[2019] FWC 7029
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s 394—Unfair dismissal

Gail Ayton
v
You Come Pty Ltd t/a Foodworks
(U2019/4473)

DEPUTY PRESIDENT SAMS

SYDNEY, 14 OCTOBER 2019

Application for an unfair dismissal remedy – casual retail employee – finding of unfairness – reinstatement inappropriate – compensation remedy – Sprigg Formula applied – orders made.

[1] On 25 September 2019, I published a decision in Ayton v You Come Pty Ltd t/a Foodworks Ashmont [2019] FWC 6585. Shortly stated, I found the dismissal of the applicant, Ms Gail Ayton by the respondent, Foodworks Ashmont on 3 April 2019 was ‘harsh, unjust and unreasonable’ both substantively and procedurally. I made a further finding that reinstatement would be inappropriate. However, in light of the limited evidence going to compensation considerations, under s 392 of the Fair Work Act 2009 (the ‘Act’), I directed further evidence and submissions on this issue.

[2] To assist the parties, I set out the relevant statutory provisions of s 392 and the methodology of calculating any compensation orders in this case. Ms Ayton provided evidence of her pre-dismissal income and the remuneration she has earnt in a new position she obtained at Charles Sturt University. These amounts will be taken into account.

[3] The respondent obtained legal advice in preparing a response to my substantive decision of 25 September 2019 and compliance with directions issued at that time as to remedy. As these submissions are short and respond directly to s 392(2) considerations, I set them out in full below:

‘4. In relation to s392(2)(a) the Respondent submits that it is a small business which currently employs 7 casual staff members. In the event that the Respondent is ordered to pay compensation to the Applicant [totalling] the equivalent of 26 [weeks’] wages the Respondent would experience financial hardship in relation to the Respondent’s business cash flow accounts which would result in being unable to place orders and pay suppliers. This would consequently result in a downturn of business and reduced hours of current staff. The Respondent submits should it be ordered to pay more than $7,000.00, this would most certainly cause the Respondent’s business to close down as a consequence of financial hardship.

5. In relation to s392(2)(c) the Respondent submits that the maximum amount the Applicant would have been likely to receive had she continued employment with the Respondent to be $974.63 (gross per week) based on a maximum of 37.5 hours per week at $25.99 per hour. Annexed hereto is a copy of the Applicant’s payslips which show that the Applicant did not work more than 37.5 hours but did work less hours on occasion.

6. In relation to s392(2)(d)-(e) the Respondent submits that the Applicant has obtained employment with CSU as a casual cleaner since approximately 16 May 2019. The Respondent notes the Applicant’s submission that she has accepted a permanent part time position from 1 August 2019 with Charles Sturt University working 20 hours per week. The Respondent submits that the maximum compensation awarded to the Applicant should be not more than 18 hours per week at the rate of $25.99 per hour for not more than 6 weeks (being the period during which the Applicant was unemployed) totalling $2,806.92 (gross).

7. In relation to s392(2)(g) the Respondent makes the following submission:

a. The Respondent does not seek to reagitate the issues of fact in the case which he failed to raise at the time of the determination of this matter due to his non-appearance however it is relevant to note that English is the Respondent’s second language and he did not understand the process in which the case was to be determined.

b. The Respondent did not obtain legal advice or representation prior to the matter being determined however has since sought such advice in relation to an appeal on the basis that there has been a substantial injustice which may result if leave to appeal is refused based on a significant error of fact. That error of fact being namely that the alleged text message (the termination notice) was not intended to be a notice of termination of the employment relationship but only a reference to the Applicant’s next shift. The Respondent in hindsight acknowledges that his English did not communicate this purpose effectively. The Respondent did not answer calls from the Applicant following the text message on 3 April 2019 as he was at that time at hospital with his child. The Respondent denies having received numerous calls from the Applicant. The next communication between the Applicant and Respondent was at such time as the Applicant asked for a job reference. The Respondent assumed that the Applicant had terminated the employment relationship at [her] own initiative and provided the reference as a gesture of good will. The Respondent submits that this is a relevant factor to be considered by the Fair Work Commission when determining the amount of compensation payable to the Applicant.’

CONSIDERATION

[4] As to the respondent’s submission prepared by Commins Hendriks Solicitors, Wagga Wagga, I make the following observations and findings.

[5] Firstly, the respondent asserts that in the event the Commission orders 26 weeks’ pay in compensation, this would result in significant financial hardship, and if an amount in excess of $7000 was ordered, the store would ‘almost certainly’ be forced to close. No financial records of any kind were produced to substantiate this submission. In light of this omission, the Commission is not prepared to accept general, unsupported claims of financial hardship. Further, the Commission notes that no submission was made to have any compensation ordered to be paid by instalment; see: s 392(3) of the Act.

[6] Secondly, the respondent submits the applicant received $974.63 gross per week based on her not working more than 37.5 hours a week, at $25.99, which she did not work on all occasions. It was then submitted that as the applicant had not worked for six weeks before obtaining alternative employment, she would receive, at most, 6 weeks x 18 hours a week at $25.99 an hour. It is unclear where an 18 hour week comes from. It seems to me that a gross figure of $974.83 would likely result in a net figure of $800 a week which is the actual amount regularly deposited into the applicant’s bank account. This was also confirmed by the payslips now provided by the respondent. I will accept that the applicant earnt an average $974.63 gross per week, with her actual gross earnings in the 26 weeks prior to dismissal being $20,155.17. However, I do not accept the respondent’s submissions. They do not reflect the correct application of the Sprigg Formula, which I will come to shortly. Further, it is plain from the applicant’s evidence that she is earning less from work at the University.

[7] Thirdly, the respondent pleads ignorance to the Commission’s processes due to his poor command of English. It was put that the termination text message of 3 April 2019 did not convey its true purpose. It was only intended for her not to come for the next shift. It did not mean dismissal. This was a significant error of fact for which an appeal may be lodged. Putting aside that all of this could have been explained earlier, I am of the view that this is little more than a post fabricated invention when the respondent finally realised he was at significant risk of formal orders being made against him.

[8] Fourthly, the respondent denied receiving numerous calls from the applicant and assumed she had left her employment of her own accord. It was said that the reference was a ‘gesture of good will’. It makes no sense why the applicant would leave her employment voluntarily when this was the only job she had worked in over 20 years. I will not accept further recreation of history based purely on submissions, without cogent evidence. Curiously, and in direct contradiction to him claiming not receiving any phone calls from the applicant, he then said he did not take her calls because he was at hospital with his child. Putting the contradiction point aside, the respondent has produced no evidence that he was indisposed due to his child’s illness. Put simply, it is too late in the day to start reagitating his defence of the case (assuming its veracity), when he was given every opportunity to do so earlier.

[9] I repeat s 392(2) which 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.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC 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 the FWC 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 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.’

I deal with each of the above subsections in turn.

(a) The effect of the order on the viability of the employer’s enterprise

[10] I accept that the effect of the order I propose to make will have some impact on the business, but not of such significance as warranting any discount in that respect. In any event, the respondent did not provide any evidence as to incapacity to pay.

(b) The length of the person’s service with the employer

[11] The applicant has had over 20 years’ service in the same position in the same store; albeit only 3 years under the current ownership of the respondent. This factor tells in favour of the applicant.

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

[12] It seems to me that had the applicant not been unfairly dismissed and in the manner she was, she would have been employed for a further 6 months. The applicant’s earnings in the 6 months prior to dismissal known from her bank account deposits and the respondent’s payslips belatedly provided, disclose that she earnt a gross amount of $20,155.17. This amount will be taken into account.

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

[13] Given the applicant’s age and regional residency, she is to be congratulated on securing alternative employment at Charles Sturt University in the month after her dismissal. This factor tells in favour of the applicant.

(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

[14] The applicant provided evidence of her to date income (almost 6 months) as disclosed from the University’s payroll system as $8,352.16. This amount will be taken into account.

(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

[15] This criterion is not relevant.

(g) Any other matter that the FWC considers relevant.

[16] I have considered the applicant’s age and her long period of service at the same store. While the appalling treatment she experienced on, and around her dismissal is worthy of reflection, it does not otherwise increase any compensation order.

[17] No deductions are made for misconduct as there was no such conduct by the applicant (s392(3)). The amount so ordered does not include any component for shock, distress, humiliation or any other analogous hurt caused by the applicant’s dismissal (s 392(4)). I make no deductions for contingencies.

[18] The amount I propose to order does not exceed either the amount earnt by the applicant in the 26 weeks prior to dismissal, or the high income threshold (ss 392(5)-(6)).

[19] In accordance with the Sprigg Formula, the amount of compensation I order is calculated as follows:

$20,155.17 - $8,352.16 = $11,803.01 (less appropriate taxation)

[20] I am satisfied this outcome is consistent with the principles set out in Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Nurcombe [2017] FWCFB 429 and Hanson Construction Materials Pty Ltd v Pericich [2018] FWCFB 5960 being a level of compensation which is appropriate, having regard for all the circumstances of the case.

[21] An order to this effect will accompany the publication of this Decision. The Order is to be complied with no later than 14 days from today.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR713225>