1
Fair Work Act 2009
s.394—Unfair dismissal
Eland
v
Childrenfirst Inc T/A Childrenfirst
(U2013/16116)
VICE PRESIDENT CATANZARITI SYDNEY, 13 JUNE 2014
Application for relief from unfair dismissal - no valid reason for dismissal - no opportunity to
respond - dismissal was harsh, unjust or unreasonable - remedy - compensation ordered.
[1] In a decision issued on 8 May 2014,1 I found that Mrs Donna Eland (the Applicant)
had been dismissed unfairly by Childrenfirst Inc T/A Childrenfirst (the Respondent). As the
parties had elected to deal with issues of remedy separately from the merits of the matter, the
parties were directed to make submissions on remedy. Having received those submissions, I
will now deal with the remedy to be afforded to the Applicant. As the factual background of
this dispute has been set out in my previous decision, I will not repeat it here.
[2] Section 390 of the Fair Work Act 2009 (the Act) sets out the circumstances in which I
may make an order for reinstatement or compensation:
“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
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DECISION
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(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.”
[3] I have already dealt with the issues at s.390(1)(a)-(b) in my previous decision. I am
satisfied that the Applicant was protected from unfair dismissal pursuant to s.382 of the Act
and that the Applicant was dismissed unfairly. Accordingly, I am required to determine
whether to order the reinstatement of the Applicant or, in circumstances where reinstatement
is inappropriate, an order for compensation if I am satisfied such an order is appropriate in all
the circumstances.
Reinstatement
[4] The Applicant seeks compensation as the primary remedy. Regardless of the remedy
sought by the Applicant, s.390 of the Act requires that I first determine whether reinstatement
is appropriate before I may consider an order for compensation.
[5] The Applicant submits that reinstatement would be inappropriate as she has
commenced working for a new employer. The Respondent did not make any submissions on
the appropriateness of reinstatement as a remedy.
[6] Given the nature of the allegations that were involved in this matter, and the nature of
the processes that followed, I am satisfied that reinstatement is not an appropriate remedy as
there does not appear to be any chance that a relationship of mutual trust and confidence
could be restored, and given that the Applicant has obtained new employment.
Compensation
[7] In making an order for compensation in lieu of reinstatement, the Act sets out the
circumstances that I must take into account in making such an order:
“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
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(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.
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
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(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.”
[8] The method for calculating compensation under s.392 of the Act was dealt with by a
Full Bench of the Commission in Bowden, G v Ottrey Homes Cobram and District Retirement
Villages Inc. T/A Ottrey Lodge.2 In that decision the Full Bench set out the order in which the
criteria and other factors should be applied, taking into account authority under the Workplace
Relations Act 1996 in Sprigg v Paul’s Licensed Festival Supermarket3 and Ellawala v
Australian Postal Corporation.4 I have adopted the methodology utilised in Bowden in
determining the amount of a payment of compensation.
[9] I will now consider each of the criteria in s.392 of the Act.
Remuneration that would have been received - s.392(2)(c)
[10] It was not contested that the Applicant’s annual salary was $40,809.60.
[11] The Respondent submits that, had the investigation into the allegations that formed the
basis of the Applicant’s dismissal been conducted in a procedurally adequate manner, it is
likely that the Applicant would still have been dismissed. Thus, the Respondent submits that
the Applicant would only have been employed for a further two weeks, a sufficient amount of
time for a fair investigation process to be undertaken.
[12] This submission, however, relies on the assumption that a fair investigation process
would lead to the conclusion that the Applicant engaged in the alleged conduct. In my
decision of 8 May 2014, however, I concluded that:
“On the basis of the evidence before me, I am unable to find that the Applicant engaged
in the conduct that she was alleged to have engaged in, and therefore do not find that
there was a valid reason for her dismissal.”5
[13] The procedurally deficient investigation process is not the only basis upon which the
Applicant’s dismissal was unfair. I was not satisfied on the basis of the evidence before me
that the Applicant had engaged in the conduct in which she was alleged to have engaged. On
the basis of this finding, it is clear that the Applicant would have been employed for more
than two weeks were it not for the unfair dismissal. I find that the Applicant would have been
employed for a further 12 months. Thus, had it not been for the unfair dismissal, the
Applicant would have received $40,809.60 in remuneration.
Remuneration earned subsequent to dismissal - s.392(2)(e)
[14] The Applicant submitted that she had earned $8,879.50 in remuneration from
employment during the period between the dismissal and the making of an order for
compensation. This amount will be deducted from the compensation to be ordered.
Income reasonably likely to be earned between the making of the order for compensation and
the actual compensation - s.392(2)(f)
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[15] No submissions were made by the Applicant with respect to income that is reasonably
likely to be earned between the making of the order for compensation and the actual
compensation. As the Applicant appears to have successfully obtained further employment, it
is likely that some income will be earned in this period. The Applicant forecasts that in the six
week period between 15 May 2014 to 30 June 2014, she will earn $4,473.36. As the period
between the making of the order for compensation and the actual compensation will be three
weeks, I will reduce the amount of compensation by $2,236.68, half the amount that the
Applicant forecasted that she would earn in a six week period.
Viability - s.392(2)(a)
[16] There has been no suggestion that the making of such an order would affect the
viability of the Respondent.
Length of service - s.392(2)(b)
[17] The Applicant had worked for the Respondent, in various capacities, since 25 March
2008. This is a significant period of time.
Mitigating effort - s.392(2)(d)
[18] While no submissions were made in relation to the efforts taken by the Applicant to
mitigate her loss, I am satisfied on the basis that she commenced employment with a new
employer that such mitigating efforts were undertaken.
Misconduct - s.392(3)
[19] As stated above and in my earlier decision, I am not satisfied that the Applicant has
engaged in misconduct and therefore do not make any reduction to the compensation ordered
on the basis of misconduct.
Other matters - s.392(2)(g)
[20] The Respondent submits that the Applicant was paid two weeks’ payment in lieu of
notice of her dismissal despite the fact that the Respondent was of the view that it was under
no obligation to make such a payment. I will reduce the compensation ordered by two weeks’
pay.
[21] In the circumstances of this case, I do not think it is appropriate that a contingency
reduction be applied, particularly given the relatively short period of the unknown
“anticipated employment period” that is, in any event, beyond the statutory six month
compensation cap.6
Shock, distress, etc. - s. 392(4)
[22] While the Applicant has claimed $50,000 for the suffering that she has endured as a
result of the unfair dismissal, this amount is not included in the amount of compensation to be
ordered.
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Compensation cap - s.392(5)
[23] I must reduce the amount of compensation to be ordered if it exceeds the lesser of the
total amount of remuneration received by the Applicant, or to which the Applicant was
entitled, for any period of employment with the employer during the 26 weeks immediately
before the dismissal, or the high income threshold immediately prior to the dismissal.
[24] The amount the Applicant would have earned, or to which the Applicant was entitled,
for the 26 week period immediately prior to the dismissal was $20,404.80. The amount of
compensation I would otherwise order exceeds the compensation cap. I will reduce the
amount of compensation to be ordered to $20,404.80.
Conclusion
[25] I am satisfied that the Applicant was protected from unfair dismissal, that the dismissal
was unfair and that a remedy of compensation is appropriate.
[26] An order will be issued with this decision.
VICE PRESIDENT
Final written submissions:
Applicant, 29 May 2014.
Respondent, 20 May 2014.
Printed by authority of the Commonwealth Government Printer
Price code C, PR552044
1 Eland v Childrenfirst Inc T/A Childrenfirst [2014] FWC 3055.
2 [2013] FWCFB 431.
3 (1998) 88 IR 21.
4 Print S5109.
5 Eland v Childrenfirst Inc T/A Childrenfirst [2014] FWC 3055, [41].
6 Cf Enhance Systems Pty Ltd v James Cox (PR910779), [38]-[39].
THE FAIR WORK A ISSION THE SEAA
