1
Fair Work Act 2009
s.604—Appeal of decision
The Heran Building Group Pty Ltd
v
Eduard Anneveldt
(C2013/4296)
SENIOR DEPUTY PRESIDENT ACTON
DEPUTY PRESIDENT SAMS
COMMISSIONER HAMPTON MELBOURNE, 23 JULY 2013
Appeal against decision [[2013] FWC 2224] and order [PR535620] of Commissioner
Cambridge on 18 April 2013 in matter number U2012/14491.
[1] This decision deals with an appeal by The Heran Building Group Pty Ltd (Heran)
against a decision1 and order2 of Commissioner Cambridge in respect of an unfair dismissal
remedy application made by Mr Edward Anneveldt.
[2] In the decision the Commissioner stated the following by way of factual background:
“Factual Background
[5] The applicant had performed work for the employer as a contractor since about
July 1988 and he became a direct employee of the employer in May 2007
Consequently the applicant’s period of service as an employee was about 5 years and
4 months. The applicant was engaged as a Construction Site Supervisor.
[6] The employer is a medium sized family business employing approximately
40 people. The employer operates a residential building/development Company based
in South East Queensland. The employer is primarily controlled and managed by
three brothers, Brian, Martin and Stephen Heran, who are Directors of the employer
Company. A fourth brother, Glenn and a Shane Heran also have senior managerial
roles in the employer’s business.
[7] In June 2011, the employer advised the applicant that his employment was
terminated because of ‘... downturn in our business activity,...’. The applicant was
given telephone and e-mail advice of the termination of employment from Mr Stuart
Knock, the employer’s Accountant. The termination advice provided four weeks’
notice which meant that the applicant was to work until 20 July 2011. However,
during this period of notice the employer reversed the decision to dismiss the applicant
and he continued in employment up until 5 September 2012.
[2013] FWCFB 4744
DECISION
AUSTR FairWork Commission
[2013] FWCFB 4744
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[8] On 5 September 2012, the applicant received telephone and e-mail advice from
Mr Knock which provided five weeks notice of termination of employment. These
communications from Mr Knock advised the applicant that he was dismissed on the
basis of unsatisfactory performance and the e-mail included ten ‘reasons’ which
related to the unsatisfactory performance.” [Endnotes omitted]
[3] Before the Commissioner there was no contest that Mr Anneveldt’s application was
made within the requisite period, that Mr Anneveldt was dismissed and was protected from
unfair dismissal, that Heran was not a small business within the meaning of the Fair Work Act
2009 (Cth) (FW Act) or that his dismissal was not a case of genuine redundancy. The
Commissioner, therefore, turned to consider whether Mr Anneveldt’s dismissal by Heran was
harsh, unjust or unreasonable.
[4] Section 387 of the FW Act provides as follows:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or
unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the
person’s capacity or conduct (including its effect on the safety and
welfare of other employees)...
(h) any other matters that the FWC considers relevant.”
[5] In considering whether there was a valid reason for Mr Anneveldt’s dismissal related
to his capacity or conduct, including its effect in the safety and welfare of other employees,
the Commissioner said:
“387 (a) - Valid reason for the dismissal related to capacity or conduct
[28] In this case the applicant was dismissed for unsatisfactory work performance.
The nature of the unsatisfactory performance was particularised in ten points which
were included as reasons in the letter of dismissal. Consequently, the Commission has
been required to examine the ten reasons for dismissal and establish whether one or
more of those reasons could be held to be valid.
[29] For a reason to be a valid reason it must, inter alia, be capable of being
established as a fact upon which the decision to dismiss was based. The Commission
must, logically, have some evidence upon which to make the necessary finding of fact.
In this instance there was no evidence provided by either the author of the letter which
contained the ten reasons or the person who made the decision to dismiss, Brian
Heran.
[30] Evidence which is provided by others and which may support the prospect that
the ten reasons contained in the letter of dismissal have a basis in fact, cannot
necessarily be translated into an evidentiary basis upon which findings could be made
that those reasons were in fact the reasons held in the mind of the decision maker. As
a matter of fundamental justice, how could the Commission find that the reasons have
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a basis in fact as the reasons for dismissal, without there being some testing of those
reasons with the person who apparently held them to be facts upon which the decision
to dismiss was taken?
[31] Unless the circumstances of a particular case allow for some means to establish
incontrovertible evidence upon which the reason or reasons for dismissal can be
established in fact as the reason(s) for dismissal, the absence of any direct evidence
from the decision maker leads to an evidentiary conundrum. The resultant difficulty
manifests as a requirement for the Commission to make an assumption that the stated
reason or reasons were in fact those relied upon by the decision maker. In simple
terms, how can the Commission be satisfied that what others said were the reasons for
dismissal, was also what the decision maker thought?
[32] In addition to what I have described as the evidentiary conundrum created by
the absence of any direct evidence from the decision maker, there was also
considerable challenge made to the accuracy and or actual existence of each of the ten
stated reasons contained in the letter of dismissal.
[33] For example, point 8 involved the pouring of a concrete driveway which had to
subsequently be pulled up to permit underground services to be installed. There was
inconclusive evidence provided during the Hearing as to whether or not the applicant
or Stephen Heran was responsible for the pouring of the concrete driveway. The
Commission simply had no evidence as to what the decision maker, Brian Heran,
understood to be the factual position as to who was responsible for the pouring of the
concrete driveway. Essentially, the Commission would have to assume that Brian
Heran believed that the applicant was responsible, otherwise that reason would not
have been mentioned. However the evidence presented during the Hearing could not
necessarily support the conclusion which had apparently been reached by Brian Heran.
[34] There was strong challenge made to the accuracy or actual existence of each of
the stated reasons for dismissal. Without the benefit of hearing from Brian Heran
about such challenge, the Commission is presented with a completely unsatisfactory
evidentiary position which does not enable proper findings of fact to be made as
verification of the stated reasons for dismissal.
[35] The evidence did establish that a number of the employer’s managers had
expressed considerable dissatisfaction with the applicant’s performance over an
extended period. However, an employer’s general dissatisfaction cannot, particularly
in the absence of any direct evidence from the person who made the decision to
dismiss, be translated into a proper evidentiary basis upon which the Commission is
able to make findings of fact that the stated reasons for dismissal were valid.
[36] The absence of any evidence from the person who made the decision to
dismiss has prevented any finding that there was valid reason for the dismissal. The
failure to call the decision maker as a witness also has other ramifications which are
mentioned later in this Decision.”
[6] Later in respect of other relevant matters, the Commissioner said:
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“387 (h) - Other relevant matters
[54] There was evidence provided by those witnesses who were called by the
employer which established that the applicant’s work performance was, in their
opinion, unsatisfactory. Importantly, none of these individuals were responsible for
the decision to dismiss the applicant. However, I have not discarded the evidence
from the employer’s witnesses which upon an objective assessment, leads me to
conclude that there was legitimate basis for serious concern about particular aspects of
the applicant’s work performance.
[55] Consequently I have balanced the evidence which verified legitimate basis for
criticism of the applicant’s work performance against the various other factors under
consideration. The corollary of this consideration is that I am unable to countenance
that an extended period of general dissatisfaction with the work performance of the
applicant should operate to displace the requirement that the applicant was entitled to
natural justice. In particular, it would not have been onerous or unrealistic for the
decision maker to have put the ten reasons contained in the letter of dismissal to the
applicant and heard ‘his side of the story’ before any decision to dismiss was taken.”
[7] The Commissioner concluded in considering whether the dismissal was harsh, unjust
or unreasonable as follows:
“Conclusion
[56] The decision to dismiss the applicant was taken by Brian Heran who was not
called to give evidence in these proceedings. The absence of evidence from the
decision maker is ordinarily problematic in one of these matters. In a case involving a
dismissal for unsatisfactory work performance the absence of any evidence from the
decision maker would almost invariably be fatal to the defence. In this instance this
difficulty was compounded by evidence that the decision maker had no direct contact
with the applicant concerning the termination of his employment…
[58] The absence of any evidence from the person who apparently concluded that
ten reasons existed as the basis for dismissal means that those reasons can not be
properly verified as findings of fact to have been the reasons for dismissal.
Consequently, the Commission must conclude that there is insufficient evidence upon
which to establish that the dismissal of the applicant was for valid reason. A dismissal
without valid reason and implemented by way of a procedure which involved a very
unfortunate absence of natural justice must be held to have been harsh, unjust and
unreasonable.”
[8] We granted both Heran and Mr Anneveldt permission to be represented by a lawyer in
the appeal because we concluded it would enable the matter to be dealt with more efficiently,
taking into account the complexity of the matter as it involved the statutory interpretation of
s.387(a) of the FW Act and the evidence required to establish a valid reason under that
section.
[9] Heran submitted permission to appeal should be granted in the public interest because
the decision evinces at least two significant errors of law:
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“1. The first significant error: The orthodox requirement is to consider whether
there is ‘a valid reason’ for dismissal. The heterodoxy inherent in the approach
adopted by the Commissioner is to convert the statutory requirement to a
requirement of ‘the valid reason held and relied on by the decision maker.’
2. The second significant error: The orthodox position is that the standard of
proof, without exception, is the balance of probabilities. The Commissioner
applied a standard of proof of ‘incontrovertible evidence’ to the appellant’s
case on the valid reason issue. In addition to being an error, the appellant
suffered the injustice that its evidence was not considered or assessed.”
[10] In respect of the second error, Heran pointed out that while Mr Brian Heran, a Director
of Heran, who ultimately directed that the notice of dismissal be given to Mr Anneveldt was
not called to give evidence, Heran did call three witnesses to give evidence about
Mr Anneveldt’s unsatisfactory performance at work:
(i) Dale Crisp, a Construction Site Foreman, who gave evidence about the failure
of Mr Anneveldt to properly supervise jobs, including in respect of a concrete
pour which subsequently had to be pulled up.
(ii) Martin Heran, a Director of Heran, who gave evidence about extensive
problems with Mr Anneveldt’s work performance, describing the serious issue
of the lack of supervision Mr Anneveldt exercised which resulted in errors and
delays and which were raised with Mr Anneveldt every week.
(iii) Glenn Heran, an Accounts Payable Manager with Heran, who gave evidence
about the warnings given to Mr Anneveldt concerning his work performance.”
[11] Permission to appeal being given was opposed by Mr Anneveldt. Mr Anneveldt
referred to selective parts of the Commissioner’s decision in support of his submission that
the errors alleged by Heran are without foundation.
[12] We are persuaded the Commissioner erred in considering whether there was a valid
reason for the dismissal of Mr Anneveldt.
[13] It is apparent from the reasons for decision that the Commissioner considers that for a
reason for dismissal to be a valid reason under s.387(a) of the FW Act it must be “capable of
being established as a fact upon which the decision to dismiss was based”, that is it must be a
reason “held in the mind of” or “relied upon by the decision maker” for the dismissal. As a
consequence the Commissioner considers that, in the absence of incontrovertible evidence
about the reasons for the dismissal and where there is a considerable challenge made to the
accuracy or actual existence of the reasons for the dismissal, evidence is needed from the
person who made the decision to dismiss for the Fair Work Commission (FWC) to find there
was a valid reason for the dismissal.
[14] The Commissioner’s view is mistaken.
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[15] In MM Cables (A Division of Metal Manufacturers Limited) v Zammit,3 a Full Bench
of the Australian Industrial Relations Commission (AIRC) considered an appeal against a
decision and order of a Commissioner on an application for relief in respect of termination of
employment which was made under the Workplace Relations Act 1996 (Cth) (WR Act). In
respect of s.170CG(3)(a) of the then WR Act, a provision which was in similar terms to
s.387(a) of the FW Act, the Full Bench said:
“[42] We think that there are two difficulties in the approach adopted by the
Commissioner to the question of whether there was a valid reason for Mr Zammit's
termination of employment. First, the Commissioner seems to have confined himself
to determining whether the reason given for Mr Zammit's termination was a valid
reason. The question in s.170CG(3)(a) is not so limited. Rather the Commission is
obliged to consider whether there was a valid reason for the termination - that inquiry
is not limited to the reason given by the employer for the termination.”
[16] It follows that evidence is not necessarily needed from the person who made the
decision to dismiss for the FWC to find there was a valid reason for the dismissal, even in the
absence of incontrovertible evidence about the reasons or where there is a considerable
challenge made to the accuracy or actual existence of the reasons for the dismissal.
[17] The Commissioner’s approach to what constitutes a valid reason for dismissal and the
evidence needed to establish a valid reason resulted in the Commissioner failing to relevantly
consider the evidence of the witnesses called by Heran in respect of whether there was a valid
reason for Mr Anneveldt’s dismissal.
[18] We think the Commissioner’s errors in considering whether there was a valid reason
for Mr Anneveldt’s dismissal are sufficient to warrant us granting permission to appeal in the
public interest. They involve errors of significance which manifest an injustice in the
determination of the matter before him. We grant permission to appeal.
[19] Heran submitted that should we grant permission to appeal, we should quash the
Commissioner’s decision and order and refer Mr Anneveldt’s unfair dismissal remedy
application to another member of the FWC to determine.
[20] We consider that it is appropriate for us to determine the matter by way of rehearing
based upon the evidence and submissions presently before the Commission as contemplated
by s.607(3)(b) of the FW Act.
Mr Anneveldt’s unfair dismissal remedy application
[21] Mr Anneveldt’s application for an unfair dismissal remedy was made under s.394 of
the FW Act within 14 days of his dismissal by Heran.
[22] We are satisfied Mr Anneveldt was protected from unfair dismissal at the time he was
dismissed.4
[23] It is also evident that Mr Anneveldt was dismissed by Heran and was not a case of
genuine redundancy. Immediately before the time of his dismissal, Heran was not a small
business employer within the meaning of the FW Act5 and compliance with the Small
Business Fair Dismissal Code does not arise.
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[24] As a result, it is necessary for us to consider whether Mr Anneveldt’s dismissal was
harsh, unjust or unreasonable. This in turn requires us to consider the matters raised by s.387
of the FW Act.
Harsh, unjust or unreasonable
[25] Section 387 of the FW Act establishes the considerations that the FWC must take into
account in assessing whether it is satisfied a dismissal was harsh, unjust or unreasonable. We
will consider them in sequence.
(i) Section 387(a) – whether there was a valid reason for the dismissal related to the
Mr Anneveldt’s capacity or conduct (including its effect on the safety and welfare
of other employees)
[26] We are persuaded there was a valid reason for Mr Anneveldt’s dismissal related to his
capacity or conduct (including its effect on the safety and welfare of other employees).
[27] The letter of dismissal provided on 5 September 2012 outlined ten grounds, which
were also relied upon by Heran in the proceedings before the FWC. They were as follows:
“1. Lack of supervision in general.
2. Getting other trades to call up materials.
3. Not working in general working hours as noted in general D.A. requirements
(starting at 6 am and leaving at 2.30 pm therefore leaving tradesmen and our
labourers unsupervised and unattended.
4. Not ensuring site is locked every day.
5. Not implementing quality control to company expectations.
6. Employing unskilled labourers to perform quality control inspections.
7. No stock control, allowing tradesmen to take allocated stock to be used on
any unit.
8. The pouring of concrete driveways when underground services had not been
installed, then pulling up the concrete the following day.
9. There is a 4 page landscape report from the landscape architect that council
has requested to be rectified at Cristaldi Avenue site. This demonstrated your
lack of supervision.
10. Poor liaison with responsible people in the office as to the progress of
construction at the Cristaldi site.”6
[28] Evidence about those matters was provided by three witnesses for Heran as outlined
earlier in this decision. Taken together, this evidence was capable of supporting the various
contentions relied upon by Heran. Mr Anneveldt also gave evidence about these matters and
for the most part contested the underlying basis of the alleged performance concerns and/or
his responsibility for them.
[29] We are satisfied that most of the concerns held by Heran had substance and were
objectively justified. In particular, those concerns about the degree of attention to quality
control issues and the active supervision of the relevant sites are demonstrated by the
evidence.
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[30] We also note that the Commissioner at first instance found:
“... I have not discarded the evidence from the employer’s witnesses which upon an
objective assessment, leads me to conclude that there was legitimate basis for serious
concern about particular aspects of the applicant’s work performance.”7
[31] Given the nature of Mr Anneveldt’s role as an experienced Construction Site
Supervisor, these concerns represent sound, defensible and well founded reasons for the
dismissal.
[32] As a result, we are persuaded the work performance issues concerning Mr Anneveldt
raised by Heran during the hearing at first instance constitute a valid reason for his dismissal
within the meaning of s.387(a) of the FW Act.
(ii) Section 387(b) – whether Mr Anneveldt was notified of the reasons for dismissal
(iii) Section 387(c) – whether Mr Anneveldt was given an opportunity to respond to
any reason related to his capacity or conduct
[33] In this matter it is convenient to deal with both of these considerations together.
[34] Heran provided telephone and e-mail notification of the reasons for Mr Anneveldt’s
dismissal when the dismissal was communicated to him.
[35] Although many of the performance concerns were earlier raised with him as part of the
ongoing communications about actual work issues at the sites, none of these were raised in a
meaningful way at an earlier time in relation to a review of his ongoing employment.
[36] In the circumstances, Mr Anneveldt was not notified of the reasons for his dismissal or
afforded an opportunity to respond to the reasons for dismissal related to his capacity or
conduct as required by ss.387(b) and (c) of the FW Act.
(iv) Section 387(d) – any unreasonable refusal by Heran to allow Mr Anneveldt to
have a support person present to assist in any discussions relating to his
dismissal.
[37] The procedure adopted by Heran did not provide any meeting or other forum which
might have involved the presence of a support person to assist Mr Anneveldt. Accordingly,
there was no refusal to allow a support person to assist him in the sense contemplated by
s.387(d) of the FW Act.
(v) Section 387(e) –– whether Mr Anneveldt has been warned about that
unsatisfactory performance before the dismissal.
[38] In Fastidia Pty Ltd v Goodwin,8 a Full Bench of the AIRC said of s.170CG(3)(d) of
the pre-reform WR Act:
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“[43] In the context of s.170CG(3)(d) we think that a warning must:
- identify the relevant aspect of the employee's performance which is of
concern to the employer; and
- make it clear that the employee's employment is at risk unless the
performance issue identified is addressed.
[44] In relation to the latter requirement, a mere exhortation for the employee to
improve his or her performance would not be sufficient. We also note that we accept
that these criterion are to be applied in a practical and commonsense way taking into
account the employment context.”
[39] We respectfully agree with the Full Bench and conclude that such an approach
remains relevant for present purposes.
[40] In relation to this consideration, the following findings of relevance were made by the
Commissioner at first instance:
“[43] This factor has particular relevance in this case where the applicant was
dismissed for reasons of unsatisfactory work performance.
[44] There was no evidence of any formal written warning made to the applicant.
The employer attempted to rely upon the prior (and subsequently reversed) dismissal
of the applicant in June 2011 as representing a warning to the applicant. However that
dismissal was stated to be for reason of ‘... downturn in our business activity, ...’ .
During the Hearing, the employer sought to recant from the stated reason and instead
Martin Heran said that the primary reason for the earlier dismissal was the applicant’s
‘poor workmanship and performance’.
[45] Martin Heran was questioned about the earlier, reversed, dismissal of the
applicant and the extent of the employer’s misrepresentation of the reason for that
action expanded to the point that according to Martin Heran, the applicant was
dismissed for ‘gross incompetency’.
[46] In an endeavour to demonstrate prior warning to the applicant, the employer
introduced a suggestion that the applicant had also been dismissed on another occasion
nominated to have been 4 October 2011. There was no evidentiary material provided
to support this assertion and during the Hearing the proposition appeared to lapse.
[47] The overall impression that emerges from an examination of the evidence
which was advanced in the employer’s attempt to establish that the applicant had been
given prior warning can be summarised as a confused ‘clutching at straws’. This
unfortunate situation was confirmed when, on the second day of Hearing, Glenn Heran
provided the following testimony:
‘So when you say “warning”, you're talking about an official warning. You're
not in a position to say, "Here's your first warning, here's your second
warning, there's your third warning"?---To tell the truth, I thought Stuart
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Knock, our accountant, had done that. I thought that was already done. Until
this morning I didn't know it wasn't done. I don't know why.’ ”9
[41] These findings were reasonably open to the Commissioner on the evidence and we
concur with them. As a result, we find that Mr Anneveldt was not warned about his
unsatisfactory performance before his dismissal.
(vi) Section 387(f) – the degree to which the size of Heran’s enterprise would be likely
to impact on the procedures followed in effecting the dismissal.
(vii) Section 387(g) – the degree to which the absence of dedicated human resource
management specialists or expertise in Heran’s enterprise would be likely to
impact on the procedures followed in effecting the dismissal.
[42] In this matter it is convenient to deal with both of these considerations together.
[43] Heran is a medium sized family business and did not have dedicated human resource
management specialists.
[44] We are satisfied the size of Heran’s enterprise and its absence of dedicated human
resource management specialists or expertise detrimentally impacted on the procedures it
followed in effecting Mr Anneveldt’s dismissal.
(vii) Section 387(h) – any other matters that the FWC considers relevant.
[45] Mr Anneveldt was involved with Heran as a contractor since July 1988 and
commenced employment in May 2007. Mr Anneveldt’s service as an employee is a relevant
consideration in this matter.
(viii) Conclusion on harsh, unjust or unreasonable
[46] We have considered all of the matters raised by the s.387 of the FW Act.
[47] We are satisfied Mr Anneveldt’s dismissal by Heran was harsh, unjust or
unreasonable. We have found that a valid reason for his dismissal existed and this is a
significant consideration. However, even accounting for the size and nature of the business,
the absence of almost all of the elements of a fair process, and the length of his employment
with Heran, lead us to the conclusion that the dismissal was harsh, unjust or unreasonable. In
so concluding, we have considered whether the absence of a fair process made any difference
to the actual outcome.
Unfairly dismissed
[48] In light of our findings in respect of the matters in s.385 of the FW Act, we are
satisfied Mr Anneveldt was unfairly dismissed.
[49] We turn then to remedy.
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Remedy
[50] Section 390 of the FW Act provides as follows in respect of remedies for unfair
dismissal:
“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.”
[51] We have earlier indicated our satisfaction in respect of the matters in s.390(1)(a) and
(b) and s.390(2) of the FW Act.
[52] In respect of reinstatement, Mr Anneveldt did not seek that form of remedy and in the
circumstances we are satisfied that reinstatement of Mr Anneveldt is inappropriate.
[53] As to compensation, Mr Anneveldt sought 12 weeks pay, which he considered to be
$25,920 (gross) plus superannuation.10 Heran opposed any compensation on the basis that
little evidence had been provided by Mr Anneveldt about his losses or attempts he had taken
to mitigate those losses. Further, it contended that even if found to be unfair, the dismissal
would have eventuated notwithstanding any improvements in the dismissal procedure.11
[54] We consider that an order for the payment of compensation to Mr Anneveldt by Heran
is appropriate in all the circumstances of this matter.
[55] With respect to this, we have had regard to the fact that there is no sound basis to
conclude that an order for the payment of compensation would affect the viability of Heran’s
enterprise. The effect of such an order on Heran does not weigh against such an order.
Similarly, Mr Anneveldt’s length of service with Heran was such that it does not weigh
against such an order. The remuneration Mr Anneveldt would have received, or would have
been likely to receive, if he had not been dismissed supports an order for the payment of
compensation. As we have intimated, we think that if Heran had afforded Mr Anneveldt a
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fair process his employment with Heran would have lasted beyond the date of his dismissal.
We are not persuaded Mr Anneveldt’s limited efforts to mitigate the loss he has suffered
because of his dismissal weighs against an order for the payment of compensation, given the
limited time we consider he would have continued to work for Heran. Nor do we think the
remuneration earned by Mr Anneveldt during the period between his dismissal and the
making of an order for compensation weighs against such an order, since the remuneration of
which we are aware is small relative to the period. With respect to the amount of any income
reasonably likely to be earned by Mr Anneveldt during the period between the making of an
order for compensation and the compensation, we are unable to find it weighs against an order
for the payment of compensation given the short duration of the period. The matter of
contingencies does not weigh against such an order, as the period that we consider
Mr Anneveldt would have worked for Heran but for his dismissal has passed. There are no
other matters that we consider are relevant for the purposes of considering whether an order
for the payment of compensation is appropriate in all the circumstances of the case.
Compensation amount and instalments
[56] Sections 392 and 393 of the FW Act provides as follows in respect of compensation:
“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
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(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.
393 Monetary orders may be in instalments
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.”
[57] We will apply these provisions to this case.
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(i) Remuneration that would have been received (s.392(2)(c))
[58] Although we have decided that the dismissal at the time was not inevitable even if
proper procedures had been followed by Heran, we do accept that the nature of the valid
reason would probably have led to the conclusion of the employment relationship within a
matter of only a few months. Mr Anneveldt was given five weeks notice of his dismissal and
he worked out that period and was paid.
[59] In these circumstances, we consider that if he had not been dismissed, Mr Anneveldt
would have continued to have worked for Heran for around a further six weeks. In that time,
he would have been likely to have received remuneration of approximately $2,300 gross per
week in wages and 9 per cent in superannuation.
[60] Accordingly, the remuneration that Mr Anneveldt would have likely to have received
in the absence of the unfair dismissal was $13,800 gross plus 9 per cent superannuation.
(ii) Remuneration earned (s.392(2)(e)) and Income reasonably likely to be earned
(s.392(2)(f))
[61] Following his dismissal, Mr Anneveldt obtained three days fencing work which
provided income of $1,170. This should be taken into account.
[62] Mr Anneveldt also undertook some massage therapy work and this involved seeing
one or two clients per week. The evidence does not permit a finding to be made as to whether
this work involved additional income or precisely when it was conducted.
[63] We are not aware of the present employment circumstances of Mr Anneveldt however
there will be a very short period between the making of the order for compensation and the
actual compensation being paid.
[64] Therefore, from the amount of some $13,800 gross plus 9 per cent in superannuation
that Mr Anneveldt would have received, or would have been likely to have received, from
Heran if he had not been dismissed, we deduct $1,170 gross. This results in an amount of
$12,630 gross plus 9 per cent in superannuation.
(iii) Other matters (s.392(2)(g))
[65] In this case, we are not persuaded we should make any deduction for contingencies
from the amounts derived above. The projected period of continued employment has long
passed and no sound basis for making a deduction for contingencies exists in this case.
[66] We have considered the impact of taxation but we elect to settle a gross amount and
leave taxation for determination. There are no other matters that we consider are relevant in
determining an amount of compensation instead of reinstatement, apart from those in
ss.392(2)(a), (b) and (d), 392(3) and 392(5) of the FW Act with which we now deal.
[2013] FWCFB 4744
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(iv) Viability (s.392(2)(a))
[67] There is no sound basis to conclude that an order of compensation of the amount we
have determined would affect the viability of Heran’s enterprise. It is not a circumstance
which warrants adjustment to the amount.
(v) Length of service (s.392(2)(b))
[68] Mr Anneveldt’s had approximately 5 years and 4 months service as an employee and
in the particular circumstances of this matter, this consideration does not lead us to adjust the
amount of compensation otherwise determined.
(vi) Mitigation efforts (s.392(2)(d))
[69] We find, as the Commissioner did at first instance, that Mr Anneveldt did not earnestly
pursue an offer of work which was made to him in the area of real estate sales. He indicated
that he was unfamiliar with, and not attracted to, working in real estate sales.12 Mr Anneveldt
had not secured any other employment at the time of the original hearing of his application.
[70] In other circumstances we would have considered making a deduction from the
compensation otherwise determined. However, given the very short period over which we
have projected the employment for the purposes of s.392(2)(c) of the FW Act, this is not
appropriate in this case.
(vii) Misconduct (s.392(3))
[71] Section 392(3) of the FW Act requires the FWC to reduce the amount of compensation
it would otherwise order by an appropriate amount on account of a person’s misconduct if
satisfied the misconduct of the person contributed to the employer’s decision to dismiss the
person.
[72] In this instance there was no evidence that any relevant misconduct of Mr Anneveldt
contributed to the Heran’s decision to dismiss.
(viii) Compensation cap (s.392(5))
[73] Since the amount of compensation we have determined is less than the compensation
cap in s.392(5) of the FW Act, we make no further reduction for that reason.
(ix) Instalments (s.393)
[74] There was no submission that any amount of compensation should be subject to
payment by instalments. In any event, we are not satisfied that in this case payment by
instalments is warranted.
Conclusion
[75] In light of the above, we consider we should make an order that Heran pay $12,630
gross plus 9 per cent in superannuation, less taxation as required by law, as compensation to
[2013] FWCFB 4744
16
Mr Anneveldt in lieu of reinstatement within 7 days of the date of this decision. It accords a
fair go all round to both parties.
[76] We therefore quash the Commissioner’s decision and order in respect of
Mr Anneveldt’s unfair dismissal remedy application. We also note that the stay order13
applied to the compensation determined at first instance lapses upon the determination of this
appeal. An order14 reflecting our conclusions is being issued in conjunction with this
decision.
SENIOR DEPUTY PRESIDENT
Appearances:
L. Reidy, of counsel, for the The Heran Building Group Pty Ltd.
A. Fitzsimmons, of counsel, for Eduard Anneveldt.
Hearing details:
2013.
Adelaide and Brisbane (video hearing):
July 2.
Endnotes:
1 Mr Eduard Anneveldt v Heran Building Group Pty Ltd, [2013] FWC 2224.
2 Mr Eduard Anneveldt v Heran Building Group Pty Ltd, PR535620.
3 Print S8106. See also Wilson v Australian Taxation Office, PR910942 at [51].
4 Fair Work Act 2009 (Cth), ss.382-384.
5 Fair Work Act 2009 (Cth), s.23.
6 Appeal book at p.167.
7 Mr Eduard Anneveldt v Heran Building Group Pty Ltd, [2013] FWC 2224 at [54].
8 Print S9280.
9 Mr Eduard Anneveldt v Heran Building Group Pty Ltd, [2013] FWC 2224.
10 Appeal book at p.328.
11 Appeal book at p.335.
12 Mr Eduard Anneveldt v Heran Building Group Pty Ltd, [2013] FWC 2224 at [67].
13 Heran Building Group Pty Ltd v Mr Eduard Anneveldt, PR536930.
14 The Heran Building Group Pty Ltd v Eduard Anneveldt, PR538993.
Printed by authority of the Commonwealth Government Printer
Price code C, PR538991
WORK CO MISSION AUSTRALIA SEAL OF FAIR THE
