1
Fair Work Act 2009
s.394—Unfair dismissal
Neil Woods
v
MSS Security Pty Limited
(U2024/3917)
DEPUTY PRESIDENT CLANCY MELBOURNE, 4 NOVEMBER 2024
Application for an unfair dismissal remedy – reinstatement inappropriate – order for
compensation appropriate – assessment of compensation– compensation assessed at
$57,838.56 gross plus Superannuation, less taxation required by law.
[1] On 18 October 2024, I determined that the dismissal of Mr Neil Woods by MSS Security
Pty Limited (the Respondent) was unfair,1 and outlined the following in relation to remedy:
“[50] Section 390 of the Act provides that, if the Commission is satisfied a person was
protected from unfair dismissal and determines that that they were unfairly dismissed, it
may order either reinstatement or compensation. Compensation can only be ordered,
however, if the Commission is satisfied that reinstatement is ‘inappropriate’
(s.390(3)(a)).
[51] In this case, Mr Woods does not seek reinstatement and in circumstances where
reinstatement is not sought, I am satisfied that reinstatement is inappropriate. I must then
consider whether an order for the payment of compensation is appropriate in all the
circumstances of the case, and if so, what that amount should be. Taking into account
my finding that the dismissal was unfair and the reasons for that conclusion I have
outlined above, and since I am satisfied an order for reinstatement is inappropriate, I
consider that an order for payment of compensation is appropriate in all the
circumstances.
[52] Section 392 of the Act sets out the criteria for deciding the amount of
compensation but there is currently insufficient material before the Commission to
enable me to determine the amount of compensation. As such, the parties will shortly
receive a Notice of Listing for a directions hearing at which the further case management
of this matter will be discussed. In the meantime, I reiterate that I have determined that
Mr Woods was unfairly dismissed.”
[2] At a directions hearing on 23 October 2024, I discussed the considerations in s.392 of
the Fair Work Act 2009 (the Act) with the parties and asked them whether they had any
questions about them. I thereafter issued the following directions:
[2024] FWC 3041
DECISION
AUSTRALIA FairWork Commission
[2024] FWC 3041
2
1. Mr Woods is directed to file with the Fair Work Commission and serve on the
Respondent material in relation to:
a. his efforts to mitigate the loss suffered because of his dismissal
• this includes evidence and details of the employment he applied
for, or was successful in securing, following his dismissal,
including at the National Gallery of Victoria and if he did not
apply for new employment or did not work, or did not have the
capacity to work at any time following his dismissal, an
explanation as to why this was the case.
b. the amount of any remuneration earned by Mr Woods from
employment or other work following his dismissal, including at the
National Gallery of Victoria; and
• i.e. relevant payslips and pay summaries.
c. the amount of any income Mr Woods reasonably expects to earn
moving forward (i.e. If Mr Woods is currently in employment, what he
is earning and expecting to earn from that employment moving
forward).
d. any other material and submissions Mr Woods wishes to file on the
issue of compensation.
by no later than 4PM on Thursday, 31 October 2024.
2. MSS Security Pty Limited is directed to file with the Fair Work Commission and serve
on the Applicant material in relation to:
a. the total amount of remuneration Mr Woods received, and was entitled
to, for the financial year commencing July 2023 until his dismissal on
15 March 2024.
1. this is to include confirmation of Mr Woods’ base rate of pay,
any allowances he was entitled to, any overtime worked, and
hours worked.
b. any other material and submissions MSS Security Pty Limited wishes
to file on the issue of compensation.
by no later than 4PM on Thursday, 31 October 2024.
[3] This decision deals with the assessment of compensation having regard to the
considerations in s.392 and the material provided by the parties in response to my directions.
The parties were offered, but did not seek, the opportunity to be heard further following the
submission of their material.
[2024] FWC 3041
3
Section 392
[4] Section 392 of the Act sets out the criteria for deciding an amount of compensation, as
follows:
“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
(c) the remuneration that the person would have received, or would have been
likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person
because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or
other work during the period between the dismissal and the making of the order
for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person
during the period between the making of the order for compensation and the
actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s
decision to dismiss the person, the FWC must reduce the amount it would otherwise
order under subsection (1) by an appropriate amount on account of the misconduct.
[2024] FWC 3041
4
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.”
[5] The assessment of compensation I am required to undertake is directed towards the
remuneration lost in consequence of Mr Woods having been unfairly dismissed.
[6] The method for calculating compensation under s.392 of the Act was considered by a
Full Bench of the Commission in Johnson v North West Supermarkets T/A Castlemaine IGA
(Johnson) in the following way:
“[41] The well-established approach to the assessment of compensation under s 392 is to
apply the ‘Sprigg formula’, derived from the Australian Industrial Relations
Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket. This
approach was articulated in the context of the current legislative framework in Bowden
v Ottrey Homes Cobram and District Retirement Villages. Under that approach, the first
step to be taken in assessing compensation is to consider s.392(2)(c), that is, to determine
what the applicant would have received, or would have been likely to receive, if the
person had not been dismissed. In Bowden this was described in the following way:
[2024] FWC 3041
5
“[33] The first step in this process - the assessment of remuneration lost - is a
necessary element in determining an amount to be ordered in lieu of
reinstatement. Such an assessment is often difficult, but it must be done. As the
Full Bench observed in Sprigg:
‘... we acknowledge that there is a speculative element involved in all such
assessments. We believe it is a necessary step by virtue of the
requirement of s.170CH(7)(c). We accept that assessment of relative
likelihoods is integral to most assessments of compensation or damages
in courts of law.’
[34] Lost remuneration is usually calculated by estimating how long the
employee would have remained in the relevant employment but for the
termination of their employment. We refer to this period as the ‘anticipated
period of employment’...”
[42] The identification of this starting point amount ‘necessarily involves assessments
as to future events that will often be problematic,’ but, as the Full Bench observed in
McCulloch v Calvary Health Care Adelaide, ‘while the task of determining an
anticipated period of employment can be difficult, it must be done.’
[43] Once this first step has been undertaken, various adjustments are made in
accordance with s.392 and the formula for matters including monies earned since
dismissal, contingencies, any reduction on account of the employee’s misconduct and
the application of the cap of six months’ pay. This approach is however subject to the
overarching requirement to ensure that the level of compensation is in an amount
that is considered appropriate having regard to all the circumstances of the case.”
2
(my emphasis, references omitted)
[7] In Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Darren Nurcombe,3 the
Full Bench stated that in quantifying compensation, it is necessary to set out, with some
precision the way in which the various matters required to be taken into account under s.392(2)
(and s.392(3) if relevant), and the steps in the Sprigg formula, have been assessed and
quantified. The Full Bench also proffered that the way in which a final compensation amount
has been arrived at should be readily apparent and explicable from the reasons of the decision-
maker.
Remuneration that Mr Woods would have received or would have been likely to receive, if he
had not been dismissed: s.392(2)(c)
[8] As was outlined by the Full Bench in Johnson, the identification of the starting point
amount in s.392(2)(c) “necessarily involves assessments as to future events that will often be
problematic”.4 It has previously been held that an assessment of the likely period of
employment is not to be conducted in a vacuum but rather against the backdrop of the
circumstances of the dismissal and the reasons for concluding that the dismissal was unfair.5
My assessment is that Mr Woods would have remained in employment with the Respondent
for a further period of at least another year. I have formed this view having regard to the
[2024] FWC 3041
6
following: Mr Woods had been employed with the Respondent for nearly eight years; he had
an unblemished employment record; he took great pride in his work and enjoyed very good
working relationships with both his colleagues and the health professionals at the client site;
there was nothing before me that suggested either that Mr Woods was intending to leave in the
short term or that he was facing an early termination of his employment for any other reason.
[9] Mr Woods was stood down from 22 February 2024 and as a result, it would appear that
from this time until his termination on 15 March 2024, he received a lower rate of remuneration.
As a result, I consider it appropriate to calculate his average gross earnings with reference to
the payroll records covering the 32-week period from 1 July 2023 until 11 February 2024. Mr
Woods’ gross ‘year to date’ earnings for that 32-week period were $71,185.92. If divided by
32, this equates to a gross weekly sum of $2,224.56. Given my assessment that Mr Woods
would have remained in employment with the Respondent for a further period of at least another
year, it is necessary to annualise this weekly sum to assess the remuneration that Mr Woods
would have received or would have been likely to receive, if he had not been dismissed on 15
March 2024. My assessment for the purposes of s.392(2)(c) is therefore $115,677.12.
Remuneration earned – s.392(2)(e) and Income reasonably likely to be earned – s.392(2)(f)
[10] Remuneration earned from the date of dismissal to the date of any compensation order
is required to be taken into account under s.392(2)(e) of the Act. Remuneration reasonably
likely to be earned from the date of any compensation order to the date the compensation is
paid is to be taken into account under s.392(2)(f) of the Act. Any remuneration likely to be
earned after that date to the end of the 1-year period of anticipated employment determined for
the purpose of s.392(2)(c), is a relevant amount to be taken into account under s.392(2)(g) in
accordance with the Sprigg formula.6
[11] Mr Woods commenced new employment as a security officer at the National Gallery of
Victoria on or about 21 June 2024 and has produced payslips covering the 15-week period from
that date until 6 October 2024. These reveal Mr Woods earned a total of $15,393.82 gross at an
average weekly rate of $1,026.25 gross. Four further weeks have now passed. Therefore, I am
satisfied the material before the Commission enables me to estimate that during the period
between the dismissal and the date of the making of this order for compensation, Mr Woods is
likely to have earned $19,498.83 gross.
[12] Given what has transpired to date and in the absence of information suggesting
otherwise, I determine that Mr Woods will continue to earn a weekly income of $1,026.25 gross
during the 2-week period between the making of the order for compensation and the actual
compensation, which produces a further total of $2,052.50 gross.
[13] In mathematical terms, deducting the actual ($19,498.83 gross) and likely income for
Mr Woods ($2,052.50 gross) for the period from the date of his dismissal from the amount
calculated for the purpose of s.392(2)(c), ($115,677.12),7 leaves $94,125.79 gross in
compensation (excluding superannuation).
[14] Any deduction for contingencies is to be applied to prospective losses, that is loss
occasioned after the date of the hearing.8 The Full Bench observed in Ellawala v Australian
Postal Corporation:9
[2024] FWC 3041
7
“... A discount for contingencies is a means of taking account of the various probabilities
that might otherwise affect earning capacity. At the time of hearing any such impact on
an applicant’s earning capacity between the date of termination and the hearing will be
known. It will not be a matter of assessing prospective probabilities but of making a
finding on the basis of whether the applicant’s earning capacity has in fact been affected
during the relevant period.”10
[15] Mr Woods was dismissed on 15 March 2024. I have found that but for his dismissal he
would have remained in his employment with the Respondent for a further period of one year.
A contingency discount only applies to prospective losses. Having regard to the circumstances
of this matter and the material submitted, I am not persuaded to make any discount for
contingencies.
Any other matters – s.392(2)(g)
[16] Neither party has made submissions directed to any other relevant matters. I have noted
above that Mr Woods had an unblemished employment record, took great pride in his work and
enjoyed very good working relationships with both his colleagues and the health professionals
at the client site.
Viability – s.392(2)(a)
[17] I have previously noted that the Respondent has more than 6,000 employees nationally.
There is no evidence to suggest that an order for compensation would have any adverse effect
on the viability of the Respondent and the Respondent did not make submissions to this effect.
There will be no deduction made having regard to this factor.
Length of service – s.392(2)(b)
[18] As noted above, at the time of his dismissal Mr Woods had completed nearly eight years
of service with the Respondent. This is not an insignificant period of time, but I do not consider
an adjustment either way is warranted on account of this factor.
Mitigation efforts – s.392(2)(d)
[19] The question in applying this factor is whether Mr Woods has acted reasonably. As held
by the Full Bench in McCulloch v Calvary Health Care Adelaide,11 the reasonableness of an
applicant’s efforts taken to mitigate loss depends on the circumstances of the case.
[20] In the circumstances of this case, I consider Mr Woods has made reasonable efforts to
mitigate his loss following his dismissal. There was a period of inactivity in the immediate
aftermath of Mr Woods’ dismissal, but I do not consider it was unreasonable. During this
period, Mr Woods reported suffering from trauma as a result of the incident with the patient on
19 February 2024. I have outlined particulars of their encounter in my previous decision. Mr
Woods started consulting a clinical hypnotherapist, Ms Alison Arvaj, shortly after his dismissal.
In a letter to the Commission, Ms Arvaj outlined that Mr Woods was emotionally and mentally
affected by the incident and that the emotional distress he experienced as a consequence had
[2024] FWC 3041
8
impacted his daily life, marriage, sleeping and overall sense of security. Ms Arvaj reported that
upon commencing work at the National Gallery of Victoria, Mr Woods consulted her less
regularly.
[21] Mr Woods advised that following his dismissal he had applied for seven or eight jobs
per week, seeking employment as either a disability support worker, because he is studying in
this field, or a security officer. Mr Woods reported that his attempts to obtain employment as a
disability support worker had, however, been unsuccessful and he had received feedback that
this was due to his lack of relevant work experience. Mr Woods also said that some of the
applications he had made for security industry work were not even met with a reply. As to new
employment, Mr Woods advised that he commenced in the casual security position he now
holds at the National Gallery of Victoria approximately 14 weeks after the termination of his
employment.
[22] Having regard to these circumstances, I do not consider that Mr Woods has acted
unreasonably such that a deduction in the amount of compensation on account of s.392(2)(d) is
warranted in this case.
Misconduct – s.392(3)
[23] My finding has been that the actions of Mr Woods on 19 February 2024 did not
constitute misconduct. Accordingly, I am not persuaded that any deduction on the basis of this
factor is warranted.
Compensation cap: s.392(5) & (6)
[24] A review of payroll records suggests that during the 26 weeks immediately before his
dismissal Mr Woods received remuneration in the vicinity of $53,148.39 gross (s.392(6)(a)(i)).
As noted above, however, Mr Woods was stood down during the final three weeks of his
employment as part of the of the disciplinary process that led to his unfair dismissal, and this
appears to have had the effect of reducing his remuneration for that period. I have earlier
determined, therefore, that it was appropriate to use the gross weekly sum of $2,224.56 to
calculate his average rate of earnings during the 2023/2024 financial year.12 I am also satisfied
that it is appropriate to regard $2,224.56 as the gross weekly rate of pay to which Mr Woods
was entitled. Applying this sum to the 26 weeks immediately before his dismissal, I therefore
consider that Mr Woods was entitled to remuneration that totalled $57,838.56 gross
(s.392(6)(a)(ii)).
[25] Having regard to s.392(5) of the Act, the statutory compensation cap in this matter is
therefore $57,838.56 gross and the compensation amount I order must not exceed this.
Instalments: s.393
[26] There were no submissions made regarding this factor and I do not consider that there
is any reason for compensation to be paid by way of instalments.
Shock, Distress: s.392(4)
[2024] FWC 3041
9
[27] The amount of compensation calculated must not and does not include a component for
shock, distress, humiliation or other analogous hurt caused to Mr Woods by the manner of his
dismissal.
Conclusion
[28] The overarching requirement in assessing compensation is to ensure that the level of
compensation is in an amount that is considered appropriate having regard to all the
circumstances of the case.13 In this case, I consider the appropriate amount of compensation to
be awarded to Mr Woods is $57,838.56 plus Superannuation, less taxation required by law.
[29] The order I make will require payment of the compensation amount by the Respondent
within 14 days of the date of the order. The order is published contemporaneously with this
decision in PR780906.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
PR780904
1 [2024] FWC 1702
2 [2017] FWCFB 4453.
3 [2017] FWCFB 429 at [43].
4 Quoting Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32].
5 Liu v Xin Jin Shan Chinese Language and Culture School Inc [2021] FWC 479 at [10].
6 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFB 7206 at [31].
7 See above at paragraph [9].
8 McCulloch v Calvary Health Care Adelaide [2015] FWCFB 2267 at [21].
9 Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000)
10 Ibid at [44].
11 [2015] FWCFB 2267 at [23], citing Biviano v Suji Kim Collection PR915963 at [34].
12 See above at paragraph [9].
13 McCulloch v Calvary Health Care Adelaide [2015] FWCFB 873 at [29].
THE FAI ORK COMMISSION THE SEA
https://www.fwc.gov.au/documents/awardsandorders/pdf/pr780906.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwc1702.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb4453.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb429.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2021fwc479.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb7206.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2015fwcfb2267.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2015fwcfb2267.htm
https://www.fwc.gov.au/documents/decisionssigned/html/pr915963.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2015fwcfb873.htm
