DECISION

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

Mr Mathew Bognar
v
Western Motorcycles Pty Limited
(U2018/9806)

Calculation of compensation for unfair dismissal, reinstatement not sought or appropriate, deduction for contributory misconduct applied.

[1] On 31 January 2019, a Decision was issued 1 in respect of Mr Bognar’s unfair dismissal application which found that his summary dismissal was unjust and unreasonable and as such his dismissal was unfair.

[2] The parties were then provided with a copy of s.392 Remedy – Compensation of the Act and provided with an opportunity to make submissions in respect to any remedy the Commission may make.

Submissions of Mr Bognar

[3] Mr Bognar’s submissions dated 7 February 2019, included a copy of a payslip issued in his name for a pay period dated 2 August 2018 to 8 August 2019.

[4] Mr Bognar listed the following items for consideration in respect of compensation:

“•  Loss of wages during my termination and re-employment period. (Dates range from 3 Sept 2018 – 19^th November = 11 weeks)

“•  from Westerns attached – Named “Mathew Bognar Payslip”

•  Consideration for the lack of efforts migrated for the loss suffered by me because of the dismissal

•  Consideration for fees on re-drawing from mortgage loan to stay afloat during my unemployment period

•  Superannuation paid on total compensation payout

•  Pro-rata long service leave – 6 years of employment

•  Statement of Service

•  An apology

•  A non-disparagement agreement (where neither party can bad-mouth the other).

•  Michelin Reward Points totalling 1,548

•  points hold a value of $1.00 per point

•  of last statement attached – Named “Michelin Motorcycle Club Results – July”

[5] On 22 February 2019, Mr Bognar provided further written submissions in reply to the respondent’s submissions.

Western Motorcycles’ submissions

[6] On 14 February 2019, Mr Ray Moody provided written submissions in reply to Mr Bognar’s submissions.

[7] Mr Moody attached a copy of Western Motorcycles’ Offer of Employment for Mr Bognar dated 9 August 2012.

[8] Mr Moody also attached a copy of a payslip for Mr Bognar with a pay period dated 30 August 2018 until 5 September 2018. The payslip identified that Mr Bognar’s annual leave balance was paid at the time of his termination.

[9] In respect of Mr Bognar’s submission regarding loss of wages during his termination and re-employment period, Mr Moody submitted that the terms of Mr Bognar’s employment provided for two weeks’ pay in lieu of notice and submitted that on this basis an award of 2 weeks’ pay would be fair.

[10] Mr Moody submitted that Mr Bognar’s claim for superannuation paid on the total compensation pay-out does not apply as the compensation is not a wage entitlement.

[11] In respect of Mr Bognar’s claim for long service leave, Mr Moody submitted that it does not apply as Mr Bognar was terminated for serious and wilful misconduct and only had 6 years’ service. Mr Moody submitted that he understood a minimum period of 10 years had to be worked to receive pro rata long service leave.

Consideration

[12] Unfortunately as with the initial hearing the parties’ written submissions on the question of remedy were not particularly helpful to the Commission. Matters clearly unrelated to the calculation of compensation under the Act have been disregarded by the Commission.

[13] Section 390(3) of the Act only allows the Commission to order the payment of compensation where the Commission is satisfied that reinstatement is inappropriate and the payment of compensation is appropriate in all the circumstances.

[14] No party sought reinstatement as a remedy in this action and I accept that reinstatement is not appropriate in this matter, as Mr Bognar has gained alternative employment and it is clear that the employment relationship has broken down.

[15] Section 392 of the Act relevantly provides as follows:

“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), the FWC 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 the FWC considers relevant.

…
Compensation cap
(5) The amount ordered by the FWC 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.”

[16] I have had regard to the approach to the assessment of compensation under s.392 of the Act, as articulated in Sprigg v Paul Licensed Festival Supermarket 2 and in Bowden v Ottrey Homes Cobram and District Retirement Villages.3

[17] The first step to be taken is to consider s.392(2)(c) of the Act, to determine what the applicant would have received, or would have been likely to receive, if the applicant had not been dismissed. In Bowden, citing Ellawala v Australian Corporation, 4 this was described in the following way:

“[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:

‘... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.’

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the ‘anticipated period of employment’...” 5

[18] Once this first step has been undertaken, various adjustments are made in accordance with s.392 of the Act and the formula for matters including income earned since dismissal, contingencies, any reduction on account of the employee’s misconduct and the application of the cap of six months’ pay. This approach is however subject to the overarching requirement to ensure that the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case. 6

The remuneration Mr Bognar would have received or would have been likely to receive if he had not been dismissed

[19] Mr Bognar was employed for approximately 6 years by the respondent. In Mr Moody’s submissions concerning the unfair dismissal application dated 10 October 2018, he stated that: “We considered Matt a trusted team member.”  7

[20] Notwithstanding the above, Mr Moody stated that until the missing money became apparent, he was intending to formally give Mr Bognar his first notice of dismissal for his “poor accountability.” Mr Moody referred to having conducted a number of meetings with Mr Bognar to resolve outstanding issues, and that he had found no cooperation on Mr Bognar’s part.  8

[21] Mr Moody further submitted that as a result of Mr Bognar’s serious behavioural issues, a notice of dismissal with the required two weeks as per Mr Bognar’s contract was already under active preparation. 9

[22] While the submissions of the respondent regarding the performance issues it had with Mr Bognar are untested, I accept that they were at least the views held by the respondent and that the employment relationship between the parties was under stress as was evident during the hearing. On this basis I find that the employment of Mr Bognar would have lasted for a further 3 months.

(s.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, and (s.392(2)(f) - income reasonably likely to be earned

[23] Mr Bognar has stated that he remained unemployed for a period of 11 weeks following his summary dismissal. Mr Bognar’s payslips indicated that he was on an annual salary of $75,000 paid at a weekly rate of $1,442.31. Mr Bognar did not provide any evidence of his current and ongoing earnings from his new employment which commenced on November 19 2018.

[24] On the basis of the above it is accepted that Mr Bognar was unemployed for a period of 11 weeks during which he embarked on a 9 day family holiday.

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

[25] Mr Bognar has been successful in gaining alternative employment, the details of which are unknown. Mr Bognar advised that he had taken a family holiday to Bali for 9 days in October 2018, while unemployed. He submitted that there was insufficient time for him to seek new employment prior to the commencement of the holiday. I am satisfied that Mr Bognar’s efforts at mitigation are sufficient to exclude any further deduction from any award of compensation apart from the period he was on his pre-planned family holiday which I assess as a 2 week absence during which he could not work elsewhere.

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

[26] Mr Bognar had been employed for approximately six years prior to his dismissal. This is a significant length of service and provides no basis for further reducing any compensation to him.

(s.392(2)(a)) - Viability and (s.393) - Instalments

[27] There was no submission from the respondent regarding incapacity to pay any compensation or that it should be paid in instalments.

(s.392(3)) - Misconduct

[28] Notwithstanding the finding of unfair dismissal, the applicant was not without blame which contributed to the reason for his dismissal. Mr Bognar’s conduct in completing a job card and invoice for an amount of $200, when $250 had been received was clearly incorrect which he accepted in his evidence and his explanation for doing so was unsatisfactory. Accordingly, I will deduct an amount equivalent to 25% from any award of compensation.

(s.392(2)(g)) - Any other matter the FWC considers relevant

[29] As Mr Bognar was summarily dismissed by the respondent, he did not receive any payment in lieu of notice. While the respondent submits that termination by notice would be 2 weeks salary as per Mr Bognar’s employment contract this is less than the minimum notice payment required under the National Employment Standards provided for in the Act. Section 117 Requirement for Notice of Termination or Payment or Payment in Lieu stipulates that for an employee with more than 5 years continuous service they are to receive 4 weeks’ pay if under 45 years of age.

[30] The respondent also submits that Mr Bognar was not paid pro-rata long service leave as he was dismissed on the ground of serious and wilful misconduct and the minimum period of service for pro-rata long service leave is understood to be 10 years.

[31] The Long Service Leave Act 1955 (NSW) (assuming it has application to Mr Bognar) provides at s.4(2)(iii) that an employee who has at least 5 years’ service, and whose services are terminated by the employer for any reason other than the worker’s serious and wilful misconduct is entitled to pro rata long service leave. While the Commission cannot award any payment sought under the Long Service Leave Act 1955, Mr Bognar is entitled to enforce what he believes is his statutory entitlement in a court of competent jurisdiction.

[32] Having regard to the above I assess Mr Bognar’s loss as being 11 weeks less a period of 2 weeks while he was on a family holiday, being a total of 9 weeks’ salary. 10 Based on a copy of the pay slip provided by Mr Bognar this amount is calculated as 9 weeks x $1,442.31 which is a sum of $12,980.79 and applying a 25% reduction on account of his misconduct provides an amount of $9,735.60 to be taxed according to law, plus a further 9.5 per cent superannuation.11

(s.392(5)) - Compensation cap

[33] Having assessed Mr Bognar’s immediate loss as $9,735.60 salary, plus his superannuation entitlement the amount is under the compensation cap.

Conclusion

[34] I find that an order for compensation is appropriate.

[35] I am satisfied that an order for payment of compensation by the respondent of $9,735.60 less tax, plus 9.5 per cent superannuation to the applicant in lieu of reinstatement is appropriate in all the circumstances of this case.

[36] The compensation payment is to be made within 14 days of this decision.

[37] A separate order will be issued giving effect to this conclusion.

DEPUTY PRESIDENT

Written Submissions

2019

Applicant

Feb 8, 21

Respondent

February 14

Printed by authority of the Commonwealth Government Printer

<PR705870>

 1   Bognar v Western Motorcycles Pty Limited [2019] FWC 420 [Print ID: PR704251]

 2   Print R0235, (1998) 88 IR 21

 3   [2013] FWCFB 431; 229 IR 6

 4   Ellawala v Australian Postal Corporation, Print 55109

 5   [2013] FWCFB 431 at [24]

 6   Smith v Moore Paragon Australia Ltd PR942856, [2004] AIRC 57; (2004) 130 IR 446 at [32]

 7   Respondent’s submissions, dated 10 October 2018 at [2]

 8   Ibid under Further submissions

 9   Submissions of 14 February 2019 at [1]

 10   See decision of Full Bench in Chesson Pty Limited t/a Pay Per Click v Nicole Knutson [2018] FWCFB 4149 at [38]

 11   The Commission is not restricted to awarding only income lost as compensation.