Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Hanson Construction Materials Pty Ltd T/A Hanson Construction Materials Pty Ltd

Application for an unfair dismissal remedy - compensation.

[1] This decision is provided further to the determination of the substantive matter.[1] Mr Darren Pericich (the Applicant) applied for a remedy for unfair dismissal under s.394 of the Fair Work Act 2009 (the Act), alleging that the termination of his employment by Hanson Construction Materials Pty Ltd T/A Hanson Construction (the Respondent) was harsh, unjust or unreasonable.

[2] The decision in the substantive matter found:

"[93] Having determined that a valid reason existed for the dismissal but that the Applicant was unfairly dismissed, due to the lack of procedural fairness afforded in the process of dismissal, it is necessary to determine whether a remedy for the unfair dismissal should be applied...

[103] In the present case, it was evident that the Respondent's concern with the Applicant's conduct and their loss of trust and confidence in the Applicant was beyond "some friction and doubts". In his evidence, some of which is extracted above, Mr Blank frequently voiced his concerns about the safety practices of his drivers being of paramount importance to the Respondent, and that the Respondent continually reinforced this message of compliance with safe driving practices. Mr Blank's primary concern in respect of the Applicant's continued employment was that the Applicant did not appreciate the gravity of his conduct, or even concede that his decision to drive through the crossing when a bullet train was rapidly approaching was dangerous.

[104] Given the significant concerns held by the Respondent, it is considered that it is inappropriate for the Commission to intervene and that reinstatement is an inappropriate remedy in the circumstances."

[106] The Applicant was not afforded procedural fairness. The allegations were not clearly addressed with him prior to the dismissal. He was also not given a proper opportunity to respond with a witness present, prior to being stood down and then prior to the termination.

[107] He was also not given the opportunity to view the footage of the incident from the dash cam on his truck prior to the dismissal, nor allowed an opportunity to comment on such to the Respondent. The Applicant was denied natural justice. The Respondent is a large employer and had the ability to seek expert advice to avoid dismissal of the Applicant without allowing the required procedurally fair process..."[2]

[3] In finding that the Applicant had been unfairly dismissed, I determined that reinstatement was not an appropriate remedy in the circumstances and that the Applicant should be granted a remedy in the form of compensation pursuant to s.392 of the Act. As referred to, a series of procedural deficiencies were set out in the initial decision, regarding the manner in which the dismissal was implemented.

[4] Directions were set to allow the parties the opportunity to file further submissions as to the estimated length of the continuing employment relationship but for the dismissal, in order for compensation to be calculated.[3] The Directions also allowed for any further submissions regarding remedy, to be provided. This decision deals with the compensation to be awarded to the Applicant, in terms of the facts and circumstances of the matter.

[5] Division 4 of Part 3-2 of the Act relevantly provides as follows:

390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person's reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) the FWC may make the order only if the person has made an application under section 394.

(3) the FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.

[6] Pursuant to ss.392 and 393 of the Act:

(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.

(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.

(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.

(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.

(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:

(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.

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order."

[7] The Applicant submitted that there was no evidence that any order for compensation would have an impact on the Respondent's business.

[8] There was no evidence of any intention for the Applicant to leave the Respondent's employment. The Applicant stated that the employment provided good benefits, suited his personal circumstances, and provided a good work life balance.

[9] The Applicant stated that but for the dismissal, the Respondent had no plans to terminate the Applicant and he would have continued to receive wages of $70,000.00 per annum, gross.

[10] The previous warnings referred to were not relied on for the dismissal. The Applicant was only paid one weeks' notice on termination. The Respondent rectified this payment just prior to the hearing, commensurate with the applicable notice period of three weeks' wages.

[11] The date of the Applicant's dismissal was 14 November 2017. The Applicant calculated a loss of $17,333.00 gross wages from 14 November 2017 to 5 March 2018.[4] The Applicant stated he had not been able to obtain full-time employment as a truck driver since his dismissal and he was concerned that within the small industry in North Queensland, serious allegations about safe driving would impede his chances of finding further employment.

[12] The Applicant has taken steps to mitigate his loss as a result of the dismissal.

The Applicant has been able to obtain after several months, casual employment on an as needs basis.

[13] The Applicant has earned $15,316.00 gross since the dismissal.[5] He indicated that the adverse regional employment market, is an important consideration weighing in favour of the award of generous compensation.

[14] It was submitted on behalf of the Applicant that any income during the period after termination should not affect the award of compensation. The Applicant argued the amount of lost remuneration less any income that the Applicant, will earn during this period will not exceed the legislative cap.

[15] In terms of other matters to be taken into account, it was argued on behalf of the Applicant that the dismissal had had a significant impact on the Applicant and his family and that they have had to rely heavily on his partner's income. This financial impact has had a greater effect, it was submitted, given that the Applicant and his spouse have three children, two of whom have additional care needs;[6] this particular required support, should be taken into account in considering the relevant compensation.

[16] Information regarding their support and the Applicant's reliance on his partner's income since dismissal was set out in the Applicant's submissions.[7] The Applicant's representative submitted that it was open to the Commission to order a remedy equal to the legislative cap pursuant to s.392(5) of the Act.

[17] The Respondent stated that compensation should be paid to the Applicant in accordance with s.392(c), and that implementing a procedurally fair process (as referred to in the original decision), would have taken a further one week to have been discharged. On that basis, the Respondent argued that one weeks' wages would be applicable to allow for this process to be undertaken. The Respondent concluded this position on the basis of the affidavit provided by the manager, Mr Shane Blank whereby he stated:

"2. I acknowledge the Commission's findings at paragraphs [106] and [107] of its Decision that the Applicant was not afforded procedural fairness because:

• the allegations were not clearly addressed with him prior to the dismissal;

• he was also not given a proper opportunity to respond with a witness present, prior to being stood down and then prior to the termination;
• he was also not given the opportunity to view the footage of the incident from the dash cam on his truck prior to the dismissal, nor allowed an opportunity to comment on such to the Respondent.

3. Had a process been followed that afforded these opportunities to the Applicant, then based on the Applicant's responses provided in these proceedings, I would have still have decided to terminate his employment, after allowing one additional week to provide him with the allegations and dash cam video and receive and consider his responses."[8]

[18] The Respondent submitted a further week's payment, was an appropriate outcome. It was stated that allowing a further week for this exercise to correct the procedural deficiencies, prior to the dismissal, would not have altered the decision to terminate the Applicant's employment.

[19] Having found that there was a valid reason for dismissal, but that the termination process had procedural flaws, it is necessary to consider the appropriate remedy.

[20] With regard to the assessment of a remedy for unfair dismissal; the statutory prerequisites required under ss.390(1) and (2) have been met. Section 390 provides that compensation is only to be awarded as a remedy where the Commission is satisfied that reinstatement is inappropriate and that compensation is appropriate in all the circumstances. As set out in the prior decision, based on the reasons provided, it has been determined that reinstatement was not appropriate.

[21] The approach to the calculation of compensation which has been adopted, is set out in the Full Bench decision of the Australian Industrial Relations Commission in Sprigg v Paul's Licensed Festival Supermarket.[9] That approach, has subsequently been endorsed and adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages inc T/A Ottrey;[10] Jetstar Airways Pty Ltd v Neeteson-Lemkes[11] and McCulloch v Calvary Health Care,[12] Johnson v North West Supermarkets T/A Castlemaine IGA,[13] and James Jones T/A The Pet Cemetery & Crematorium v Ms Raquel Ciuzelis (The Pet Cemetery).[14]

[22] In calculating the appropriate amount of compensation to be awarded, regard must be

had to the matters in s.392(2) of the Act:

(a) the effect of the order on the viability of the employer's enterprise; and

[23] There is no evidence of any financial incapacity on the part of the Respondent or that the Order for compensation will have any impact on its viability. The Respondent is a significant employer with some 3,000 employees.

(b) the length of the person's service with the employer; and

[24] The Applicant was employed by the Respondent for four years and seven months. It was submitted for the Applicant that based on his employment record, he was entitled to a generous award of compensation. In contrast given the risk taken by the Applicant in the incident on which the dismissal is based, the Respondent argued no compensation was owed to the Applicant, based on his conduct.

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

[25] In accordance with the decision in The Pet Cemetery,[15] the parties were directed to address the estimated length of the continuation of the employment contract, but for the dismissal. For the purposes of s.392(2)(c), the submission of the Applicant was that he intended to remain employed for some time. There was no evidence that he had any intention of leaving the Respondent's business, prior to his dismissal. The Respondent only relied on the incident in contention for the dismissal.

[26] The Respondent considered the Applicant's employment would only have continued for a further week, to allow for a procedurally fair process to occur. The Respondent noted the risk taken by the Applicant as a driver, and considered the employment relationship would not continue for long.

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

[27] The Applicant was earning $70,000 gross per annum and it was calculated that he had lost $17,333.00[16] gross in wages since the dismissal. The Applicant has attempted to mitigate his loss by seeking alternative employment. The total amount of earnings since his dismissal was $15,316 gross.[17]

(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

[28] Since the dismissal, the Applicant had earned $15,316.00 gross,[18] and future earnings were uncertain.

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

[29] The Respondent submitted it should be taken into account that:

"9. The Commission found that a valid reason existed for the dismissal because:

"The conduct of the Applicant involved taking an unnecessary risk that could have resulted in a serious accident. This conduct was fundamental to his duties as a truck driver."

10. Pursuant to s.392(3) of the Act, it is submitted that due to the Applicant's misconduct involving necessary risk of collision with a passenger train, a deduction equal to the amount of any further of compensation calculated as above should be made."[19]

[30] The Applicant's obligations for the particular care and support of their children (as set out) have been taken into account, as has the submissions on the employment opportunities in the regional area.

[31] Based on the approach in Johnson v North West Supermarkets T/A Castlemaine IGA,[20] the following is provided in relation to the applicable remedy for the Applicant.

[32] The Applicant had been employed for approximately four and a half years. The Applicant's conduct in the approach to driving the vehicle in the incident in question, has been taken into account.

[33] The reasons in relation to the dismissal, based on the evidence, have been set out in the substantive decision.[21] In the assessment of the continuation of the employment contract (as required in the consideration of compensation), it is considered that based on the Applicant's prior employment and the procedural fairness issues, the particular circumstances of the Applicant's driving as set out in relation to the incident, that the Applicant's employment would have continued for six months.

[34] If the Applicant had remained working for that period he would have received further remuneration to the amount of $35,000.00 gross, based on his annual salary. The Applicant has made attempts to mitigate his loss in the regional employment market. Since his dismissal he has earned $15,316.00 gross income.[22]

[35] That amount is deducted from the $35,000 of the estimated gross earnings for the continuing employment relationship, calculated at an applicable rate of $19,684.00. The Applicant has been paid three weeks' wages in lieu of notice, equal to $4,038.46. This is further deducted from the amount, totalling $15,645.54.

[36] On the material, it is determined that there would be no effect on the viability of the employer's enterprise with regard to an award of compensation. There is no basis for any deduction for contingencies from this resulting amount, as the period of compensation, I have assessed, has already passed as at the date of this Decision.

[37] As set out, the Respondent significantly failed to provide a procedurally fair process in implementing the dismissal. The Respondent is a large organisation, with access to HR and IR advice and resources. However, the Applicant's conduct in relation to the driving incident (that resulted in the termination) contributed to the dismissal. Accordingly, a 30% deduction has been made for this conduct. This reduction represents an amount of $4,693.67.

[38] In assessing the resulting figure for the award of compensation the decision of Deputy President Sams in Double N Equipment Hire Pty Ltd T/A A1 Distributions v Alan Humphries,[23] has been taken into account, in considering the overall fairness of the amount in relation to all of the circumstances, as have been set out.

[39] Accordingly, the amount of compensation (as per the calculations set out) to be paid within 14 days of this decision as per the attached Order [PR609283], is $10,951.87.

[1] [2018] FWC 1336.

[4] Applicant's Submissions Re Compensation dated 1 June 2018 at para 12.

[5] Statement of Darren Pericich sworn/affirmed 31 May 2018 at para 7.

[7] Applicant's Submissions Re Compensation dated 1 June 2018 at paras 23 - 38.

[8] Affidavit of Shane Blank sworn 29 May 2018 at paras 2 - 3.

[9] (1998) 88 IR 21.

[10] [2013] FWCFB 431

[11] [2014] FWCFB 8683.

[12] [2015] FWCFB 2267.

[13] [2018] FWC 679.

[14] [2015] FWCFB 84.

[15] [2015] FWCFB 84.

[16] Applicant's Submissions Re Compensation dated 1 June 2018 at para 12.

[17] Statement of Darren Pericich sworn/affirmed 31 May 2018 at para 7.

[19] Applicant's Submissions Re Compensation dated 1 June 2018 at paras 9 - 10.

[20] [2018] FWC 679.

[21] [2018] FWC 1336.

[22] Statement of Darren Pericich sworn/affirmed 31 May 2018 at para 7.

[23] [2016] FWCFB 7206.

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