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Fair Work Act 2009
s.604—Appeal of decision
B, C and D
v
Australian Postal Corporation T/A Australia Post
(C2011/6623)
VICE PRESIDENT LAWLER MELBOURNE, 26 NOVEMBER 2013
Appeal – unfair dismissal – decision on remedy.
[1] On 28 August 2013 a Full Bench delivered a decision upholding an appeal by three
employees of Australia Post against a decision at first instance dismissing their unfair
dismissal applications ([2013] FWCFB 6191, Lawler VP and Cribb C, Hamberger SDP
dissenting). The majority granted permission to appeal, allowed the appeal and quashed the
decision at first instance. The majority found that the dismissal of each of B, C and D were
harsh, unjust and unreasonable and that each was unfairly dismissed.
[2] The majority allowed the appeals, quashed the decision and orders of the
Commissioner at first instance, and remitted the “matter of remedy” to me “for determination
in accordance with these reasons” ([2013] FWCFB 6191 at [120]).
[3] These are my reasons for decision on remedy and should be read in conjunction with
the reasons of the majority.
[4] The majority addressed the issue of remedy in the following terms:
“[114] The grant of a remedy is governed by s.390 of the FW Act.
“390 When FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), FWC may order a person’s reinstatement, or
the payment of compensation to a person, if:
(a) 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) FWC may make the order only if the person has made an application
under section 394.
(3) FWC must not order the payment of compensation to the person unless:
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DECISION
E AUSTRALIA FairWork Commission
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(a) FWC is satisfied that reinstatement of the person is
inappropriate; and
(b) 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.
[115] There is no dispute that the Appellants were protected from unfair dismissal at
the time of being dismissed. The only issue in relation to whether the Appellants had
been unfairly dismissed was whether their dismissal was harsh, unjust or
unreasonable. Each of the Appellants made an application under s.394.
[116] Having concluded that each of the dismissals were harsh, we are also satisfied
that each of the Appellants was unfairly dismissed such that the requirement in
s.390(1)(b) is satisfied. We are satisfied that, in the circumstances we have set out, a
remedy is appropriate.
[117] The language of s.390 demonstrates that the legislature intended reinstatement to
be the primary remedy where FWC was satisfied that the discretion to order a remedy
was exercised. The plain words of s.390(3) prohibit FWC from ordering compensation
unless FWC is affirmatively satisfied that “reinstatement of the person is
inappropriate”.
[118] Given the time that has elapsed since the decision of the Commissioner, and the
scope for changed circumstances that may bear upon the issue of whether
reinstatement is appropriate, we have decided not to determine remedy ourselves but
instead remit the issue of remedy to Vice President Lawler for determination. In
making that remitter, we make the following observations:
(a) On the present state of evidence we are not satisfied that reinstatement
is inappropriate for each of the Appellants. Indeed, we are affirmatively
satisfied that reinstatement with continuity of employment is appropriate.
There is nothing about the conduct of Appellants that could reasonably be
taken to have undermined fundamental trust and confidence in the employment
relationship. It is unlikely that any of the Appellants would engage again in
conduct of the sort in issue in this case. The factors that weighed in favour of
the dismissal being harsh also weigh in favour of reinstatement being
appropriate.
(b) There must be a significant discount in any order for back pay to reflect
the fact of the Appellants’ misconduct, quite apart from any other discounts
that may be appropriate to reflect a “fair go all round”, particularly in light of
the delay in the resolution of these matters. Obviously income earned in the
intervening period must be brought to account.”
(emphasis added)
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The issue of remedy is not at large
[5] Australia Post contended, in effect, that the whole issue of remedy was still at large
and argued that reinstatement was not appropriate on the facts in existence at the time of the
termination. That contention is inconsistent with the reasons of the majority. I am obliged to
determine remedy “in accordance with” the majority’s reasons ([2013] FWCFB 6191 at para
[120]). The majority was affirmatively satisfied that reinstatement was appropriate on the
evidence before the Full Bench but recognised that the long lapse of time since the hearing at
first instance, and the absence of any evidence as to events since that time, rendered it
possible that events in the intervening period may have rendered reinstatement inappropriate.
Superannuation issues
[6] Australia Post relied on evidence from Ms Guthrie, the company secretary of the
trustee for the beneficial superannuation scheme operated by Australia Post of which each of
the three employees was a member. That scheme is now closed. Ms Guthrie gave evidence of
difficulties and complexities associated with reinstating the three employees to that
superannuation scheme. However, the ‘bottom line’ of her evidence was that it was possible
to restore each of the employees to membership of the scheme provided Australia Post
cooperated (as it would be obliged to do if required by a relevant order of the Commission). I
am not satisfied that the complexities associated with restoring each of the appellants to the
superannuation scheme is a factor that renders reinstatement inappropriate, either alone or in
combination with other factors.
Reinstatement remains an appropriate remedy
[7] I have now heard evidence in relation to the intervening events and I am not satisfied
that anything has occurred in relation to any of the appellants that has rendered their
reinstatement inappropriate. On the contrary, the evidence of the circumstances of each of the
three appellants lends weight to the conclusion of the Full Bench that reinstatement is
appropriate. Each of the appellants is suffering a continuing financial disadvantage as a result
of the termination. Each continues to seek reinstatement.
[8] I am not persuaded that the existence of a recruitment freeze and the present staffing
situation at the Dandenong Letter Centre (“DLC”) should prevent reinstatement of the
employees.
[9] I am not persuaded that the additional emails discovered in relation to one of the
appellants after the decision to terminate changes the analysis in relation to that appellant.
[10] Australia Post argued that it has lost trust and confidence in the appellants such that
they should not be reinstated and placed reliance on a statement from Mr Doyle, the head of
the DLC, in which he expressed his loss of trust and confidence in the appellants.
[11] In Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 at 191-192, the Full
Court of the Industrial Relations Court said:
“...we accept that the question whether there has been a loss of trust and confidence is a
relevant consideration in determining whether reinstatement is impracticable, provided
that such loss of trust and confidence is soundly and rationally based.
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At the same time it must be recognised that, where an employer, or a senior officer of
an employer, accuses an employee of wrongdoing justifying the summary termination
of the employee’s employment, the accuser will often be reluctant to shift from the
view that such wrongdoing has occurred, irrespective of the Court’s finding on that
question in the resolution of an application under Division 3 of Part VIA of the Act.
If the Court were to adopt a general attitude that such a reluctance destroyed the
relationship of trust and confidence between employer and employee, and so made
reinstatement impracticable, an employee who was terminated after an accusation of
wrongdoing but later succeeded in an application under the Division would be denied
access to the primary remedy provided by the legislation. Compensation, which is
subject to a statutory limit, would be the only available remedy. Consequently, it is
important that the Court carefully scrutinise any claim by an employer that
reinstatement is impracticable because of loss of confidence in the employee.
Each case must be decided on its own merits.”
[12] In oral evidence, Mr Doyle agreed that it was extremely unlikely that any of the
appellants would ever again breach the policies against sending etc pornographic emails using
Australia Post’s IT systems. I find accordingly. The majority found that “there is nothing
about the conduct of the Appellants that could reasonably be taken to have undermined
fundamental trust and confidence in the employment relationship” ([2013] FWCFB 6191 at
para [118](a)). Mr Doyle’s concession in oral evidence is consistent with that finding.
[13] A grant of the remedy of reinstatement is governed by s.391:
“391 Remedy—reinstatement etc.
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s
employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was
employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no
less favourable than those on which the person was employed immediately
before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the
dismissal is no longer a position with the person’s employer at the time of the
dismissal; and
(b) that position, or an equivalent position, is a position with an associated
entity of the employer;
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the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed
immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less
favourable than those on which the person was employed immediately before
the dismissal.
Order to maintain continuity
(2) If FWA makes an order under subsection (1) and considers it appropriate to do
so, FWA may also make any order that FWA considers appropriate to maintain the
following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if
subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) If FWA makes an order under subsection (1) and considers it appropriate to do
so, FWA may also make any order that FWA considers appropriate to cause the
employer to pay to the person an amount for the remuneration lost, or likely to have
been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3),
FWA must take into account:
(a) 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 reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by
the person during the period between the making of the order for reinstatement
and the actual reinstatement.”
[14] In all the circumstances I am satisfied that it is appropriate that there be an order
pursuant to s.391(1)(a) requiring Australia Post to reinstate each of the employees by
reappointing the person to the position in which the person was employed immediately before
the dismissal. This does not require Australia Post to restore each to the precise role that they
performed at the time of their dismissal. The order I will make will not require Australia Post
to restore each to a position within the DLC at the classification that they held at the time of
their dismissal.
Continuity
[15] In all the circumstances, I also consider it appropriate to make an order pursuant to
s.391(2) to maintain the continuity of the employment of each of the appellants and their
period of continuous service for all purposes other than in respect of the accrual of annual
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leave and long service leave in the period between termination and reinstatement (albeit that
the order will have the effect of restoring any partial long service leave accrual that was not
paid out at the time of termination).
Order to restore lost pay
[16] I consider it appropriate to make an order for the restoration of some lost pay that
causes Australia Post to pay to the person an amount for the remuneration lost, or likely to
have been lost, by each of the appellants because of their dismissal. However, consistent with
the reasons of the majority, I did not consider it appropriate that the order be for the full
amount of remuneration lost by each of the appellants. In particular, there must be a
substantial discount for misconduct of each, and a further discount to reflect the matters
identified by the majority in para [118](b) of their reasons.
[17] I am required to consider the matters specified in s.391(4) and do so:
(a) the amount of any remuneration earned by each of the appellants from
employment or other work during the period between the dismissal and the making of
the order for reinstatement is as set out in the statements of each of the appellants (and
I assume that they have continued earning at the same rate between the remedy
hearing 22 October 2013 and the making of order for reinstatement).
(b) the amount of any remuneration reasonably likely to be so earned by each of
the appellants during the period between the making of the order for reinstatement and
the actual reinstatement is likely to be de minimis and in the order of one weeks’
income at the rate specified in each of the appellants’ statements.
[18] I do not accept the submission of Australia Post that there should be no order for back
pay. The cases relied upon Australia Post in that submission are cases that turn on their own
facts and do not lay down any principle that demands that outcome in this case.
[19] It is tolerably clear that the majority considered that an order for back pay would be
appropriate subject to a substantial discount in relation to the misconduct of the appellants and
in recognition that it would be unfair to Australia Post to visit the consequences of the delay
in the final resolution of this matter upon Australia Post alone in circumstances where it had
not had the benefit of the employee’s labour during the period of delay ([2013] FWCFB 6191
at para [118](b)).
[20] The assessment of the appropriate quantum of back pay in this case is not greatly
assisted by an application of the principles in Sprigg v Paul’s Licensed Festival Supermarket
(1988) 88 IR 21, a case focussed on assessing compensation when reinstatement is not
ordered and the Commission is concerned to assess future likelihoods, whereas here I am
concerned only with pay in respect of a period in the past (together with the likely short
period between orders and the orders being given effect). The decision in Sprigg is not to be
applied in a mechanical fashion (see Smith v Moore Paragon Australia Ltd (PR942856 at para
[32]). In any event, but for the dismissal, each of the appellants would more likely than not
have continued in employment with Australia Post for many years. The amounts I have
determined include a discount for contingencies and are amounts that I consider appropriate in
all the circumstances.
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[21] I accept the evidence in the witness statements filed by the appellants on the question
of remedy. Those statements were tendered without objection and the appellants were not
cross-examined on their contents. Those statements show that the dismissal had material
adverse consequences on each of the appellants and their families. Each made reasonable
efforts to mitigate his loss. Those statements support the following calculation of the notional
loss of each of the appellants as a result of their dismissal (noting that no allowance has been
made for wage increases over the period since 2011 such that the implied loss figures is a
little understated):
B C D
AP EARNINGS - 2009-2010 $91,574 $71,290 $57,181
AP Earnings - 1 Jul to 14 Dec 2010 $30,800 $38,998 $42,706
Implied Annual earnings (x 365 / 166) $67,723 $85,749 $93,902
Midpoint of these two figures $79,648 $78,519 $75,541
Earnings if no dismissal (2.964 years between
14 December 2010 and 26 November 2013) $236,078 $232,731 $223,905
Total earned since dismissal $108,715 $179,479 $118,322
Payment in lieu of notice brought to account $7,030 $4,867 $3,811
Calculated Loss for period 14 Dec 2010 to 26
Nov 2013 $120,333 $48,385 $101,772
25% $30,083 $12,096 $25,442
[22] I consider that a discount of 75% on the calculated loss is appropriate to reflect both
the misconduct and the inappropriateness, in the peculiar circumstances of this case, of
holding Australia Post liable for the whole of the very long period that the course of the unfair
dismissal applications have taken thus far. The quantification of an appropriate discount
referable to each of those components is necessarily impressionistic and does not admit of
precise quantification. It seems to me that the figures I have arrived at strike an appropriate
balance given the findings and reasons of the majority of the Full Bench.
[23] It will be evidence that the employees are each out of pocket to the tune of many tens
of thousands of dollars. In those circumstances and in all the circumstances of the case I did
not consider it appropriate to impose a further disadvantage on the appellants in the form of a
reduction in classification levels as sought by Australia Post.
[24] Orders to give effect to these reasons have issued in conjunction with these reasons.
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VICE PRESIDENT
Appearances:
Mr. D. Victory of Maurice Blackburn Lawyers on behalf of the Appellants
Mr. M. McKenney of Counsel and Mr. B. Avallone of Minter Ellison Lawyers on behalf of the
Respondent
Remedy Hearing details:
2013.
Melbourne:
22, October.
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Price code C, PR545007
OF FAIR WORK COME AUSTRALIA THE SEAL
