DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Ronaldo Salazar
v
John Holland Pty Ltd T/A John Holland Aviation Services Pty Ltd
(U2014/3774)

Application for relief from unfair dismissal - quantum of compensation.

[1] On 25 June 2014 I issued a decision in this matter, [2014] FWC 4030 [PR552150], where I found that there was an unfair dismissal of the Applicant and that a remedy was appropriate and that the appropriate remedy was compensation. I commenced the consideration of the criteria in s.392(2) and made a finding in relation to the criteria in s.392(2)(a).

[2] The Commission was unable to consider the remaining criteria in s.392(2) due to a lack of material before the Commission. The parties were given an opportunity to provide material relevant to s.392(2).

[3] I now consider the remaining criteria under s.392(2) and the other matters contained within s.392.

392(2)(b) - the length of the person’s service with the employer

[4] The Applicant commenced employment with the Respondent in May 2010 and employment ended on 23 December 2013. Whilst this would suggest a period of employment of 3 years and 7 months, the reality is that the Applicant was unfit for work for a significant part of 2013. For the purpose of this criterion I treat the effective employment period of the Applicant as being 3 years. The period of service is not so short as to warrant any reduction in an amount of compensation nor is it of such length that it should be a significant factor in favour of an amount of compensation.

[5] In all of the circumstances of the present matter I consider the Applicant’s length of service to have a neutral impact on the calculation of an amount of compensation.

392(2)(c) - the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[6] The evidence before the Commission was that the Respondent ceased conducting a business of aircraft maintenance in May 2014 but that the business was commenced to be run down as from 9 January 2014 when the Respondent made 30 employees redundant including 15 LAME’s.

[7] The Respondent contends that, had the Applicant continued in his employment and not been dismissed, the Applicant would have been included in the redundancies effected on 9 January 2014.

[8] From the evidence in this matter it is clear that had the Respondent not terminated the Applicant’s employment on 23 December 2013 then the Applicant would not have been able to perform any work as a LAME until he regained his company authorisations and his CASA approvals. Additionally it was the Respondent’s position, in accepting the CASA recommendation about Engine Ground Runs, that the Applicant would not have been permitted to undertake an Engine Ground Run on a Rolls Royce Trent 700 engine without first having been given specific in aircraft or simulator training.

[9] It is reasonable to conclude that the Applicant would have been in the first group of LAME’s to be made redundant on 9 January 2014.

[10] If the Applicant’s employment had continued after the 23 December 2013 then the Applicant would have received remuneration for the period 24 December 2013 to 9 January 2014, an amount of $5,948.55 less tax.

[11] If the Applicant had continued in his employment until 9 January 2014 then the Applicant would as a result of having been made redundant received a redundancy payment of $52,886.68 less any tax.

[12] Additionally the Applicant would have received a payment in lieu of notice of $11,257.67 and a payment of $889.65 for unused annual leave.

[13] Thus, if the Applicant had not been dismissed the Applicant would have received remuneration of $70,982.55 less appropriate tax.

392(2)(d) - the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[14] Whilst the Applicant provided material as to his efforts to mitigate his loss suffered because of the dismissal all of that material is irrelevant as it related to efforts made after 9 January 2014.

[15] The loss suffered by the Applicant because of the dismissal only relates to the period between 24 December 2014 and 9 January 2014. For that period it appears on the material before the Commission that the Applicant made no effort to mitigate his loss.

[16] I do not intend to make any reduction to the amount of compensation that would be appropriate because of the failure of the Applicant to mitigate his loss between 24 December 2013 and 9 January 2014. That period covers the Christmas and New Year public holiday period and significant parts of industry close down over that period. Whilst the airline industry operates throughout that period it is not clear as to whether the industry advertises for LAME’s over that period.

[17] Additionally the very brevity of the period suggests that no reduction should be made to the amount of compensation.

392(2)(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

392(2)(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

[18] Each of the criteria in s.392(2)(e) and (f) are not relevant given that the Applicant’s employment with the Respondent would have ended on 9 January 2014.

392(2)(g) - any other matter that the FWC considers relevant

[19] It is relevant that when the Applicant was terminated on 23 December 2013 that the Respondent paid to the Applicant a termination payment of $12,147.32, comprising $11,257.67 as payment in lieu of notice and $889.65 as payment of unused annual leave. These amounts need to be deducted from any amount of compensation determined in this matter.

[20] I have not taken into account the taxation that would apply to the amount of remuneration that the Applicant would have earned had he not been dismissed as against the amount of taxation that would apply to any amount of compensation paid to the Applicant as a result of this matter. Clearly, the bulk of the amount that would have been paid to the Applicant had he not been dismissed would have been tax free given that most of the amount would have been a genuine redundancy payment. Against this all of the amount of compensation may be taxed as an ETP.

[21] Having regard to the authorities it would appear that the net effect of the taxation issues would lead to an increase in the amount of compensation needed to be awarded in this matter. 1

[22] In all of the circumstances of this matter I will not increase or decrease the amount of compensation due to taxation issues.

[23] For the purposes of s.392(2) I determine that an appropriate amount of compensation is $58,835.23 ($70,982.55 less $12,147.32)

[24] I am not satisfied that there was misconduct of the Applicant which contributed to the Respondent’s decision to dismiss the Applicant and therefore no reduction to the amount of compensation is required under s.392(3).

[25] The amount of compensation does not include any component by way of shock, distress or humiliation, or other analogous hurt, caused to the Applicant by the manner of the Applicant’s dismissal.

[26] The Respondent contends that at the date of termination the Applicant’s weekly gross pay was $2,251.54 and the compensation cap for the purposes of s.392(5) and (6) would be $58,540.04 ($2,251.54 x 26).

[27] The amount of compensation determined to be appropriate exceeds the compensation cap and therefore the amount of compensation to be ordered in this matter is reduced to the compensation cap of $58,540.04.

COMMISSIONER

 1   Shorten v Australian Meat Holdings Pty Ltd (1996) 70 IR 360 at 378.

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