DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Baldhir Singh
v
Indian Food Catering Pty Ltd T/A Amritsari Dhaba
(U2018/3873)

Application for an unfair dismissal remedy – remedy granted – compensation ordered.

[1] On 14 August 2018, I issued a decision 1 (the merits decision) in which I found Baldhir Singh (the applicant) had been unfairly dismissed by Indian Food Catering Pty Ltd T/A Amritsari Dhaba (the respondent). I indicated at the conclusion of that decision that I had insufficient information before me to deal properly with the issue of remedy, and I subsequently invited written submissions from the parties concerning that issue.2

[2] After both parties had filed written submissions, it became clear that there were some contested facts, especially in relation to the financial health of the respondent. Accordingly, I directed that the parties attend a further hearing, which occurred earlier today, 14 September 2018. At the hearing, further evidence was tendered by the applicant and Mr Gummi, the respondent’s Director.

[3] Section 390 of the Fair Work Act 2009 (Cth) (the FW Act) provides as follows:

‘390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.’

[4] Given the findings I made in the merits decision about the way the applicant was treated by the respondent, I consider it appropriate that he be granted a remedy. He is not seeking reinstatement, and the respondent also opposes reinstatement. In the circumstances, I consider that reinstatement would be inappropriate, but an order for the payment of compensation in lieu of reinstatement should be made.

[5] Sections 392 and 393 of the FW Act provide 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.

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.

393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.’

[6] The applicant had been working for the respondent since 2016. I consider that his length of service is a neutral consideration in considering an order for compensation.

[7] I will adopt the approach in Sprigg 3 in assessing the amount of remuneration the applicant would have received or would have been likely to receive if he had not been dismissed.

[8] The first step is estimating the length of time the applicant would have been employed if he had not been dismissed.

[9] The respondent submitted that even if the applicant had not been dismissed, he would not have been employed by the respondent for much longer. This was put for a number of reasons, including that the applicant was dissatisfied with his level of pay, the applicant walked off the job, the applicant complained about working additional reasonable hours, which was provided for in his contract of employment, and Mr Gummi was not in a position to yield to the applicant’s demands concerning his conditions of employment.

[10] These claims are to some extent inconsistent with the findings I have already made in the merits decision. In particular, I have already rejected the notion that the applicant ‘walked off the job’. 4 I also found that the applicant’s proposals relating to his pay and conditions were completely reasonable, and were in response to a request from Mr Gummi.5

[11] I also have some difficulty in accepting the notion that the applicant would not have remained long in employment because Mr Gummi was only willing to continue to employ him if he accepted pay and conditions well below the award. I think it is reasonable to assume, in a matter such as this dealing with the appropriate remedy for unfair dismissal, that the respondent would have met his legal obligations under the award.

[12] The respondent had applied in February 2018 to sponsor the applicant for a four-year subclass 457 visa to work in the restaurant. (The applicant was on a bridging visa at the time of his dismissal.) The applicant would not have been able to work for anyone else whilst being on this visa. It is reasonable to assume that if the applicant had not been dismissed he would have remained employed by the respondent for at least a further two years.

[13] Using the applicant’s salary of $56,000 a year, this yields a gross remuneration lost figure of $112,000.

[14] The second step is to deduct any remuneration received by the applicant since termination; however, in this case, I accept the applicant’s evidence that he has been unable to obtain alternative employment, and make no such deduction.

[15] The third step is to make an allowance for contingencies. I consider that a deduction of 30 per cent would be reasonable, reducing the provisional amount to $78,400.

[16] As in Sprigg, I propose to settle on a gross amount before taxation.

[17] In relation to the issue of mitigation, I accept the applicant’s evidence that he has tried to find alternative employment, but this has been very difficult, because any prospective employer would need to pay for his sponsorship.

[18] The respondent presented evidence of its financial position, in the form of a draft profit and loss statement for the period from 20 November 2017 (when Mr Gummi took over the business) until 30 June 2018, 6 and a worksheet for the business activity statement for the June 2018 quarter,7 together with a business activity statement for the December 2017 quarter. These suggest that the business has been trading at a loss since Mr Gummi took over the business. Mr Gummi said he was keeping the business open because he has a six-year lease on the property occupied by the restaurant. His representative also suggested that he was hopeful that the business would pick up, especially over the upcoming December period.

[19] I am satisfied that that there is a risk that an order for compensation, depending on its quantum and/or form might pose a risk to the viability of the respondent’s enterprise.

[20] I consider, therefore, that it would be appropriate to reduce somewhat the amount I would otherwise order, because of the risk to the viability of the respondent’s enterprise. I will also order that the amount be paid in instalments.

[21] The applicant did not engage in any misconduct that would justify reducing any order for compensation.

[22] Any order will need to be under the compensation cap. I conservatively estimate this to be half the applicant’s yearly salary of $56,000 – though he was almost certainly entitled to more than this as he was being paid less than the award, given the hours he was working – that is, $28,000.

[23] Having regard to the above, I consider that the respondent should pay the applicant $18,000 in six monthly instalments of $3,000 each, commencing from 14 days after the date of this decision, as compensation in lieu of reinstatement. This amount is a gross amount and is subject to taxation. I will issue an order to this effect with this decision.

SENIOR DEPUTY PRESIDENT

Appearances:

B Singh, the applicant, in person.

N Singh, solicitor, for Indian Food Catering Pty Ltd T/A Amritsari Dhaba.

Hearing details:

Sydney.

2018.

September 14.

Printed by authority of the Commonwealth Government Printer

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 1   Singh v Indian Food Catering Pty Ltd T/A Amritsari Dhaba [2018] FWC 4766 (‘Singh’).

 2   Ibid [66].

 3   Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21.

 4   Singh [56].

 5   Ibid [55].

 6   Exhibit 1 attachment A.

 7   Ibid attachment B.