Fair Work Act 2009

s.365 - General protections (consent arbitration)

Rimfire Asia Pacific Pty. Limited, Adam Monaco, Raymond Richards

Application to deal with a general protections dismissal by arbitration.

• [1] Mr Christopher Gray (Mr Gray or the Applicant) applied under section 365 of the Fair Work Act 2009 (Cth) (the Act) for the Fair Work Commission (the Commission) to deal with a general protections dispute involving a dismissal (general protections dismissal application). The matter was determined through consent arbitration, and I determined that Mr Gray's employment with Rimfire Asia Pacific Pty. Limited (Rimfire or the Respondent) was terminated for prohibited reasons.

• [2] Having found that Rimfire has breached the provisions in Part 3 - 1 of the Act, I turn to consider the orders that may be made.

• [3] The Commission's power to make orders in arbitrating a general protections dispute is dealt with in section 369(2) of the Act, as outlined below:

"(2) The FWC may deal with the dispute by arbitration, including by making one or more of the following orders:

(b) an order for the payment of compensation to the person;

(c) an order for payment of an amount to the person for remuneration lost;

(d) an order to maintain the continuity of the person's employment;

(e) an order to maintain the period of the person's continuous service with the employer."

• [4] In Liu v Compuworld Pty Ltd,[1] Vice President Asbury, then Deputy President, outlined the following in regard to assessing compensation under section 369 (2) of the Act:

[181] The approach to assessing compensation under s. 369(2) of the Act has been drawn from cases involving s. 545(2)(b) which concerns orders that particular courts may make for contraventions of civil penalty provisions under the Act, including ss. 340 and 351. Section 545(2)(b) provides that the Federal Court or Federal Circuit Court may make orders for loss that a person has suffered because of a contravention. In Heraud v Roy Morgan Research Ltd (No 2)[2] Judge Jones summarised cases in relation to compensation under s. 545(2)(b). Notwithstanding that Courts are dealing with damages, the principles are apposite when compensation under s. 369(2) is being determined. The principles which can be distilled from those case are:

• Compensation is for loss suffered because of the contravention and there must be an appropriate causal connection between the contravention and the loss claimed.[3]

o have regard to what is reasonable in the circumstances and what would have been likely to occur if had the Act not been contravened; and

o consider the detriment to the employee occasioned by the employer's contravention and the extent to which it is reasonable to compensate the employee for such consequence.[4]

• The approach to calculation of compensation is, so far as a monetary amount can achieve, to place the employee in the position he or she would have been in had the employer not contravened the Act, having regard to:

o how long the employee would have remained in employment and the determination of the value of the likely income stream.[5]

• The value of the likely income stream is discounted for reduced by the discount for contingencies and vicissitudes and the employee's mitigated loss.

• The Court may consider whether the employee has taken appropriate steps to mitigate his or her loss, however it is for the employer to establish the facts going to the employee's alleged failure in this regard.[6]

• Assessment for economic compensation for loss suffered because of a contravention of the Act is not limited to the loss of a particular job and may extend to circumstances where the employee has suffered a loss of opportunity for employment because of a particular contravention.[7]

[182] In relation to estimating how long an employee may have remained in employment, it was held in Bostik Australia Pty Ltd v Gorgevski[8] that:

"Where an employee is wrongfully dismissed, he is entitled, subject to mitigation, to damages equivalent to the wages he would have earned under the contract from the date of dismissal to the end of the contract. The date when the contract would have come to an end, however, must be ascertained on the assumption that the employer would have exercised any power he may have had to bring the contract to an end in the way most beneficial to himself; that is to say, that he would have determined the contract at the earliest date at which he could properly do so."

[183] Similarly in Dalfalla v Fair Work Commission[9] Mortimer J held that it was appropriate for the purposes of determining compensation under s. 545(1) to consider that the employer would have been entitled to exercise any power it had to bring the employment contract lawfully to an end in a way most beneficial to itself. Her Honour also observed in that case that the likelihood of the employer taking that approach will be fact dependent.[10] In Heraud v Roy Morgan Research Limited (No 2)[11] Jones J expressed a view that Bostik and Dalfalla respectively involved misconduct and poor work performance in contrast with Heraud (No 2) where the Applicant was a valued employee and the Respondent was seeking to fill positions in a newly create Research Centre. Her Honour concluded that the evidence did not support a contention by the Respondent that it would have brought the contract lawfully to an end because of ongoing redundancies and that in the circumstances of that case, the question of any ongoing redundancies was relevant to the consideration of any discount for contingencies or vicissitudes rather than to the length of time the Applicant would have remained in employment.[12]

[184] Similar issues were considered by Wilson C in in Masson-Forbes v Gaetjens Real Estate Pty Ltd[13] and by Simpson C in Roos and Ors v Winnaa Pty Ltd.[14] In Masson-Forbes matters relevant to how long the Applicant would have remained in employment included issues with the Applicant's performance, a change in expectations in relation to her role and that the market in which the Applicant was working was not one that the Respondent wished to remain involved in. In Winnaa the casual and fluctuating nature of the Applicants' work was relevant to the period they would have remained in employment. This approach was not disturbed by a Full Bench of the Commission in Andrew Roos; Loretta Roos v Winnaa Pty Ltd.[15]

[185] I have applied the principles in those cases in assessing whether I should award compensation to the Applicant and if so, the amount that should be awarded."[16]

• [5] Mr Gray is seeking compensation for both economic and non-economic loss pursuant to section 369(2)(b) and (c) of the Act. Mr Gray is seeking the amount of 50 weeks, at $1,442.31 per week, totalling $72,125 in economic loss.

• [6] Mr Gray submitted that he planned to remain employed with Rimfire for up to five (5) years, until he retired from the workforce. Mr Gray submitted that, at minimum, he intended to remain with Rimfire for two (2) years and then reassess his situation at that time.

• [7] Mr Gray submitted that, after the successful completion of his 6-month probation period, in which there were no performance concerns raised by Rimfire, he was enjoying the position with Rimfire and committed to staying with the business.

• [8] Mr Gray submitted that, due to his age when joining Rimfire (68 years), it was highly unlikely he would find alternate employment and had to rely on the pension which provided $841.40 per fortnight.

• [9] Mr Gray made limited submissions in relation to non-economic loss. However, he outlined that the way he was terminated caused both him and his wife a great deal of angst. Mr Gray did not provide any substantive evidence that supported this claim.

• [10] Mr Gray submitted that he had also sought legal advice and support which had come at a cost, however no invoice or similar was provided in his submission to support this assertion.

• [11] Rimfire provided limited submissions in relation to the remedy of the matter before the Commission. I would like to note this is not a criticism of Mr Monaco who I believe acted in good faith and to the best of his ability in the provision of materials to the Commission, it is simply an observation of the material provided.

• [12] Rimfire submitted that they had attempted to settle the matter in good faith with Mr Gray at the staff conciliation conference which would have resulted the dispute. Rimfire submitted that they are still of the view that the termination of Mr Gray was a genuine redundancy, rather than for the reasons I outlined in my substantive decision.

• [13] Mr Mario Racki (General Manager) of Rimfire did not provide evidence at the hearing to determine if Mr Gray was terminated for a prohibited reason. For the determination of the remedy, Mr Racki provided a statutory declaration, however he did not attend the hearing and was not available for examination on his evidence by Mr Gray or the Commission. Therefore, I consider his evidence as being untested and I am not inclined to consider that it carries any significant weight.

• [14] It would also appear that the evidence of Mr Racki is an attempt to justify the termination of Mr Gray (via a redundancy) and the business grounds for the decision being made, however, this evidence was not previously presented and I find it to be self-serving and, further, given Mr Racki failed to attend the hearing, I question the sincerity of the statement provided and motivations for providing it.

• [15] To consider the quantum of compensation to be awarded to Mr Gray, I need to determine, based on the totality of the evidence before the Commission, how long Mr Gray would have remained employed by Rimfire had the adverse action not been taken.

• [16] In determining this issue there are two very significant factors that I have taken into consideration, the first being the duration that Mr Gray had been employed for at the time of his termination. Mr Gray was not employed with Rimfire for a long period of time, in fact the tenure of his employment with Rimfire was rather short, lasting only nine months and fifteen days. However, I note there was no substantive evidence lead by Rimfire that suggests there were any significant or legitimate performance concerns in relation to Mr Gray's ability to complete the job he had been employed to do.

• [17] Secondly, in consideration of the principles on ascertaining the end of employment (had the contravention not occurred), it appears, had Rimfire ended the employment in a way most beneficial to itself, Mr Gray would not have remained in employment for the duration of two to five years. I accept that, if the end of the employment was determined from when the Applicant would have sought to cease employment, Mr Gray intended to and likely would have spent the remainder of his working years with Rimfire. However, I have concluded that the employment would have ceased earlier, consistent with the guidance offered in Bostik Australia Pty Ltd v Gorgevski:[17]

"The date when the contract would have come to an end, however, must be ascertained on the assumption that the employer would have exercised any power he may have had to bring the contract to an end in the way most beneficial to himself; that is to say, that he would have determined the contract at the earliest date at which he could properly do so."

• [18] Rimfire submitted that Mr Gray had not shown mitigation of loss. I note that it is for Rimfire to establish Mr Gray's failures in this regard,[18] which has not occurred. Further, as Mr Gray contends, it is clear his age is a significant hurdle in mitigation of loss.

• [19] In relation to the question of future economic loss, for the reasons set out above, I have determined that Mr Gray would have remain employed for a further period of twelve months (12 months). In that twelve-month period, Mr Gray would have earned an amount of $75,000. I have decided to apply a 50% deduction for contingencies, and noting that Mr Gray had only been employed for some nine months and fifteen days that the time of his termination. Applying a 50% deduction for contingencies, that amount of future economic loss is $37,500.

• [20] I accept that the termination of his employment at the age of 68 years old would have caused a significant period of stress and anxiety for Mr Gray and his family. I accept that it would also have been a highly unfortunate way for someone's professional working career to end abruptly. The age discrimination many older workers face would have applied to and had great impact on Mr Gray. The link between employment and personal identity can often be overlooked an undervalued. However, in this case, having heard from Mr Gray, I am satisfied that the way his career ended had a substantial impact on him personally and there is nothing before me to detract from his assertions of such.

• [21] In all the circumstances, I consider it appropriate to award an amount of $5,000 for non-economic loss.

• [22] I have determined to award Mr Gray compensation in the following amounts:

• $37,500 in economic loss (both past and future);

• Superannuation contributions as required by law on the $37,500 in economic loss to be paid into the superannuation fund of Mr Gray.

• [23] An Order is issued concurrently,[19] requiring such payments to be made within 21 days of this decision.

[1] [2020] FWC 2569.

[2] [2016] FCCA 1797.

[3] (2011) 103 FCR 526 at [423].

[4] [1995] IRCA 352; (1995) 63 IR 1.

[5] [1991] HCA 15; (1991) 172 CLR 60.

[6] [1928] NSWStRp 103; (1928) 29 SR (NSW) 96 at 106; [2008] NSWCA 248; 75 NSWLR 1 at [55] - [72]; [1934] NSWStRp 30; (1934) 34 SR (NSW) 421 at 430.

[7] [2015] FCAFC 120.

[9] [2014] FCA 328.

[11] [2016] FCCA 1797.

[13] [2015] FWC 4239; [2014] FCCA 1627 at [8] - [9].

[14] [2018] FWC 3568.

[15] [2018] FWCFB 7394 at [30].

[16] [2020] FWC 2569 at [181] - [185].

[18] [2020] FWC 2569 at [181].

[19] [PR790997].

Printed by authority of the Commonwealth Government Printer