issued on 2 January 2020 1 I found that the Applicant was unfairly dismissed within the meaning of section 385 of the FW Act. However, there was insufficient material before me at that hearing to determine the question of remedy. Consequently, directions were issued to the parties and a further hearing to deal with the question of remedy was held on 13 February 2020.

[3] At the hearing on 13 February 2020, the Applicant appeared on her own behalf and Mr. Greg Raines (the Respondent’s HR manager) appeared on behalf of the Respondent.

[4] I turn now to deal with the question of remedy arising from the Applicant’s unfair dismissal.

Remedy

[5] Being satisfied that the Applicant:

(i) made an application for an order granting a remedy under section 394;

(ii) was a person protected from unfair dismissal; and

(iii) was unfairly dismissed within the meaning of section 385 of the FW Act,

I may, subject to the FW Act, order the Applicant’s reinstatement, or the payment of compensation to the Applicant.

[6] Under section 390(3) of the FW Act, I must not order the payment of compensation to the Applicant unless:

(a) I am satisfied that reinstatement of the Applicant is inappropriate; and

(b) I consider an order for payment of compensation is appropriate in all the circumstances of the case.

Is reinstatement of the Applicant inappropriate?

[7] The Applicant submitted that reinstatement is inappropriate because of the circumstances that led to her dismissal including that of alleged sexual harassment and the manner of her dismissal. The Respondent submitted that reinstatement is inappropriate because of the breakdown in the employment relationship, and that the position the Applicant had held prior to her termination of employment had now been filled by a replacement.

[8] The Applicant did not seek an order for reinstatement and has since confirmed that she does not wish to be reinstated. In such circumstances, “the Applicant’s disposition is a sure guide to the Commission as to whether or not it would be appropriate to reinstate or re-employ the Applicant. To act contrary to the Applicant’s desired position in this respect would be to give effect to an order that may not yield a productive or cooperative workplace.”²

[9] Having regard to the matters referred to above, I consider that reinstatement is inappropriate. I will now consider whether a payment for compensation is appropriate in all the circumstances.

Is an order for payment of compensation appropriate in all the circumstances of the case?

[10] Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, “[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…”³

[11] The Applicant submits that payment of compensation is appropriate because she had been unfairly dismissed and that she had been unable to secure alternate employment since her dismissal whereas the Respondent sought to rely on material previously submitted to the Commission in the substantive proceedings.

[12] Having previously found that the Applicant was unfairly dismissed and noting that the Applicant has been unable to secure alternate employment since her dismissal, in these circumstances I consider that an order for payment of compensation is appropriate. There is nothing in the material filed by the Respondent in the substantive proceedings, which was not tested in an evidentiary sense in any case, that persuades me that a payment of compensation would be inappropriate.

Compensation – what must be taken into account in determining an amount?

[13] Section 392(2) of the FW Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement including:

(a) the effect of the order on the viability of the Respondent’s enterprise;

(b) the length of the Applicant’s service;

(c) the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;

(d) the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant because of the dismissal;

(e) the amount of any remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation;

(f) the amount of any income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the Commission considers relevant.

[14] I consider all the circumstances of the case below.

Effect of the order on the viability of the Respondent’s enterprise

[15] While the Respondent submits that it is not a large employer, there was no material filed or evidence adduced by it that would support a finding that an order for compensation would have an effect on the viability of the employer’s enterprise. I consequently find that an order for compensation is unlikely to have an effect on the viability of the employer’s enterprise.

Length of the Applicant’s service

[16] The Applicant commenced employment with the Respondent on 3 July 2018 and was terminated on 13 August 2019. That length of service was relatively short, being only 13 months. I consider that the Applicant’s relatively short period of service warrants some reduction in the amount of compensation ordered.

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

[17] As stated by a majority of the Full Court of the Federal Court, “[i]n determining the remuneration that the Applicant would have received, or would have been likely to receive… the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.”⁴

[18] The Applicant submits that her employment would have been likely to continue for a further period of at least 12 months and that the amount of remuneration that the Applicant would have received or would have been likely to receive during that period is $55,000. The Respondent submits that had the Applicant remained in employment she would have been unlikely to have received a salary increase in the near term.

[19] It was not contested that the Applicant commenced employment on 3 July 2018 on a salary of $50,000 per annum and received a 10% increase to that salary on 15 January 2019 taking her annual salary to $55,000. There was also no evidence that the Applicant had been subject to performance management or that the Respondent held any conduct concerns regarding the Applicant.

[20] While the Applicant submits that she expected to continue working for the Respondent for at least 12 months, it is also the case that the Applicant gave evidence in the substantive proceedings as to having been subject to “sexual harassment, innuendo and inappropriate comments” 5 during her employment with the Respondent. It is clear on the Applicant’s own evidence that she felt that her working environment was not ideal and had at times made her feel uncomfortable.

[21] I am satisfied that but for the dismissal for the Applicant would have remained employed by the Respondent for a period of 6 months. In reaching this finding I have taken into account the Applicant’s short length of service to which I referred at [16] above, her stated concerns about the workplace and the inherent uncertainty of predicting the likelihood of long-term employment based on such short service.

[22] Had the Applicant not been dismissed she would have continued to receive weekly remuneration calculated by reference to her annual salary of $55,000. On the basis of what is referred to as the “anticipated period of employment” 6 of 6 months, this equates to an amount of $22,500.

Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal

[23] The Applicant must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal.⁷ What is reasonable depends on the circumstances of the case.⁸

[24] The Applicant submits that she taken reasonable steps to minimise the impact of the dismissal by making a significant number of job applications since her dismissal. In support of that submission the Applicant furnished copies of multiple job applications made over several months. The Respondent did not challenge the Applicant’s contention that she had taken reasonable steps to mitigate the impact of her dismissal.

[25] I am satisfied on the material provided by the Applicant that she has taken reasonable steps to mitigate her loss. Accordingly, no deduction will be made.

Amount of remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation

[26] The Applicant submits, which is not challenged by the Respondent, that she has not earned income from employment or other work since her dismissal. She acknowledged that she had, at the time of her dismissal, received one week’s pay in lieu of notice on termination.

[27] It is appropriate that a deduction of one week’s pay be made, which based on the Applicant’s hourly rate of pay of $27.83, equates to a deduction of $1057.69.

Amount of income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation

[28] The Applicant submits that she is unlikely to earn any income in the period between the making of the order for compensation and the payment of compensation. That submission was not challenged by the Respondent.

[29] I accept that the Applicant is unlikely to earn any income in the period between the making of the order for compensation and the payment of compensation and as such no deduction is to be made.

Other relevant matters

[30] No other relevant matters were raised by the parties going to an order for compensation.

Compensation – how is the amount to be calculated?

[31] As noted by the Full Bench, “[t]he well-established approach to the assessment of compensation under s.392 of the FW Act… is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).⁹ This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages¹⁰.”¹¹

[32] The approach in Sprigg is as follows:

•  Step 1: Estimate the remuneration the Applicant 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.

Step 1

[33] I have estimated the remuneration the Applicant would have received, or would have been likely to have received, if the Respondent had not terminated the Applicant’s employment to be $22,500 on the basis of my finding that the Applicant would likely have remained in employment for a further period of 6 months. This estimate of how long the Applicant would have remained in employment is the anticipated period of employment.

Step 2

[34] I have found that the Applicant has not earned any remuneration since the date of dismissal, save for the week’s pay in lieu of notice she received on termination. Further, it is unlikely that any income will be earned by the Applicant between the making of the order for compensation and the payment of compensation.

[35] As a consequence of the above, a deduction of $1057.69, that being one week’s pay, is to be made at Step 2 of the calculation. This reduces the amount of compensation to $21,442.31.

Step 3

[36] I now need to consider the impact of contingencies on the amounts likely to be earned by the Applicant for the remainder of the anticipated period of employment.¹²

[37] I do not consider it appropriate to deduct an amount for contingencies from the sum of $21,442.31.

Step 4

[38] I have considered the impact of taxation but have elected to settle a gross amount of $21,442.31 and leave taxation for determination.

[39] Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case,”¹³ including my findings that:

•  the Applicant had a relatively short period of service;

•  there were no performance issues at the time of the Applicant’s dismissal;

•  her performance was recognised by a 10% increase in salary in January 2019; and

•  the applicant has not secured alternate employment since her dismissal despite reasonable efforts to mitigate her loss.

[40] I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the FW Act.

Compensation – is the amount to be reduced on account of misconduct?

[41] I am satisfied that misconduct of the Applicant did not contribute to the employer’s decision to dismiss. Therefore, the amount of the order for compensation of $21,442.31 is not to be reduced on account of misconduct.

Compensation – how does the compensation cap apply?

[42] Section 392(5) of the FW Act provides that the amount of compensation ordered by the Commission must not exceed the lesser of:

(a) the amount worked out under section 392(6); and

(b) half the amount of the high income threshold immediately before the dismissal.

[43] The amount worked out under section 392(6) is the total of the following amounts:

(a) the total amount of the remuneration:

(i) received by the Applicant; or

(ii) to which the Applicant 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 Applicant 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 Applicant for the period of leave in accordance with the regulations.

[44] There was no dispute and I find that the total amount of the remuneration to which the Applicant was entitled during the 26 weeks immediately before the dismissal was $22,500.

[45] The high income threshold immediately before the dismissal was $148,700. Half of that amount is $74,350. The amount of compensation ordered by the Commission must therefore not exceed $74,350.

[46] In light of the above, I will make an order that the Respondent pay $21,442.31 gross less taxation as required by law to the Applicant in lieu of reinstatement within 14 days of the date of this decision.

[47] An order giving effect to that decision will be separately issued with this Decision.

DEPUTY PRESIDENT

Appearances:

Z. Zellman on her own behalf

G. Raines for the Respondent

Hearing details:

2020

Melbourne

13 February

Printed by authority of the Commonwealth Government Printer

<PR716493>

 1   [2020] FWC 5

2 Taylor v C-Tech Laser Pty Ltd[2013] FWC 8732, [58].

3 Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].

4 He v Lewin [2004] FCAFC 161, [58].

 5   [2020] FWC 5 at [32] & [33]

 6   Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].

7 Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].

8 Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.

9 (1998) 88 IR 21.

10 [2013] FWCFB 431.

11 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [16].

12 Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].

13 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].