| [2022] FWC 1185 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Peter David Bostock
v
Austmont Pty Ltd
(U2022/2707)
COMMISSIONER MATHESON |
SYDNEY, 16 MAY 2022 |
Application for an unfair dismissal remedy – Applicant unable to perform inherent requirements of his role – valid reason for dismissal – no notification of reason for dismissal – no opportunity to respond to reason for dismissal – procedural fairness considerations – length of service – Applicant unfairly dismissed – reinstatement inappropriate – compensation ordered.
[1] On 3 March 2022, Peter David Bostock (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 he had been unfairly dismissed from his employment with Austmont Pty Ltd (Respondent). The Applicant seeks financial compensation.
[2] Section 390 of the FW Act provides that the Commission may order a remedy if:
(a) the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed; and
(b) the Applicant has been unfairly dismissed.
[3] Both limbs must be satisfied. I am therefore required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that the Applicant was so protected, whether the Applicant has been unfairly dismissed.
[4] Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.
[5] Section 385 of the FW Act provides that a person has been unfairly dismissed if the Commission 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.
[6] The uncontested factual background to the matter is as follows:
• The Applicant began working for the Respondent on 8 March 1989.
• In March 2021, the Respondent advised the Applicant that the Respondent had received an anonymous complaint against the Applicant which would be investigated. The Respondent found the complaint was not substantiated, however the parties do not agree upon the date that the Applicant was advised of this.
• The Applicant became unwell and went on leave from 22 April 2021, which was the last date that he attended the workplace prior to his dismissal.
• On 16 July 2021, the Respondent wrote to the Applicant advising that it required him to undertake a fitness for duties assessment.
• On 16 July 2021, the Applicant’s spouse, Ms McKenzie-Bostock, responded to the Respondent’s request that the Applicant undertake a fitness for duties assessment stating that, after seeking advice, the Applicant had been informed that there was no requirement for him to attend a doctor’s appointment made by an employer.
• The Applicant has made two workers’ compensation claims, one in relation to a hernia and the other in relation to mental illness or injury which the Applicant says was caused by the Respondent.
• On 6 October 2021, EML Workers Compensation NSW referred the Applicant to Dr Shannon Paisley for an independent medical examination. Dr Paisley provided a report dated 12 October 2021 as a result of that examination.
• The Applicant’s workers’ compensation claim in relation to mental illness was dismissed by the insurer, however this decision is under appeal by the Applicant.
• The Applicant was dismissed from his employment by the Respondent on 10 February 2022, with the Respondent stating the reason for dismissal as being the Applicant’s inability to perform the inherent requirements of his role.
• At the time of his dismissal, the Applicant was employed full time as a Factory Foreman.
• The Applicant is unable to return to work for the Respondent as a result of his persisting medical condition.
[7] The Applicant contends that the dismissal was unfair for a range of reasons which, by way of summary, include that:
• the Respondent was the predominant cause of his psychiatric symptoms, which led to his inability to perform the inherent requirements of his role as Factory Foreman;
• he experienced bullying, harassment, ostracisation, exclusion and unfair treatment from the Respondent which resulted in his diagnosis;
• in April 2021, he was advised he was no longer required to do overtime which impacted his ability to fulfil his role; and
• due to the Respondent’s actions, he now suffers an illness and this should not be considered a valid reason for the dismissal.
[8] The Respondent refutes these contentions, submitting that it had a valid reason for the dismissal and the dismissal is not unfair.
The hearing
[9] There being contested facts involved, the Commission is obliged by s.397 of the FW Act to conduct a conference or hold a hearing.
[10] After taking into account the views of the Applicant and the Respondent and whether a hearing would be the most effective and efficient way to resolve the matter, I considered it appropriate to hold a hearing for the matter (s.399 of the FW Act).
[11] At the hearing on 5 and 6 May 2022, both the Applicant and Respondent were self-represented.
Witnesses
[12] The Applicant gave evidence on his own behalf.
[13] The following witnesses gave evidence on behalf of the Respondent:
• Marc Graham, Managing Director of the Respondent;
• Rutuma Patel, Human Resources Business Partner employed by Dunbrae Pty Limited, which is the entity that owns the Respondent. Ms Patel provides human resources support to the Respondent;
• Belinda Moore, Financial Controller of the Respondent;
• Aaron Shaw, Factory Supervisor of the Respondent; and
• Byron Stanton, Leading Hand/Tradesperson of the Respondent.
Submissions
[14] The Applicant filed submissions in the Commission on 1 April 2022. The Respondent filed submissions in the Commission on 19 April 2022. Final written submissions were filed by the Applicant on 27 April 2022.
[15] A threshold issue to determine is whether the Applicant has been dismissed from their employment.
[16] Section 386(1) of the FW Act provides that the Applicant has been dismissed if:
(a) the Applicant’s employment with the Respondent has been terminated on the Respondent’s initiative; or
(b) the Applicant has resigned from their employment but was forced to do so because of conduct, or a course of conduct, engaged in by the Respondent.
[17] Section 386(2) of the FW Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant.
[18] There was no dispute and I find that the Applicant’s employment with the Respondent terminated at the initiative of the Respondent.
[19] I am therefore satisfied that the Applicant has been dismissed within the meaning of s.385 of the FW Act.
[20] Under s.396 of the FW Act, the Commission is obliged to decide the following matters before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.
Was the application made within the period required?
[21] Section 394(2) requires an application to be made within 21 days after the dismissal took effect.
[22] It is not disputed and I find that the Applicant was dismissed from his employment on 10 February 2022 and made the application on 3 March 2022. I am therefore satisfied that the application was made within the period required in s.394(2).
Was the Applicant protected from unfair dismissal at the time of dismissal?
[23] I have set out above when a person is protected from unfair dismissal.
Minimum employment period
[24] It was not in dispute and I find that the Respondent is not a small business employer, having 15 or more employees at the relevant time.
[25] It was not in dispute and I find that the Applicant was an employee, who commenced his employment with the Respondent on 8 March 1989 and was dismissed on 10 February 2022, a period in excess of 6 months.
[26] It was not in dispute and I find that the Applicant was an employee.
[27] I am therefore satisfied that, at the time of dismissal, the Applicant was an employee who had completed a period of employment with the Respondent of at least the minimum employment period.
[28] It was not in dispute and I find that, at the time of dismissal, the sum of the Applicant’s annual rate of earnings (being $72,558.72) together with such other amounts worked out in accordance with regulation 3.05 of the Fair Work Regulations 2009, was less than the high income threshold, which, for a dismissal taking effect on or after 1 July 2021, is $158,500.00.
[29] I am therefore satisfied that, at the time of dismissal, the Applicant was a person protected from unfair dismissal.
Was the dismissal consistent with the Small Business Fair Dismissal Code?
[30] Section 388 of the FW Act provides that 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.
[31] As mentioned above, I find that the Respondent was not a small business employer within the meaning of s.23 of the FW Act at the relevant time, having in excess of 14 employees (including casual employees employed on a regular and systematic basis).
[32] I am therefore satisfied that the Small Business Fair Dismissal Code does not apply, as the Respondent is not a small business employer within the meaning of the FW Act.
Was the dismissal a case of genuine redundancy?
[33] Under s.389 of the FW Act, a person’s dismissal was a case of genuine redundancy if:
(a) the 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.
[34] It was not in dispute and I find that the Applicant’s dismissal was not due to the Respondent no longer requiring the Applicant’s job to be performed by anyone because of changes in the operational requirements of the Respondent’s enterprise.
[35] I am therefore satisfied that the dismissal was not a case of genuine redundancy.
[36] Having considered each of the initial matters, I am required to consider the merits of the Applicant’s application.
[37] Section 387 of the FW Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission 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.
[38] I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me. 1
[39] I set out my consideration of each below.
Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?
[40] In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded” 2 and should not be “capricious, fanciful, spiteful or prejudiced.”3 However, 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.4
[41] The Respondent submits that there was a valid reason for the dismissal of the Applicant related to the Applicant’s capacity. “A reason will be ‘related to the capacity’ of the employee where the reason is associated or connected with the ability of the employee to do his or her job.”5
[42] In particular, the Respondent asserts that there was a valid reason for the dismissal of the Applicant related to the Applicant’s capacity to perform the inherent requirements of his substantive role. In such circumstances, “it is the substantive position or role of the employee that must be considered and not some modified, restricted duties or temporary alternative position that must be considered”6 and “the reference to ‘inherent’ requirements invites attention to what are the characteristic or essential requirements of the employment as opposed to those requirements that might be described as peripheral.” 7
[43] At the time of dismissal, the Applicant had already been absent for a period of over nine months, with his last day of work being 22 April 2021. As the Full Bench has found, “[w]hen an employee is absent because of an incapacity to perform duties, a question of timing arises. The Act precludes a termination for a temporary absence of up to 3 months. If an absence extends beyond that period, it becomes a question of whether there is likely to be a return to duties in the short or medium term. Usually updated medical advice will be important to that consideration. Indeed that medical information could have a bearing on the adequacy of the reason for termination”.8
[44] The Respondent relied on a summary report in relation to a medical examination conducted by Dr Shannon Paisley in relation to the Applicant (Summary Report) in support of its contention that there is a valid reason for the termination of the Applicant’s employment. The Applicant also filed the substantive medical report of Dr Shannon Paisley dated 12 October 2021 (Dr Paisley’s Report). This is not a case in which there are conflicting medical opinions regarding the Applicant’s capacity that would require me to resolve any conflict in such evidence. Both the Summary Report and Dr Paisley’s Report indicate that:
• the Applicant’s symptoms satisfy the criteria for diagnosis of a Major Depressive Disorder; and
• the Applicant will be unable return to his former workplace.
[45] The parties are in dispute regarding the factors that contributed to the Applicant’s medical condition. Proceedings under workers’ compensation legislation remain on foot as the Applicant’s workers’ compensation claim in relation to mental illness has been rejected and is currently under appeal.
[46] The essence of the Applicant’s submission is that there was no valid reason for the dismissal because the Respondent was the predominant cause of his psychiatric symptoms, which led to his inability to perform the inherent requirements of his role as Factory Foreman for the Respondent and his dismissal. The Respondent disputes this and these issues will likely be ventilated during the proceedings related to the workers’ compensation claim.
[47] It is generally the case that a valid reason for dismissal exists where an employee is unable to perform the inherent requirements of their position. While the parties remain in dispute regarding the factors that contributed to the Applicant’s medical condition and the Respondent’s responsibility for the medical condition, it was not in dispute that the Applicant is unable to return to work for the Respondent because of that condition. This is the reason why the Applicant was dismissed after having not worked for the Respondent for over nine months.
[48] In Michael Smith v Capral Aluminium, 9 Lawler VP cited a number of authorities in providing the following summary:
“[17] Thus, subject to an obligation to provide continuing employment arising under state legislation 10 incapacity arising from a work-related injury provides a valid reason for termination of the employment of an incapacitated employee where:
(a) further performance of the employee's contractual obligations in the future would either be impossible or would be a thing radically different from that undertaken by him or her and accepted by the employer under the agreed terms of his or her contract of employment; or
(b) continued employment would involve imposing a material productivity burden or some other unreasonable burden on the employer; or
(c) continued employment would impose an unreasonable burden on other employees.”
[49] The Applicant’s own evidence corroborates the Respondent’s contention that the Applicant was not able to perform the inherent requirements of his role and was not able to return to work for the Respondent. Accordingly, I am satisfied that the Respondent had a valid reason for the Applicant’s dismissal and that this decision was sound, defensible and well founded.
[50] Having found that a valid reason exists under s.387(a) of the Act, I now turn to the balance of considerations I need to take into account in determining whether a dismissal is harsh, unjust, or unreasonable. A failure to consider the balance of the criteria under s.387 or to concentrate solely on whether a valid reason exists would be an erroneous application of s.387 as described by Cowdroy J in Coal v Allied Mining Services Pty Ltd v Lawler. 11
Was the Applicant notified of the valid reason?
[51] Proper consideration of s.387(b) requires a finding to be made as to whether the Applicant “was notified of that reason”. Contextually, the reference to “that reason” is the valid reason found to exist under s.387(a). 12
[52] On 10 February 2022, the Respondent wrote to the Applicant to inform him of his dismissal with immediate effect and this correspondence was also emailed to the Applicant.
[53] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment, 13 and in explicit14 and plain and clear terms.15
[54] The notification of a valid reason must take place before any decision to terminate the Applicant’s employment in order to provide the Applicant with an opportunity to respond to the reason identified.16
[55] I find that the Applicant was not notified of the reason for his dismissal prior to the decision to dismiss being made. This weighs in favour of a finding of unfairness.
Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct?
[56] An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment. 17
[57] The opportunity to respond does not require formality and this factor is to be applied in a common sense way to ensure the employee is treated fairly. 18 Where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements.19
[58] The Applicant was dismissed for a reason related to his capacity. It is not disputed and I find that the Respondent did not give the Applicant an opportunity to respond to the reason for his dismissal before the decision to dismiss him was made.
[59] At the hearing, the Respondent submitted that it did not provide the Applicant with an opportunity to respond as he could not return to his role and it was reasonable for the Respondent to assume that, because the Applicant and his wife had not responded to the Respondent’s correspondence in relation to his workers’ compensation claims, no response was necessary and it would not in any way have changed the outcome in relation to the dismissal. It may have been the case that providing an opportunity to respond would not have changed the outcome of the decision to dismiss the Applicant, however I consider that the opportunity to respond should have been provided and this weighs in favour of a finding that the dismissal was unfair.
Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal?
[60] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present.
[61] 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.”20
[62] The Respondent made a decision to dismiss the Applicant and this decision was then communicated to him in correspondence dated 10 February 2022. There were no discussions relating to the dismissal and, as such, the issue of the presence of a support person does not arise for consideration.
Was the Applicant warned about unsatisfactory performance before the dismissal?
[63] As the dismissal did not relate to unsatisfactory performance, this factor is not relevant to the present circumstances.
To what degree would the size of the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
[64] At the hearing, the Respondent submitted that the small size of the Respondent’s enterprise was likely to impact on the procedures followed in effecting the dismissal. However, while the Respondent employed 36 employees at the time the Applicant was dismissed, the evidence of Ms Patel during the hearing was that the Respondent was a part of a larger group and that she provided human resources support to the Respondent being a part of that group structure.
[65] There is no evidence to suggest and I find that the size of the Respondent’s enterprise was not likely to impact the procedures followed in effecting the dismissal.
To what degree would the absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
[66] Ms Patel provides human resources support to the Respondent. I find that the Respondent’s enterprise did not lack dedicated human resource management specialists or expertise.
What other matters are relevant?
[67] Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.
[68] An employee’s long and satisfactory work performance or history may be taken into consideration under s.387(h) of the FW Act and, depending on all the circumstances, may weigh in favour of a conclusion that the dismissal of the employee was harsh, unjust or unreasonable.21
[69] I consider that the following matters are relevant to my consideration of whether the dismissal was harsh, unjust or unreasonable:
• the Applicant’s lengthy service for the Respondent spanning almost 33 years; and
• procedural fairness considerations. These concern the decision-making process followed and steps taken by the decision maker, rather than the actual decision itself.
[70] In particular, having served almost 33 years with the Respondent, I consider it would have been appropriate, as a matter of procedural fairness, for the Respondent to notify the Applicant of its intention to bring his employment to an end based on the medical evidence it had available to it and to provide the Applicant with an opportunity to respond. I agree with the Respondent’s contentions that, even if that process had been followed, the decision to terminate the Applicant would still have been made by the Respondent. However, this does not mean that the opportunity should not have been afforded to the Applicant at all. These matters weigh in favour of a finding of unfairness.
Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable?
[71] I have made findings in relation to each matter specified in s.387 as relevant.
[72] I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable. 22
[73] Having considered each of the matters specified in s.387 of the FW Act, I am satisfied that the dismissal of the Applicant was harsh because, even though there was a valid reason for the dismissal, the Applicant should have been notified of the Respondent’s intention to dismiss him before the decision was made and should have been provided with an opportunity to respond. While this would not have changed the outcome of that decision, it was an opportunity and courtesy that should have been extended to the Applicant in the context of an employee who has almost 33 years of service with the Respondent.
[74] I am therefore satisfied that the Applicant was unfairly dismissed within the meaning of s.385 of the FW Act.
[75] Being satisfied that the Applicant:
• made an application for an order granting a remedy under s.394;
• was a person protected from unfair dismissal; and
• was unfairly dismissed within the meaning of s.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.
[76] Under s.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?
[77] It is not in dispute that the Applicant is unable to perform the inherent requirements of his role and cannot return to the Respondent’s workplace. I consider that reinstatement is inappropriate. I will now consider whether a payment of compensation is appropriate in all the circumstances.
Is an order for payment of compensation appropriate in all the circumstances of the case?
[78] The Applicant seeks financial compensation, however has not quantified the amount of compensation sought. The Respondent submits that no compensation should be paid to the Applicant.
[79] Having found that reinstatement is inappropriate, it does not automatically follow that a payment of 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…”. 23
[80] Where an applicant has suffered financial loss as a result of the dismissal, this may be a relevant consideration in the exercise of this discretion. 24
[81] I have considered the question of loss. The application before me is an unfair dismissal claim, not a claim under workers’ compensation laws or common law for work related injury or illness. I have considered whether the Applicant has incurred loss as a result of the dismissal. The Applicant is unable to work for the Respondent. This was the case at the time of the dismissal and remains the case today. The factors that have led to my finding that the dismissal was harsh and therefore unfair relate to the process followed in effecting the dismissal. However, even if the Applicant had been notified of the reason for his dismissal and afforded an opportunity to respond prior to the decision to dismiss him having been made, this would not have changed the outcome.
[82] It is likely that a notification and show cause process would not have taken long in the circumstances of this matter because the Applicant is not disputing the findings of Dr Paisley and does not dispute that he is unable to work for the Respondent. It is likely that, upon the Respondent notifying the Applicant that it was considering terminating his employment and seeking a response, the fact that the Applicant cannot return to work for the Respondent would have been confirmed relatively quickly and the decision to dismiss the Applicant would have occurred a short time thereafter. In the circumstances of this matter, I estimate this show cause process would have taken approximately two weeks and the Applicant would have remained in employment during that time, after which he would have been dismissed by the Respondent paying notice in lieu.
[83] In ordinary circumstances, the Applicant would have been paid his usual weekly wage of $1,395.36 for each week. This would amount to $2,790.72 for two weeks. However, in the present case, the parties are in agreement that, in the three weeks following the dismissal, the Applicant received workers’ compensation payments in the amount of $1,160.00 a week. This means that, in the two weeks following the dismissal, being the period I estimate the Applicant would have remained employed had a show cause process been carried out, the Applicant received $2,320.00. The difference between $2,790.72 and $2,320.00 is $470.72. I am satisfied the Applicant has incurred loss as a result of the dismissal.
[84] In all the circumstances, I consider that an order for payment of compensation is appropriate because the Applicant has incurred such loss.
Compensation – what must be taken into account in determining an amount?
[85] 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.
[86] I consider all the circumstances of the case below.
Effect of the order on the viability of the Respondent’s enterprise
[87] There is no evidence before me that establishes that an order for compensation would have any effect on the viability of the Respondent’s enterprise. I find that an order for compensation would have no such effect.
Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed
[88] 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.” 25
[89] In the circumstances of this case, it is agreed that the Applicant is unable to return to the Respondent’s workplace and is unable to perform the inherent requirements of his role. As I have found above, if the Respondent went through a process of notifying the Applicant that it was considering terminating his employment and affording an opportunity to respond, it is likely that the Applicant would have remained in employment with the Respondent for a further period of two weeks and, in usual circumstances, would have been likely to receive $1,395.36 in gross wages for each week, amounting to a total of $2,790.72.
Applicant’s service
[90] The Applicant’s length of service was in excess of 32 years. While this is a long period of time, I do not consider that the Applicant’s length of service supports reducing or increasing the amount of compensation ordered in the circumstances of this matter.
Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal
[91] The Applicant must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal. 26 What is reasonable depends on the circumstances of the case.27
[92] In the circumstances of this case, the Applicant has a medical condition that has prevented him from sourcing employment. The Summary Report states:
“Mr Bostock’s current treatment consists of regular appointments with his GP, weekly appointments with his psychologist, antidepressant medications and psychiatric consultations. I recommend continuation of these treatments. These treatments are evidence-based and have resulted in an improvement in his condition. Therefore, I consider his current treatment to be reasonably necessary for his work-related psychiatric condition.”
[93] This suggests the Applicant is seeking treatment for his condition. In these circumstances, I have not made any adjustment to the amount of compensation.
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
[94] The Applicant was paid the following amounts by way of workers compensation following the dismissal:
• $1,160.00 in respect of the period between 11 February 2022 and 17 February 2022;
• $1,160.00 in respect of the period between 18 February 2022 and 24 February 2022; and
• $1,160.00 in respect of the period between 25 February 2022 and 3 March 2022.
[95] The Applicant says he has not been able to earn any other income from employment or other work since the dismissal as he is unable to work and this is not challenged by the Respondent.
[96] I am satisfied that the Applicant has not earned any income from employment or other work during the period since the dismissal, however has received the above described amounts by way of workers’ compensation.
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
[97] The Applicant does not have another job and says he is currently unable to work. This is not challenged by the Respondent. Given this and the Applicant’s persisting medical condition, I am satisfied the Applicant is not reasonably likely to earn income between the making of the order for compensation and the payment of compensation.
Compensation – how is the amount to be calculated?
[98] 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). 28 This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages29.”30
[99] The approach in Sprigg is as follows:
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. Workers’ compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation ordered.
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
[100] 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 employment to be $2,790.72 on the basis of my finding that the Applicant would likely have remained in employment for a further period of two weeks. This estimate of how long the Applicant would have remained in employment is the “anticipated period of employment”. 31
Step 2
[101] I have found that the Applicant was paid $3,480.00 in workers compensation payments for the period between 11 February 2022 and 3 March 2022 and it is not reasonably likely that he will earn any income between the making of the order for compensation and the payment of compensation.
[102] Only monies earned since termination for the anticipated period of employment are to be deducted. 32 This is an amount of $2,320.00 in respect of the two weeks following the dismissal. The difference between $2,790.72 and $2,320.00 is $470.72.
Step 3
[103] 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. 33 I have earlier found that the Applicant’s anticipated period of employment was a period of two weeks following the dismissal. I have not made any adjustment for contingencies in respect of this period.
Step 4
[104] I have considered the impact of taxation but have elected to settle a gross amount of $470.72 and leave taxation for determination.
[105] 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”. 34
[106] 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?
[107] If I am satisfied that misconduct of the Applicant contributed to the employer’s decision to dismiss, I am obliged by s.392(3) of the FW Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.
[108] I am satisfied that misconduct of the Applicant did not contribute to the Respondent’s decision to dismiss him. Therefore, the amount of the order for compensation is not to be reduced on account of misconduct.
Compensation – how does the compensation cap apply?
[109] 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 s.392(6); and
(b) half the amount of the high income threshold immediately before the dismissal.
[110] The amount worked out under s.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.
[111] The Applicant was not on leave without pay or without full pay during the 26 weeks immediately before the dismissal.
[112] The Respondent’s submissions indicate that the employee earned $26,052.16 in the 26 weeks immediately before the dismissal and this was not disputed. However, assuming that the employee was entitled to be paid $1,395.36 per week, the total amount of the remuneration to which the Applicant was entitled during the 26 weeks immediately before the dismissal was $36,279.36.
[113] The high income threshold immediately before the dismissal was $158,500. Half of that amount is $79,250.
[114] The amount of compensation ordered by the Commission must therefore not exceed $36,279.36.
[115] In light of the above, I will make an order that the Respondent pay $470.72 gross less taxation as required by law to the Applicant within 14 days of the date of this decision.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<PR741655>
Appearances:
Mr P Bostock on his own behalf.
Mr M Graham on behalf of the Respondent.
Hearing details:
2022.
Sydney (By Video using Microsoft Teams).
May 5 and 6.
1 Sayer v Melsteel Pty Ltd [2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].
2 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
3 Ibid.
4 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.
5 Crozier v Australian Industrial Relations Commission [2001] FCA 1031, [14].
6 J Boag & Son Brewing Pty Ltd v Button [2010] FWAFB 4022, [22].
7 X v Commonwealth [1999] HCA 63, [102].
8 Shortland v Smiths Snackfood Co [2011] FWAFB 2303, [19].
10 With reference to workers compensation legislation.
11 [2011] FCAFC 54.
12 Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].
13 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
14 Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).
15 Ibid.
16 Crozier v Palazzo Corporation Pty Ltd t/as Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [39].
17 Ibid, [75].
18 RMIT v Asher (2010) 194 IR 1, 14-15.
19 Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.
20 Explanatory Memorandum, Fair Work Bill 2008 (Cth), [1542].
21 Telstra Corporation v Streeter [2008] AIRCFB 15, [27].
22 ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7].
23 Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter [2014] FWCFB 7198, [9].
24 Vennix v Mayfield Childcare Ltd [2020] FWCFB 550, [20]; Jeffrey v IBM Australia Ltd [2015] FWCFB 4171, [5]-[7].
25 He v Lewin [2004] FCAFC 161, [58].
26 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].
27 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.
28 (1998) 88 IR 21.
30 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFB 7206, [16].
31 Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].
32 Ibid.
33 Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].
34 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFB 7206, [17].