[2012] FWA 5012 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Nick Rushiti
v
Australian Postal Corporation T/A Australia Post
(U2011/8066)
COMMISSIONER RYAN |
MELBOURNE, 19 JUNE 2012 |
Termination of employment - remedy.
[1] This decision follows an earlier decision of Fair Work Australia, [2012] FWA 2850 [PR522002], which determined that the dismissal of Mr Rushiti from his employment with Australia Post was an unfair dismissal. That decision did not deal with the issue of remedy.
[2] Following the issuing of the earlier decision further hearings were conducted on 20 April and 4 May 2012 at which further evidence was led by both parties and submissions made on the issue of whether any remedy for the unfair dismissal was appropriate and if a remedy was appropriate what should be the remedy.
[3] The relevant provisions of the Fair Work Act 2009 are found in Division 3 of Part 3-2 and are as follows:
“Division 4—Remedies for unfair dismissal
390 When FWA may order remedy for unfair dismissal
(1) Subject to subsection (3), FWA may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) FWA 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) FWA may make the order only if the person has made an application under section 394.
(3) FWA must not order the payment of compensation to the person unless:
(a) FWA is satisfied that reinstatement of the person is inappropriate; and
(b) FWA 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.
391 Remedy—reinstatement etc.
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
Order to maintain continuity
(2) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), FWA must take into account:
(a) 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 reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.
392 Remedy—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), FWA 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 FWA considers relevant.
Misconduct reduces amount
(3) If FWA is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, FWA 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 FWA 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 FWA 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.
Note: subsection 395(5) indexed to $59,050 from 1 July 2011
(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 FWA under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”
[4] The grant of a remedy for an unfair dismissal is not automatic or as of right. It is discretionary. 1
[5] The only constraints on the discretion are those specified in s.390(1)(a) and (b) and s.390(2). The three prerequisites identified in s.390(1)(a) and (b) and s.390(2) have been determined to exist through the earlier decision in this matter.
[6] Once Fair Work Australia is satisfied as to the matters in s.390(1) and (2) there are no other limitations on the exercise of the discretion of Fair Work Australia to decide if a remedy is to be ordered. If Fair Work Australia exercises its discretion to grant an order for reinstatement under s.391 there are no constraints placed upon Fair Work Australia in exercising its discretion to grant an order for reinstatement although there are constraints on the exercise of a follow on discretion to make orders under either or both s.391(2) and (3).
[7] The open discretion granted to Fair Work Australia in relation to both the power to order a remedy and to order the specific remedy of reinstatement is in stark contrast to the powers given to the Australian Industrial Relations Commission under the Workplace Relations Act which provided in former s.654 (previously s170CH) a significant constraint on the making of any order. The key provisions of s.654 are:
(1) Subject to this section, the Commission may, on completion of the arbitration, make an order that provides for a remedy of a kind referred to in subsection (3), (4) or (7) if it has determined that the termination was harsh, unjust or unreasonable.
(2) The Commission must not make an order under subsection (1) unless the Commission is satisfied, having regard to all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s undertaking, establishment or service; and
(b) the length of the employee’s service with the employer; and
(c) the remuneration that the employee would have received, or would have been likely to receive, if the employee’s employment had not been terminated; and
(d) the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination; and
(e) any other matter that the Commission considers relevant; that the remedy ordered is appropriate.”
[8] The types of orders referred to in s.654(3), (4) and (7) were respectively: an order for reinstatement, an order for continuity of service and an order for remuneration lost, and an order for compensation. Once the Australian Industrial Relations Commission was satisfied that it could exercise its discretion to make an order, then if it chose to consider an order under ss.654(4) or (7) there were additional constraints on the exercise of the discretion similar to the constraints found currently in s.391(4) and s.392.
[9] The plain language of s.390 and s.391(1) make it clear that Parliament intended that the discretion residing in Fair Work Australia to grant a remedy and to grant the remedy of reinstatement is at large. A discretion at large is certainly not open-ended or unfettered.
[10] The effective constraints on the exercise of the discretion to grant a remedy and to grant the remedy of reinstatement would appear to be that the decision would have to be consistent with -
[11] I have taken into account s.3 of the Act and in particular that one of the means of achieving the object of the Act “to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians” is by “protecting against unfair treatment”.
[12] I have taken into account that one of the objects in s.381 of the Act is “to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.”
[13] It is clear that the primary remedy in a case of unfair dismissal is reinstatement. As s.390(3) makes clear Fair Work Australia cannot consider the remedy of compensation unless Fair Work Australia is satisfied of two preconditions:
1. that reinstatement is inappropriate, and
2. that a payment of compensation is appropriate.
[14] Section 390(3) can only come into play if Fair Work Australia has decided not to exercise its discretion to order the remedy of reinstatement.
[15] Section 390(3) does not have reverse application where Fair Work Australia is considering whether to exercise its discretion to order reinstatement. By this I mean that where Fair Work Australia has decided that a remedy should be granted and is then considering exercising its discretion to order reinstatement there is no requirement that it be satisfied that reinstatement is more appropriate than compensation or even as appropriate as compensation.
[16] Merely because, as occurred in the present matter, both the Applicant and the Respondent addressed both the remedies of reinstatement and compensation, this does not require Fair Work Australia to balance the remedies of reinstatement or compensation when considering exercising its discretion to make an order for reinstatement. To suggest otherwise would require reading words into the Act which simply are not there and are not needed. It is generally impermissible to read words into legislation where the language is clear. 5
[17] The words of Lord Mersey in Thompson v Goold and Co [1910] AC 409 at 420 are still relevant:
“It is a strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do”
[18] Flowing from the above consideration I approach the exercise of the discretion given to Fair Work Australia under Division 4 of Part 3-2 by posing the following question as the necessary start point:
[see flowchart attached which illustrates above]
[19] I now turn to answering the first question.
Is any remedy appropriate in the present matter?
[20] The Respondent contended that no remedy should be given to the Applicant in this matter 6 and the Applicant sought the remedy of reinstatement and in the alternative the remedy of compensation. Whilst the Respondent only briefly referred to this issue in a specific manner the whole substance of the Respondent’s submission was that any remedy was inappropriate.
[21] Notwithstanding the submissions of the Respondent I consider that it would be inappropriate to deny the Applicant a remedy in relation to his unfair dismissal. I have had regard to the reasons for the decision that the dismissal was unfair in considering whether any remedy is appropriate. To deny the Applicant any remedy would in my view merely compound the unfairness of the decision of the Respondent to dismiss the Applicant. It is in my view appropriate to grant a remedy for the unfair dismissal.
[22] Having answered Yes to the first question I now turn to the second question.
Is reinstatement an appropriate remedy?
[23] The Respondent contended that reinstatement was inappropriate. It was put by Mr McKenney for the Respondent as follows:
“There are three main grounds as to why the respondent says reinstatement is inappropriate. The first ground is this: that the current situation regarding the transport hubs and the capacity for effective ongoing employment. The second matter is the severing of the employment relationship and the resulting loss of trust and confidence that the employer has; and the third issue relates to the applicant's compensation status, and realistic employment opportunities that may exist within the organisation.” 7
[24] Each of the three grounds raised by the Respondent needs to be separately considered.
Reorganization of the Transport Hubs
[25] Mr Humble, Manager, Melbourne Metropolitan Hubs Network (MMHN) gave evidence that the ten transport hubs which currently made up the network were gradually being removed from the network and were being placed under a new management structure which was based upon business hubs. Mr Humble indicated that the transport hub where the Applicant had been employed would become part of a separate business hub and that eventually Mr Humble would only have responsibility for 3 transport hubs. Mr Humble’s evidence was that as control of a transport hub was transferred to a business hub then all of the staff of the transport hub, including those on return to work programmes, were transferred from the MMHN to the relevant business hub. Mr Humble also gave evidence that part of the work performed by the Applicant as part of his return to work programme had disappeared. The Applicant had been performing a task which related to assembling data on an aspect relevant to the whole of the transport hub network. This task would no longer be done on a transport hub network basis as each business hub would be responsible for the transport hub within their business hub.
[26] Mr Humble also gave evidence that the original position of the Applicant as a driver had also changed and that now “the driver becomes the front of Australia Post”(PN4808). Mr Humble’s evidence was that this change was achieved on the basis that “we've just gone through some new training with the drivers, and it will be ongoing”(PN4808).
[27] I am not persuaded that the reorganisation that has occurred with the transport hubs and with the duties of drivers is sufficient to make reinstatement an inappropriate remedy.
[28] The evidence is clear that employees in transport hubs who were on return to work programs were dealt with in the same way as employees who were carrying out their normal duties, ie all transport hub staff were placed under the control of the business hub to which the transport hub was attached.
[29] The concept of reinstatement is not limited to reinstatement to the exact position that the Applicant had nor is reinstatement dependent upon the same organisational structure that existed at the time of the dismissal being in existence at the time of the reinstatement. As s.391(1) makes clear reinstatement can be either by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
[30] The very fact that reinstatement can be to another position permits reinstatement in circumstances where, such as in the present matter, a reorganisation of the Respondent’s business may have led to the Applicants pre-dismissal position no longer existing.
Loss of Trust and Confidence
[31] Evidence was given by both Mr Karzons and Mr Humble that they had lost trust and confidence in the Applicant. The Respondent contended that there was such a loss of trust and confidence in the Applicant that reinstatement was inappropriate.
Mr Humble’s evidence was that:
“Now, do you have a view to express as a senior manager of the respondent with 32 years experience, as to the level of confidence you would have if the applicant was to Return to Work at Australia Post, and his ability to comply with the policies and procedures of Australia Post?---My concerns - I have to relate back to confidence of the driver and of the position as he goes back, I wouldn't have great amounts of confidence in giving him the amount of room required to deal with work on his own. No, I wouldn't have any confidence.
What's that based upon?---That's based upon a number of things. .........So to keep the business going and to keep the business going to where it needs to be, I need to have a lot of confidence in the people that are going out. If you ask me, do I have a hundred per cent confidence in everybody that I've got, of course I haven't. But what we're doing is that we're building rapport with those people, so that they've got the self-confidence to go away and do that. Then we can release them. It must be understood that a driver is 90 per cent self-managed. The minute they drive a vehicle out of the facility, they are self managed, and my question - the question that relates to me, is do I have confidence that he's self-managed? The answer is no. If I put Mr Rushiti back in charge or in control of a computer, can I be a hundred per cent certain that I'm not going to have any more problems with the emails? I'm not. That would have to be rebuilt, and I don't know - I don't have the confidence to do that.” 8
[32] Mr Karzons’s evidence was that:
“Given the training that you provided and your knowledge of the respondent and its policies, do you have a level of confidence about the applicant's ability to comply with Australia Post policies in the future?---Given that Mr Rushiti has been with Australia Post for 12 years, he's had numerous training sessions throughout that time, he would have been exposed to numerous policies on display or via a toolbox talk, or any other kind of training, I believe I have little confidence, or no confidence, that if he was returned that he would change in the future based on that.
Is that in any way formed by your interactions with him directly?---Yes. I spent a fair amount of time with Mr Rushiti and also my experience. I have been exposed to a number of staff across a number of sites, various backgrounds, and, yes, I believe just from what I - my experience, that it would be based on that.” 9
[33] The evidence of each of Mr Humble and Mr Karzons needs to be put into context. Mr Humble had no confidence in the Applicant yet retained confidence in those employees who had sent the offensive emails to the Applicant. Mr Karzons had only been the Applicant’s direct supervisor for a period of a few months in 2009 well before the issues which gave rise to the dismissal of the Applicant. Whilst I don’t doubt that each of Mr Humble and Mr Karzons hold the beliefs they recounted in their evidence the test in this matter is that as enunciated by the Full Court of the Industrial Relations Court of Australia in Perkins v Grace Worldwide (Aust) Pty Ltd:
“So we accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.”
and
“Each case must be decided on its own merits. There may be cases where any ripple on the surface of the employment relationship will destroy its viability. For example the life of the employer, or some other person or persons, might depend on the reliability of the terminated employee, and the employer has a reasonable doubt about that reliability. There may be a case where there is a question about the discretion of an employee who is required to handle highly confidential information. But those are relatively uncommon situations. In most cases, the employment relationship is capable of withstanding some friction and doubts. Trust and confidence are concepts of degree. It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether that standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party.
It may be difficult or embarrassing for an employer to be required to re-employ a person the employer believed to have been guilty of wrongdoing. The requirement may cause inconvenience to the employer. But if there is such a requirement, it will be because the employee's employment was earlier terminated without a valid reason or without extending procedural fairness to the employee. The problems will be of the employer’s own making. If the employer is of even average fair-mindedness, they are likely to prove short-lived. Problems such as this do not necessarily indicate such a loss of confidence as to make the restoration of the employment relationship impracticable.” 10
[34] The Respondent relies on the evidence of Mr Humble and Mr Karzons as establishing that the Respondent has lost trust and confidence in the Applicant. It does not appear to me that the Respondent’s position is soundly or rationally based. The loss of trust and confidence in the Applicant appears directly attributable to the fact that the Applicant got caught sending offensive emails and that he admitted doing so. The Respondent appears to have discounted both the obvious regret of the Applicant for his conduct and his clear intention not to repeat such conduct as well as the fact that those employees who sent the offensive emails to the Applicant remain employed with the Respondent because they neither got caught nor made admissions.
[35] I am satisfied that there can be and should be sufficient trust in the Applicant to make the employment relationship viable and productive. The likelihood of the Applicant accessing or sending offensive emails in the future would appear to be remote.
The Applicant’s compensation status
[36] The Respondent contended that the capacity of the Applicant to perform work was relevant when considering the appropriateness of reinstatement.
“PN5640. Mr McKenney:... in circumstances where in reality Mr Rushiti could only perform administrative tasks, you have the evidence of Mr Humble that there are no positions available within the transport network at the moment.
PN5642. Mr McKenney: But that - that is going to the question of appropriateness of reinstatement in the circumstances, Commissioner, because you've got the factual position of this applicant being in the position he is, work capacity wise, you've got no evidence that this applicant would perform other duties other than administrative ones, and the evidence before you, Commissioner, is that there are no positions available. So, hence, the submission is made, Commissioner, that there's directly on the question of whether, in the circumstances of this case, reinstatement would be an appropriate remedy.
PN5647. Mr McKenney: ..... on the basis of the evidence at 4805 and 4806, at Mr Humble's aware of work restrictions, and perhaps, a more precise question that I then put to him was with his knowledge of those restrictions, was he aware of any positions available within the transport network that he'd be able to perform consistent with those restrictions, and the answer was, "no".
PN5649. Mr McKenney: So that is how the submission is put as to section 390 (3)(a) as to whether reinstatement in those circumstances would be appropriate.
PN5674. Mr McKenney: And so - but relevant to that, Commissioner, as you will have heard me say is that the status of Mr Rushiti's work capacity is relevant to that question for the reasons I've advanced. Not per se because he's a under a compensation scheme, but because the work capacities that he has when translated to what opportunities they are in the workforce currently, mean that there are no realistic prospects of finding work for Mr Rushiti in the transport network.”
[37] The contentions of the Respondent lose much of their impact when all of the circumstances of the case are taken into account. The very fact that other employees on return to work programs within the transport hub network have continued to be employed when their transport hub has been placed under the management of a business hub suggests that even in the reorganized business hub model there are return to work opportunities for employees. As the Applicant was an employee of the Respondent it is proper to consider the appropriateness of reinstatement from the perspective that the Respondent has a very large business in Melbourne and one which is much larger than the transport hub network where the Applicant was originally employed as driver and subsequently employed on a return to work program.
[38] Whilst the capacity of the Applicant to perform work was clearly identified through the evidence in this matter the actual work that may be performed by the Applicant if he is reinstated will be that determined by the Respondent’s return to work experts. The evidence relied on by the Respondent does not establish that there is no possibility of the Applicant being employed anywhere within the Respondent’s Melbourne business on a return to work program.
[39] I consider that reinstatement is an appropriate remedy in this matter. Although having regard to the evidence about the restructuring of the transport hub network it would appear that reinstatement of the Applicant should not be to the position in which the Applicant was employed immediately before the dismissal, but rather should be to another position on terms and conditions no less favourable than those on which the Applicant was employed immediately before the dismissal.
[40] An order for reinstatement is an appropriate remedy in this instance.
[41] Having answered the second question Yes I now turn to consider the appropriateness of orders under s.391(2) and (3).
[42] Reinstatement without an order to maintain continuity or an order to restore lost pay would have the effect of punishing the Applicant with a loss of 13 months pay and recognition of service for that period.
Order to maintain continuity - s.391(3)
[43] Having regard to all of the circumstances of this case I consider it appropriate that the continuity of the Applicant’s employment be maintained but that the period between the date of dismissal and the date of reinstatement not count for the purposes of continuous service.
Order to restore lost pay - s.391(4)
[44] I consider that an order to restore lost remuneration should be made. I do not think it appropriate to discount the amount of lost remuneration for any of the reasons advanced by the Respondent. The order I will make will have the effect of requiring the Respondent to pay to the Applicant an amount equal to the amount of remuneration lost by the Applicant from the date of dismissal to the date of reinstatement. I note that the Applicant will be obliged to repay to the Respondent amounts included in his termination pay which related to the paying out on termination of accrued leave entitlements.
[45] An order as to reinstatement and orders as to continuity of service and restoration of lost pay will be issued separately with his decision.
COMMISSIONER
Appearances:
D. Dwyer and D. Khatab, CEPU, for the Applicant
M. McKenney of Counsel for Australia Post
Hearing details:
2012
Melbourne
April 20
May 4
Attachment A
1 Ellawala v Australian Postal Corporation, Print S5109 at pn 24 and 26, Ross VP, Williams SDP, Gay C; Re Australian Industrial Relations Commission; Ex parte Smith [2004] FCAFC 271 at pn 50, per Lee, Goldberg, Weinberg JJ.
2 Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997, per Lord Reid at p.1030; Wu v The Queen [1999] HCA 52, per Kirby J (dissenting) at pn 70 and 71
3 Associate Provincial Picture Houses Ltd v Wednesbury Corporation [1947] 2 All ER 680, [1948] 1 KB 223, [1947] EWCA Civ 1, per Lord Greene MR
4 Barach v University of NSW [2010] FWAFB 3307 at pn 16
5 See the discussion in Statutory Interpretation in Australia, Pearce and Geddes, 7th edn at 2.32 - 2.36
6 Transcript of proceedings at PN4783
7 Ibid at PN4657
8 Ibid at PN4807 - PN4808
9 Ibid at PN5128 - PN5129
10 [1997] IRCA 15
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