| [2014] FWCFB 8683 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
VICE PRESIDENT HATCHER |
|
Appeal against decision [2013] FWC 5840 of Commissioner McKenna at Sydney on 16 August 2013 in matter number U2013/27.
[1] In a decision issued on 13 December 2013 1 (Appeal Decision), this Full Bench quashed a decision2 and order3 made on 16 August 2013 which reinstated Ms Monique Neeteson-Lemkes to her former employment as a flight attendant with Jetstar Airways Pty Limited (Jetstar). In the Appeal Decision, we proceeded to re-determine Ms Neeteson-Lemkes’s application for an unfair dismissal remedy. It was concluded that her dismissal was harsh, unjust and unreasonable. However we did not proceed to deal with the question of remedy (in circumstances where Ms Neeteson-Lemkes sought the primary remedy of reinstatement) because we considered that before we could do so, it would be necessary for us to have before us additional expert medical evidence concerning Ms Neeteson-Lemkes’s capacity to resume duties as a flight attendant. We also expressed a concern that we had not received any information or submissions concerning another issue identified in the Appeal Decision.4 Directions were subsequently made to allow further evidence to be filed concerning these matters, including specific directions to facilitate the provision of a report by an agreed independent forensic psychiatrist. These directions were made on the basis that Ms Neeteson-Lemkes maintained her claim for a reinstatement order.
[2] A hearing before us for the purpose of receiving the additional evidence filed pursuant to those directions and any further submission which the parties wished to make occurred on 17 July 2014. That hearing was adjourned before it was completed because it emerged that a defect in the instructions given for the preparation of the agreed independent psychiatrist’s report meant that a matter of significance had not been considered and dealt with. This made it necessary for a further independent psychiatric report to be obtained.
[3] Before this could be done, there was a change of position on the part of Ms Neeteson-Lemkes. On 22 August 2014 Ms Neeteson-Lemkes informed the Commission that she no longer sought the remedy of reinstatement, and instead sought compensation under s.392 of the Fair Work Act 2009 (the Act). In the light of this, directions were made for the filing of written submissions in relation to compensation. We formed the view that the issue of compensation could be adequately determined without the need for the parties to make oral submissions, and the parties consented to the appeal proceedings being finalised without the need for a further hearing. Accordingly, pursuant to s.607(1) of the Act, the issue of compensation will be determined on the basis of the parties written submissions.
[4] Section 390(3) of the Act provides that the Commission must not order the payment of compensation as an unfair dismissal remedy to a person unless it is satisfied that the reinstatement of the person is inappropriate and that an order for the payment of compensation is appropriate in all the circumstances of the case. We are satisfied that reinstatement is inappropriate in circumstances where Ms Neeteson-Lemkes does not seek reinstatement, it is opposed by Jetstar, and the matters we required in the Appeal Decision to be dealt with before we would order reinstatement will now not be dealt with.
[5] Whether the making of an order for compensation would be appropriate in all the circumstances of this case turns on the question of whether Ms Neeteson-Lemkes suffered any pecuniary loss as a result of that dismissal. Jetstar has submitted that she has suffered no loss and therefore any order for the payment of compensation would not be appropriate. This submission was based on three propositions:
(1) Ms Neeteson-Lemkes was unfit for work at the time she was dismissed.
(2) Her dismissal was found to be unfair for largely procedural reasons, in that she was not given a proper opportunity to respond to the medical reports of Dr Walker. If she had been given that opportunity, it is likely that the result would have been the same, in that she would have still been dismissed. There is therefore no reason to think that she would have been employed for longer than an additional two months.
(3) Ms Neeteson-Lemkes was on workers’ compensation benefits at the time of the dismissal and for more than two months after that, so no pecuniary loss could have been suffered.
[6] That submission does not properly take into account an important aspect of the reasons for our conclusion in the Appeal Decision that Ms Neeteson-Lemkes’s dismissal was harsh, unjust and unreasonable. As was made clear in paragraphs [70]-[74] of the Appeal Decision, the opinion of Dr Walker that Ms Neeteson-Lemkes suffered from a personality disorder which was incompatible with the performance of the duties of a flight attendant was a highly controversial one. None of her treating practitioners (Dr Saunders, Dr Farago and Mr McKinley) had ever diagnosed Ms Neeteson-Lemkes with a personality disorder, and each gave evidence at the hearing at first instance that she had never suffered from such a disorder. Further, the evidence at hearing of Mr Cohen, a Clinical Psychologist, contested Dr Walker’s diagnosis of a personality disorder. The evidence of these practitioners would cause us to conclude that, if Ms Neeteson-Lemkes had been given a proper opportunity to respond to Dr Walker’s reports prior to dismissal, it is overwhelmingly likely that she would have been able to present Jetstar with a considerable weight of medical opinion that contested Dr Walker’s diagnosis. We do not consider that, faced with that response, Jetstar would have closed its mind and continued to rely upon Dr Walker’s reports as a proper basis for Ms Neeteson-Lemkes’s dismissal. It is more likely that Jetstar would have realised the controversial nature of Dr Walker’s diagnosis and concluded that it did not provide a reliable justification for dismissal.
[7] There would still have remained the problem of Ms Neeteson-Lemkes’s anxiety/depression disorder. However although at the time of the dismissal there was no positive prognosis for a full recovery from this disorder, there was no evidence that Jetstar would have dismissed Ms Neeteson-Lemkes on the basis of this disorder alone. The medical evidence indicated that Ms Neeteson-Lemkes made significant progress in her recovery from this disorder in the months after her dismissal, to the extent that her practitioners had diagnosed her as fit to return to full-time duties as a flight attendant by April/May 2013. 5 She had gone off workers’ compensation benefits on 25 March 2013. The proper application of Jetstar’s own “Return to Work Program” to Ms Neeteson-Lemkes’ changed circumstances should have seen her to return to work during this period to full-time flight attendant’s duties on at least a graduated if not immediate basis.
[8] The unfair dismissal of Ms Neeteson-Lemkes denied her this likely opportunity to return to work and resume her previous rate of earnings as a full-time flight attendant. There is no dispute that Ms Neeteson-Lemkes has been unemployed or underemployed since the date of her dismissal. She has therefore suffered pecuniary loss as a result of her dismissal. We therefore find, contrary to Jetstar’s submissions, that compensation is appropriate in all the circumstances of this case.
[9] It is necessary therefore to assess the amount of compensation that should be ordered. In doing so, we are required by s.392(2) of the Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a)-(g) of the subsection. The established methodology for assessing compensation in unfair dismissal cases under the Act has been set out in the Full Bench decisions of Tabro Meat Pty Ltd v Heffernan 6 and Bowden v Ottrey Homes Cobram and District Retirement Villages7. We will apply that methodology subject to the caveat expressed in Smith v Moore Paragon Australia Ltd8 concerning the overriding necessity to ensure that the final amount of compensation arrived at is one which is appropriate in all the circumstances of the case.
Remuneration that would have been received (s.392(2)(c))
[10] For the reasons already stated, we consider that, had she not been dismissed, Ms Neeteson-Lemkes would probably have resumed her duties as a flight attendant on a full-time basis from about May 2013. The evidence demonstrated that she enjoyed her work, and there was no evidence that Jetstar had any concern about the quality of Ms Neeteson-Lemkes’s work provided that she was medically fit to perform that work. It is therefore likely that, upon a resumption of her duties, Ms Neeteson-Lemkes would have continued to work for Jetstar for a period of at least two years.
[11] The evidence demonstrated that Ms Neeteson-Lemkes’s total annual remuneration package at the time of her dismissal was $74,040.37 (consisting of a base salary of $49,048.96, 9% superannuation on base salary of $4,414.41, Back of Clock Flying Allowances of $2,224.80, Live Day Rate payments of $9,811.20, Flying Duty Hour Payments of $6,257.14 and Rest Break Penalty payments of $2,283.86). Therefore over an additional two years of full-time employment Ms Neeteson-Lemkes would have earned about $148,080.74 (noting that this amount may be conservative because it does not take into account any pay rises that may have occurred or may occur over that two year period).
Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f))
[12] Since her dismissal, Ms Neeteson-Lemkes has received a total of $12,713.45 gross remuneration (consisting of $8,588.45 in workers’ compensation payments and $4,125.00 in earnings from casual employment with Crew IQ, a non-registered flight attendants’ union). Deducting this remuneration from the starting point amount, leaves $135,367.29.
[13] We estimate that from now until the end of the two year period of additional employment with Jetstar ending in about May 2015, Ms Neeteson-Lemkes would, based on her past post-dismissal earnings, earn approximately $2,000.00. We shall deduct this amount also, leaving $133,367.29.
Other matters (s.393(2)(g))
[14] We do not consider that there should be any further deductions for “contingencies”. We have considered the impact of taxation, but prefer to determine compensation as a gross amount and leave taxation for separate determination.
Viability (s.393(2)(a))
[15] There was no suggestion that any particular amount of compensation would affect the viability of Jetstar. No adjustment will be made on this account.
Length of service (s.392(2)(b))
[16] In all the circumstances of this case we do not consider that Ms Neeteson-Lemkes length of service at the time of her dismissal (about 6½ years) justifies any increase or reduction to the amount of compensation otherwise payable.
Mitigation efforts (s.392(2)(d))
[17] The evidence in the hearing at first instance demonstrated that Ms Neeteson-Lemkes made reasonable efforts to mitigate her loss by seeking alternative employment. However, there was no evidence advanced before us to demonstrate what efforts have been made since that hearing by Ms Neeteson-Lemkes to mitigate her loss. We are not satisfied that Ms Neeteson-Lemkes’s earnings from her alternative employment in that period represent a reasonable attempt to mitigate her loss by obtaining any available alternative employment. To take this into account, we shall reduce by 75% ($55,530.28) the amount of earnings that Ms Neeteson-Lemkes would have earned in the second year of additional employment with Jetstar. Deducting this amount leaves $77,837.01.
Misconduct (s.392(3))
[18] Ms Neeteson-Lemkes did not commit any misconduct, so this has no relevance to the assessment of compensation.
Compensation cap (s.392(5))
[19] We accept the submission of Jetstar that the compensation cap in this case (calculated in accordance with s.392(6)(b) and Regulation 3.06 of the Fair Work Regulations 2009) is $36,298.23. The amount of compensation we have calculated is above this cap. It is therefore necessary to reduce the amount to the level of the cap, so that the amount will be (rounding to the nearest dollar) $36,298.00.
Instalments (s.393)
[20] There was no submission that any compensation amount should be payable by instalments, and we do not consider that payment by instalments is warranted.
Conclusion
[21] We consider that in all the circumstances of this case it is appropriate to order that Jetstar pay Ms Neeteson-Lemkes the amount of $36,298.00 as compensation for her harsh, unjust and unreasonable dismissal. The amount shall be payable within 21 days of the date of this decision. A separate order to this effect will be issued at the same time as this decision.
VICE PRESIDENT
Final written submissions:
Jetstar Airways Pty Limited - 24 September 2014, 22 October 2014 and 22 December 2014.
Monique Neeteson-Lemkes - 15 October 2014 and 18 December 2014.
4 Appeal Decision at [81]
5 Appeal Decision at [33]-[35]
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