DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mrs Dell Humphries
v
Buslink Vivo Pty Ltd
(U2015/2674)

Application for relief from unfair dismissal – decision on restoration of lost pay.

[1] On 3 August 2015 I delivered a decision determining part of the remedy to be applied in this unfair dismissal application. In that decision 1 I held that Mrs Humphries (the Applicant) had been unfairly dismissed from her employment with Buslink Vivo Pty Ltd (the Respondent) and I made the following findings:

“ [61] Accordingly I consider that it is appropriate to order that the Applicant be reinstated to her former employment with the Respondent under ss.390(1) and 391(1) of the Act. I also consider it appropriate to make an order under s.391(2)(a) to maintain the continuity of the Applicant’s employment.

[61] I decline to make an order at this stage regarding the issue of back pay for lost remuneration under s.391(3). The Applicant found employment within 3 days of her dismissal and between the time she was dismissed and the making of this decision she has been employed, albeit at less favourable conditions. I direct that the Applicant has 7 days following the date of this decision to demonstrate any shortfall in pay and order 7 days for respondent to make any submissions in reply thereafter. I will then determine on the papers an appropriate amount based on the documentary evidence submitted and will make further orders accordingly.

[62] A separate order will be issued giving effect to this decision with the reinstatement taking effect on Monday 10 August 2015.”

[2] Both parties filed submissions in accordance with the directions issued. These are my reasons for decision on remedy for lost pay and should be read in conjunction with my reasons contained in [2015] FWC 4641 and accompanying order PR570091.

[3] The relevant section of the Fair Work Act 2009 (the Act) dealing with remedy and lost pay is s. 391(3) and (4) and provides:

“391 Remedy—reinstatement etc.
……

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.”

Applicant’s submissions

[4] The Applicant filed written submissions on 7 August 2015 and further submissions in reply on 24 August 2015 outlining the following position:

(a) From the period 12 January 2015 to 7 August 2015, the Applicant would have earned $50,205.60 if she had not been unfairly dismissed by the Respondent. This is based on a gross income of $1673.52 per week;

(b) From the period 12 January 2015 to 7 August 2015, the Applicant would have accrued an additional 2 weeks of annual leave equating to $3,347.04 of gross pay (not including leave loading);

(c) From the period 12 January 2015 to 7 August 2015, the Applicant would have been paid 9.5% superannuation on wages earned if she had not been unfairly dismissed, equating to approximately $4,769.53 in lost superannuation;

(d) Since 12 January 2015, the Applicant has received:

(i) $3,347.04 in lieu of notice from the Respondent;

(ii) $21,830.37 in other work income from Buslink Pty Ltd;

(iii) $6,364.66 in accrued annual leave entitlements (3.8 weeks).

(e) In total the Applicant has received $31,542.07 in other income since 12 January 2015 to 7 August 2015;

(f) Based on the above, the Applicant submits that the outstanding amount owed to the Applicant is $26,780.10 (minus applicable taxation) for the period of 12 January 2015 to 7 August 2015 which equates to approximately 16 weeks of gross pay.

[5] The Applicant acknowledged that the original hearing date was vacated on her application due to her pre-arranged vacation. The Applicant submitted that the vacation was planned to occur during a 6-week period of annual leave approved by the Respondent. The Applicant submitted that if she had not been unfairly dismissed, she would have received annual leave payments for the 6-week period of annual leave. On termination of the Applicant, she received 3.8 weeks of accrued annual leave ($6,364.66). Had the Applicant not been unfairly dismissed, she submitted that she would have accrued 2 additional weeks of annual leave during the period 12 January 2015 to 10 August 2015. Combined with the initial 3.8 weeks of annual leave, the Applicant submitted that the 6 week approved period of annual leave would have been paid to her had she remained in her employment with the Respondent.

[6] The Applicant also submitted that any order for back pay should be tempered by consideration of the fact that the Applicant acknowledged her mistake and has shown remorse for the incidents that led to her dismissal.

Respondent’s submissions

[7] The Respondent filed written submissions on 24 August 2015 challenging the amount sought by the Applicant and expounded the following position:

(a) The payment in lieu sought by the Applicant is incorrect and in fact was $4,661.23, as evidence by the Applicant’s pay slip;

(b) The Applicant sought a deferment of the original hearing date. Upon the request of the Applicant, the hearing date was adjourned from 15 April 2015 until the 17 June 2015. This adjournment delayed the hearing by 10 weeks. If the proceedings had been heard on 15 April 2015 the final outcome would have occurred at least 10 weeks earlier;

(c) In any event the Applicant on termination was paid the full annual leave entitlements of $6,364.66, which would have been paid to her had she remained in her employment with the Respondent;

(d) The Commission has a discretion to make such an order and does have a discretion to take in account contingencies such as the delay in the proceedings, as initiated by the Applicant and also to take into account the fact that the Vice President did find in his Decision at [35] that the Respondent had a valid reason for the dismissal of the Applicant.

[8] The Respondent relied on the principles enunciated in Noel Cannan and Kevin Fuller v Nystar Hobart Pty Ltd 2, in support of its challenge to the amount claimed by the Applicant. This decision was partially overturned on appeal in Nystar Hobart Pty Ltd v N. Cannan and J Fuller3. At first instance Deputy President Wells gave a 50% discount on the amount to be back paid on the basis of the Applicant’s conduct and behaviour that was considered inappropriate. In this case the inappropriate behaviour was bullying and harassment. On appeal, a failure to offset notice against lost earnings and a failure to deal with payment of accrued entitlements in the context of the Deputy President’s decision to order to reinstate and maintain continuity of service, was found to have constituted significant error. The question of the terms of the order for payment of compensation for lost pay was remitted back to the Deputy President for determination.

[9] The Respondent therefore submitted that the following calculation should apply to the calculation of monies due to the Applicant:

“30 weeks at $1,673.52 (12 January 2015 to 7 August 2015) $50,205.60

Less

10 weeks delay in the proceedings at the Applicant’s request $16,732.20

Less

Payment in lieu $4,661.23

Less

Annual Leave payments $6,364.66

Less

Payment as agreed by Buslink Pty Ltd $21,830.37

The total deductions amount to $49,588.46.”

[10] In the Respondent’s submission, there are no further monies due to the Applicant as any small amount would be offset against any deduction that the Commission may make with respect to the contributing behaviour of the Applicant which warranted the support of the valid reason for the dismissal.

Consideration

[11] An order to restore lost pay pursuant to s. 391(3) is a discretionary one and the Commission may take into account all of the circumstances of the case, including the conduct of the employee that led to the dismissal. 4 The back pay ordered can be for the full amount of such remuneration, or a part of that amount. In some cases the Commission may decide to reduce the amount of back pay by a certain amount or percentage5, or even to zero6, because of misconduct on the employee’s part, or some other consideration such as contingencies.7 In Noel Cannan and Kevin Fuller v Nystar Hobart Pty Ltd8 a reinstatement order was made with partial back pay. The amounts were reduced by 50% to reflect misconduct and behaviours held to be inappropriate. Importantly, Deputy President Wells noted that “the quantification of the discounting application to the behaviours and misconduct in this matter are not an exact science”. In contrast, in Eng v Goodman Fielder Limited9 in which the dismissal of an employee was found to be harsh, unjust or unreasonable, the employee was reinstated and the employer was ordered to restore lost pay but no reduction was made for the employee’s conduct by reason of a medical condition which led it part to the conduct that caused the dismissal. Thus, any deductions with respect to an employee’s conduct are a matter wholly in the discretion of the Commission, taking into account the individual circumstances of that particular case.

[12] In making the order under s.391(3) I have taken into account, as required:

● The amount earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement (s. 391(4)(a)); and

● The amount reasonably likely to be earned by the applicant during the period between making the order for reinstatement and the actual reinstatement (s. 391(4)9(b)).

[13] I note that there has been divergence between the parties calculations as to the correct amount the Applicant should receive. I have reviewed all the documentary material attached to the parties submissions and considered their respective calculations. I prefer the calculations of the Applicant and adopt the Applicant’s starting position of the equivalent of 16 weeks’ salary claimed to which I will apply any deductions.

[14] The Respondent has raised 2 issues that I will address when exercising my discretion to take into account contingencies and make any deductions by way of contributing behaviour. The first is the Applicant’s deferment of the original hearing date and the second is the contention that a deduction should be made given my finding that there was a valid reason for the dismissal.

[15] In relation to the Applicant’s request to change the original hearing date, the 4 weeks required by the Commission to relist the matter was outside the control of the Applicant and I am not persuaded that, in the circumstances of this case, it would be appropriate to make deductions in respect of that time. In relation to the 6 week delay caused to the hearing date due to the Applicant’s vacation, I find that there should be a deduction made from the amount calculated by the Applicant because of the 6 week delay caused to the proceedings by the Applicant. I regard such a deduction as within the discretion conferred by s.392(3) of the Act.

[16] In relation to the Respondent’s submission regarding a deduction in acknowledgement of the valid reason for dismissal, I note that the Applicant was responsible for a safety breach on 19 December 2014 and the procedural breach on 3 January 2015, that was sufficiently serious that the Respondent was entitled to treat it seriously. Albeit that, for the reasons I have given in the substantive judgment, an unqualified dismissal was a sanction that was, in the all the circumstances, disproportionate and harsh. Conversely, I also consider it is relevant to the exercise of my discretion in awarding an amount of compensation, that the Applicant has consistently shown genuine contrition and remorse for the events leading to her dismissal and took responsibility for her actions.

[17] In these circumstances, I find that it is appropriate that there be a deduction from the amount ordered pursuant to s.391(3) to reflect a material sanction for the Applicant’s conduct giving rise to the dismissal. I regard such a deduction also as within the discretion conferred by s.392(3). I find that there should be a deduction equivalent to 2 week’s gross salary from the amount sought by the Applicant. In this way the importance of the Respondent’s safety and procedural policies will be vindicated and no other employee ought be able take any comfort from this decision that breaches of the policies of the Respondent will do other than expose them to consequences.

[18] In summary, there will be a 6 week deduction plus a 2 week deduction from the 16 weeks’ equivalent earnings claimed by the Applicant. It ought be unnecessary to say that this is a case that, in terms of outcome, turns on its own particular facts.

Conclusion

[19] I order that the Applicant be paid an amount equivalent to 8 weeks’ gross salary within 7 days of the date of this decision.

VICE PRESIDENT

 1   [2015] FWC 4641

 2   [2014] FWC 7014

 3   [2015] FWCFB 888

 4   Kenley v JB Hi Fi (unreported, AIRCFB, Ross VP, Watson SDP, Holmes C, 22 June 2000) Print S7235 at [36]; Davison v Aurora Energy Pty Ltd (unreported, AIRC, Full Bench, 8 March 2001, PR902108) Print 902108 at [24]-[25].

 5   See for example Lawrence v Coal Allied Mining Services Pty Ltd [2010] FWAFB 10089 (unreported, Lawler VP, O’Callaghan SDP, Roberts C, 24 December 2010); Ishak v Jetstar Airlines[2013] FWC 4794.

 6   See for example Colson v Barwon Health [2013] FWC 766.

 7   Ibid. See also Regional Express Holdings Ltd v Richards (2010) 206 IR 17; [2010] FWAFB 8753.

 8   [2014] FWC 7014.

 9   [2011] FWA 317 (unreported, Gooley C, 18 January 2011).

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