[2015] FWCFB 4171
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.604—Appeal of decision

Kylie Jeffrey
v
IBM Australia Limited
(C2014/7304)

VICE PRESIDENT LAWLER
SENIOR DEPUTY PRESIDENT HARRISON
COMMISSIONER WILLIAMS

SYDNEY, 22 JUNE 2015

Appeal – unfair dismissal – proper award of compensation – discretion to refuse to award compensation.

[1] This is an appeal against a decision of Deputy President McCarthy 1 finding that the dismissal of the Appellant was harsh, unjust or unreasonable, but declining to order any remedy.

[2] This matter was the subject of a substantive hearing and decision in relation to the issue of permission to appeal. A Full Bench, headed by the President, granted permission to appeal and issued substantial reasons for judgment that summarise the facts and identify a number of arguable errors affecting the Deputy President’s decision. 2

[3] The Deputy President found that the reason for the Appellant’s dismissal, namely that she did not have the capacity to do her job for the foreseeable future, was not a valid reason. The Deputy President continued:

[4] The Deputy President concluded that the dismissal of the Applicant was harsh, unjust, or unreasonable. The Deputy President dealt with the issue of remedy in the following way.

[5] The earlier Full Bench held:

[6] Accordingly, this Full Bench is concerned only with the appeal against the Deputy President’s decision to refuse to order the remedy of compensation.

[7] At the hearing of the appeal, the Respondent was not in a position to strongly advance arguments against those arguable errors. We are satisfied that the arguable errors identified by the Full Bench are established, for the reasons outlined by the Full Bench. We are satisfied that the Deputy President erred in failing to make an order for compensation in favour of the Appellant.

[8] It is reasonably clear from the Deputy President’s reasons that his Honour took the view that the Appellant was disentitled, as a matter of discretion, from being awarded a remedy because of her conduct, as a self-represented litigant, at the hearing and, in particular, her attacks on Dr Ryan.

[9] The Deputy President’s judgment of the Appellant was overly harsh. It is not disputed by the Respondent that Dr Ryan had held herself out as an occupational physician at a time when she did not in fact hold registration in that speciality. The Appellant was understandably distressed by the Respondent’s reliance on a report produced by Dr Ryan, not only because of her lack of formal qualification in Australia, but also because Dr Ryan’s opinions adverse to the Appellant were based only on a review of other medical reports and without the benefit of any examination of, or consultation with, the Appellant. Allowances must be made for self-represented litigants who feel a genuine sense of grievance.

[10] Viewed from the perspective of the Appellant, her sense of grievance in relation to Dr Ryan was undoubtedly genuine and not without some rational basis. The Deputy President accepted as having occurred one of the incidences relied upon by the Appellant, when pubic hair was left on her desk in a fashion that was manifestly deliberate. The Deputy President did not make the findings in relation to many of the particulars of bullying and harassment relied upon by the Appellant.

[11] It is undesirable for this Full Bench to attempt to make findings in relation to the extent to which the Appellant’s approach and presentation were themselves the result of the conduct of the Respondent that rendered the dismissal harsh, unjust or unreasonable. We do not have the benefit of seeing the competing experts, and other witnesses, give their evidence. We note that the Appellant relied upon specialist medical reports that supported her contentions and liability has been accepted in relation to a salary continuance insurance policy that she had provided to her when in employment with the Respondent and had maintained after her dismissal. On the other hand, the Deputy President had clearly formed a view that the IBM managers faced real difficulties in dealing with the Appellant and were certainly not the malign figures portrayed by the Appellant (which does not equate to a finding that the Respondent was blameless).

[12] The Deputy President also erred in placing adverse reliance on the Appellant’s absences as a factor in favour of refusing to order a remedy. Most of those absences were supported by medical certificates and were a product of the Appellant’s state of mental health which, on her case, was the result of the Respondent’s treatment of her.

[13] Permission to appeal having been granted by the earlier Full Bench, and having satisfied ourselves that the decision of the Deputy President is affected by error, the role of this Full Bench is to conduct a re-hearing. Given the finding of the Deputy President that the dismissal was harsh, unjust or reasonable, and the limited grant of permission to appeal, the appeal proceeds as a rehearing and it falls to this Full Bench to determine the proper amount of compensation that should be ordered in favour of the Appellant.

[14] The grant of a remedy for unfair dismissal is, relevantly for present purposes, governed by ss.390 and 392 of the Fair Work Act 2009 (Cth) (the Act). Section 390 provides:

[15] Section 392 provides:

[16] Section 392(5) imposes a cap on the amount of compensation that can be ordered - generally equivalent to six months of the employee’s total remuneration.

[17] Section 392 is concerned with compensating an employee who has been dismissed for monetary loss. This is underscored by the express exclusion in s.392(4). In the first instance, the task required by s.392 is essentially concerned with assessing the difference between the amount of remuneration that the employee would have earned if they had not been unfairly dismissed, and the amount or remuneration they have actually earned and are likely to earn, subject to issues of mitigation.

[18] A methodology for determining the proper amount of compensation was discussed in Ellawalla v Australia Postal Corporation 6 and refined by the Full Bench in the well-known decision in Sprigg v Paul’s Licensed Festival Supermarket7 (Sprigg). That methodology involves the following steps:

[19] A Full Bench in Smith v Moore Paragon 8 (Moore Paragon) at [32] noted the desirability of applying the Sprigg approach, but cautioned that regard must always be had to the words of the statute, and that an award of compensation in an amount yielded by a Sprigg analysis must be “appropriate”:

[20] Sprigg and Moore Paragon were decided under earlier legislation; however, those principles are equally applicable to an assessment of compensation under s.392 of the Act.

[21] There are difficulties in undertaking Step 1 of the Sprigg analysis in this case. In particular, there are real difficulties in predicting how long the Appellant would have remained in the employment of the Respondent if she had not been unfairly dismissed.

[22] The decision of the Full Bench in Iliadis v Rail Corporation of NSW 9 (Iliadis) is also relevant. In that case the Member at first instance had refused an application for an extension of time by an employee who had suffered bullying and harassment, leaving her in a state where even her own treating specialist concluded that she would never be fit to work again for the employer. The Member at first instance took the view that the applicant’s own medical evidence meant that the employee could never again perform the inherent requirements of the job and that, accordingly, the dismissal could not be harsh, unjust or unreasonable. The Full Bench referred to “the assumption which underlies [the] decision [at first instance], namely, that the medical condition which rendered the appellant unfit for work in the respondent’s business had been caused by the respondent”, and continued (at [8]):

[23] The decision in Iliadis suggests that in making an assessment, for the purposes of a Sprigg analysis, of how long an employee would have remained in employment if they had not been unfairly dismissed, the period should not be reduced because of factors, such as tension with managers or other staff, that are themselves the result of, for example, bullying and harassment for which the employer is vicariously responsible.

[24] In the present case, this means we are concerned with how long the employee would have remained in employment but for the treatment she received, at least some of which amounted to bullying and harassment for which the employer is vicariously responsible.

[25] That becomes very problematic because of the absence of findings by the Deputy President in relation to most of the Appellant’s claims of bullying and harassment, and is compounded by the paucity of medical and other evidence going to the issue of how the Appellant may have fared in her employment in the absence of any of the conduct that the Appellant alleged as bullying and harassment.

[26] We are most reluctant to see this case remitted for a further hearing. That would be an unfortunate outcome that would impose additional stress and costs on the parties that is out of proportion to the amount at stake.

[27] The Appellant has indigenous heritage. She completed a tertiary degree and obtained employment with Qantas in January 2009. In late 2009, the area in which the Appellant was employed was outsourced to IBM. The Appellant’s employment transferred to IBM as part of that process. The Appellant went on sick leave in September 2010 and, other than two short periods when she returned to work, remained away from work until her dismissal in August 2012. It is tolerably clear that the Appellant was determined to pursue a career, whether with IBM, or moving to a new employer at some point. The medical issues suffered by the Appellant have harmed her prospects in that regard. On the other hand, it is clear that the Appellant’s managers found her difficult to manage in a fashion that suggests that, even if the Appellant had not been subject to the treatment she alleges, it is more likely than not that the Appellant would not have remained as a long-term employee of the Respondent. It is impossible to have any certainty around how long the Appellant would have remained employed in those circumstances.

[28] In this case, the Appellant had prudently maintained a salary continuance insurance policy. The Appellant made a claim under that policy, which claim was accepted by the insurer. As a result, the Appellant has been receiving payments under the policy equivalent to 75% of her salary at the time of dismissal. We are satisfied that, given the statutory purpose of an award of compensation, these income protection insurance payments should be brought to account in determining the amount of the Appellant’s monetary loss. In other words, the Appellant was accruing a monetary loss at a rate of 25% of her salary each year.

[29] The Appellant has not earned a salary since her dismissal. We are satisfied that any award of compensation should not be reduced because of an unreasonable failure by the Appellant to mitigate her loss. The medical evidence provides a proper explanation in that regard.

[30] Even when a proper allowance is made for contingencies, we are satisfied that an amount of compensation that is “appropriate” is three months’ salary ($115,745 per annum divided by 4 equals $28,936.25), less any tax deductions required by law to be made.

[31] For the reasons we have given, the orders of the Full Bench will be that:

[32] Orders to this effect will issue concurrently with this decision.

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VICE PRESIDENT

Appearances:

Ms K Jeffrey, the Appellant, appeared for herself

Mr S Woodbury, Ashurst Australia, appeared for the Respondent

Hearing details:

2015

Sydney

24 March

Final written submissions:

Appellant’s final submissions: 21 April 2015

Respondent’s final submissions: 4 June 2015

Appellant’s submissions in reply: 12 and 15 June 2015

 1   [2014] FWC 8166.

 2   [2015] FWCFB 397.

 3   [2014] FWC 8166.

 4   Ibid.

 5   [2015] FWCFB 397.

 6   Print S5109.

 7   (1998) 88 IR 21.

 8   (2004) 130 IR 446.

 9   [2007] AIRCFB 1041.

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