Fair Work Act 2009

s.394 - Unfair dismissal

Application for an unfair dismissal remedy -award of compensation made.

• [1] On 11 November 2024 I issued a decision[1] (the First Decision) finding that Alex Yates (Applicant) had been unfairly dismissed from his employment with Stephanie Muir Ridge (Respondent).

• [2] The Applicant sought a remedy of compensation. Given the evidence before me I was satisfied that reinstatement was inappropriate, however there was insufficient evidence to make a proper determination as to what compensation ought to be payable. I gave the parties the opportunity to file and serve any evidence and/or submissions they wanted to rely on so that I could determine the compensation to be payable.

• [3] The First Decision was the subject of an appeal by the Respondent. Permission to appeal was refused in a decision dated 20 February 2025[2] (Appeal Decision).

• [4] The determination of compensation was held over pending the outcome of the appeal which has now been finalised.

• [5] Section 392(2) of the Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant. I consider all the circumstances of the case below.

Effect of the order on the viability of the Respondents enterprise

• [6] The Applicant submitted that the Respondent had given evidence in the hearing that the business was doing quite well, however the Respondent submitted that a significant payment to the Applicant would have a significant detrimental impact on the business. A copy of the Respondent's balance sheet was provided in support of this submission.

• [7] Having considered the contents of the balance sheet, I accept that a significant payment will affect the viability of the Respondent's enterprise.

• [8] The Applicant's length of service was around 14 months. I consider that this period does not support reducing or increasing the amount of compensation ordered.

Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed

• [9] The Commission must address the question of whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.[3]

• [10] The Applicant gave evidence to the effect that he expected to remain in the business for some time, however there can be no doubt that the relationship between the Applicant and the Respondent was deteriorating rapidly by the time the Applicant was dismissed.

• [11] I do not consider the Applicant's employment would have continued for more than two months given the state of the relationship between the parties as at May 2024.

Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal

• [12] The Applicant provided a letter from his treating psychologist which went to the impact the dismissal, and the unfair dismissal proceedings, had on his mental health and ability to work.

• [13] The Respondent submitted that the Applicant had not taken any steps to mitigate his loss which was evident from the letter from his psychologist, and in those circumstances submitted that his incapacity to work meant he was not entitled to compensation insofar as he could not have worked.

• [14] I accept that the Applicant's efforts to mitigate his loss were negatively affected by his health issues, and I consider that this should not impact the compensation ordered.

Amount of remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation

• [15] The Applicant did not provide any material which demonstrated he had received any income during the relevant period. The Respondent submitted this was due to his incapacity for work and meant that the Applicant was not entitled to any compensation as a result.

Amount of income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation

• [16] The Respondent made similar submissions as above and said that compensation should be limited to one day's pay.

Any other matters the Commission considers relevant

• [17] In relation to other relevant matters, the Respondent submitted that the Applicant's employment would have ended on 15 or 17 May due to his conduct towards the Respondent and/or his 'perceived misuse of his position'. The Respondent also submitted that the correct pay rate for the Applicant was $55 per hour. Finally, the Respondent submitted that it is a small business employer and would not have engaged in a significant process in providing procedural fairness.

• [18] I have considered these matters in my determination of the amount to be paid as compensation.

• [19] I have considered each of the factors above in addition to the well-established approach to the assessment of compensation which arises from the decision in Sprigg v Paul's Licensed Festival Supermarket (Sprigg).[4]

• [20] Having found in the First Decision that there was an agreement between the parties that the Applicant and Respondent would be paid the same weekly rate of pay (ie $65 gross per hour for 38 hours per week), I have calculated the compensation to be payable on this rate of pay.

• [21] I have determined that the Respondent should pay compensation to the Applicant in the sum of four weeks' pay, that being $9,880.00 gross plus superannuation less taxation as required by law, within 28 days of the date of this decision.

• [22] I am satisfied that this amount of compensation takes into account all the circumstances of the case as required by s.392(2) of the Act and that it does not include a component compensating for shock, distress and humiliation.

• [23] An order giving effect to this decision is published with this decision.

[1] [2024] FWC 2973.

[2] [2025] FWCFB 42.

[3] He v Lewin [2004] FCAFC 161, [58].

[4] [1998] AIRC 989; (1998) 88 IR 21.

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