| [2016] FWC 4317 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Robert Goodwin
v
Shanaya Pty Ltd T/A Domino’s Pizza
(U2016/6282)
COMMISSIONER RYAN |
MELBOURNE, 7 JULY 2016 |
Application for relief from unfair dismissal – remedy – compensation.
[1] Further to the Decision 1 of the Fair Work Commission on 24 June 2016 in which I found that the Applicant’s dismissal was unreasonable, I now turn to the question of remedy.
[2] The parties consented to have the determination in regards to remedy determined on the papers. Directions were issued to the parties on 24 June 2016 to file submissions in relation to s.392 of the Act.
[3] Initially the Respondent did not make any submissions which address the relevant sections of the Fair Work Act 2009 (the Act). The Respondent wrote to me on 29 June 2016 and said:
“Thanks for your decision, we welcome that. We are happy to accept. We are more than happy to close this chapter so I request you to make a fair decision for both parties.”
[4] The Applicant filed a submission with the Commission in which he sought compensation totalling $7287.51 in lieu of reinstatement. The Applicant broke this amount into two components: one representing the hours which he believes he should have been rostered to work in the weeks leading up to the date of termination (totalling $2,065.16) and the second for the hours he believes he would have worked after the date of termination, up until compensation is ordered (totalling $5,222.25).
[5] After the Applicant filed his material the Respondent filed further material and submission. The Respondent contended it could not afford to pay the amount of compensation being sought by the Applicant. The Respondent supported its contention by providing a copy of its bank account records for the period 14 May 2016 to 13 June 2016. The Respondent’s submission and supporting material was not given to the Applicant.
[6] The provisions of Division 4 of Part 3-2 of the Act deal with remedies for unfair dismissal.
[7] Section 390 of the Act provides as follows:
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC 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) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC 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.”
[8] The decision as to whether any remedy should be granted by the Commission is at the discretion of the Commission. Section 381 sets out the objects of Part 3-2 of the Act and is as follows:
(1) The object of this Part is:
(a) to establish a framework for dealing with unfair dismissal that balances:
(i) the needs of business (including small business); and
(ii) the needs of employees; and
(b) to establish procedures for dealing with unfair dismissal that:
(i) are quick, flexible and informal; and
(ii) address the needs of employers and employees; and
(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.”
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a "fair go all round" is accorded to both the employer and employee concerned.
Note: The expression "fair go all round" was used by Sheldon J in in re Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95."
[9] Whilst the Commission has discretion to not grant a remedy, the very language of s.381 suggests that where a dismissal has been found to be unfair then a remedy will normally follow. In the present matter having regard to all of the circumstances of this matter I am of the view that it is appropriate that I exercise the discretion available to the Commission to order a remedy.
[10] The primary remedy provided for is that of reinstatement and the remedy of compensation can only be considered if reinstatement is inappropriate. In the present matter the Applicant made submissions that reinstatement was inappropriate. The Respondent did not make any submissions regarding reinstatement.
[11] Consistent with my findings in this matter that the course of conduct engaged in by the Respondent contributed to the termination of employment, I am of the view that there has been sufficient loss of trust and confidence in the employment relationship as to make reinstatement impracticable.
[12] Compensation is the only other remedy available and compensation can only be ordered if the Commission considers an order for payment of compensation is appropriate in all the circumstances of the case.
[13] I consider that compensation is appropriate in all the circumstances of this matter.
[14] As compensation is appropriate then the amount of compensation is to be determined in accordance with s.392.
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.
(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.”
[15] The Applicant seeks compensation in the amount of $7287.51. The Respondent has made no submissions as to remedy other than to contend that it cannot afford to pay the amount of compensation sought by the Applicant.
[16] In calculating an amount of compensation the Commission must have regard to all the circumstances of the case including each of the matters listed in s.392(2). As a Full Bench of the AIRC noted in relation to the predecessor to s.392(2), “No one matter referred to in s.170CH(7) is to be regarded as paramount but regard must still be had to each of them. In the end result, it is for the Commission to arrive at an assessment of an appropriate amount in the circumstances of each particular case.” 2
[17] The bank statement provided by the Respondent shows that the business of the Respondent is not profitable. The Respondent described its current status as follows:
“Company financial position is not strong. Whatever weekly we earn all money paid on wages, shop expenses, supplier payment and master franchisee royalty and charges.” The Respondent requested that the Commission, in considering an amount of compensation: “Please consider all factor before making decision so that company financial stability will not become worst with this business 13 to 14 local people’s get employment.”
[18] The financial record provided by the Respondent suggests (and it is no more than a suggestion) that if the Commission ordered the Respondent to pay an amount of compensation to the Applicant equal to the compensation cap set by s.392(5) and (6) then the viability of the Respondent’s enterprise may be put at risk. However the financial record provided by the Respondent does not suggest that the viability of the Respondent’s enterprise would be put at risk by every possible order for compensation. The snapshot of the financial status of the Respondent’s enterprise provided by a single monthly bank statement shows that for that month that the business traded at an overall loss and the information suggests that the business has traded at a loss on other occasions. However as the business continues to trade and appears to be supported to some extent by the bank there is no reason to conclude that a reasonable order for compensation would effect the viability of the Respondent’s enterprise.
[19] I have had regard to the legislative history of s.390(3)(b) and s.392(2)(b) and it would appear that length of an employee’s service with the employer does not carry with it any particular weighting either for or against the calculation of the amount of compensation. Whilst long service may weigh in favour of an employee in terms of calculating an amount of compensation it is not axiomatic that short service must weigh against the employee. The Applicant was only employed by the Respondent for a period of approximately 6 months.
[20] Length of service is a factor that must be considered by the Commission but that consideration must be undertaken in the context of having regard to all the circumstances of the case. This I have done in the present matter and I conclude that the length of service of the Applicant with the Respondent is neutral in my calculation of the amount of compensation.
[21] The Applicant does not address the length of time he considers he would have remained in the employment of the Respondent if not for the conduct of the Respondent which led to him terminating his employment.
[22] It is relevant that no issues of conduct or performance were raised by the Respondent against the Applicant. The Applicant liked his work and expressed a very strong desire to keep working in his communications with Domino’s Pizza head office. In the circumstances of the present matter I consider that the Applicant’s employment with the Respondent could have continued for at least two months, but for the dismissal and the Respondent’s course of conduct which led to the dismissal. Whilst the Applicant had regular and systematic employment it was not the same hours each week. For the purpose of calculating the amount that the Applicant would have earned I have assumed that the Applicant would have worked 21 hours per week on average over the two months. At $18 per hour the amount for the purpose of this sub section is $3024.00
[23] As well as the earnings of the dismissed person, s.392 of the Act requires me to take into account the efforts of the dismissed person (if any) to mitigate the loss suffered by them because of their dismissal. The Applicant submitted that since his termination he has found other employment.
[24] On the basis of the material before me, I am satisfied that the Applicant has made efforts to mitigate his loss and no adjustment need be made to the amount of compensation otherwise calculated under s.392.
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 (s.392(2)(f))
[25] As detailed above, the Applicant did commence new employment one week after his termination, however there is no evidence before me as to the amount of remuneration he has earned during the period from his termination to now.
[26] With respect to the amount of any remuneration earned by the Applicant from employment or other work during the period between the date of termination and the making of an order for compensation and any income reasonably likely to be so earned by him during the period between the making of an order for compensation and the actual compensation, there is no evidence from the Applicant which allows any calculation of this amount.
[27] In his written submission on compensation the Applicant identified the circumstances of the job he obtained after his dismissal.
“I did start alternative work one week after I quit working for Shanaya pty ltd. but I had already informed the manager saravpreet that I was looking for a second job to help with bills and was not going to quit prior to the problems arising if i found a second job,
The job I have at the moment is during the day and I could have still worked for domino's of an evening till close and still done the hours I was getting.”
[28] Consistent with the Full Bench decision in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge 3 I consider that it is not reasonable to reduce the amount of compensation by the amount earned by the Applicant in this other employment. As the Applicant contended, if he had not been dismissed he would have worked both his evening job for the Respondent and his day job for the other employer.
[29] It is relevant that the matter which led to the course of conduct by the Respondent which resulted in the dismissal of the Applicant was the Applicant’s inability to be available for the full length of a rostered shift due to personal matters. Whilst the Applicant was prepared to work a shortened shift the Respondent only wanted the Applicant to work a full shift or not at all. It is likely that the Applicant would be unavailable on occasions to work the full shift for which he was to be rostered. The Commission considers that a deduction must be made to the amount calculated under s.392(2)(c) to take into account the likelihood of the Applicant being unavailable on occasions.
[30] It is relevant that the hourly rate used for the calculation under s.392(2)(c) was the base rate identified by the Respondent. However, each pay record for the Applicant included a payment for a “MFFA Adjustment”. The nature and purpose of this payment was never explained to the Commission but it is clear that such payments were a feature of every pay even though the amounts of MFFA Adjustment varied from pay to pay. An increase needs to be made to the amount calculated under s.392(2)(c) to reflect the existence of MFFA Adjustments.
[31] It is also relevant that the pattern of work of the Applicant showed an increasing average hours worked. In the three weeks immediately before the events commencing on 2 March 2016 the Applicant averaged 27 hours per week. Whilst I do not consider that this average would have been maintained it does suggest that if the Applicant had remained in employment then the average hours worked would have been above the 21 used in the calculation under s.392(2)(c). An increase in the amount calculated under s.392(2)(c) is needed to account for this increasing average hours.
Conclusion as to the amount of compensation
[32] Having taken into account each of the factors under s.292(2) the Commission determines that the appropriate amount of compensation to be ordered in this matter is $3,000.00
Misconduct (s.392(3))
[33] There has been no finding of any misconduct of the Applicant. Therefore no alteration will be made to the appropriate amount of compensation.
Shock, distress to be disregarded (s.392(4))
[34] In calculating the appropriate amount of compensation I have not included any component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the Applicant by the manner of the person’s dismissal.
Compensation cap (s.392(5))
[35] Since the amount of compensation of $3,000.00.gross is less than the compensation cap in s.392(5) of the Act, I make no alteration to the appropriate amount of compensation.
Instalments (s.393)
[36] There was no submission that any amount of compensation should be subject to payment by instalments and I make no order in this regard.
[37] Having considered all of the matters I am required to take into account under s.392(2) I determine that the amount of compensation to be ordered in this matter is $3,000.00 to be taxed at the appropriate rate.
[38] An order to that effect will issue separately.
COMMISSIONER
2 Tempo Services Limited v Klooger and Others, PR953337 para. 22
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