[2013] FWCFB 4744 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
SENIOR DEPUTY PRESIDENT ACTON |
|
Appeal against decision [[2013] FWC 2224] and order [PR535620] of Commissioner Cambridge on 18 April 2013 in matter number U2012/14491.
[1] This decision deals with an appeal by The Heran Building Group Pty Ltd (Heran) against a decision 1 and order2 of Commissioner Cambridge in respect of an unfair dismissal remedy application made by Mr Edward Anneveldt.
[2] In the decision the Commissioner stated the following by way of factual background:
“Factual Background
[5] The applicant had performed work for the employer as a contractor since about July 1988 and he became a direct employee of the employer in May 2007 Consequently the applicant’s period of service as an employee was about 5 years and 4 months. The applicant was engaged as a Construction Site Supervisor.
[6] The employer is a medium sized family business employing approximately 40 people. The employer operates a residential building/development Company based in South East Queensland. The employer is primarily controlled and managed by three brothers, Brian, Martin and Stephen Heran, who are Directors of the employer Company. A fourth brother, Glenn and a Shane Heran also have senior managerial roles in the employer’s business.
[7] In June 2011, the employer advised the applicant that his employment was terminated because of ‘... downturn in our business activity,...’. The applicant was given telephone and e-mail advice of the termination of employment from Mr Stuart Knock, the employer’s Accountant. The termination advice provided four weeks’ notice which meant that the applicant was to work until 20 July 2011. However, during this period of notice the employer reversed the decision to dismiss the applicant and he continued in employment up until 5 September 2012.
[8] On 5 September 2012, the applicant received telephone and e-mail advice from Mr Knock which provided five weeks notice of termination of employment. These communications from Mr Knock advised the applicant that he was dismissed on the basis of unsatisfactory performance and the e-mail included ten ‘reasons’ which related to the unsatisfactory performance.” [Endnotes omitted]
[3] Before the Commissioner there was no contest that Mr Anneveldt’s application was made within the requisite period, that Mr Anneveldt was dismissed and was protected from unfair dismissal, that Heran was not a small business within the meaning of the Fair Work Act 2009 (Cth) (FW Act) or that his dismissal was not a case of genuine redundancy. The Commissioner, therefore, turned to consider whether Mr Anneveldt’s dismissal by Heran was harsh, unjust or unreasonable.
[4] Section 387 of the FW Act provides as follows:
“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)...
(h) any other matters that the FWC considers relevant.”
[5] In considering whether there was a valid reason for Mr Anneveldt’s dismissal related to his capacity or conduct, including its effect in the safety and welfare of other employees, the Commissioner said:
“387 (a) - Valid reason for the dismissal related to capacity or conduct
[28] In this case the applicant was dismissed for unsatisfactory work performance. The nature of the unsatisfactory performance was particularised in ten points which were included as reasons in the letter of dismissal. Consequently, the Commission has been required to examine the ten reasons for dismissal and establish whether one or more of those reasons could be held to be valid.
[29] For a reason to be a valid reason it must, inter alia, be capable of being established as a fact upon which the decision to dismiss was based. The Commission must, logically, have some evidence upon which to make the necessary finding of fact. In this instance there was no evidence provided by either the author of the letter which contained the ten reasons or the person who made the decision to dismiss, Brian Heran.
[30] Evidence which is provided by others and which may support the prospect that the ten reasons contained in the letter of dismissal have a basis in fact, cannot necessarily be translated into an evidentiary basis upon which findings could be made that those reasons were in fact the reasons held in the mind of the decision maker. As a matter of fundamental justice, how could the Commission find that the reasons have a basis in fact as the reasons for dismissal, without there being some testing of those reasons with the person who apparently held them to be facts upon which the decision to dismiss was taken?
[31] Unless the circumstances of a particular case allow for some means to establish incontrovertible evidence upon which the reason or reasons for dismissal can be established in fact as the reason(s) for dismissal, the absence of any direct evidence from the decision maker leads to an evidentiary conundrum. The resultant difficulty manifests as a requirement for the Commission to make an assumption that the stated reason or reasons were in fact those relied upon by the decision maker. In simple terms, how can the Commission be satisfied that what others said were the reasons for dismissal, was also what the decision maker thought?
[32] In addition to what I have described as the evidentiary conundrum created by the absence of any direct evidence from the decision maker, there was also considerable challenge made to the accuracy and or actual existence of each of the ten stated reasons contained in the letter of dismissal.
[33] For example, point 8 involved the pouring of a concrete driveway which had to subsequently be pulled up to permit underground services to be installed. There was inconclusive evidence provided during the Hearing as to whether or not the applicant or Stephen Heran was responsible for the pouring of the concrete driveway. The Commission simply had no evidence as to what the decision maker, Brian Heran, understood to be the factual position as to who was responsible for the pouring of the concrete driveway. Essentially, the Commission would have to assume that Brian Heran believed that the applicant was responsible, otherwise that reason would not have been mentioned. However the evidence presented during the Hearing could not necessarily support the conclusion which had apparently been reached by Brian Heran.
[34] There was strong challenge made to the accuracy or actual existence of each of the stated reasons for dismissal. Without the benefit of hearing from Brian Heran about such challenge, the Commission is presented with a completely unsatisfactory evidentiary position which does not enable proper findings of fact to be made as verification of the stated reasons for dismissal.
[35] The evidence did establish that a number of the employer’s managers had expressed considerable dissatisfaction with the applicant’s performance over an extended period. However, an employer’s general dissatisfaction cannot, particularly in the absence of any direct evidence from the person who made the decision to dismiss, be translated into a proper evidentiary basis upon which the Commission is able to make findings of fact that the stated reasons for dismissal were valid.
[36] The absence of any evidence from the person who made the decision to dismiss has prevented any finding that there was valid reason for the dismissal. The failure to call the decision maker as a witness also has other ramifications which are mentioned later in this Decision.”
[6] Later in respect of other relevant matters, the Commissioner said:
“387 (h) - Other relevant matters
[54] There was evidence provided by those witnesses who were called by the employer which established that the applicant’s work performance was, in their opinion, unsatisfactory. Importantly, none of these individuals were responsible for the decision to dismiss the applicant. However, I have not discarded the evidence from the employer’s witnesses which upon an objective assessment, leads me to conclude that there was legitimate basis for serious concern about particular aspects of the applicant’s work performance.
[55] Consequently I have balanced the evidence which verified legitimate basis for criticism of the applicant’s work performance against the various other factors under consideration. The corollary of this consideration is that I am unable to countenance that an extended period of general dissatisfaction with the work performance of the applicant should operate to displace the requirement that the applicant was entitled to natural justice. In particular, it would not have been onerous or unrealistic for the decision maker to have put the ten reasons contained in the letter of dismissal to the applicant and heard ‘his side of the story’ before any decision to dismiss was taken.”
[7] The Commissioner concluded in considering whether the dismissal was harsh, unjust or unreasonable as follows:
“Conclusion
[56] The decision to dismiss the applicant was taken by Brian Heran who was not called to give evidence in these proceedings. The absence of evidence from the decision maker is ordinarily problematic in one of these matters. In a case involving a dismissal for unsatisfactory work performance the absence of any evidence from the decision maker would almost invariably be fatal to the defence. In this instance this difficulty was compounded by evidence that the decision maker had no direct contact with the applicant concerning the termination of his employment…
[58] The absence of any evidence from the person who apparently concluded that ten reasons existed as the basis for dismissal means that those reasons can not be properly verified as findings of fact to have been the reasons for dismissal. Consequently, the Commission must conclude that there is insufficient evidence upon which to establish that the dismissal of the applicant was for valid reason. A dismissal without valid reason and implemented by way of a procedure which involved a very unfortunate absence of natural justice must be held to have been harsh, unjust and unreasonable.”
[8] We granted both Heran and Mr Anneveldt permission to be represented by a lawyer in the appeal because we concluded it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter as it involved the statutory interpretation of s.387(a) of the FW Act and the evidence required to establish a valid reason under that section.
[9] Heran submitted permission to appeal should be granted in the public interest because the decision evinces at least two significant errors of law:
“1. The first significant error: The orthodox requirement is to consider whether there is ‘a valid reason’ for dismissal. The heterodoxy inherent in the approach adopted by the Commissioner is to convert the statutory requirement to a requirement of ‘the valid reason held and relied on by the decision maker.’
2. The second significant error: The orthodox position is that the standard of proof, without exception, is the balance of probabilities. The Commissioner applied a standard of proof of ‘incontrovertible evidence’ to the appellant’s case on the valid reason issue. In addition to being an error, the appellant suffered the injustice that its evidence was not considered or assessed.”
[10] In respect of the second error, Heran pointed out that while Mr Brian Heran, a Director of Heran, who ultimately directed that the notice of dismissal be given to Mr Anneveldt was not called to give evidence, Heran did call three witnesses to give evidence about Mr Anneveldt’s unsatisfactory performance at work:
(i) Dale Crisp, a Construction Site Foreman, who gave evidence about the failure of Mr Anneveldt to properly supervise jobs, including in respect of a concrete pour which subsequently had to be pulled up.
(ii) Martin Heran, a Director of Heran, who gave evidence about extensive problems with Mr Anneveldt’s work performance, describing the serious issue of the lack of supervision Mr Anneveldt exercised which resulted in errors and delays and which were raised with Mr Anneveldt every week.
(iii) Glenn Heran, an Accounts Payable Manager with Heran, who gave evidence about the warnings given to Mr Anneveldt concerning his work performance.”
[11] Permission to appeal being given was opposed by Mr Anneveldt. Mr Anneveldt referred to selective parts of the Commissioner’s decision in support of his submission that the errors alleged by Heran are without foundation.
[12] We are persuaded the Commissioner erred in considering whether there was a valid reason for the dismissal of Mr Anneveldt.
[13] It is apparent from the reasons for decision that the Commissioner considers that for a reason for dismissal to be a valid reason under s.387(a) of the FW Act it must be “capable of being established as a fact upon which the decision to dismiss was based”, that is it must be a reason “held in the mind of” or “relied upon by the decision maker” for the dismissal. As a consequence the Commissioner considers that, in the absence of incontrovertible evidence about the reasons for the dismissal and where there is a considerable challenge made to the accuracy or actual existence of the reasons for the dismissal, evidence is needed from the person who made the decision to dismiss for the Fair Work Commission (FWC) to find there was a valid reason for the dismissal.
[14] The Commissioner’s view is mistaken.
[15] In MM Cables (A Division of Metal Manufacturers Limited) v Zammit, 3 a Full Bench of the Australian Industrial Relations Commission (AIRC) considered an appeal against a decision and order of a Commissioner on an application for relief in respect of termination of employment which was made under the Workplace Relations Act 1996 (Cth) (WR Act). In respect of s.170CG(3)(a) of the then WR Act, a provision which was in similar terms to s.387(a) of the FW Act, the Full Bench said:
“[42] We think that there are two difficulties in the approach adopted by the Commissioner to the question of whether there was a valid reason for Mr Zammit's termination of employment. First, the Commissioner seems to have confined himself to determining whether the reason given for Mr Zammit's termination was a valid reason. The question in s.170CG(3)(a) is not so limited. Rather the Commission is obliged to consider whether there was a valid reason for the termination - that inquiry is not limited to the reason given by the employer for the termination.”
[16] It follows that evidence is not necessarily needed from the person who made the decision to dismiss for the FWC to find there was a valid reason for the dismissal, even in the absence of incontrovertible evidence about the reasons or where there is a considerable challenge made to the accuracy or actual existence of the reasons for the dismissal.
[17] The Commissioner’s approach to what constitutes a valid reason for dismissal and the evidence needed to establish a valid reason resulted in the Commissioner failing to relevantly consider the evidence of the witnesses called by Heran in respect of whether there was a valid reason for Mr Anneveldt’s dismissal.
[18] We think the Commissioner’s errors in considering whether there was a valid reason for Mr Anneveldt’s dismissal are sufficient to warrant us granting permission to appeal in the public interest. They involve errors of significance which manifest an injustice in the determination of the matter before him. We grant permission to appeal.
[19] Heran submitted that should we grant permission to appeal, we should quash the Commissioner’s decision and order and refer Mr Anneveldt’s unfair dismissal remedy application to another member of the FWC to determine.
[20] We consider that it is appropriate for us to determine the matter by way of rehearing based upon the evidence and submissions presently before the Commission as contemplated by s.607(3)(b) of the FW Act.
Mr Anneveldt’s unfair dismissal remedy application
[21] Mr Anneveldt’s application for an unfair dismissal remedy was made under s.394 of the FW Act within 14 days of his dismissal by Heran.
[22] We are satisfied Mr Anneveldt was protected from unfair dismissal at the time he was dismissed. 4
[23] It is also evident that Mr Anneveldt was dismissed by Heran and was not a case of genuine redundancy. Immediately before the time of his dismissal, Heran was not a small business employer within the meaning of the FW Act 5 and compliance with the Small Business Fair Dismissal Code does not arise.
[24] As a result, it is necessary for us to consider whether Mr Anneveldt’s dismissal was harsh, unjust or unreasonable. This in turn requires us to consider the matters raised by s.387 of the FW Act.
Harsh, unjust or unreasonable
[25] Section 387 of the FW Act establishes the considerations that the FWC must take into account in assessing whether it is satisfied a dismissal was harsh, unjust or unreasonable. We will consider them in sequence.
(i) Section 387(a) – whether there was a valid reason for the dismissal related to the Mr Anneveldt’s capacity or conduct (including its effect on the safety and welfare of other employees)
[26] We are persuaded there was a valid reason for Mr Anneveldt’s dismissal related to his capacity or conduct (including its effect on the safety and welfare of other employees).
[27] The letter of dismissal provided on 5 September 2012 outlined ten grounds, which were also relied upon by Heran in the proceedings before the FWC. They were as follows:
“1. Lack of supervision in general.
2. Getting other trades to call up materials.
3. Not working in general working hours as noted in general D.A. requirements (starting at 6 am and leaving at 2.30 pm therefore leaving tradesmen and our labourers unsupervised and unattended.
4. Not ensuring site is locked every day.
5. Not implementing quality control to company expectations.
6. Employing unskilled labourers to perform quality control inspections.
7. No stock control, allowing tradesmen to take allocated stock to be used on any unit.
8. The pouring of concrete driveways when underground services had not been installed, then pulling up the concrete the following day.
9. There is a 4 page landscape report from the landscape architect that council has requested to be rectified at Cristaldi Avenue site. This demonstrated your lack of supervision.
10. Poor liaison with responsible people in the office as to the progress of construction at the Cristaldi site.” 6
[28] Evidence about those matters was provided by three witnesses for Heran as outlined earlier in this decision. Taken together, this evidence was capable of supporting the various contentions relied upon by Heran. Mr Anneveldt also gave evidence about these matters and for the most part contested the underlying basis of the alleged performance concerns and/or his responsibility for them.
[29] We are satisfied that most of the concerns held by Heran had substance and were objectively justified. In particular, those concerns about the degree of attention to quality control issues and the active supervision of the relevant sites are demonstrated by the evidence.
[30] We also note that the Commissioner at first instance found:
“... I have not discarded the evidence from the employer’s witnesses which upon an objective assessment, leads me to conclude that there was legitimate basis for serious concern about particular aspects of the applicant’s work performance.” 7
[31] Given the nature of Mr Anneveldt’s role as an experienced Construction Site Supervisor, these concerns represent sound, defensible and well founded reasons for the dismissal.
[32] As a result, we are persuaded the work performance issues concerning Mr Anneveldt raised by Heran during the hearing at first instance constitute a valid reason for his dismissal within the meaning of s.387(a) of the FW Act.
(ii) Section 387(b) – whether Mr Anneveldt was notified of the reasons for dismissal
(iii) Section 387(c) – whether Mr Anneveldt was given an opportunity to respond to any reason related to his capacity or conduct
[33] In this matter it is convenient to deal with both of these considerations together.
[34] Heran provided telephone and e-mail notification of the reasons for Mr Anneveldt’s dismissal when the dismissal was communicated to him.
[35] Although many of the performance concerns were earlier raised with him as part of the ongoing communications about actual work issues at the sites, none of these were raised in a meaningful way at an earlier time in relation to a review of his ongoing employment.
[36] In the circumstances, Mr Anneveldt was not notified of the reasons for his dismissal or afforded an opportunity to respond to the reasons for dismissal related to his capacity or conduct as required by ss.387(b) and (c) of the FW Act.
(iv) Section 387(d) – any unreasonable refusal by Heran to allow Mr Anneveldt to have a support person present to assist in any discussions relating to his dismissal.
[37] The procedure adopted by Heran did not provide any meeting or other forum which might have involved the presence of a support person to assist Mr Anneveldt. Accordingly, there was no refusal to allow a support person to assist him in the sense contemplated by s.387(d) of the FW Act.
(v) Section 387(e) –– whether Mr Anneveldt has been warned about that unsatisfactory performance before the dismissal.
[38] In Fastidia Pty Ltd v Goodwin, 8 a Full Bench of the AIRC said of s.170CG(3)(d) of the pre-reform WR Act:
“[43] In the context of s.170CG(3)(d) we think that a warning must:
- identify the relevant aspect of the employee's performance which is of concern to the employer; and
- make it clear that the employee's employment is at risk unless the performance issue identified is addressed.
[44] In relation to the latter requirement, a mere exhortation for the employee to improve his or her performance would not be sufficient. We also note that we accept that these criterion are to be applied in a practical and commonsense way taking into account the employment context.”
[39] We respectfully agree with the Full Bench and conclude that such an approach remains relevant for present purposes.
[40] In relation to this consideration, the following findings of relevance were made by the Commissioner at first instance:
“[43] This factor has particular relevance in this case where the applicant was dismissed for reasons of unsatisfactory work performance.
[44] There was no evidence of any formal written warning made to the applicant. The employer attempted to rely upon the prior (and subsequently reversed) dismissal of the applicant in June 2011 as representing a warning to the applicant. However that dismissal was stated to be for reason of ‘... downturn in our business activity, ...’ . During the Hearing, the employer sought to recant from the stated reason and instead Martin Heran said that the primary reason for the earlier dismissal was the applicant’s ‘poor workmanship and performance’.
[45] Martin Heran was questioned about the earlier, reversed, dismissal of the applicant and the extent of the employer’s misrepresentation of the reason for that action expanded to the point that according to Martin Heran, the applicant was dismissed for ‘gross incompetency’.
[46] In an endeavour to demonstrate prior warning to the applicant, the employer introduced a suggestion that the applicant had also been dismissed on another occasion nominated to have been 4 October 2011. There was no evidentiary material provided to support this assertion and during the Hearing the proposition appeared to lapse.
[47] The overall impression that emerges from an examination of the evidence which was advanced in the employer’s attempt to establish that the applicant had been given prior warning can be summarised as a confused ‘clutching at straws’. This unfortunate situation was confirmed when, on the second day of Hearing, Glenn Heran provided the following testimony:
‘So when you say “warning”, you're talking about an official warning. You're not in a position to say, "Here's your first warning, here's your second warning, there's your third warning"?---To tell the truth, I thought Stuart Knock, our accountant, had done that. I thought that was already done. Until this morning I didn't know it wasn't done. I don't know why.’ ” 9
[41] These findings were reasonably open to the Commissioner on the evidence and we concur with them. As a result, we find that Mr Anneveldt was not warned about his unsatisfactory performance before his dismissal.
(vi) Section 387(f) – the degree to which the size of Heran’s enterprise would be likely to impact on the procedures followed in effecting the dismissal.
(vii) Section 387(g) – the degree to which the absence of dedicated human resource management specialists or expertise in Heran’s enterprise would be likely to impact on the procedures followed in effecting the dismissal.
[42] In this matter it is convenient to deal with both of these considerations together.
[43] Heran is a medium sized family business and did not have dedicated human resource management specialists.
[44] We are satisfied the size of Heran’s enterprise and its absence of dedicated human resource management specialists or expertise detrimentally impacted on the procedures it followed in effecting Mr Anneveldt’s dismissal.
(vii) Section 387(h) – any other matters that the FWC considers relevant.
[45] Mr Anneveldt was involved with Heran as a contractor since July 1988 and commenced employment in May 2007. Mr Anneveldt’s service as an employee is a relevant consideration in this matter.
(viii) Conclusion on harsh, unjust or unreasonable
[46] We have considered all of the matters raised by the s.387 of the FW Act.
[47] We are satisfied Mr Anneveldt’s dismissal by Heran was harsh, unjust or unreasonable. We have found that a valid reason for his dismissal existed and this is a significant consideration. However, even accounting for the size and nature of the business, the absence of almost all of the elements of a fair process, and the length of his employment with Heran, lead us to the conclusion that the dismissal was harsh, unjust or unreasonable. In so concluding, we have considered whether the absence of a fair process made any difference to the actual outcome.
Unfairly dismissed
[48] In light of our findings in respect of the matters in s.385 of the FW Act, we are satisfied Mr Anneveldt was unfairly dismissed.
[49] We turn then to remedy.
Remedy
[50] Section 390 of the FW Act provides as follows in respect of remedies for unfair dismissal:
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.”
[51] We have earlier indicated our satisfaction in respect of the matters in s.390(1)(a) and (b) and s.390(2) of the FW Act.
[52] In respect of reinstatement, Mr Anneveldt did not seek that form of remedy and in the circumstances we are satisfied that reinstatement of Mr Anneveldt is inappropriate.
[53] As to compensation, Mr Anneveldt sought 12 weeks pay, which he considered to be $25,920 (gross) plus superannuation. 10 Heran opposed any compensation on the basis that little evidence had been provided by Mr Anneveldt about his losses or attempts he had taken to mitigate those losses. Further, it contended that even if found to be unfair, the dismissal would have eventuated notwithstanding any improvements in the dismissal procedure.11
[54] We consider that an order for the payment of compensation to Mr Anneveldt by Heran is appropriate in all the circumstances of this matter.
[55] With respect to this, we have had regard to the fact that there is no sound basis to conclude that an order for the payment of compensation would affect the viability of Heran’s enterprise. The effect of such an order on Heran does not weigh against such an order. Similarly, Mr Anneveldt’s length of service with Heran was such that it does not weigh against such an order. The remuneration Mr Anneveldt would have received, or would have been likely to receive, if he had not been dismissed supports an order for the payment of compensation. As we have intimated, we think that if Heran had afforded Mr Anneveldt a fair process his employment with Heran would have lasted beyond the date of his dismissal. We are not persuaded Mr Anneveldt’s limited efforts to mitigate the loss he has suffered because of his dismissal weighs against an order for the payment of compensation, given the limited time we consider he would have continued to work for Heran. Nor do we think the remuneration earned by Mr Anneveldt during the period between his dismissal and the making of an order for compensation weighs against such an order, since the remuneration of which we are aware is small relative to the period. With respect to the amount of any income reasonably likely to be earned by Mr Anneveldt during the period between the making of an order for compensation and the compensation, we are unable to find it weighs against an order for the payment of compensation given the short duration of the period. The matter of contingencies does not weigh against such an order, as the period that we consider Mr Anneveldt would have worked for Heran but for his dismissal has passed. There are no other matters that we consider are relevant for the purposes of considering whether an order for the payment of compensation is appropriate in all the circumstances of the case.
Compensation amount and instalments
[56] Sections 392 and 393 of the FW Act provides as follows in respect of compensation:
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.
393 Monetary orders may be in instalments
To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”
[57] We will apply these provisions to this case.
(i) Remuneration that would have been received (s.392(2)(c))
[58] Although we have decided that the dismissal at the time was not inevitable even if proper procedures had been followed by Heran, we do accept that the nature of the valid reason would probably have led to the conclusion of the employment relationship within a matter of only a few months. Mr Anneveldt was given five weeks notice of his dismissal and he worked out that period and was paid.
[59] In these circumstances, we consider that if he had not been dismissed, Mr Anneveldt would have continued to have worked for Heran for around a further six weeks. In that time, he would have been likely to have received remuneration of approximately $2,300 gross per week in wages and 9 per cent in superannuation.
[60] Accordingly, the remuneration that Mr Anneveldt would have likely to have received in the absence of the unfair dismissal was $13,800 gross plus 9 per cent superannuation.
(ii) Remuneration earned (s.392(2)(e)) and Income reasonably likely to be earned (s.392(2)(f))
[61] Following his dismissal, Mr Anneveldt obtained three days fencing work which provided income of $1,170. This should be taken into account.
[62] Mr Anneveldt also undertook some massage therapy work and this involved seeing one or two clients per week. The evidence does not permit a finding to be made as to whether this work involved additional income or precisely when it was conducted.
[63] We are not aware of the present employment circumstances of Mr Anneveldt however there will be a very short period between the making of the order for compensation and the actual compensation being paid.
[64] Therefore, from the amount of some $13,800 gross plus 9 per cent in superannuation that Mr Anneveldt would have received, or would have been likely to have received, from Heran if he had not been dismissed, we deduct $1,170 gross. This results in an amount of $12,630 gross plus 9 per cent in superannuation.
(iii) Other matters (s.392(2)(g))
[65] In this case, we are not persuaded we should make any deduction for contingencies from the amounts derived above. The projected period of continued employment has long passed and no sound basis for making a deduction for contingencies exists in this case.
[66] We have considered the impact of taxation but we elect to settle a gross amount and leave taxation for determination. There are no other matters that we consider are relevant in determining an amount of compensation instead of reinstatement, apart from those in ss.392(2)(a), (b) and (d), 392(3) and 392(5) of the FW Act with which we now deal.
(iv) Viability (s.392(2)(a))
[67] There is no sound basis to conclude that an order of compensation of the amount we have determined would affect the viability of Heran’s enterprise. It is not a circumstance which warrants adjustment to the amount.
(v) Length of service (s.392(2)(b))
[68] Mr Anneveldt’s had approximately 5 years and 4 months service as an employee and in the particular circumstances of this matter, this consideration does not lead us to adjust the amount of compensation otherwise determined.
(vi) Mitigation efforts (s.392(2)(d))
[69] We find, as the Commissioner did at first instance, that Mr Anneveldt did not earnestly pursue an offer of work which was made to him in the area of real estate sales. He indicated that he was unfamiliar with, and not attracted to, working in real estate sales. 12 Mr Anneveldt had not secured any other employment at the time of the original hearing of his application.
[70] In other circumstances we would have considered making a deduction from the compensation otherwise determined. However, given the very short period over which we have projected the employment for the purposes of s.392(2)(c) of the FW Act, this is not appropriate in this case.
(vii) Misconduct (s.392(3))
[71] Section 392(3) of the FW Act requires the FWC to reduce the amount of compensation it would otherwise order by an appropriate amount on account of a person’s misconduct if satisfied the misconduct of the person contributed to the employer’s decision to dismiss the person.
[72] In this instance there was no evidence that any relevant misconduct of Mr Anneveldt contributed to the Heran’s decision to dismiss.
(viii) Compensation cap (s.392(5))
[73] Since the amount of compensation we have determined is less than the compensation cap in s.392(5) of the FW Act, we make no further reduction for that reason.
(ix) Instalments (s.393)
[74] There was no submission that any amount of compensation should be subject to payment by instalments. In any event, we are not satisfied that in this case payment by instalments is warranted.
Conclusion
[75] In light of the above, we consider we should make an order that Heran pay $12,630 gross plus 9 per cent in superannuation, less taxation as required by law, as compensation to Mr Anneveldt in lieu of reinstatement within 7 days of the date of this decision. It accords a fair go all round to both parties.
[76] We therefore quash the Commissioner’s decision and order in respect of Mr Anneveldt’s unfair dismissal remedy application. We also note that the stay order 13 applied to the compensation determined at first instance lapses upon the determination of this appeal. An order14 reflecting our conclusions is being issued in conjunction with this decision.
SENIOR DEPUTY PRESIDENT
Appearances:
L. Reidy, of counsel, for the The Heran Building Group Pty Ltd.
A. Fitzsimmons, of counsel, for Eduard Anneveldt.
Hearing details:
2013.
Adelaide and Brisbane (video hearing):
July 2.
1 Mr Eduard Anneveldt v Heran Building Group Pty Ltd, [2013] FWC 2224.
2 Mr Eduard Anneveldt v Heran Building Group Pty Ltd, PR535620.
3 Print S8106. See also Wilson v Australian Taxation Office, PR910942 at [51].
4 Fair Work Act 2009 (Cth), ss.382-384.
5 Fair Work Act 2009 (Cth), s.23.
6 Appeal book at p.167.
7 Mr Eduard Anneveldt v Heran Building Group Pty Ltd, [2013] FWC 2224 at [54].
8 Print S9280.
9 Mr Eduard Anneveldt v Heran Building Group Pty Ltd, [2013] FWC 2224.
10 Appeal book at p.328.
11 Appeal book at p.335.
12 Mr Eduard Anneveldt v Heran Building Group Pty Ltd, [2013] FWC 2224 at [67].
13 Heran Building Group Pty Ltd v Mr Eduard Anneveldt, PR536930.14 The Heran Building Group Pty Ltd v Eduard Anneveldt, PR538993.
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