1
Fair Work Act 2009
s.604—Appeal of decision
Saki Elefantis
v
The Trustee for Timber Ridge Unit Trust
(C2021/8150)
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT ASBURY
COMMISSIONER BISSETT
SYDNEY, 28 MARCH 2022
Appeal against decision [2021] FWC 5305 of Commissioner Wilson at Melbourne on 10
November 2021 in matter number U2021/5033 – permission to appeal granted.
BACKGROUND
[1] Mr Saki Elefantis (Mr Elefantis or the Appellant) has lodged an appeal, for which
permission is required in relation to a decision of Commissioner Wilson (Decision)1 issued in
Melbourne on 10 November 2021. In the Decision the Commissioner found that the Appellant
had been unfairly dismissed, determined to award compensation but ultimately determined no
award of compensation was payable. The Commissioner’s concluded that compensation was
not payable because he found that amounts received by the Appellant from an industry scheme
providing for portable redundancy payments, into which the Respondent had made
contributions on the Appellant’s behalf, should be deducted.
[2] The Appellant was employed by The Trustee for Timber Ridge Unit Trust which trades
as Auscut (Respondent). At the beginning of 2021 Ms Catherine Thomson took over, on the
death of her father, as Managing Director for the Respondent. In March 2021 Ms Thompson
introduced revised timesheets which she required employees to complete and submit on a
Monday morning.2
[3] On 11 May 2021 Ms Thomson became aware that the Appellant was not submitting his
timesheets – rather he had developed a work around with one of the office staff – and confronted
him. An argument ensured in which the Respondent and Ms Thomson were shouting at each
other. Ultimately, that day, Ms Thomson gave the Appellant a letter in which he was advised
his employment was terminated effective immediately due to serious misconduct.
1 Saki Elefantis v The Trustee for Timber Ridge Unit Trust [2021] FWC 5303.
2 Decision at [18].
[2022] FWCFB 43
DECISION
AUSTRALIA FairWork Commission
[2022] FWCFB 43
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[4] The Appellant did not dispute that he failed to complete and submit his timesheets as
required.
DECISION
[5] On considering the evidence of both the Appellant and Ms Thomson the Commissioner
found that:
[17] Neither [the Appellant] or Ms Thomson was an especially compelling witness
and the evidence of each must be qualified. [The Appellant] did not want to accept he
had been instructed to submit timesheets and continued to present the view that it was
acceptable for Ms Legitsas to complete and submit them on his behalf. He had no insight
as to his unacceptable or provocative conduct and much of his evidence sought to justify
how he was the victim of Ms Thomson’s aggression, when that characterisation is
simply not believable. Ms Thomson was genuinely afraid of [the Appellant’s] temper,
both as demonstrated on the day and by reputation previously. However, as with [the
Appellant], she would not accept her own failings or that her own conduct was
unacceptable for a workplace, let alone the managing director of a workplace. Neither
protagonist adequately addressed in their evidence that other witnesses, notably Mr
O’Connell, Mr Batchelor and Mr Hughes, each reported hearing mutual yelling and
shouting and that each had been involved. As such the evidence of both [the Appellant]
and Ms Thomson about what occurred on 11 May 2021 must be regarded as unreliable
on the main contentions.
[6] The Commissioner made various findings in relation to the completion of timesheets
and the argument of 11 May 2021 including:
In or around March 2021 [the Appellant] and other employees were directed to fill in
and submit timesheets on a weekly basis. While others conformed, [the Appellant] did
not. Why that is so is not adequately explained in the evidence…
It is more likely than not that Ms Thomson told [the Appellant] that she knew he was
not completing and submitting his timesheets and that he did not at any time say that
he would do so either for the past week’s work or in the future.
…
I do not accept [the Appellant's] characterisation of the last stage of the argument as
him walking away from Ms Thomson in order to defuse the situation; such is
extremely unlikely given how the argument developed and progressed. Instead it is
likely he walked away simply because he did not accept what Ms Thomson was
saying.
Ms Thomson dismissed [the Appellant] in the course of the argument. It is likely that
his dismissal followed her stating to him that he must complete his timesheets,
[2022] FWCFB 43
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probably put as an ultimatum to do so or no longer work for Auscut, which was not
accepted by [the Appellant]. 3
[7] The Commissioner firstly considered and found that the dismissal of the Appellant was
not consistent with the Small Business Fair Dismissal Code and so proceeded to determine if it
was harsh, unjust or unreasonable pursuant to s.387(a)-(h) of the Fair Work Act 2009 (FW Act).
[8] In finding that there was no valid reason for dismissal (s.387(a) of the FW Act) the
Commissioner said:
[47] …even in tandem with the matters of his belligerence and physical conduct, the
failure to agree to submit timesheets does not rise in this case to be a valid reason for
dismissal since it seems the unambiguous direction of complete the time sheets or leave
was only given to [the Appellant] in the course of the altercation with Ms Thomson. His
failure to agree should have been tested and if he failed to heed the direction, there may
have then been a valid reason for dismissal
[48] Ms Thomson’s feelings of anger or anxiety during the argument should have
been a trigger for her to step back, return to calm and, at a later time, decide what should
be done about [the Appellant]; but they were not. Instead, she dismissed [the Appellant]
in the course of the altercation and then swiftly afterward confirmed his dismissal in
writing. Thinking the matter through, investigating [the Appellant's] claims, or why Ms
Legitsas was completing his timesheets, or seeking advice about what had just
transpired, should have brought Ms Thomson to the conclusion that immediate
termination was not justified.
[49] Consequently, when Ms Thomson dismissed [the Appellant's] in the heat of the
moment Auscut did not have was (sic) a valid reason for the dismissal related to his
capacity or conduct.
[9] The Commissioner next considered matters under s.387(b)-(h) of the FW Act before
concluding that the dismissal of the Appellant was harsh, unjust or unreasonable.4
[10] The Commissioner then considered the question of remedy, noting that the Appellant
did not seek reinstatement. Being satisfied that reinstatement would be inappropriate the
Commissioner proceeded to consider compensation, setting out those matters in s.392(2) of the
FW Act which must be taken into account in determining the amount to be paid.
[11] The Commissioner found:
That there was no evidence about the effect of an order of compensation on the
Respondent’s business; and
3 Decision at [18].
4 Decision at [61].
[2022] FWCFB 43
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That the Appellant had been employed by the Respondent for in excess of 17 years
and that was a factor for him to take into account.5
[12] In deciding the remuneration the Appellant would have received or have been likely to
receive had he not been dismissed the Commissioner said:
[71] [the Appellant] was summarily dismissed for the argument which developed
when he was challenged by Ms Thomson principally regarding his failure to submit
weekly timesheets as directed as well as what was said to be his “continued threatening
and intimidating behavior (sic) towards staff”. He should not have been dismissed for
those matters and a more reasonable action by Auscut would have been to issue a written
warning to [the Appellant] in unambiguous terms that he would be dismissed if he lost
his temper with anyone at work again, or if he failed to heed directions he was given by
Auscut, such as to complete and submit timesheets on time.
[72] [the Appellant] though is not a person who would particularly heed such a
warning. Ms Thomson had been belligerent and provocative toward him certainly,
however the evidence suggests he is a person who likely does what he wants to do and
resists things he does not. For her part, Ms Thomson saw the payroll system she
inherited upon arrival as inadequate and requiring change. She directed there be a
change, and what she put in place was neither unreasonable nor unusual. Had she not
said to [the Appellant] in the argument that took place that he was dismissed, but instead
simply said, “this is my system and you have to follow it unless you give me a reason
why you cannot” it is doubtful the Applicant would either have changed or changed for
long.
[73] A warning on the subject would likely have been breached soon after it was
given. My assessment then of [the Appellant’s] anticipated remaining period of
employment is that it would be no more than 4 to 6 weeks. Because of the need to take
into account his lengthy period of employment, I find the remaining period of
employment would be 6 weeks.
[13] The Commissioner considered the evidence before him in relation to the Appellant’s
pay and determined that the Appellant would have received, or would have been likely to
receive, $11,046 (inclusive of superannuation) had his employment not been terminated.
[14] The Commissioner determined that a reduction in compensation of 5% should be
imposed in relation to the Appellant’s “tepid” effort to mitigate his loss.6
[15] In considering the amount of remuneration earned by the Appellant from other
employment or other work during the period between dismissal and the making of the order for
compensation the Commissioner noted that the Appellant applied to Incolink and received
payments from Incolink totalling $66,117. The Commissioner did not consider the Appellant
would receive any other income prior to receipt of any compensation amount as he was not, at
the time of hearing, employed. The Commissioner took into account the Appellant’s age and
5 Decision at [67]-[68].
6 Decision at [77].
[2022] FWCFB 43
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length of service as factors which would suggest compensation should be “higher than would
otherwise be the case”.7
[16] The Commissioner proceeded to apply the “Sprigg formula”8 to determine the amount
of compensation. He set out the four steps in Sprigg:
Step 1: Estimate the remuneration the Applicant would have received, or have been
likely to have received, if the employer had not terminated the employment
(remuneration lost).
Step 2: Deduct monies earned since termination.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual
amount he or she would have received if they had continued in their employment.9
[17] With respect to Step 1 the Commissioner referred to his earlier determination of how
long the Appellant would have remained in employment to determine estimated remuneration
under this step at $11,046.
[18] With respect to Step 2 in Sprigg the Commission said that:
[85] …The Full Bench unequivocally found in ERGT Australia Pty Ltd v Kevin
Govender (Govender) that redundancy or severance pay is not an excluded amount and
is instead an amount to be deducted at this step in the calculation of compensation...
[19] He noted the Appellant’s representative’s argument that the money paid to the Appellant
was:
[86] …distinguishable since he has been in receipt not of redundancy pay as such,
but rather payments upon cessation of employment from a portable severance scheme,
which is not a subject considered in Govender…The industrial means by which the
employer’s contributions were made to Incolink would suggest the path followed in
Govender should not be followed here…
[20] The Commissioner observed that:
[88] …it is the case that [the Appellant] was not made redundant but dismissed for
misconduct. Under any view redundancy payments are not due to him. However, the
consideration at this Step is whether the payments made to him by Incolink are moneys
earned since termination.
7 Decision at [78]-[81].
8 See Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21 (Sprigg).
9 Decision at [83]. It should be noted that this is an abbreviated form of the steps set out in Sprigg.
[2022] FWCFB 43
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[21] The Commissioner considered decisions in which payments from Incolink and BERT
(a similar scheme) had been excluded from consideration in the determination of
compensation10 but determined that each of these decisions was inconsistent with the decision
in Govender11. Whilst acknowledging that the decision Papadopoulos v MC Labour & Anor
(Ruling No. 2),12 the Commissioner ultimately concluded that:
[89] Papadopoulos potentially gives rise to a body of reasoning which may have been
inadequately explored in Govender, however it must be observed that Govender was
also dealing with the matter of whether a contractual payment should be excluded from
deduction. Govender explicitly decided that redundancy pay “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.” It would be disharmonious with the Full Bench’s
reasoning in Govender for me not to make the deduction here.
[22] The Commissioner therefore determined to deduct the payments to the Appellant from
Incolink from the amount determined in Step 1 of Sprigg. After considering the relevant matters
at Step 3 and Step 4 the Commissioner set out the finality of his calculations as to compensation
for the Appellant.13 After deducting the amount of Incolink payments made to the Appellant of
$66,117 the Commissioner determined that no order for compensation would be made as the
deductions from compensation was greater than the lost remuneration, taking the determination
of compensation payable, to nil.
GROUNDS OF APPEAL
[23] The appeal against the Decision is made on two grounds:
The Commission erred in its calculation of compensation by taking into account the
[Appellant’s] lncolink payments, as remuneration earned by the Applicant since his
termination, as part of the Sprigg test and under s392(2)(e) of the Act.
The Commission made a significant error of fact in finding that, had [the Appellant]
not been dismissed, his employment with the respondent would have continued for a
period of only 6 weeks.
[24] The decision is not otherwise challenged.
PRINCIPLES ON APPEAL
[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
10 McLean v Transfield [2013] FWC 2573, [143] and Rankine v Pileworx [2020] FWC 6406, [85].
11 ERGT Australia Pty Ltd v Kevin Govender [2021] FWCFB 5389.
12 [2009] VSC 176.
13 Decision at [99].
[2022] FWCFB 43
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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.14
[26] Section 400 of the FW Act applies to this appeal. It provides that:
(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, Buchanan J (with whom Marshall
and Cowdroy JJ agreed) characterised the test under s.400 of the FW Act as “a stringent one”.15
The task of assessing whether the public interest test is met is a discretionary one involving a
broad value judgment.16 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the
Commission identified some of the considerations that may attract the public interest. These
considerations were that:
... 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…17
[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.18 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.19
14 Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission and Others (2000) 203 CLR 194 at
[17] per Gleeson CJ, Gaudron and Hayne JJ.
15 Coal & Allied Mining Services Pty Ltd v Lawler (2011) 207 IR 177 at [43].
16 O’Sullivan v Farrer and Another (1989) 168 CLR 210 at 216-217 per Mason CJ, Brennan, Dawson and Gaudron JJ;
applied in Hogan v Hinch (2011) 243 CLR 506 per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ at [69]; Coal
& Allied Mining Services Pty Ltd v Lawler (2011) 207 IR 177 at [44]-[46].
17 (2010) 197 IR 266 at [27].
18 Wan v Australian Industrial Relations Commission and Another (2001) 116 FCR 481 at [30].
19 GlaxoSmithKline Australia Pty Ltd v Makin 197 IR 266 at [26]-[27]; Lawrence v Coal & Allied Mining Services Pty Ltd
T/A Mt Thorley Operations/Warkworth , 202 IR 388 at [28], affirmed on judicial review in Coal & Allied Mining
Services Pty Ltd v Lawler (2011) 207 IR 177; New South Wales Bar Association v McAuliffe; Commonwealth of
Australia represented by the Australian Taxation Office (2014) 241 IR 177 at [28].
[2022] FWCFB 43
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FURTHER EVIDENCE
[29] The Appellant sought permission to introduce further evidence for consideration by the
Full Bench in the form of an affidavit of Ms Emma Barnes-Whelan, Legal Officer of the
Victorian/Tasmanian Branch of the Construction and General Division of the Construction,
Forestry, Maritime, Mining and Energy Union. The Respondent objected to the admission of
some aspects of the affidavit.
[30] After hearing from the parties and a brief adjournment we advised the parties that we
had decided to admit the affidavit.20
[31] We did so as we considered the affidavit relevant to the proceedings before us in that it
went to earnings of the Appellant post the termination of his employment. Had we granted both
grounds of appeal it was the Appellant’s submission that we should re-determine the matter of
compensation ourselves. For this reason, information in relation to the Appellant’s earnings
since the termination of his employment is relevant.
[32] The affidavit also attached a full copy of the “Redundancy Payment Approved Workers
Entitlement Fund 1. Consolidated Trust Deed and Trustee Determinations (as at 31 October
2014)” (the Trust Deed)21 in relation to the relevant Incolink fund. We considered it prudent,
given the matters raised on appeal, that we have access to the relevant document.
[33] Neither party took issue with the ability of the Full Bench to admit fresh evidence in the
appeal proceedings.
CONSIDERATION
[34] The FW Act sets out the requirements for the calculation 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
20 Exhibit A - witness statement of Emma Barnes-Whelan.
21 Exhibit A - witness statement of Emma Barnes-Whelan, annexure EBW-2.
[2022] FWCFB 43
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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.
Permission to appeal
[35] We consider that it is in the public interest to grant permission to appeal. The matter
arising under appeal ground 1 in relation to payments received from Incolink (and similar funds)
has not been considered before by a Full Bench and it is appropriate that guidance on this issue
be given.
Ground 1 – Incolink payment
[36] The Commissioner determined that, consistent with the decision in Govender, the
amount of compensation payable to the Appellant should be reduced in accordance with
s.392(2)(e) of the FW Act taking into account money he had received from Incolink.
[37] The Appellant submits that the Commissioner erred in calculating compensation due to
him in taking into account Incolink payments received as remuneration earned by the Appellant
since the termination of his employment.
[38] The Appellant submits that “remuneration earned” as referred to in s.392(e) of the FW
Act is concerned with remuneration earned between the dismissal and making of the order for
compensation. The monies deposited into the Appellant’s Incolink account was earned by the
Appellant in each week he provided his service to the Respondent. Even if the Incolink
payments are not then received by the Appellant until after the termination of his employment
this does not alter when the money was, in fact, earned and this occurred while the employment
relationship was on foot.
[39] In this respect the Appellant says that it is not unusual for money earned to be paid to a
worker after the time it is earned – the payment of wages is commonly made a week, fortnight
or month after the work for which it is paid occurs.
[2022] FWCFB 43
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[40] The Appellant submits that Incolink payments are analogous to superannuation
payments received from a superannuation or pension fund and should be seen as delayed
remuneration for work carried out.
[41] The Appellant further submits that the purpose of an award of compensation is to “put
the applicant in the financial position he or she would have been in but for the termination of
their employment.”22 He submits that if Incolink payments are offset against any award of
compensation the net result is that he would not be returned to the financial position he would
have been in but for the dismissal. Further, the Appellant submits that the deduction of Incolink
payments from an award of compensation would depart from the way in which similar
payments have been treated at common law.23
[42] The Appellant sought to distinguish the circumstances in his case from that considered
by the Full Bench in Govender. The Appellant submits that in Govender the focus was on
whether a redundancy payment was remuneration within the meaning of s.392(2)(e) and should
be deducted from any proposed award for compensation. The critical finding in Govender was
that “to make an award of compensation where it was apparent there was no loss arising from
the dismissal” was an error. Further, the Appellant submits that the Commissioner incorrectly
equated the circumstances in this case with those in Govender in circumstances where the cases
are clearly distinguishable.
[43] The Respondent submits that the payment made to the Appellant from Incolink must be
assessed by reference to the scheme under which it was paid.
[44] The Respondent submits that the NES redundancy pay entitlement does not apply to the
Appellant as an “industry specific redundancy scheme” applies (the building industry
redundancy scheme) which:
Has a broader definition of redundancy than that applicable under the NES;
Provides a minimum entitlement to redundancy pay calculated on a formula based on
continuous service;
Provides, on termination, that a redundant employee is entitled to the greater of the
formula derived amount and the benefit paid via the applicable “redundancy pay
scheme”; and
Allows the relevant employer to offset an employee’s redundancy pay entitlement by
contribution to a redundancy pay scheme.
[45] The Respondent submits that, under the provision of the Timber Ridge Unit Trust (The
Trustee for) T/As AUSCUT and the CFMEU (Victorian Construction and General Division)
Concrete Sawing and Drilling Enterprise Agreement 2016-2018 (enterprise agreement) it offset
its redundancy obligations by paying into the Incolink Redundancy Fund and it was from this
fund the Appellant received payment following termination of his employment.
22 Ellawala v Australian Postal Corporation [2000] AIRC 1151.
23 Papadopolous v MC Labour Hire Services Pty Ltd (Ruling No 2) [2009] VSC 1276.
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[46] In these circumstances the Respondent submits that the Appellant’s case is not
distinguishable from the decision in Govender. Firstly it says that the redundancy pay scheme
which applied to Mr Govender was substantially identical to the NES provisions and the
redundancy pay scheme applicable to the Appellant is of the same character as the NES; second
the Respondent submits that Govender was not decided on the basis that the employee received
a windfall on termination; third it is incorrect to say that the redundancy scheme payment to the
Appellant was earned prior to dismissal and fourth, it is no answer to say that Govender is
distinguishable because the Appellant, had he not been dismissed, may have received the money
at some time in the future. In this respect it submits that the entitlement remains contingent until
it is triggered by redundancy.
[47] We have determined that the Commissioner was in error in deducting payments from
Incolink to the Appellant in determining compensation.
[48] Firstly, by virtue of his termination of employment having been for reasons of
misconduct the Appellant was not entitled under the enterprise agreement that applied to his
employment to “redundancy” payments. For this reason, the payment to him from Incolink
cannot be held to be a “redundancy” payment. The reasoning of the Full Bench in Govender is
therefore distinguishable as it relates to the treatment of redundancy payments.
[49] The enterprise agreement defines redundancy as (underlining added):
Redundancy means a situation where an employee ceases to be employed by an
employer to whom this agreement applies, other than for reasons of misconduct or
refusal of duty. Redundant has a corresponding meaning24
[50] The Appellant’s employment was terminated for reasons of misconduct. His termination
therefore could not be for reasons of redundancy and the payment he received from Incolink
therefore cannot be said to be a redundancy payment as defined in the enterprise agreement
[51] We therefore reject the arguments of the Respondent that the money received by the
Appellant from Incolink was “redundancy” pay. Whilst we acknowledge that Incolink, into
which contributions on behalf of the Appellant were made, is described in the enterprise
agreement as the “Redundancy Payment Approved Workers Entitlement Fund 1” we do note
that the terms under which the Appellant could access money in Incolink is established in the
Trust Deed and is not subject to any provision of the Agreement.
[52] Further, Incolink is no more than the “approved specific industry scheme” such that
payments to it offset any redundancy entitlement. It would be wrong in our view to read any
more into it or to the basis of any withdrawal from a worker’s account. We also note that under
modern awards, employers can choose to offset their obligations to make redundancy payments,
by making contributions into such funds. Employers may also include provisions in enterprise
agreements in relation to redundancy funds. The benefits to employers are that contributions
are made at the rate the employee is paid at the relevant time and not at a higher rate that the
employee may be receiving at the time the employee is made redundant. Employers have
certainty that their obligations to pay redundancy under the NES have been fulfilled by payment
24 Timber Ridge Unit Trust (The Trustee for) T/As AUSCUT and the CFMEU (Victorian Construction and General Division)
Concrete Sawing and Drilling Enterprise Agreement 2016-2018, Clause 2 Definitions.
[2022] FWCFB 43
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to the fund. The benefit for employees is that the fund may allow them to access their accounts
in circumstances where they have been dismissed for reasons other than redundancy.
[53] Second, the Incolink Trust Deed makes clear that the moneys paid into Incolink over the
course of employment are monies that are placed into the worker’s account and that are payable
to the worker when the worker is terminated from employment (without specification of the
reason for termination).
[54] Clause 7 of the Trust Deed states that contributions paid by an employer into Incolink
“must be credited to the Worker’s…Account.”
[55] Clause 9 of the Trust Deed provides as follows (underlining added):
9. Benefits Payable to Worker’s – Worker’s Account
9.1 Where the employment of the Worker (other than an Approved Worker) is
terminated for any reason then, upon the Trustee receiving a written request form
the Worker…at or after the time of termination of employment in a form
prescribed by the Trustee and the Worker is still out of work at the time the
Worker submits the written request to the Trustee, the Trustee must pay to the
Worker the lesser of:
(1) a redundancy benefit not exceeding the maximum initial payment benefit
as prescribed from time to time in the Redundancy Pay Agreement; and
(2) a redundancy benefit equal to the amount standing to the credit of that
Worker in her or her Worker’s Account as at the date the request is made.
…
9.2 If the Worker remains out of work for four (4) consecutive weeks commencing
the date after termination of his or her employment, the Worker is entitled to
withdraw the balance (if any) of his or her Account…
[56] It is apparent from the terms of the Trust Deed that the money received from Incolink is
held in a worker’s account and is paid out at the request of the worker on termination of
employment and access is not limited to termination due to redundancy.
[57] We accept that, regardless of the particular employer, or any change of employer, any
contributions on behalf of a specified worker paid into the Worker’s Account, are held for the
benefit of the worker, and are not held for the benefit of the employer nor disbursed on account
of or at the discretion or direction of the employer.
[58] Third, it would be an absurdity if an employer, when faced with an unfair dismissal
application, could rely on contributions made on behalf of a worker into Incolink or a
withdrawal by a worker from their Incolink account, in circumstances where the decision as to
when and what amount is to be withdrawn from Incolink, is a matter for the worker and not the
employer. This can best be illustrated by example.
[2022] FWCFB 43
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[59] Two employees, both with the same length of service with the employer, are made
“redundant”. Employee A has not accessed their Incolink account. Employee B, given their
financial situation, has withdrawn from their account. On application for a remedy for unfair
dismissal both are found not to be genuinely redundant within the meaning of s.386 of the FW
Act. Otherwise, both are in the same situation at the time compensation is determined. To accept
the Respondent’s argument in this case, the Commission would be required to take into account
in the calculation of compensation to be awarded to Employee B the amount received by them
from Incolink. No such reduction is sought for Employee A or considered by the Commission
because Employee A has not sought access to Incolink.
[60] Following the finalisation of compensation Employee A accesses from Incolink the
same amount that Employee B had accessed prior to the determination of compensation. As a
result of their unfair dismissals Employee A is well ahead financially if it is that Employee B’s
compensation is reduced by the amount accessed from Incolink. Such an outcome suggests no
consistency in the application and determination of compensation awarded as a result of unfair
dismissal.
[61] This can be distinguished from a redundancy payment as generally understood under
the NES (i.e. not an industry specific scheme such as that in the building industry). On making
an employee redundant the employer makes payment to the employee of the amount of
redundancy due as part of the final payment made by the employer direct to the employee. In
the above scenario, Employee A and B would have received an equivalent payment from the
Respondent which then may be considered as per the principal in Govender.
[62] Further, it seems to us inequitable that an employer could argue for a reduction on
compensation to be awarded to an unfairly dismissed employee based on money accessed from
the worker’s Incolink account when part of that money may have been contributed by other
employers from previous employment of the worker. That is, there is no necessary or direct link
between what may be in a worker’s Incolink account and withdrawn by the worker and the
amount contributed by the employer who instigated the dismissal found to be unfair as defined
in the FW Act.
[63] We would also observe that, consistent with the foregoing, Incolink funds are accessed
by a worker at their own discretion and not under the control of the employer further supporting
a conclusion that this matter is distinguishable from Govender.
[64] Finally, we do not consider that money drawn from Incolink (and hence paid by
Incolink) after termination of employment falls within the category of money earned in the
period between the termination of employment and the making of an order for compensation
(s.392(2)(e)) of the FW Act:
The money was earned and paid periodically into the Appellant’s account in
accordance with the enterprise agreement and requirements of the Trust Deed during
the period of the Appellant’s employment.
The money was paid to Incolink by the Respondent in accordance with the enterprise
agreement for each week the Appellant worked.
[2022] FWCFB 43
14
The money accumulated into the Appellant’s account whilst employed on account of
the time worked in the week preceding payment. The Respondent paid the amount
required to be paid at the time the work was done.
The money withdrawn by the Appellant was paid to him by Incolink.
[65] In these circumstances we do not accept, given its characteristics, that the money paid
out of Incolink is remuneration earned after termination of employment although it is related to
work done. Rather we consider it is more akin to “money received from other sources”25.
[66] We do not consider that any assistance is provided by the decision on Govender as relied
on by the Respondent.
[67] In concluding this aspect of the appeal, we do observe that the chapeau of s.392(2) says
that, in determining the amount of compensation “the FWC must take into account all of the
circumstances of the case” including those matters listed in s.392(2). Whilst, as was said in
Govender, the methodology in Sprigg should be applied in a consistent manner this cannot
detract from the importance, in determining compensation, to take heed of the requirements of
the FW Act and take into account all of the circumstances of the case in determining the amount
of compensation to be paid.
[68] For the reasons given we grant the appeal with respect to Ground 1 – Incolink payments.
Ground 2 – anticipated period of employment
[69] The Commissioner’s reasons for reaching his conclusion that the Appellant would only
have remained employed by the Respondent for a period of 6 weeks are set out in the Decision
at paragraphs [69]-[75]. In essence, while concluding that the Appellant should have been
issued with a final warning in relation to completing his time sheets the Commissioner also
found that the Appellant would not heed such a warning and that, while Ms Thomson had been
belligerent and provocative “the evidence suggests [the Appellant] is a person who likely does
what he wants to do and resists things he does not” and that “it is doubtful that the [Appellant]
would have changed or would have changed for long.”26 The Commissioner found that a
warning would likely have been breached soon after being issued. For these reasons he
determined the likely period of employment to be 6 weeks.
[70] The Appellant says that the Commissioner’s findings of fact at paragraphs [72]-[73]
were not open to him because (footnotes in original):
(a) The evidence does not provide any basis for the findings made at [72], and
therefore it was not open to Commissioner Wilson to reach the conclusion at
[73].
(b) The propositions in [72] were never put to Mr Elefantis. In particular, the
proposition that Mr Elefantis would not have changed, or changed for long (in
25 Mullany v Active Concrete (1995) 62 IR 237 at p.376 as cited in ERGT v Govender [2021] FWCFB 5389 at [45].
26 Decision at [72].
[2022] FWCFB 43
15
circumstances where he had been warned that it threatened his ongoing
employment) was never put to Mr Elefantis. There was no evidence supporting
such a conclusion. The evidence (explained below) was to the contrary effect.
(c) The findings at [72] are inconsistent with following statements made by Mr
Elefantis27
MR ZICCONE: So you were aware of the requirement to complete the
timesheets and that it was now being - - -?---Yes, yes, that's correct, I
was aware. I was aware of the new system. It just took me a bit of time
or - - -
But you didn't want to do them, did you?---Not at all, I did want to do
them, it's just I got complacent, as in 16 or 17 years doing it the way we
were doing it, and it just - yes, it just needed a bit of time.
I put to you that you had no intention of doing the new timesheets
because you saw it as an impost. It was a hassle for you. Is that fair?---
Not at all, it wasn't a hassle.
I also put to you that you rarely if ever completed a timesheet, and you
didn't want to change this practice?---No, I wanted to do it. It's just like
I said, because I've been doing it for so long the same way, it just -
because it was different days too, to hand it in. Usually, we were handing
in the timesheets on Wednesday. Because she change the pay week and
we had to put it on a Monday, so first thing Monday you go to the job,
you start the job, and sometimes - most of the time I worked through
smoko and then, you know, you just forget, or it was too late.28
[71] On this basis the Appellant submits that he held an intention and desire to change and
that, whilst resistant to change, ultimately he would have to do so.
[72] The Respondent submits that
the Commissioner’s findings in [72] of the Decision were not the sole basis on which
the Commissioner reached his conclusion as to anticipated period of employment and
that, in any event, there is an evidentiary basis for the Commissioner’s conclusion;
in submitting that certain propositions were not put to the Appellant, the Appellant
contradicts this by relying on the evidence in cross examination (above);
the Commissioner was not obliged to accept the Appellant’s evidence that he might
change in the future. The Commissioner’s rejection of that evidence is consistent with
his earlier finding that the Appellant was not “an especially compelling witness”.29
27 Transcript of proceeding before Commissioner Wilson dates 31 August 2021 at PN174-176.
28 Written submissions of the Appellant on appeal dated 28 January 2022 at paragraph 75.
29 Written submissions of the Respondent on appeal dated 25 February 2022 at paragraphs 37-39.
[2022] FWCFB 43
16
[73] The Respondent says that the employment of the Appellant would only have continued
for 1 week. A finding that the Appellant’s employment would have continued for 4 to 6 weeks
is inconsistent with the Commissioner’s finding that the Appellant had “no intention” of
submitting timesheets in the future30 and that he was likely to breach a warning if given.31
Rather, the Commissioner’s findings suggests that the Appellant’s employment would only
have continued until the next time a timesheet was due such that the anticipated period of
employment should be 1 week.
[74] We do not consider that the Commissioner fell into error in reaching his conclusion as
to the anticipated period of employment.
[75] The Commissioner had the benefit of observing and hearing first-hand the Appellant
give evidence. The Commissioner concluded that the Appellant (and Ms Thomson) was not an
“especially compelling witness”. He found that the Appellant “did not want to accept” that he
had been instructed to complete timesheets and “continued to present the view” that it was
alright for an office worker to complete timesheets on his behalf. Most tellingly the
Commissioner found that the Appellant had “no insight as to his unacceptable or provocative
conduct”. Further, the Commissioner found that “much of [the Appellant’s] evidence “sought
to justify how he was the victim” which the Commissioner found “simply unbelievable.”32
Having made such findings as to the Appellant the Commissioner was not in error to then take
these into account in determining the anticipated period of employment of the Appellant.
[76] The Appellant does not challenge these findings of the Commissioner which we
consider lay a sound foundation on which the Commissioner could draw the conclusions he did
in relation to whether the Appellant would abide by the instruction to complete timesheets in
the future.
[77] The decision of the Commissioner as to the anticipated period of employment was a
discretionary decision and a conclusion, on the evidence, that he was entitled to draw. We see
no error in his finding that the Appellant would only have remained in employment for a further
6 weeks, much less a significant error.
[78] Having found no error in the reasoning of the Commissioner we do not need to consider
the submissions of the Respondent as to the anticipated period of employment, such
submissions being predicated on error being found such that the matter should be reconsidered.
RECONSIDERATION OF COMPENSATION
[79] In the circumstances where we are satisfied that the Commissioner incorrectly reduced
the amount of compensation otherwise due to the Appellant by virtue of the monies he received
from Incolink we have decided to reconsider the question of compensation.
30 Decision at [46].
31 Decision at [72].
32 Decision at [17].
[2022] FWCFB 43
17
[80] There being no other error identified in the decision, we adopt and accept the
conclusions reached by the Commissioner in relation to those factors in s.392(2) of the FW Act
save the deduction made for the Incolink payments.
[81] The Appellant’s employment was terminated on 11 May 2021. We are satisfied that,
had his employment not been terminated he would have remained employed for a further period
of 6 weeks – that is, until 22 June 2021. We are satisfied that, until 22 June 2021 the Appellant
did not receive remuneration from employment or other work. Earnings of the Appellant after
November 202133 are therefore not relevant to our calculation of compensation.
[82] Utilising the calculation undertaken by the Commissioner at [99] of the decision we find
as follows:
1. Estimate the amount the
employee would have
received or would have been
likely to receive if the
employment had not been
terminated;
6 weeks projected lost income
at the rate of $1,626 per week
$9,756
Employer superannuation
contribution – flat rate of $215
per week
+ $1,290
Subtotal $11,046
Deduction attributable to
mitigation efforts (5%)
- $552
Deduction for misconduct
(10%)
- $1,104
2. Deduct monies earned since
termination;
$0
3. Deduction for
contingencies
$0
TOTAL $9,390
4. Calculate any impact of
taxation;
To be taxed
according to law
5. Apply the legislative cap. Does not exceed
the compensation
cap.
DISPOSITION
[83] We therefore determine that:
Permission to appeal is granted;
33 Witness statement of Ms Barnes-Whelan.
[2022] FWCFB 43
18
The appeal upheld with respect to the deduction of Incolink payment;
The decision is quashed to the extent it deals with the treatment of the Incolink
payment and in the final determination of compensation;
The order with respect to compensation is quashed;
The appeal is otherwise dismissed.
[84] We order that the Appellant be paid an amount of compensation of $9,390.00 taxed
according to law. We further order that the amount be paid within 14 days of the date of this
decision.
VICE PRESIDENT
Appearances:
Mr C Dowling SC and Mr B Bromberg of Counsel for the Appellant
Mr N Burmeister of Counsel for the Respondent.
Hearing details:
2022.
Microsoft Teams (Video).
4 March.
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