[2018] FWC 6385
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.394—Unfair dismissal

Michael Newton
v
Lend Lease Engineering Pty Ltd
(U2018/7514)

COMMISSIONER SAUNDERS

NEWCASTLE, 16 OCTOBER 2018

Application for an unfair dismissal remedy - not employed under a contract of employment for a specified task - employment not terminated on completion of a task - dismissal harsh and unreasonable - compensation ordered.

[1] Mr Michael Newton was employed by Lendlease Engineering Pty Ltd (Lendlease) in the period from 28 November 2017 until 29 June 2018. During that time Mr Newton worked for Lendlease on sections 10 and 11 of the Woolgoolga to Ballina, Pacific Highway upgrade project. Lendlease refers to that project as the Richmond to Ballina or R2B project.

[2] Mr Newton contends that he was dismissed by Lendlease and his dismissal was harsh, unjust and unreasonable.

[3] Lendlease denies that it dismissed Mr Newton and, in the alternative, contends that any dismissal of Mr Newton was not harsh, unjust or unreasonable.

[4] I heard this matter in the Byron Bay Local Court on 25 September 2018. Mr Newton gave evidence in support of his unfair dismissal claim. Mr Paul Bull, General Superintendent, and Mr Brett Macauley, Superintendent, gave evidence on behalf of Lendlease.

Initial matters

[5] Section 396 of the Fair Work Act 2009 (Cth) (Act) sets out four matters which I am required to decide before I consider the merits of Mr Newton’s application. There is no dispute between the parties and I am satisfied on the evidence that each matter set out in s 396 of the Act, insofar as it is relevant, is satisfied in this case.

Was Mr Newton dismissed?

[6] Lendlease contends that Mr Newton was employed under a contract of employment for a specified task and his employment terminated on completion of the task, with the result that he was not dismissed (s 386(2)(a) of the Act). In the alternative, Lendlease contends that Mr Newton was not dismissed because his employment with Lendlease was not terminated on Lendlease’s initiative within the meaning of s 386(1)(a) of the Act.

What is a contract of employment for a specified task?

[7] In Dale v Hatch Pty Ltd1 a Full Bench of the Fair Work Commission (Commission) considered the meaning of the expression “contract of employment … for a specified task” in s 386(2)(a) of the Act:

Was Mr Newton employed under a contract of employment for a specified task?

[8] Mr Newton was employed by Lendlease pursuant to a letter of offer dated 23 November 2017 (Contract). Relevant express terms of the Contract include:

[9] Mr Newton signed the Contract, and by doing so, confirmed that he had read, understood and accepted the terms and conditions outlined in the Contract.

[10] At the time the Contract was made, Lendlease had only been awarded the bulk earthworks package of works on sections 10 and 11 of the R2B project. At a later time, Lendlease was awarded the paving package of works on sections 10 and 11 of the R2B project.

[11] There is no dispute that in about February 2018 Mr Newton commenced undertaking some work for Lendlease as a Roller Operator on the R2B project, as well as his duties as a Labourer. From about April 2018 until the cessation of his employment with Lendlease on 29 June 2018, Mr Newton spent about 70% of his working time undertaking duties as a Roller Operator and about 30% of his time undertaking duties as a Labourer. Notwithstanding the fact that Mr Newton worked partly as a Roller Operator and partly as a Labourer from about April 2018 onwards, he was classified and paid as a CW4 employee for the whole of that period.

[12] It is clear from the “Engagement” term of the Contract that Mr Newton was not assured employment throughout the whole of the time that Lendlease was engaged on the R2B project. Instead, the Contract states that Mr Newton’s engagement would “end either when the project concludes, or the work for which you are employed on this project concludes”. The “work for which … [Mr Newton was] employed on this project” was, initially, that of a Labourer and, from about February 2018, partly as a Labourer and partly as a Roller Operator.

[13] The Contract does not, expressly or impliedly, identify, in definite terms, any distinct piece of work that was required to be performed by Mr Newton or any specific result required to be achieved by him. The Contract nominates Mr Newton’s position as a Labourer, which was modified by agreement to that of part Labourer and part Roller Operator. A “position” is not the same thing as a “task”, particularly in circumstances where the Contract permitted Lendlease to direct Mr Newton to perform “any duties or tasks”. Further, the Contract permitted Lendlease to unilaterally determine, at any time, when the work for which Mr Newton was employed on the R2B project had completed. Lendlease did this by deciding in June 2018 that it no longer needed Mr Newton to work on the R2B project as a Labourer and/or Roller Operator, notwithstanding that such work was continuing to be done on the R2B project by other Lendlease employees. In this way, identification of when the “task” for which Mr Newton was employed would be, or had been, completed was not clear or predictable, but was a matter of doubt and speculation on Mr Newton’s part. For these reasons, Mr Newton was not employed under a contract of employment for a specified task.

Did Mr Newton’s employment terminate on completion of the task?

[14] A task is one which is completed when the employee finishes the work involved in it. 2

[15] Mr Newton’s employment with Lendlease did not end because he had completed any particular task. Rather, Lendlease decided to bring Mr Newton’s employment to an end because it had completed about 85% of its bulk earthworks on the R2B project and it did not require as many Labourers or Roller Operators working on the project to complete it. Lendlease did not employ anyone else to replace Mr Newton’s role on the R2B project. 3 In other words, Lendlease made a no doubt commercially sensible decision that it no longer required as many employees working on the R2B project, so it abolished the roles of a number of employees on the project, including the role occupied by Mr Newton.4 However, the abolition of a role does not constitute, or necessarily coincide with, the completion of a task.5 In this case it did not, for there was no specific task which Mr Newton had completed.

[16] Mr Macauley gave evidence that by the end of the week in which Mr Newton’s employment came to an end, the work of Mr Newton and two other Roller Operators who ceased employment on 29 June 2018 had “largely completed”. 6 I infer from the expression “largely completed” that some work remained to be done. Accordingly, even taking Lendlease’s case at its highest, the work Mr Newton was undertaking on the R2B project had not been completed at the time his employment came to an end.

[17] For the reasons given, Mr Newton’s employment with Lendlease did not terminate on completion of any specified task.

Was Mr Newton’s employment terminated on Lendlease’s initiative?

[18] A termination of employment at the initiative of the employer is one that is brought about by an employer and which is not agreed to by the employee. There is no suggestion in this case that Mr Newton voluntarily left his employment relationship with Lendlease. Therefore, the focus of the inquiry is whether an action on the part of the employer was the principal contributing factor which results, directly or consequentially, in the termination of the employment. 7

[19] Mr Newton’s employment relationship with Lendlease did not terminate according to the terms of the Contract. 8 The “Engagement” term of the Contract contemplated the engagement ending “either when the project concludes, or the work for which you are employed on this project concludes”. On the basis of the findings I have made in paragraphs [15] and [16] above, at the time Mr Newton’s employment with Lendlease came to an end, the R2B project had not concluded and nor had the work for which Mr Newton was employed on the project concluded.

[20] On 29 June 2018, Mr Bull met separately with Mr Newton and two other Lendlease employees and informed each of them that they would be finishing up that day on the R2B project. Mr Bull explained to Mr Newton that the decision to finish him up on the project was not because of his performance or conduct, but was on account of the operational requirements for the R2B project. Mr Bull also accepts that he used the word “redundancies” when explaining to Mr Newton the reason his employment was coming to an end. 9 By “redundancy”, Mr Bull meant “Their work’s redundant, they are no longer required… Redundancy is when their job becomes redundant and there’s no more work for them.”10

[21] Mr Bull also gave Mr Newton a letter dated 29 June 2018 in the following terms:

“Dear Michael

[22] It is clear from both what Mr Bull said to Mr Newton on 29 June 2018 and the terms of the 29 June 2018 letter that it was action on the part of Lendlease which was the principal contributing factor which resulted, directly, in the termination of Mr Newton’s employment relationship with Lendlease. Accordingly, Mr Newton’s employment with Lendlease was terminated on Lendlease’s initiative.

Conclusion re dismissal

[23] It follows from the conclusions I have reached that Mr Newton was dismissed by Lendlease within the meaning of s 386 of the Act.

Was Mr Newton’s dismissal unfair?

[24] It remains for me to consider whether Mr Newton’s dismissal was harsh, unjust or unreasonable. 11 Section 387 of the Act states:

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC 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.”

[25] In determining whether Mr Newton’s dismissal was harsh, unjust or unreasonable, I will consider and take into account each of the matters specified in paragraphs (a) to (h) of s 387 of the Act below.

Paragraph 387(a)

[26] For the reasons set out in paragraph [15] above, I have concluded that Lendlease dismissed Mr Newton because it no longer required his job to be performed by anyone. The reason Lendlease no longer required anyone to perform Mr Newton’s job is because it had completed 85% of the earthworks on the R2B project and it needed fewer employees to complete that work. I do not accept any suggestion that Mr Newton was dismissed because he did not accept the Leading Hand role offered to him in January 2018 or because of any deterioration in his relationship with Lendlease management as a consequence of his decision to turn down that offer. No evidence of any probative weight was adduced to support such a finding. 12

[27] There was no prospect of Mr Newton being offered employment in an alternative position because, at the time of his dismissal, Lendlease did not have any alternative roles available. At that time, Lendlease needed fewer employees working on the R2B project and the roles it did need on that project were already occupied by other employees.

[28] It follows from the findings I have made that Mr Newton was not dismissed for a reason relating to his capacity or conduct, so the question as to whether any such reason was a valid one does not arise. 13

Paragraph 387(b)

[29] Mr Newton was not dismissed for a reason relating to his capacity or conduct, so no issue arises as to the notification of such a reason. 14

Paragraph 387(c)

[30] Mr Newton was not dismissed for a reason relating to his capacity or conduct, so the issue of whether he was given an opportunity to respond to any such reason does not arise. 15

Paragraph 387(d)

[31] There was no evidence that suggested that Lendlease denied Mr Newton the assistance of a support person at any discussion which may have occurred concerning his dismissal. 16

Paragraph 387(e)

[32] The dismissal was not related to any unsatisfactory performance on the part of Mr Newton, so no issue arises as to whether he had previously been warned about unsatisfactory performance. 17

Paragraphs 387(f) and (g)

[33] Lendlease is a large employer with a dedicated human resources team, and accordingly there was no adverse impact on its capacity to follow appropriate procedures in effecting the dismissal. 18

Paragraph 387(h)

[34] Relying on somewhat similar reasoning in Dale v Hatch (at [37]), Lendlease contends that the following matters weigh against the proposition that Mr Newton’s dismissal was unfair: 19

[35] I agree with Lendlease’s contentions set out in the previous paragraph, save that:

[36] The following matters also weigh in favour of a finding that Mr Newton’s dismissal was not unfair:

Conclusion re dismissal harsh, unjust and/or unreasonable

[37] Having considered and weighed up all the relevant circumstances, including those referred to in the previous three paragraphs, I am satisfied that Mr Newton’s dismissal was harsh and unreasonable. There are two principal reasons which have led me to form that evaluative judgment. First, the Contract is vague as to how long Mr Newton may be employed on the R2B project. In particular, the Contract permits Lendlease to unilaterally decide, at any time convenient to it and without prior notice to Mr Newton, that the work for which he was employed on the project has concluded. Lendlease communicated its decision in that regard to Mr Newton on 29 June 2018, notwithstanding that there remained Roller Operating and Labouring work to be undertaken by Lendlease on the R2B project. Although contracts for a specified task, such as erecting the framework on a house, will likely be for an uncertain duration (due to weather etc.), an employee working on such a task can monitor progress of the task and readily understand the scope of the work they have remaining on the project. The vague language of the Contract meant that Mr Newton did not have such information or knowledge on the R2B project.

[38] Secondly, as stated above, the real reason for Mr Newton’s dismissal was because Lendlease no longer required the role he was performing to be undertaken by anyone. However, Lendlease did not consult with Mr Newton about the abolition of his role or its impact on him and his family (including two dependent children) prior to calling him to a meeting on 29 June 2018 and telling him that he would be finishing up on that day. During that discussion, Mr Bull did offer to assist Mr Newton to find alternative employment with a different employer on the R2B project. 22 I have taken that offer of assistance into account.

[39] Further to the second reason, the lack of consultation occurred in circumstances where, prior to his dismissal, Mr Newton was not on notice that his employment on the R2B project was about to come to an end. Mr Newton was obviously aware during 2018 that Lendlease’s work on the R2B project was progressing, had not been delayed by inclement weather, and the earthworks were nearing completion in mid-2018. 23 Mr Newton also attended tool box meetings at which he was informed about matters such as milestones reached on the R2B project and upcoming work.24 However, I accept Mr Newton’s evidence that, at no time prior to his conversation with Mr Bull on 29 June 2018, did any representative of Lendlease inform Mr Newton of the possibility that he would be retrenched.25 The evidence revealed discussions at some toolbox meetings and otherwise generally on the R2B project about potential retrenchments and some work winding up, but I am not satisfied on the evidence that Mr Newton attended any such meeting or was otherwise informed of such matters.26 In addition, at no time was Mr Newton informed that his work on the R2B project was limited to bulk earthworks or any specific work.27

[40] Taking the same approach as that adopted by the Full Bench in Dale v Hatch (at [38]), I do not propose to express a view as to whether the circumstances of Mr Newton’s dismissal gave rise to any entitlement to redundancy pay benefits under the Enterprise Agreement, the Act, or the Building and Construction General On-Site Award 2010 (Award), because I do not consider that the unfair dismissal provisions of the Act should be used as a substitute mechanism for the recovery of monetary entitlements under the Act or an industrial instrument. If Mr Newton believes he has an entitlement to redundancy pay, then he can make an appropriate application to a relevant court for the recovery of such an entitlement. I do not regard this as a matter relevant to whether Mr Newton’s dismissal was unfair.

Remedy

[41] In light of my findings that Mr Newton was protected from unfair dismissal, and that his dismissal was harsh and unreasonable, it is necessary to consider what, if any, remedy should be granted to him.

[42] Lendlease submits that this is a matter where the Commission should exercise its discretion to not order any remedy.

Reinstatement

[43] Mr Newton seeks compensation, not reinstatement. Lendlease submits that reinstatement is not an appropriate remedy. Given that Lendlease has completed the bulk earthworks and is nearing completion on the gravel phase of construction on the R2B project, I accept that reinstatement of Mr Newton is inappropriate in the circumstances.

Compensation

[44] Section 390(3)(b) of the Act provides the Commission may only issue an order for compensation if it is appropriate in all the circumstances. A compensation remedy is designed to compensate an unfairly dismissed employee in lieu of reinstatement for losses reasonably attributable to the unfair dismissal within the bounds of the statutory cap on compensation that is to be applied. 28

[45] Having regard to all the circumstances of the case, including the fact that Mr Newton has suffered financial loss as a result of his unfair dismissal, I consider that an order for payment of compensation to him is appropriate.

[46] It is necessary therefore for me to assess the amount of compensation that should be ordered to be paid to Mr Newton. In assessing compensation, I am required by s 392(2) of the Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a) to (g) of this subsection.

[47] In undertaking this task, I shall use the established methodology for assessing compensation in unfair dismissal cases which was set out in Sprigg v Paul Licensed Festival Supermarket and applied and elaborated upon in the context of the current Act by Full Benches of the Commission in a number of cases. 29 The approach to calculating compensation in accordance with these authorities 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.

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 5: Apply the legislative cap on compensation.

Remuneration Newton would have received, or would have been likely to receive, if he had not been dismissed (s 392(2)(c))

[48] Like all calculations of damages or compensation, there is an element of speculation in determining an employee’s anticipated period of employment because the task involves an assessment of what would have been likely to happen in the future had the employee not been dismissed. 30

[49] In light of the genuine operational need Lendlease had in late June 2018 to reduce the number of employees it was using on the R2B project and the absence of any suitable alternative positions for Mr Newton, I am satisfied his employment would have come to an end shortly after 29 June 2018 had he not been dismissed on 29 June 2018. As to precisely when dismissal would have occurred, I find that Mr Newton’s dismissal would have taken place two weeks after 29 June 2018 had he not been dismissed on 29 June 2018. I have decided on a period of two weeks because, in my assessment, two weeks is the period it would have taken Lendlease to comply with its obligations in the Award to consult with Mr Newton about the loss of his job as a result of the fact that Lendlease no longer required as many Labourers or Roller Operators working on the R2B project. 31

[50] Accordingly, I am of the view that the remuneration Mr Newton would have received, or would have been likely to receive, if he had not been dismissed would have been another two weeks’ remuneration. Mr Newton’s average gross pay per week during his employment with Lendlease on the R2B project was $1,825.04. It follows that in two weeks he would have received $3,650.08 gross.

Remuneration earned (s 392(2)(e)) and income reasonably likely to be earned (s 392(2)(f) and (g))

[51] Mr Newton finished employment with Lendlease on Friday, 29 June 2018 and commenced employment with Complete Staff Solutions (5) Pty Ltd (Complete Staff) on Monday, 2 July 2018.

[52] Mr Newton submits, and Lendlease does not contest, that the difference between his gross weekly earnings with Lendlease and his gross weekly earnings with Complete Staff is $364.31 per week. Accordingly, in the two week period following his dismissal from Lendlease, Mr Newton suffered a loss of remuneration in the gross sum of $728.62.

[53] Lendlease paid Mr Newton one week’s wages in lieu of notice on the termination of his employment. I am satisfied that Lendlease would have made the same payment in lieu of notice to Mr Newton had he been dismissed two weeks after 29 June 2018, rather than on 29 June 2018. Accordingly, I will not reduce the compensation payable to Mr Newton on account of the payment in lieu of notice he received.

Any other relevant matter (s 392(2)(g))

[54] It is necessary to consider whether to discount the remaining amount ($728.62) for “contingencies”. This step is a means of taking into account the possibility that the occurrence of contingencies to which Mr Newton was subject might have brought about some change in earning capacity or earnings. 32 Positive considerations which might have resulted in advancement and increased earnings are also taken into account. Ordinarily, the discount for contingencies is only applied in respect to an “anticipated period of employment” that is not actually known.33

[55] In the present case, there is no “anticipated period of employment” that is not actually known. That is, the evidence discloses the remuneration Mr Newton received in the two week period following his dismissal. In the circumstances, therefore, I will not discount the remaining amount ($728.62) for contingencies.

[56] Save for the matters referred to above, there are no other matters which I consider relevant to the task of determining an amount for the purposes of an order under s 392(1) of the Act.

[57] I have considered the impact of taxation, but I prefer to determine compensation as a gross amount and leave taxation for determination.

Viability (s 392(2)(a))

[58] Lendlease is a large organisation. No submission was made nor was any evidence adduced on behalf of Lendlease, that any particular amount of compensation would affect the viability of Lendlease’s business. No adjustment will be made on this account

Length of service (s 392(2)(b))

[59] In all the circumstances, I consider that Mr Newton’s relatively short period of service with Lendlease (about seven months) does not in all the circumstances justify any increase or reduction to any amount of compensation otherwise calculated.

Mitigation efforts (s 392(2)(d))

[60] I am satisfied that Mr Newton acted reasonably to mitigate his loss by finding alternative employment with Complete Staff and do not consider it appropriate to reduce the compensation on this account.

Misconduct (s 392(3))

[61] Section 392(3) of the Act provides that if the Commission is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the Commission must reduce the amount it would otherwise order under s 392(1) of the Act by an appropriate amount on account of the misconduct.

[62] There is no suggestion that Mr Newton engaged in any misconduct. Accordingly, I will not reduce compensation on this account.

Shock, distress or humiliation, or other analogous hurt (s.392(4))

[63] I note that in accordance with s 392(4) of the Act, the amount of compensation calculated does not include a component for shock, humiliation or distress

Compensation cap (s 392(5)-(6))

[64] The amount of $728.62 is less than half the amount of the high income threshold immediately before the dismissal. It is also less than the total amount of remuneration to which Mr Newton was entitled in his employment with Lendlease during the 26 weeks immediately before his dismissal. In those circumstances, I am satisfied that there is no basis to reduce the amount of $728.62 by reason of s 392(5) of the Act.

Instalments (s 393)

[65] No application was made by Lendlease for any amount of compensation awarded to be paid in the form of instalments.

Conclusion on remedy

[66] In my view, the application of the Sprigg formula does not, in this case, yield an amount that is clearly excessive or clearly inadequate.

[67] For the reasons I have given, I am satisfied that a remedy of compensation in the sum of $728.62 in favour of Mr Newton is appropriate in the circumstances of this case. I will issue an order PR701347 to that effect.

tle: Seal of the Fair Work Commission with Member's signature - Description: Seal of the Fair Work Commission with Member's signature

COMMISSIONER

Appearances:

D. Syron of the Construction, Forestry, Maritime, Mining and Energy Union, on behalf of Mr Newton

B. Gee on behalf of Lendlease

Hearing details:

2018.

Byron Bay:

25 September.

Printed by authority of the Commonwealth Government Printer

<PR701344>

 1   [2016] FWCFB 922

 2   Dale v Hatch at [15] & [21]

 3   Exhibit R2 at [28]

 4   PN287–291; PN302-3; PN320-2; PN367-8; PN382-7; PN405; PN517

 5   Dale v Hatch at [21]

 6   Exhibit R3 at [22]

 7   Khayam v Navitas English Pty Ltd [2017] FWCFB 5162 at [75(2)], applying Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200 at 205-6

 8   Dale v Hatch at [25]

 9   PN289-90

 10   PN291

 11   Section 385 of the Act

 12   PN140-3

 13   Dale v Hatch at [31]

 14   Dale v Hatch at [32]

 15   Dale v Hatch at [33]

 16   Dale v Hatch at [34]

 17   Dale v Hatch at [35]

 18   Dale v Hatch at [36]

 19   Lendlease’s written outline of submissions dated 14 September 2018 at [46]

 20   Exhibit A1 at [11] & [26]; PN347

 21   PN115-6

 22   Exhibit R2 at [24]

 23   PN129

 24   Exhibit A1 at [22]

 25   Exhibit A1 at [25]

 26   Exhibit A1 at [22]-[26]; PN301; PN349-363; Exhibit R2 at [15];

 27   Exhibit A1 at [11] & [26]; PN347

 28   Kable v Bozelle, Michael Keith T/A Matilda Greenbank [2015] FWCFB 3512 at [17]

 29   Tabro Meat Pty Ltd v Heffernan [2011] FWAFB 1080; Read v Golden Square Child Care Centre [2013] FWCFB 762; Bowden v Ottrey Homes Cobram [2013] FWCFB 431

 30   Double N Equipment Hire Pty Ltd v Humphries [2016] FWCFB 7206 at [16]-[17]

 31   See, by analogy, UES (Int'l) Pty Ltd v Harvey [2012] FWAFB 5241 at [53]

 32   Ellawala v Australian Postal Corporation Print S5109 at [36]

 33   Enhance Systems Pty Ltd v Cox PR910779 at [39]