1
Fair Work Act 2009
s.394—Unfair dismissal
Catherine Favaloro
v
MVCI Australia Pty Ltd
(U2023/8977)
DEPUTY PRESIDENT BOYCE SYDNEY, 11 JUNE 2024
Application for an unfair dismissal remedy – Applicant’s dismissal harsh, unjust and
unreasonable – remedy – reinstatement inappropriate – compensation ordered.
Introduction
[1] Ms Catherine Favaloro (Applicant) has filed an unfair dismissal application
(Application) with the Fair Work Commission (Commission) alleging that she was unfairly
dismissed (within the meaning of s.385 of the Fair Work Act 2009 (Act)) by her former
employer, MVCI Australia Pty Ltd (Respondent).
[2] The Respondent says that the Applicant was dismissed for performance related reasons
associated with her failure to meet KPIs over an extended period, and otherwise denies that the
Applicant was unfairly dismissed.
[3] At the hearing, Mr Garry Dircks, Principal, Just Relations Consultants, appeared with
permission on behalf of the Applicant, and Ms Melissa Butters, Senior Industrial Relations
Adviser, Queensland Hotels Association, appeared on behalf of the Respondent.
Relevant law regarding unfair dismissal
[4] Section 385 of the Act qualifies a claim for unfair dismissal:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal
Code; and
[2024] FWC 1508
DECISION
AUSTRALIA FairWork Commission
[2024] FWC 1508
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(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see
section 388.”
[5] The parties are not in dispute as to the following:
(a) the unfair dismissal application was made within the period required by
s.394(2) of the Act.
(b) the Applicant is a person protected from unfair dismissal within the
meaning of s.382 of the Act;
(c) the Applicant was “dismissed” by the Respondent within the meaning of
s.386 of the Act;
(d) the Small Business Fair Dismissal Code (as provided for in s.388 of the
Act) does not apply; and
(e) the Applicant’s dismissal was not a case of genuine redundancy within
the meaning of s.389 of the Act.
[6] I accept and make findings consistent with the foregoing position of the parties.
[7] The Application was not filed within 21 days of the Applicant’s dismissal. Following a
hearing, I issued an order extending the time for the Applicant to file her Application.1
[8] It follows from paragraph [6] and [7] above that the Applicant is an employee protected
from unfair dismissal in respect of her employment with the Respondent, and has filed a valid
unfair dismissal application.
Applicant’s evidence
[9] The Applicant worked for the Respondent from 14 June 2021 to 30 August 2023. She
was engaged to work from home. Her home is in the Australian Capital Territory, however,
the Respondent’s business (that she worked for) is in the Gold Coast, Queensland.
[10] As I understand it, the Respondent is part of the Mariott Vacation Club, that sells
timeshare, hotel packages and rooms, and tourist activities, primarily via telephone marketing.
[11] The Applicant worked as a “Vacation Specialist” (VS role) from 14 June 2021 to 10
April 2023. Her role changed after 10 April 2023 to that of Vacation Planner” (VP role) on a
fulltime basis. The roles of VS and VP are different.
[12] In the VS role, the Applicant was essentially a telemarketer, and would telephone
previous guests of the Marriott hotel group and offer them heavily discounted short stays
provided the guest agreed to attend a 90 minute time-share package presentation. The
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Applicant’s KPIs in the VS role were three sales per week, which were confirmed when the
relevant contacted customer made a $199 deposit for the heavily discounted short stay (with
the stay to occur in the next 12-24 months). In some weeks, the Applicant made no sales,
however, her ultimate spread of sales always ended up being (or averaging) three sales per week
over an extended time period. A strict requirement for three sales per week was not enforced
by the Respondent, i.e. provided sales eventually ended up averaging three per week, no issues
were raised with VS role employees.
[13] The Applicant says that the Respondent’s foregoing approach changed in February
2023, whereby the three sales per week KPI started to be vigorously enforced by the
Respondent. Those engaged in the VS role were given warnings if they did not meet the three
sales per week KPI in any given week, and advised that their employment would be terminated
if they received three (KPI not met) warnings. The Applicant says that this caused some
employees in VS roles to quit before they could be terminated (so as to keep their resumes and
employment background checks clean of employment terminations).
[14] After three employees in VS roles resigned, the Applicant was offered the VP role. The
Applicant says that the VP role was offered to her on 10 April 2023, in circumstances where
she was told by the Respondent that VS roles were to be permanently downsized to three (in
total), i.e. the Applicant would not have a VS role to remain in, so she may as well accept the
VP role and get on with it.
[15] In relation to the work of the VP role, the Applicant says that she was told:
a) it will be less money overall, but there are no KPI pressures; and
b) the VP role will be ‘easy’ and ‘cruisy’. It only concerns “Activations” (meaning the
Applicant would need to lock in specific dates for former guests who had decided
to make a $199 deposit for a discounted short stay, and secure the rest of any monies
owing beyond the $199 from the guest (that the VS roles had already booked in to
add onto, or form part of, the initial discounted short stay)).2
[16] The Applicant agreed to accept the VP role, and commenced in that role on 11 April
2023. After taking up the VP role, the Applicant says that the following matters became
apparent to her:
a) a lack of thorough or structured training;
b) an absence of on-site training, let alone an offer of on-site training; and
c) two new computer software programs that she needed to learn, or teach herself to
use (with some informal help remotely from other staff in VP roles, who were at the
same time trying to get their own work done).
[17] On 13 June 2023, the Applicant had a formal performance review meeting (PR
Meeting). She says that the PR Meeting was sprung on her. At the PR Meeting, the Applicant
says she was given five KPIs to meet. She says that the five KPIs were then doubled by the
Respondent in the following week to 10 KPIs.
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[18] As a result of not meeting her KPIs, the Applicant was ‘file noted’ on 13 June 2023,
received a verbal warning on 19 June 2023,3 a written warning on 10 July 2023,4 a second
written warning on 15 August 2023,5 and was dismissed on 30 August 2023 for not meeting
her KPI for the period 21 to 25 August 2023 (with two weeks’ in lieu of notice paid to her,
along with her other accrued leave entitlements).6
Respondent’s evidence
[19] Ms Jemma Holman, Activations Supervisor, Marriott Vacation Club, was the
Applicant’s supervisor, and in charge of training, KPI monitoring and recruitment for the
Respondent’s telemarketing team (VS roles), and the Activations Team (VP roles). Her
evidence in relation to the Applicant’s commencement and training can be summarised as
follows:
a) the Applicant’s VS role was coming to an end in late May 2023 (as per the end date
of her VS role employment contract);
b) she raised with the Applicant in March 2023 that she might like to apply for the VP
role;
c) the Applicant applied for the VP role herself, and attended an interview for the
position. At this interview, KPIs and minimum performance standards were
discussed. These are contained in the Commission Plan dated 18 April 2023 (and
signed by the Applicant on that date).7 There was no suggestion to the Applicant
that the VP role would be “cruisy”;8 and
d) the Applicant undertook training for the VP role, which consisted of step-by-step
documents being sent to her, listening to example sale call recordings, and reviewing
sales scripts. This training started on 11 April 2023, and finished on 12 April 2023.
There was also on-going screen sharing used to train the Applicant, along with entire
team training sessions on new promotions, how bookings occur (or how to book) at
other Mariott hotel sites or partners (e.g. in Bali and Singapore), ‘painting the
picture’ to customer sessions, creating urgency sessions, and outlining things to do
and see (e.g. tourist attractions) at various hotel locations to which bookings had
been made.
[20] Ms Holman’s evidence as to the Applicant’s performance, and the ‘progressive
disciplinary process’ that occurred, is as follows:
“13. On the 19th of June I was advised by Catherine she had not been using our dialer
correctly (which is how to contact guests). We did further training on the 20th of June.
14. Week of the 14th of July, we went over rooms types again, rooms codes, did
catch up training and Catherine continued to screen share with both Pasty and Cheyanne
when completing reservations to make sure she was doing them correctly and watch
them to upgrade her skills.
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15. During the period from April until the end of August 2023, multiple training
sessions were held for the entire team on new promotions, booking other sites including
Bali, Phuket, and Singapore, CIMB training (a new program) painting the picture,
creating urgency and things to do and see at all sites.
16. There are commission plans for both positions of Vacation Planner (activations),
which was Catherine’s role, and for the role of Vacation Specialist (telemarketing),
which was Catherine’s previous role.
17. All new starters have a grace period of 4 weeks on sales/ activations. The next 3
weeks are halved so KPI for activators is 5 per week, after that, the full KPI is in place
activators 10 per week.
18. Catherine struggled to achieve the full KPI in most weeks of her employment.
19. Catherine received enough leads that would have allowed her to reach the KPI
of 10 activations per week.
20. The progressive disciplinary process was undertaken in accordance with the
Progressive Disciplinary Policy, and the further training provided.
21. The progressive disciplinary policy is applied in an equitable and consistent
manner across all employees with identified performance is Catherine received the same
treatment as any other employee would who returned the same performance results as
Catherine.
22. Catherine’s performance was addressed i.e., her attention to detail, needing to
tell her about the same thing on many occasions, overcharging guests which occurred
on 4 separate occasions (20 July, 27 July, 2 Aug, 3 Aug 2023) and not adhering to the
line rules and calling other activators leads. There is a 14-day rule which means a lead
belongs to an activators for 14 days. I also needed to remind Catherine to save OTM
before exiting the screen.
23. I addressed Catherine performance in regard to her manner when speaking to
customers as we dealt with two customer complaints.”9
Whether the Applicant’s dismissal was harsh, unjust, and/or unreasonable
[21] Section 387 of the Act provides what matters must be taken into account in determining
whether a dismissal was harsh, unjust or unreasonable.
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable,
the FWC must take into account:
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(a) whether there was a valid reason for the dismissal related to the person’s
capacity or conduct (including its effect on the safety and welfare of
other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason
related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a
support person present to assist at any discussions relating to dismissal;
and
(e) if the dismissal related to unsatisfactory performance by the person—
whether the person had been warned about that unsatisfactory
performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely
to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource
management specialists or expertise in the enterprise would be likely to
impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant”.
[22] The terms “harsh”, unjust” and “unreasonable” are to be given their ordinary meaning.
[23] An Applicant (employee) carries the onus to prove that his or her dismissal was unfair.
[24] It is well settled that a statutory requirement to ‘have regard to’ or ‘take into account’
requires the Commission to give a matter(s) weight as a fundamental element in the decision-
making process. However, as Kitto J noted in Rathborne v Abel10:
“Finally, to require that regard be had to a particular matter in making a discretionary
judgment is not to require that that matter shall be allowed an actual influence upon the
ultimate result. The matter is to be considered for such bearing as it may have upon the
question to be decided, and it is to be allowed such weight (if any) as the tribunal thinks
it ought to be given; but if the tribunal thinks it ought to have no weight, then no weight
is required to be given to it: cf. Beresford v. Ward [1961] YR 632, at 634.”11
(my emphasis)
s.387(a) — Whether there was a valid reason for the Applicant’s dismissal which is related
to her capacity or conduct
[25] An employer bears the persuasive onus of establishing or proving that there was a valid
reason for an employee’s dismissal.12 The level of proof is on the balance of probabilities, at a
[2024] FWC 1508
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reasonable level of satisfaction.13 The fact that serious allegations are made does not alter the
position in civil proceedings that the level of proof is based upon the balance of probabilities.14
[26] In order to be a valid reason, the reason for the dismissal should be “sound, defensible
or well founded”, and should not be “capricious, fanciful, spiteful or prejudiced”.15 Further, the
Commission will not stand in the shoes of the employer and determine what the Commission
would do if it was in the position of the employer.16
[27] Where a dismissal relates to conduct, the reason for the dismissal may be valid because
the conduct occurred and justified dismissal. However, the reason may not be valid because the
conduct did not occur, or it did occur but did not justify dismissal.17
[28] The question of whether the alleged conduct took place, and what it involved, is to be
determined by the Commission on the basis of the evidence in the proceedings before it,18 and
reasonable minds may differ.
[29] The Respondent submits that there was a valid (performance) reason for the Applicant’s
dismissal. That valid reason is said to be the Applicant’s failure to meet her KPIs over an
extended period (i.e. ten or more Activations each week). Her failure in this regard is said to
have occurred despite the Respondent providing the Applicant with an appropriate induction,
relevant training and support, and the provision of around 500 leads per month. In essence, the
Respondent says that the Applicant was a poor performer in the VP role, who did not improve,
or shows signs of sustained and consistent future improvement, across her 4 month engagement
in the VP role (including during the 11 week disciplinary process that preceded her dismissal).
[30] Between her commencement in the VP role in April 2023, and her dismissal in August
2023, there were four (including the Applicant) employees working in the VP role. The
Respondent relies upon Attachment “L” to compare the Applicant’s Activation numbers to the
three other VP role employees during the period 10 April 2023 to 1 September 2023.
Attachment L is not evidence. Rather, it is a purported summary of evidence (in table form)
that is not supported by the tender of the underlying evidence (i.e. raw data) that it purports to
summarise. That said, having regard to the evidence of Ms Holman at the hearing,19 I am
prepared to accept that Attachment “L” can be relied upon by the Respondent in these
proceedings as a factual comparator of the number of Activations made by the four employees
in the VP roles during the period 10 April 2023 to 1 September 2023.
[31] One of the Applicant’s core contentions as to the absence of valid reason for her
dismissal rests upon her claim that because she worked from home, whilst the three other TP
role employees worked together for one day in the office each week (and worked from home
the other four days), she was disadvantaged. In circumstances where the Applicant was
employed on the basis that she would be working wholly from home in the ACT, and the
Respondent’s offices are in the Gold Coast, Queensland, I do not accept that the reason relied
upon by the Respondent for the Applicant’s dismissal ought be undermined by the Applicant
not being in a position to attend the Respondent’s offices one day per week.
[32] In my view, the real (and fatal) difficulty with the Respondent’s asserted valid reason
for the Applicant’s dismissal is that it relies upon asserted contractual terms that hold not force
or effect. In this regard, I make the following findings:
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a) the Applicant signed (and thus agreed to enter into) the written employment
agreement for the VP role on 11 April 2023 (Employment Contract).20
b) the Applicant signed (and thus agreed to enter into) the written Marriott Vacation
Club International (MVCI) Australia Vacation Planner Commission Plan on 18
April 2023 (VP Commission Plan).21
c) Clause 5 ‘Remuneration’ of the Employment Contract provides that the Applicant’s
remuneration for the VP role consists of a base hourly rate, and superannuation
contributions;22
d) Clause 7 “Incentive Arrangements” of the Employment Contract provides that the
Applicant “may be eligible to participate in the [VP] Commission Plan” which will
be paid in addition to remuneration under Clause 5. Such Commission Plan may be
unilaterally amended from time to time by the Respondent, and payments under the
VP Commission Plan are not included when calculating remuneration or other
entitlements (including payments in lieu of notice) under the Employment
Contract;23
e) Clause 19 ‘General’ of the Employment Contract provides that its written terms
constitute the “entire agreement” between the parties;
f) Clause 6.0 of the VP Commission Plan reads:
“PERFORMANCE STANDARDS:
Certain performance standards are required to continue employment. Failure to
achieve established performance standards may result in performance
management, up to and including separation from the company.
1) Associate must reconfirm/reverify 100% of their bookings and enter 90%
data entry correctly.
2) Associate Gross Booking To Show factor should not fall below 90% in a
sales month.
3) Associate productivity should not fall below other standards as defined by
management.
The Company reserves the right to adjust these performance factors from time
to time. Any adjustments will be communicated to the associate in advance of
the month for which they will be effective.
PRO-RATED TARGET
Prorated targets will be applicable to associates who are on paid leave for a
certain period. The criteria are as follow:
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− On paid leave for a minimum of 5 days and above, taken consecutively.
The leave must be applied 30 days in advance and are subjected to
approval.
− Personal leave will not be taken into consideration.
− Hospital leave will be taken into consideration if the leave duration is for
a minimum of 1 week:
All minimum targets for tours and packages sold will be prorated accordingly if
the criteria are met. The Volume tier required will be affected and will follow
the pro-rated target given. If the revised prorated target is not met, no
commission payment will be made”; and
g) the written “Acknowledgement” on the last page of the VP Commission Plan states
that “it is not to be construed as a contract or a guarantee of employment”, and that
the Respondent “reserves the right to amend, modify eliminate any single
component(s) of this Plan at any time”.
[33] On the basis of the foregoing terms of the Employment Contract and the VP
Commission Plan, I find that from a contractual and employment relationship perspective, there
was no basis upon which the Respondent had the lawful right to hold the Applicant to the
performance standards set out in clause 6.0 of the VP Commission Plan, such that any failure
to meet such performance standards could give rise to her discipline or dismissal. I reach this
finding in circumstances where:
a) the VP Commission Plan expressly states that it is not a contract; and
b) the Employment Contract states that:
(i) it constitutes the entire agreement between the parties;
(ii) the Applicant ‘may’ (not shall be required to) participate in an incentive
program; and
(iii) any incentive program (such as the VP Commission Plan) does not form part
of the Applicant’s remuneration under the Employment Contract.24
[34] The words set out in Clause 2 of the Employment Contract concerning the duties and
responsibilities of the Applicant, in my view, do not extend to a requirement for the Applicant
to comply with an incentive program (such as the VP Commission Plan) that can be unilaterally
amended by the Respondent at any time. This is especially so in circumstances where the VP
Commission Plan is not a contract, and does not form part of the Employment Contract
(including in respect of remuneration to be paid for work performed under the Employment
Contract).
[35] In the facts and circumstances of this case, relying upon a requirement that has no basis
in contract (as between the parties), to meet a specific number of KPIs is not a sound, defensible,
or well-founded reason for dismissal. I find that the Applicant’s dismissal was not for a valid
[2024] FWC 1508
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reason, which weighs in favour of a finding that the Applicant’s dismissal was harsh, unjust
and unreasonable.
s.387(b) - Whether the Applicant was notified of the valid reason; and s.387(c) - Whether
the Applicant was given an opportunity to respond to any reason related to her capacity
or conduct
[36] Proper consideration of s.387(b) of the Act requires a finding to be made as to whether
the Applicant “was notified of that reason” and given an opportunity to respond to same.
[37] Contextually, the reference to “that reason” is the valid reason found to exist under
s.387(a) of the Act.25 Notification of a valid reason for termination must be given to an
employee protected from unfair dismissal before the decision is made to terminate their
employment,26 and in explicit, plain and clear terms.27
[38] In order to be given an opportunity to respond for the purposes of s.387(c), the employee
must be made aware of allegations concerning the employee’s conduct so as to enable them to
respond to the allegations and must be given an opportunity to defend themselves. As Justice
Moore has stated in Wadey v YMCA Canberra28:
“the opportunity to defend, implies an opportunity that might result in the employer
deciding not to terminate the employment if the defence is of substance. An employer
may simply go through the motions of giving the employee an opportunity to deal with
allegations concerning conduct when, in substance, a firm decision to terminate had
already been made which would be adhered to irrespective of anything the employee
might say in his or her defence. That… does not constitute an opportunity to defend.”29
[39] Given I have found that there was no valid reason for the Applicant’s dismissal, the
criterion under ss.387(b) and (c) do not arise for consideration. If they did arise for
consideration, I note that the Applicant was given a second written warning on 16 August 2023,
and was subsequently dismissed by way of letter dated 30 August 2023. There was no further
disciplinary or termination meeting with the Applicant between the second warning and her
dismissal. The criterion under ss.387(b) and (c) of the Act would thus weigh in favour of a
finding that the Applicant’s dismissal was harsh, unjust or unreasonable. Whilst the Applicant
was made well aware of the asserted reason/s that would lead to her dismissal (i.e. her failure
to meet 10 KPIs) prior to her dismissal, and given an opportunity to engage with and respond
to same during the disciplinary process, that is not sufficient on the case law in respect of
compliance with ss.387(b) and (c) of the Act.
s.387(d) — Whether there was any unreasonable refusal by the Respondent to allow the
Applicant to have a support person present to assist at any discussions relating to
dismissal
[40] As noted by a Full Bench of this Commission, “[t]he subsection is not concerned with
whether or not the employee was informed that he or she could have a support person present”.30
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[41] The Applicant was provided with the opportunity to bring a support person to the
disciplinary meetings she attended. But there was no termination meeting, meaning that this
criterion is not a relevant consideration.
s.387(e) — Whether the Applicant was warned about that unsatisfactory performance
before her dismissal
[42] A warning for the purposes of s.387(e) of the Act must clearly identify:
• the areas of deficiency in the employee’s performance;
• the assistance or training that might be provided;
• the standards required; and
• a reasonable timeframe within which the employee is required to meet such
standards.31
[43] In addition, the warning must “make it clear that the employee’s employment is at risk
unless the performance issue identified is addressed.”32 In order to constitute a warning for the
purposes of s.387(e), it is not sufficient for the employer merely to exhort their employee to
improve their performance.33
[44] I am satisfied that the Applicant was warned about her unsatisfactory work performance
prior to her dismissal, however, given the reasons for the warnings relate to performance issues
surrounding the VP Commission Plan, and noting my findings about the absence of valid
reason, I treat this criterion as a neutral consideration in this case.
The degree to which the size of the Respondent’s enterprise would be likely to impact on
the procedures followed in effecting the dismissal (s.387(f)); and the degree to which the
absence of dedicated human resource management specialists or expertise in the
enterprise would be likely to impact on the procedures followed in effecting the dismissal
(s.387(g))
[45] The Respondent made no submissions as to its employment of dedicated human
resources management specialists.
[46] There is no evidence to suggest that the size of the Respondent’s enterprise likely
impacted upon the procedures it followed in effecting the Applicant’s dismissal.
[47] Neither party put forward substantive or relevant submissions that go directly to either
of the criteria under ss.387(f) and (g) of the Act. I therefore treat both of these criteria as neutral
considerations in this case.
s.387(h) - Any other matters that the Commission considers relevant
[48] Neither party made any substantive submissions on this criteria. I treat it as a neutral
consideration.
Was the Applicant’s dismissal unfair?
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[49] I have made findings in relation to each of the criterion specified under s.387 of the Act
(as relevant). I have also considered and given due weight to each of the criterion as a
fundamental element in determining whether the Applicant’s dismissal was harsh, unjust or
unreasonable.34
[50] In relation to the criterion set out under s.387 of the Act, I have found that:
(a) the absence of a valid reason for the Applicant’s dismissal weighs in favour of a
finding that the Applicant’s dismissal was harsh, unjust and unreasonable; and
(b) other relevant criterion are either not relevant, or neutral considerations.
[51] In view of the findings and conclusions set out in this decision, including as to the
absence of a valid reason for dismissal, I find that the Applicant’s dismissal was harsh, unjust
and unreasonable (i.e. unfair).
Remedy
[52] Being satisfied that the Applicant:
(a) has made a valid application for an order granting a remedy under s.394 of the
Act;
(b) was a person protected from unfair dismissal; and
(c) was unfairly dismissed within the meaning of s.385 of the FW Act;
I may, subject to the Act, order the reinstatement of the Applicant, or the payment of
compensation to her.
[53] Under s.390(3) of the Act, I must not order the payment of compensation to the
Applicant unless:
a. I am satisfied that his reinstatement is inappropriate; and
b. I consider that an order for payment of compensation is appropriate in all the
circumstances of the case.
[54] In all of the circumstances, I do not consider that reinstatement of the Applicant is an
appropriate remedy. The Applicant does not seek reinstatement, and the Respondent does not
want her back in the workplace.
[55] As I have found that reinstatement is inappropriate, I must now consider whether an
order for compensation is appropriate under s.390(3)(b) of the Act. A Full Bench of the
Commission has noted that the question of whether to order a remedy in a case where a
dismissal has been found to be unfair remains a discretionary one, and whether an applicant has
suffered financial loss may be a relevant consideration.35
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[56] I am satisfied that the Applicant has suffered a financial loss, and having considered all
of the circumstances of this case, it is appropriate to order compensation in her favour. My
reasons and assessment of the amount to be awarded follow below.
[57] The long-established approach to assessing compensation in unfair dismissal matters
was set out in Sprigg v Paul Licensed Festival Supermarket (Sprigg),36 which the Full Bench
of this Commission has since applied under the current Act.37
[58] I summarise the Sprigg formula as follows:
i) estimate the remuneration that employee would have received if the employer
had not terminated the employment;
ii) deduct monies earned since termination;
iii) discount the remaining amount for contingencies; and
iv) calculate the impact of taxation.
[59] While Sprigg’s case sets out the method, I must nevertheless take account of all the
circumstances of the case, and the specific criteria listed under s.392 of the Act.38
[60] The overall consideration is that the level of compensation must nevertheless be
appropriate (i.e. neither clearly excessive, nor clearly inadequate) having regard to all of the
circumstances of the case.39
[61] Section 392(2)-(6) of the Act, reads:
“(2) In determining an amount for the purposes of an order under subsection (1), the
FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer's enterprise; and
(b) the length of the person's service with the employer; and
(c) the remuneration that the person would have received, or would have been
likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person
because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or
other work during the period between the dismissal and the making of the
order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person
during the period between the making of the order for compensation and the
actual compensation; and
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(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer's
decision to dismiss the person, the FWC must reduce the amount it would otherwise
order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must
not include a component by way of compensation for shock, distress or humiliation, or
other analogous hurt, caused to the person by the manner of the person's dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must
not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the
dismissal.
(6) The amount is the total of the following amounts:
(a) The total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during
the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so
employed during any part of that period--the amount of remuneration taken to
have been received by the employee for the period of leave in accordance with
the regulations.”
Section 392(2)(a) – Viability
[62] The Respondent has not filed any evidence regarding this factor. I am not persuaded
that my consideration of this factor means that I should not make an order for compensation, or
reduce any amount of compensation to be ordered.
Section 392(2)(b) – Length of service
[2024] FWC 1508
15
[63] The Applicant was employed by the Respondent for around 2 years and 2 months. This
is a relatively short period of time, however, I consider that the Applicant’s length of service
does not support reducing or increasing the amount of compensation ordered.
Section 392(2)(c) – Remuneration the person would have received
[64] As stated by a majority of the Full Court of the Federal Court in the He v Lewin40 (as
quoted in Zeng v Conrock Australia Pty Limited)
“[i]n determining the remuneration that the Applicant would have received, or would
have been likely to receive... the Commission must address itself to the question
whether, if the actual termination had not occurred, the employment would have been
likely to continue, or would have been terminated at some time by another means. It is
necessary for the Commission to make a finding of fact as to the likelihood of a further
termination, in order to be able to assess the amount of remuneration the employee
would have received, or would have been likely to receive, if there had not been the
actual termination.”
[65] The Employment Contract contains an end date of “22 December 2023, or such other
date as notified to you by [the Respondent]”. The ordinary meaning of those words is that the
Employment Contract will come to an end on 22 December 2023 unless it is extended by
another document, replaced, or varied in accordance with clause 19(a) of the Employment
Contract. In my view, there is no basis on the evidence to suggest that the Employment Contract
(or the Applicant’s employment with the Respondent) would have extended beyond 22
December 2023. The Respondent was clearly unsatisfied by the Applicant’s performance, and
she was not meeting her KPIs (putting aside their validity) on a consistent basis, including as
compared to other employees in VP roles.41 I therefore consider that the Applicant would not
have remained in the Respondent’s employ beyond 22 December 2023 (at the latest), especially
given that she was already subject to disciplinary action. It is further noted that the Applicant
became injured, and was not looking for work post 26 December 2023.42 Absent an appropriate
medical clearance from the Applicant, which has not been put into evidence, there can be no
suggestion that the Applicant would have been in an income earning capacity post 26 December
2023 in any event (i.e. with the Respondent, or any other employer).43
Section 392(2)(d) – Efforts to mitigate loss
[66] The Applicant’s evidence as to her attempts to mitigate her loss are unsupported by
documentary evidence.44 She simply says that she has been unsuccessful in applying for
various jobs on the employment platform, SEEK. I am therefore unable to objectively assess
the genuineness of the Applicant’s attempts to find alternative work post her dismissal. I
consider it appropriate to reduce any amount ultimately awarded to the Applicant by 15 percent
(i.e. based upon her failure to tender, or otherwise rely upon, probative objective evidence of
her mitigation attempts post her dismissal).
Section 392(2)(e) & (f) – Remuneration and income earned
[2024] FWC 1508
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[67] The Respondent paid the Applicant two weeks in lieu of notice. This amount is to be
deducted from any ultimate compensation amount awarded to the Applicant. The Applicant’s
oral evidence is that she has not earnt any income or secured any paid employment between her
dismissal, and 22 December 2023.45 She was not tested on this evidence during cross-
examination.
Section 392(2)(g) – Any other matter
[68] I am not aware of any other matter to be considered in determining the amount of
compensation to be awarded to the Applicant.
Section 392(3) – Contribution to dismissal by misconduct not relevant
[69] I do not find that any misconduct by the Applicant contributed to her dismissal. I will
not reduce any compensation awarded to the Applicant on the basis of misconduct.
Section 392(4) – Shock, distress etc disregarded
[70] I have not ordered an amount of compensation for shock and distress given that I am
not permitted to do so.
Taxation
[71] Consistent with prior decisions,46 I propose to order payment of a gross (that is, before
tax) amount of compensation, to be taxed according to law. I therefore take into account issues
of taxation, but leave such issues to applicable taxation legislation.
Section 392(5) Compensation Cap
[72] At the time of her dismissal, the Applicant was paid $26.18 per hour. She worked 38
hours per week, meaning that her gross weekly wage was $26.18 x 38 = $994.84.47
[73] Under s.392(5) of the Act, the compensation cap is the lesser of 26 weeks of the
Applicant’s pay, or half the amount of the high income threshold.
• $83,750 is half the amount of the high income threshold that applied immediately before
the Applicant’s dismissal, which was $167,500.
• $25,865.84 is 26 weeks of the Applicant’s gross weekly pay ($994.84 x 26).
[74] The compensation cap that applies to the Applicant is therefore $25,865.84.
Consequently, I am unable to award the Applicant any compensation in excess of this amount.
Conclusion on Remedy
[75] Having weighed each of the considerations under section 392, I find it appropriate to
grant the Applicant a compensation amount that is equivalent to the income that she would have
received had she not been unfairly dismissed by the Respondent, being the time between her
[2024] FWC 1508
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termination, and 22 December 2023. I take that period of time to be 16 weeks, or the gross sum
of $15,917.44 (i.e. 16 x $994.84).
[76] Noting that the Applicant received two week’s pay in lieu of notice, I also consider it
appropriate that the period of compensation be reduced accordingly, to 14 weeks, or the sum of
$13,927.76 (i.e. 14 x $994.84). I then reduce this amount by 25 percent (being 15 percent for
failure to appropriately (on the evidence) mitigate loss, and a further 10 percent for
contingencies per Sprigg, being a final sum of $13,927.76 less 25 percent ($3,481.94) =
$10,445.82.
[77] In all the circumstances, my evaluative assessment is that the appropriate remedy in this
matter is an order compensating the Applicant for her unfair dismissal in the gross amount of
$10,445.82, plus superannuation of 11 percent on this amount.
[78] Section 381(2) of the Act is a significant overarching object of Part 3-2 of the Act. It is
expressed as follows:
“381 Object of this Part
(1) The object of this Part is:
(a) to establish a framework for dealing with unfair dismissal that balances:
(i) the needs of business (including small business); and
(ii) the needs of employees; and
(b) to establish procedures for dealing with unfair dismissal that:
(i) are quick, flexible and informal; and
(ii) address the needs of employers and employees; and
(c) to provide remedies if a dismissal is found to be unfair, with an emphasis
on reinstatement.
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the
manner of deciding on and working out such remedies, are intended to ensure
that a “fair go all round” is accorded to both the employer and employee
concerned.
Note: The expression “fair go all round” was used by Sheldon J in Re Loty and Holloway v Australian
Workers’ Union [1971] AR (NSW) 95.”
[79] In my judgment, the outcome in this case is consistent with the object of Part 3-2 of the
Act of providing a ‘fair go all round’ to both the Applicant (as employee) and the Respondent
(as employer).
[80] I will issue an order that the Respondent pay to the Applicant the sum of $10,445.82
gross, taxed in accordance with law, plus an 11 percent superannuation contribution on this
amount ($1,149.04), payable within 14 days. Orders to that effect will be issued
contemporaneously with, and separately to, this decision.
[2024] FWC 1508
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DEPUTY PRESIDENT
Mr Garry Dircks, Principal, Just Relations Consultants, appeared with permission on behalf of
the Applicant.
Ms Melissa Butters, Senior Industrial Relations Adviser, Queensland Hotels Association,
appeared on behalf of the Respondent.
Printed by authority of the Commonwealth Government Printer
PR775842
1 PR768971.
2 Transcript, PN81.
3 Favaloro Statement in-chief, Attachment CF-3.
4 Ibid, Attachment CF-4.
5 Ibid, Attachment CF-5.
6 Ibid, Attachment CF-6.
7 Attachment “I” to Respondent’s Submissions, Email from Ms Butters to Chambers dated 29 January 2024
(1:28PM) attaching a copy of the Commission Plan signed by the Applicant on 18 April 2023.
8 Transcript, PN79.
9 Statement of Jemma Holman, at [13]-[23].
10 (1964) 38 ALJR 293.
11 Ibid, at 301.
12 Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410, at 412; Yew v ACI Glass Packaging Pty Ltd
(1996) 71 IR 201, at 204.
13 Briginshaw v Briginshaw (1938) 60 CLR 336, at 361-362 (per Dixon J); Neat Holdings Pty Ltd v Karajan
Holdings Pty Ltd (1992) 67 ALJR 170, at 170-171 (per Mason CJ, Brennan, Deane and Gaudron JJ).
14 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170, at 170-171 (per Mason CJ, Brennan,
Deane and Gaudron JJ).
15 Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333; (2000) IR 371, at 373.
16 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, at 685.
17 Edwards v Justice Giudice (1999) 94 FCR 561; (1999) 169 ALR 89; [1999] FCA 1836, at [7]; Gelagotis v Esso
Australia Pty Ltd [2018] FWCFB 6092, at [117]; Titan Plant Hire Pty Ltd v Van Malsen [2016] FWCFB 5520,
263 IR 1, at [28].
18 King v Freshmore (Vic) Pty Ltd [2000] AIRC 1019, Print S4213, at [23] to [24].
19 Transcript, PN452-PN454, and PN497.
20 Attachment “H” to Respondent’s Submissions.
21 Attachment “I” to Respondent’s Submissions, Email from Ms Butters to Chambers dated 29 January 2024
(1:28PM) attaching a copy of the Commission Plan signed by the Applicant on 18 April 2023.
22 See also definition of “Remuneration” at clause 20.1 of the Employment Contract (which refers the parties to
clause 5.1 of the Employment Contract).
23 Clauses7(a) and (b)(ii) of the Employment Contract.
24 Note, Transcript, PN349-PN375.
THE WORK COMMISSION
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25 Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, at [19]; Reseigh v Stegbar Pty Ltd [2020]
FWCFB 533, at [55]; Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, at 151.
26 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, at 151.
27 Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998). See also
Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2
February 2000), at [41]; Read v Gordon Square Child Care Centre Inc [2013] FWCFB 762 (Acton DP, Deegan
C and Gregory C), at [46] to [49].
28 [1996] IRCA 568.
29 Ibid.
30 Jurisic v ABB Australia Pty Ltd [2014] FWCFB 5835, at [84].
31 McCarron v Commercial Facilities Management Pty Ltd t/a CFM Air Conditioning Pty Ltd [2013] FWC 3034,
at [32].
32 Fastidia Pty Ltd v Goodwin, Print S9280 (AIRCFB, Ross VP, Williams SDP, Blair C, 21 August 2000), at [43]
to [44].
33 Ibid.
34 ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, at [51]. See also Smith v Moore
Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), at [92];
Edwards v Justice Giudice [1999] FCA 1836, at [6] to [7].
35 Vennix v Mayfield Childcare Limited [2020] FWCFB 550, at [20].
36 (1988) 88 IR 21.
37 ERGT Australia Pty Ltd v Govender [2021] FWCFB 4508, at [35].
38 Elefantis v The Trustee for Timber Ridge Unit Trust [2022] FWCFB 43, at [67].
39 McCulloch v Clavary Health Care Adelaide [2015] FWCFB 873, at [29].
40 [2004] FCAFC 161 at [58].
41 Respondent’s Attachment “L”. Transcript, PN623-PN625, and PN635-PN643.
42 Medical Certificate from Greenway Medical Centre (Dr Nosa Efeovbokhan) dated 26 January 2024 stating that
the Applicant has not been able to look for work since 26 December 2023 (being an attachment to email from
Mr Dircks to Chambers dated 27 January 2024 (12:11pm).
43 Transcript, PN31-PN33, and PN538.
44 Favaloro Statement in-chief, at [64]. Transcript, PN542 and PN646.
45 Transcript, PN543.
46 Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge [2013] FWCFB 431
at [55]; Vennix v Mayfield Childcare Limited [2020] FWCFB 550 at [32].
47 Favaloro Statement in-chief, Attachment CF-1.
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