[2021] FWCFB 4508
The attached document replaces the document previously issued with the above code on 3
August 2021.
The word “remuneration” was mistyped as “renumeration” a number of times. This typo has
been corrected.
Associate to Vice President Catanzariti
Dated 4 August 2021
1
Fair Work Act 2009
s.604—Appeal of decision
ERGT Australia Pty Ltd
v
Kevin Govender
(C2021/2800)
VICE PRESIDENT CATANZARITI
COMMISSIONER LEE
COMMISSIONER CIRKOVIC
SYDNEY, 3 AUGUST 2021
Appeal against decision [2021] FWC 1788 of Deputy President Binet at Perth on 31 March
2021 and order PR728302 Deputy President Binet at Perth on 28 April 2021 in matter
number U2020/11820 – permission to appeal granted – appeal upheld.
Introduction and background
[1] ERGT Australia Pty Ltd (ERGT) has lodged an appeal, for which permission to appeal
is required, against a decision of Deputy President Binet on 31 March 20211 and order for
compensation made on 28 April 2021.2 The grounds of appeal are directed entirely at the
amount of compensation ordered by the Deputy President. There is no challenge to the
decision of the Deputy President that the dismissal was unfair.
[2] The Appellant requested that the appeal be determined on the papers without the need
for a formal hearing. The Respondent consented to this request. Accordingly, pursuant to
s.607(1) of the Fair Work Act 2009 (Cth) (the FW Act), the appeal was conducted on the
basis of written submissions only.
[3] The order issued by the Deputy President on 28 April 2021 to give effect to the
decision included further reasons for the making of the order. The order was for ERGT to pay
Mr Govender the sum of $24,633.75 (taxed according to law) plus applicable superannuation
within 14 days of the date of the order.
[4] ERGT’s notice of appeal, which was lodged on 18 May 2021, sought a stay of the
order to pay $24,633.75 as compensation to Mr Kevin Govender. Vice President Catanzariti
determined to issue an order staying the order to pay compensation.3 The order was made by
consent. The order issued by the Vice President included the following:
1 [2021] FWC 1788.
2 PR728302.
3 PR730087.
[2021] FWCFB 4508 [Note: This decision has been revoked - refer to
order dated 31 August 2021 PR733352]
DECISION
E AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/awardsandorders/html/pr733352.htm
[2021] FWCFB 4508
2
“ERGT Australia Pty Ltd (the Appellant) is to make payment within seven days of the
amount of $24,633.75, less appropriate taxation, into a trust account.
Subject to any further order, the sum held in trust in accordance with paragraph 2 of
this order:
(a) be paid to Kevin Govender, subject to the deduction of taxation as required
by law, in the event that the Appellant is unsuccessful in its appeal; or
(b) be returned to the Appellant, in the event that the Appellant is successful in
its appeal.”4
[5] The order issued by Vice President Catanzariti operates until the determination of the
appeal against the decision or until a further order of the Commission.
The decision
[6] In the proceeding before the Deputy President, ERGT submitted that Mr Govender’s
dismissal was a case of genuine redundancy and therefore he could not have been unfairly
dismissed. Mr Govender disputed that his dismissal was a case of genuine redundancy.
[7] The Deputy President determined that she was satisfied that Mr Govender’s role as an
Accountant was no longer required to be performed by anyone because of changes in the
operational requirements of ERGT’s enterprise. However, the Deputy President found that it
would have been reasonable in all the circumstances to redeploy Mr Govender within the
employer’s enterprise to the role of Book Keeper, notwithstanding the duties of the role and
the lower remuneration attached to the Book Keeper position.
[8] The Deputy President determined on this point that:
“In light of ERGTs failure to offer Mr Govender the role of Book Keeper, I find that Mr
Govender’s dismissal was not a case of genuine redundancy within the meaning of
section 389 of the FW Act.”5
[9] Having rejected ERGT’s jurisdictional objection that the dismissal was a case of
genuine redundancy, the Deputy President turned to consider the merits of the application.
Having done so, the Deputy President determined:
“Having considered each of the matters specified in section 387 of the FW Act, I am
satisfied that, overall, the dismissal of Mr Govender was unreasonable because he
could have been redeployed, and harsh because of the impact of losing his employment
in the midst of a pandemic. Accordingly, I find that Mr Govender’s dismissal was
unfair within the meaning of the FW Act.”6
[10] Turning to remedy, the Deputy President determined that reinstatement was not
appropriate, but that an order for compensation was appropriate.
4 Ibid at [2] – [3].
5 [2021] FWC 1788 at [133].
6 Ibid at [169].
[2021] FWCFB 4508
3
[11] The Deputy President then set out the requirements in assessing compensation, that
being to take into account all of the circumstances of the case, including the specific matters
identified in paragraphs (a) to (g) of s.392(2) of the FW Act. The Deputy President also sets
out that she will apply the established methodology for assessing compensation set out in
Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).7
[12] Having regard to s.392(2)(c), the Deputy President determined that the remuneration
Mr Govender would have received or would have been likely to receive was $73,150.88 per
annum less a temporary salary cut Mr Govender had agreed in order to assist ERGT deal with
the impact of COVID. Further, the Deputy President determined that Mr Govender’s
employment with ERGT would have continued for a further 6 months.8
[13] In consideration of ss.392(2)(e) and (f), the remuneration Mr Govender earned or is
reasonably likely to earn since his dismissal, the Deputy President made the following
findings:
“Upon termination ERGT paid Mr Govender the equivalent of eighteen weeks’ pay in
the form of 14 weeks severance pay, in accordance with clause 41.3 of the Agreement,
and four weeks pay in lieu of notice, pursuant to clause 40.1 of the Agreement. This
payment was made at the rate Mr Govender was receiving in his position as an
Accountant. In monetary terms, these payments amount to $40,427.03 in total.
I should deduct from the amount of compensation the four weeks’ notice payment paid
to Mr Govender in the amount of $8983.78.
I will not deduct the fourteen weeks’ severance payment paid to Mr Govender.
Severance payments are not remuneration. Severance payments serve a different
purpose. The purpose of severance pay is to compensate an employee for matters such
as the trauma associated with the termination of employment, the loss of non-
transferable credits such as sick leave, the loss of security and seniority, lower job
satisfaction and diminished social status and conditions.”9
[14] The Deputy President then, in considering the factors under ss.392(2)(a) and (b),
determined that neither factor satisfied her that any adjustment to the amount of compensation
was required.
[15] In considering the factors relevant to s.392(2)(d), the Deputy President determined as
follows:
“Noting that Mr Govender was paid four weeks’ notice and fourteen weeks’ redundancy
totalling an eighteen week period from the date of his dismissal, Mr Govender did not
suffer any economic loss.
The evidence of Mr Govender is that he has made efforts to obtain alternative
employment following his dismissal on 14 August 2020. Not unsurprisingly in the
7 (1998) 88 IR 21.
8 [2021] FWC 1788 at [179] – [179].
9 Ibid at [180] – [182].
[2021] FWCFB 4508
4
current environment, Mr Govender has not yet been able to obtain alternative
employment.”10
[16] Turning to s.392(2)(g), which deals with any other relevant matters, the Deputy
President determined as follows:
“Any discount for contingencies should only be applied in respect to an anticipated
period of employment that is not actually known, that is a period that is prospective to
the date of the decision. Namely the period between the date of this decision until 14
August 2021.
In all of the circumstances, my view is that it is appropriate to apply a discount to the
amount of compensation for contingencies of 10%.”11
[17] The Deputy President then considered the amount should be reduced because of
misconduct and determined that this factor was not relevant.12 Her Honour noted the
prohibition under s.392(4) on compensating for shock, distress or humiliation and noted the
amount calculated did not include a component for these factors.13 In considering the impact
of taxation, the Deputy President determined to express the compensation sum in a gross
amount with a direction that ERGT withhold taxation in accordance with the law.14 In
consideration of s.392(5), the compensation cap, the Deputy President determined the amount
she proposed to order was less than the compensation cap.15
[18] In the final paragraphs of the decision, the Deputy President set out the following:
“[200] In my view, the application of the Sprigg formula does not, in this case, yield an
amount that is clearly excessive or clearly inadequate. Accordingly, my view is that
there is no basis for me to reassess the assumptions made in reaching my conclusion as
to the appropriate amount of compensation to be awarded to Mr Govender.
Conclusion
[201] Having considered each of the matters specified in section 387 of the FW Act, I
am satisfied that, overall, the dismissal of Mr Govender was unreasonable because he
could have been redeployed, and harsh because of the impact of losing his
employment in the midst of a pandemic. Accordingly, I find that Mr Govender’s
dismissal was unfair within the meaning of
the FW Act.
[202] For the reasons I have given, my view is that a remedy of compensation in
favour of Mr Govender is appropriate in the circumstances of this case.
Further Directions
10 Ibid at [185] – [186].
11 Ibid at [188] – [189].
12 Ibid at [192].
13 Ibid at [193].
14 Ibid at [194].
15 Ibid at [198].
[2021] FWCFB 4508
5
[203] The parties are directed to provide to Chambers within seven days of the date of
this decision details of the period in relation to which Mr Govender agreed to the
temporary reduction in his salary so that the compensation sum can be calculated.
[204] Upon provision of this information an Order will be issued.”16
[19] Subsequently, on 28 April 2021, the Deputy President issued an order, which includes
further reasons for the Deputy President’s calculation of the appropriate amount of
compensation to be ordered. The order is in the following terms:
“[1] Further to the decision in [2021] FWC 1788 the Fair Work Commission orders
ERGT Australia Pty Ltd (ERGT) pay Mr Kevin Govender (Mr Govender) the sum of
$24,633.75 (to be taxed according to law) plus applicable superannuation within 14
days of the date of this Order.”
[20] The further reasons were as follows:
“[2] This amount has been calculated as set out below.
[3] It was determined that the position it would have been reasonable, in all of the
circumstances, for ERGT to have redeployed Mr Govender into was the role of Book
Keeper. The evidence was that the Book Keeper position would be paid an annual
salary of $10,000 less than the role of Accountant which, according to the ERGT
Australia Pty Ltd (ERGT) Form F3 – Employer Response to Unfair Dismissal
Application, attracted a salary of $83,150.88 per annum.
[4] The evidence is that employees including Mr Govender agreed to a temporary
salary reduction to assist ERGT deal with the impact of COVID.
[5] The remuneration Mr Govender would have been likely to have received if he had
not been dismissed is $73,150.88 per annum less the temporary salary cut agreed to
assist ERGT deal with the impact of COVID. $73,150.88 per annum equates to a
daily rate of $200.41.
[6] Mr Govender would have remained in employment for a further 6 months until 15
February 2021. I accept the evidence of Mr Govender that the temporary salary
reduction which applied to employees in the salary band $70,000 to $80,000 was 5%.
I accept the evidence of ERGT that the temporary salary cut ceased on 25 October
2020. During this period he would have earned:
$200.41 per day from 15 August 2020 until 25 October 2020 (72 days) =
$14,429.76 less 5% ($721.48) = $13,708.28
$200.41 per day from 26 October 2020 until 15 February 2021 (113 days) =
$22,646.33
TOTAL = $36,354.61
16 Ibid at [200] – [204].
[2021] FWCFB 4508
6
[7] From this is subtracted the sum of $8983.78 which Mr Govender was paid in lieu
of notice reducing the amount payable to Mr Govender to $27,370.83.
[8] Applying contingencies of 10% ($2,737.08) the amount payable to Mr Govender is
reduced from $27,370.83 to $24,633.75.
[9] From this amount taxation is to be deducted and superannuation is to be added.”17
(citations omitted)
Appeal Grounds and Submissions
[21] As noted earlier, ERGT does not challenge the decision of the Deputy President that
the dismissal was unfair. The two grounds of appeal are directed at the alleged error in the
calculation of the proper amount of compensation. In particular, that the Deputy President
erred in calculating the proper amount of compensation by:
(a) misapplying the principles in Sprigg v Paul Licensed Festival Supermarket; and
(b) misapplying section 392(2).18
[22] A summary of ERGT’s submissions in support of the appeal ground that the Deputy
President misapplied the principles in Sprigg are as follows:
Step 1 is to estimate the remuneration the employee would have received if they had
not been dismissed. The purpose of step 1 is to ascertain what the successful
applicant has lost as a consequence of the unfair dismissal. That estimate should take
into account that the successful applicant would not have received a redundancy
payment if they had been redeployed rather than dismissed.
The refinement of that step could be re-stated as: estimate the shortfall between the
remuneration that the employee received at termination, and the remuneration the
employee would have received if their employment had continued for the period of
time that accords with the Commission’s conclusion about how long the
employment would have continued.
By failing to deduct the redundancy pay received from the compensation amount,
ERGT contents that the Deputy President has applied an overly technical approach
to defining remuneration and, in doing so, distorted the compensation order’s
intended effect.
[23] A summary of ERGT’s submissions in support of the appeal ground that The Deputy
President misapplied s.392(2) are as follows:
applying Sprigg (even correctly) is not a substitute for properly construing section
392(2) and that subsection (2) requires the Commission to, firstly, “take into account
17 Ibid at [2] – [9].
18 Appellant’s Outline of Submissions at [24].
[2021] FWCFB 4508
7
all the circumstances of the case” and in doing so taken into account the matters
from (a) to (f).
Subsection 2(g) requires the Commission to look at all other relevant considerations
that are not listed in subsections (a) to (f), including whether the compensation order
achieves the purpose for which the order is made.
That the purpose of the order is to replace the successful applicant’s prospective
earnings as though the dismissal had not taken place, and to require the unsuccessful
respondent to bear the cost of that replacement.
The order is not intended to allow the successful applicant to make any kind of
windfall gain (i.e. to be in a better position that they would have been had they not
been dismissed), nor it intended to impose costs on the unsuccessful respondent
beyond what is necessary to replace the applicant’s lost remuneration.
Deputy President Binet’s decision to the effect that redundancy payments should be
ignored for the purpose of applying section 392(2) and the Sprigg principles that
guide interpretation of that section, is incorrect.
The effect of taking the redundancy payment into account, and depriving the
Respondent of his windfall gain, is that no order for compensation should be made at
all.”19
(citations omitted)
[24] Mr Govender in reply submitted that redundancy payments should not be considered
remuneration and that the Deputy President was therefore correct in her approach. Mr
Govender’s submissions included the following:
“In the 2004 Redundancy Case, (2004) 129 IR 155. the Full Bench of the Australian
Industrial Relations Commission confirmed the purpose of redundancy pay is to
compensate an employee for matters such as the trauma associated with the
termination of employment, the loss of non-transferable credits such as sick leave, the
loss of security and seniority, lower job satisfaction and diminished social status and
conditions.
Deputy President Binet therefore correctly estimated the remuneration by not
considering the redundancy payment as remuneration. Deputy President Binet also
correctly applied the principles in Sprigg v Paul Licensed Festival Supermarket to
calculate the compensation for the unfair dismissal.
I experienced trauma associated with the termination of my employment with
Wellparks Holdings Pty Ltd t/as ERGT Australia. I lost my employment during a
pandemic. I lost my job keeper entitlement and was not eligible for jobseeker. It was
exceedingly difficult to find employment in the midst of a pandemic. ERGT Australia
did not show compassion by terminating me during a pandemic. ERGT Australia did
not consider the ramifications and trauma this decision would cause me.
19 Ibid at [25] – [38].
[2021] FWCFB 4508
8
The objects of the unfair dismissal provisions are:
to establish a framework for dealing with unfair dismissal that balances the needs of
business (including small business) and the needs of employees.
to establish procedures which are quick, flexible and informal, and address the needs
of employers and employees.
to provide remedies where a dismissal is found to be unfair with an emphasis on
reinstatement.
Employers in situations like this case would be able to dismiss staff unfairly and not
be liable for compensation if the redundancy pay is not ignored for the purpose of
applying section 392 (2). This is not the purpose and intention of unfair dismissal
provisions.
Redundancy payments are not considered remuneration and should be ignored for the
purpose of applying section 392 (2).
Deputy President Binet correctly estimated the remuneration by not considering the
redundancy payment as remuneration and correctly applied the principles in Sprigg v
Paul Licensed Festival Supermarket to calculate the compensation for the unfair
dismissal.”20
Consideration
[25] The appeal is made under s.604 of the FW Act. There is no right to appeal and an
appeal may only be made with permission of the Commission. If permission is granted, the
appeal is by way of rehearing. The Commission’s powers on appeal are only exercisable if
there is error on the part of the primary decision maker.21
[26] Section 400 of the FW Act applies to this appeal. It provides:
“(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a
decision made by the FWC under this Part unless the FWC considers that it is in the
public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation
to a matter arising under this Part can only, to the extent that it is an appeal on a
question of fact, be made on the ground that the decision involved a significant error
of fact.
[27] In Coal & Allied Mining Services Pty Ltd v Lawler and others, Buchanan J (with
whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 of the FW Act as
“a stringent one”. The task of assessing whether the public interest test is met is a
20 Respondent’s Outline of Submissions at [4] – [11].
21 Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194, 99 IR 309 at [17]
per Gleeson CJ, Gaudron and Hayne JJ.
[2021] FWCFB 4508
9
discretionary one involving a broad value judgment.22 In GlaxoSmithKline Australia Pty Ltd v
Makin a Full Bench of the Commission identified some of the considerations that may attract
the public interest:
“... the public interest might be attracted where a matter raises issues of importance and
general application, or where there is a diversity of Decisions at first instance so that
guidance from an appellate court is required, or where the Decision at first instance
manifests an injustice, or the result is counter intuitive, or that the legal principles
applied appear disharmonious when compared with other recent Decisions dealing
with similar matters”.23
[28] It will rarely be appropriate to grant permission to appeal unless an arguable case of
appealable error is demonstrated. This is so because an appeal cannot succeed in the absence
of appealable error.24 However, the fact that the Member at first instance made an error is not
necessarily a sufficient basis for the grant of permission to appeal.25
[29] We are satisfied that the grant of permission to appeal would be in the public interest
because it is apparent that the Deputy President’s calculation of compensation was attended
by appealable error and raises issues of general application.
[30] The error of the Deputy President was the failure to deduct the amount of $31,488.25
from the calculation of the appropriate amount of compensation ordered to be paid to Mr
Govender.
[31] The amount was paid to Mr Govender because at the time of termination of
employment, ERGT was proceeding on the basis that they no longer required the job to be
done by anyone, triggering an obligation to pay redundancy pay.
[32] The reasoning of the Deputy President was that payments for redundancy, or
severance payments, are not remuneration and serve a different purpose. In taking this course,
the Deputy President cited an earlier decision of Commissioner Johns, being Alana Fayad
v NobleOak Aspire Pty Ltd.26 In that decision, Commissioner Johns determined that
“I will not deduct the 10 weeks’ redundancy payment paid to the Applicant.
Redundancy payments are not remuneration. Redundancy payments serve a different
purpose. The purpose of redundancy pay is to compensate an employee for matters
such as the trauma associated with the termination of employment, the loss of non-
22 O’Sullivan v Farrer (1989) 168 CLR 210 at 216-217 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v
Hinch (2011) 243 CLR 506 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining
Services Pty Ltd v Lawler and others (2011) 192 FCR 78, 207 IR 177 at [44] - [46].
23 [2010] FWAFB 5343, 197 IR 266 at [27].
24 Wan v Australian Industrial Relations Commission (2001) 116 FCR 481 at [30].
25 GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343, 197 IR 266 at [26]-[27]; Lawrence v Coal & Allied
Mining Services Pty Ltd T/A Mt Thorley Operations/Warkworth [2010] FWAFB 10089, 202 IR 388 at [28], affirmed on
judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78, 207 IR 177; New South Wales
Bar Association v McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB
1663, (2014) 241 IR 177 at [28].
26 [2020] FWC 6475.
http://www.fwc.gov.au/decisionssigned/html/2014fwcfb1663.htm
http://www.fwc.gov.au/decisionssigned/html/2014fwcfb1663.htm
http://www.fwc.gov.au/decisionssigned/html/2010fwafb10089.htm
http://www.fwc.gov.au/decisionssigned/html/2010fwafb5343.htm
http://www.fwc.gov.au/decisionssigned/html/2010fwafb5343.htm
[2021] FWCFB 4508
10
transferable credits such as sick leave, the loss of security and seniority, lower job
satisfaction and diminished social status and conditions.27”28
[33] It is apparent that the Deputy President adopted the same approach as that of
Commissioner Johns. We were not taken to any other decisions, where redundancy payments
have not been deducted as remuneration earned as part of the consideration of s.392(2)(e).
However, ERGT referred us to three other decisions where single Members of the
Commission have deducted severance pay as part of the calculation of the appropriate
compensation.29
[34] As noted by the Full Bench, “[t]he well-established approach to the assessment of
compensation under s.392 of the FW Act… is to apply the “Sprigg formula” derived from the
Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed
Festival Supermarket.30 This approach was articulated in the context of the FW Act in
Bowden v Ottrey Homes Cobram and District Retirement Villages31.”32
[35] The Sprigg formula was decided under previous legislation. However, a number of
Full Benches of the Commission have confirmed its continuing relevance to the calculation of
compensation, taking into account the factors in s.392(2) of the Act.33 More recently, it was
said that the decision in Sprigg sets out a well established, structured and transparent
methodology for the assessment of compensation.34
[36] It is important that the methodology in Sprigg is applied in a consistent manner by the
Commission and this includes consistency in the treatment of moneys paid to an Applicant by
way of severance or redundancy pay when considering s.392(2)(e). Indeed, the Full Bench in
Sprigg stated that “it is desirable that a consistent and predictable technique for determining
an amount to be ordered in lieu of reinstatement should emerge in Commission practice.”35
We consider that principle to be no less important today as it was when Sprigg was decided.
[37] The decision in Sprigg, essentially adopted the approach set out by Vice President
Ross as he then was in Shorten v Australian Meat Holdings Pty Ltd (Shorten):36
“Steps 1 to 4 set out as part of principle 5 in Shorten in our view continue to be
appropriate and relatively necessary steps in the estimation and appropriate assessment
of remuneration lost.”37
27 The Redundancy Case (2004) 129 IR 155.
28 [2020] FWC 6475 at [60].
29 Lindsay v Department of Finance [2011] FWA 4078; Ho v AP Eagers Ltd [2010] FWA 5897; Dixon v Natures Organics,
McCarthy v Natures Organics [2013] FWA 9720.
30 (1998) 88 IR 21.
31 [2013] FWCFB 431.
32 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFB 7206, [16].
33 Bowden v Ottrey Homes Cobram and District Retirement Villages [2013] FWCFB 431; See also in Smith v Fearon
Howard Real Estate Pty Ltd T/A Ray White (Balmain) [2021] FWCFB 581.
34 Chesson Pty Limited t/a Pay Per Click v Nicole Knutson [2018] FWCFB 4149.
35 (1998) 88 IR 21 at [31].
36 (1996) 70 IR 360.
37 (1998) 88 IR 21 at [35].
[2021] FWCFB 4508
11
[38] Step 2, as it was set out in Shorten, reads as follows:
“Deduct moneys earned since termination. Workers compensation payments are
deducted but not social security payments. The failure of an applicant to mitigate his or
her loss may lead to a reduction in the amount of compensation awarded.”38
[39] In settling on the approach to step 2, his Honour Vice President Ross referred to the
decision of Wilcox CJ in Mullany v Active Concrete39:
“The Court is required under s 170EE(3), in working out the amount of compensation,
‘to have regard to the remuneration that the employee would have received or would
have been likely to have received if the employer had not terminated the
employment’; but the amount must not exceed the amount of remuneration that would
have been received by the employee in respect of the period of six months that
immediately followed the date of termination. I think that the subsection directs
attention to remuneration received in respect of work done, not money received from
other sources and unrelated to work done; for example, social security receipts or gifts
received from organisations or persons who take a charitable interest in the employee’s
plight. Accordingly, I do not propose to reduce the amount of compensation to which I
think the applicant is otherwise entitled because of the social services payments.”40
[40] It is apparent from the foregoing that the methodology in Sprigg, contemplates as a
second step in the process, the deductions of “moneys earned since termination”. The only
moneys excluded from this is moneys received from other sources and unrelated to work
done.
[41] The payment of redundancy pay made to Mr Govender in this matter is not money
received from another source and nor is it unrelated to work done. It should therefore,
consistent with a proper application of step 2 in Sprigg, be deducted from the amount of
remuneration established in step 1.
[42] We agree that the purpose of redundancy pay is to, among other things, compensate an
employee for the loss of the types of things cited in the Redundancy Case41 such as sick leave
However, that does not mean that the payment made is not “remuneration” within the
meaning of s.392(2)(e).
[43] This is consistent with a proper reading of the text of s.392(2). As was said by the Full
Bench in Deborah Kable v Bozelle, Michael Keith T/A Matilda Greenbank:
“A compensation remedy is designed to compensate an unfairly dismissed employee in
lieu of reinstatement for losses reasonably attributable to the unfair dismissal within
the bounds of the statutory cap on compensation that is to be applied. That this is so is
evident from the nature of the considerations to which the Commission must have
regard set out in s.392 of the Act.”42
38 (1996) 70 IR 360 at p.381.
39 (1995) 62 IR 237.
40 (1996) 70 IR 360 at p.376.
41 (2004) 129 IR 155.
42 [2015] FWCFB 3512 at [17].
[2021] FWCFB 4508
12
[44] More recently, the Full Bench in Chesson Pty Limited t/a Pay Per Click v Nicole
Knutson43 confirmed that the function of compensation ordered pursuant to s.392 is to
compensate for loss arising from the dismissal.
[45] When considering s.392(2)(d), which requires the Commission to consider what
efforts the Applicant had made to mitigate his loss, the Deputy President made the following
finding:
“Noting that Mr Govender was paid four weeks’ notice and fourteen weeks’ redundancy
totalling an eighteen week period from the date of his dismissal, Mr Govender did not
suffer any economic loss.”44
[46] On this point, the Deputy President was correct. The amount of remuneration Mr
Govender was likely to earn had he remained in employment for a further period of 6 months
was $36,354.61. Mr Govender had been paid the amount of $8,983.78 as payment in lieu of
notice, plus the amount of severance pay of $31,488.25. These payments amount to
$40,427.03 in total. This is an amount that exceeds the remuneration he was likely to have
received by more than $4,000.
[47] In the circumstances, the Deputy President was in error to make an award for
compensation where it was apparent there was no loss arising from the dismissal. In doing so,
the Deputy President has misapplied s.392(2) of the FW Act and has misapplied the principles
in the Sprigg decision.
Orders
[48] We order as follows:
Permission to appeal is granted in relation to the two grounds of appeal.
The appeal is upheld in respect of both grounds of appeal.
The Deputy President’s determination is quashed insofar as it concerns the payment
of any compensation to Mr Govender.
The order45 that ERGT pay Mr Govender the sum of $24,633.75 is quashed.
ERGT are not required to pay any compensation to Mr Govender.
[49] The stay order46 issued by Vice President Catanzariti on 21 May 2021 is set aside.
43 [2018] FWCFB 4149.
44 [2021] FWC 1788 AT [185].
45 PR728302.
46 PR730087.
[2021] FWCFB 4508
13
VICE PRESIDENT
Hearing details:
By consent, on the papers.
Final written submissions:
Respondent’s written submissions lodged 26 June 2021.
Printed by authority of the Commonwealth Government Printer
PR732165
THE FAIR WORK COMME A ISSION THE SEA
