DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

SAM Technology Engineers Pty Ltd
v
Steven Perry
(C2020/4913)

Appeal against decision [2020] FWC 2134 of Deputy President Boyce at Sydney on 10 June 2020 in matter number U2019/14163.

Introduction

[1] SAM Technology Engineers Pty Ltd (STE) has lodged an appeal, for which permission is required, against a decision 1 and order2 issued by Deputy President Boyce on 10 June 2020 (decision). The decision concerned an application by Mr Steven Perry for an unfair dismissal remedy consequential upon the termination of his employment with STE. The Deputy President found in the decision that Mr Perry had been unfairly dismissed and ordered as a remedy that STE pay Mr Perry the amount of $16,381.91, subject to taxation, and also to pay $2,457.29 into Mr Perry’s nominated superannuation fund. STE’s appeal is confined to the Deputy President’s quantification of the compensation amount.

[2] In the decision under appeal, the Deputy President commenced his assessment of compensation by assessing Mr Perry’s remuneration at the time of his dismissal as follows (footnote omitted):

“[41] The Applicant’s salary was $105,000 per annum, plus superannuation, motor vehicle, mobile phone and laptop computer. I value the motor vehicle, in terms of earnings, at $12,000 per annum, and give no value (in terms of personal use) to the mobile telephone and laptop computer. I therefore equate the weekly gross salary of the Applicant to be $2,243.96 (i.e. $117,000 divided by 52.14 weeks per annum), plus superannuation (9.5 percent of ordinary time earnings).”

[3] The Deputy President then applied the “Sprigg formula” 3 and took into account the matters requiring consideration under s 392 to assess compensation in the following manner:

(1) He estimated that, had he not been dismissed, Mr Perry would have been employed for a further 13 weeks, and earned $29,171.48 (13 x $2,243.96). His estimate in this regard was based on “...the short period of the Applicant’s employment with the Respondent, and the evidence of some on-going animosity between the parties...”. 4

(2) He deducted $6,057.69 from this amount, said to represent “4 weeks’ notice paid to the Applicant upon dismissal”, leaving $23,113.79. 5

(3) He found that Mr Perry was employed by STE from 1 April 2019 to 16 December 2019, a period of 8 months and 15 days, and considered that this “short period of service” warranted reducing the amount of compensation by one week ($23,113.79 less $2,243.96 = $20,869.83). 6

(4) He was not satisfied that Mr Perry had taken reasonable steps to mitigate his loss, which warranted the reduction of the compensation amount by a further two weeks ($20,869.83 less 2 x $2,243.96 = $16,381.91). 7

[4] The Deputy President concluded that the compensation amount he had arrived at by the above process of reasoning, namely $16,381.91, was one that took into account all the circumstances of the case. 8 He also determined that the amount of $2,457.29, which he characterised as “9.5 percent of $16,318.91”, should be paid into Mr Perry’s superannuation fund. The order which the Deputy President made reflected these amounts (and included the characterisation of the superannuation amount as “9.5 percent of $16,318.91”).

[5] STE’s notice of appeal contends that the decision and order were in error in two respects: first, in the calculation of the weeks or period of Mr Perry’s unemployment and, second, in the arithmetic of the calculation of the amount of compensation. In its written submissions in support of its appeal STE submitted that:

•  the amount of compensation was disproportionate to the period of Mr Perry’s employment, since the Deputy President found that Mr Perry had been employed for a period of 8 months and 15 days, but in fact the true period was only two months and 15 days because the first six months constituted a probation period;

•  it is only after the probationary period that the Fair Work Act 2009 (Cth) (FW Act) treats an employee as having completed their minimum qualifying period, and therefore it is only employment after this period which is relevant to unfair dismissal;

•  in calculating the amount of compensation, the Deputy President said he deducted four weeks’ pay on account of the amount paid in lieu of notice, but he only deducted $6,057.69 when Mr Perry’s weekly remuneration as found by the Deputy President was $2,243.96;

•  the Deputy President’s assessment of compensation resulted in 5.4 weeks’ pay owing, which on a salary of $105,000 or $2,019.23 a week should have amounted to $10,903.85, not $16,381.91; and

•  the calculation of the superannuation amount was incorrect, since $2,457.29 is greater than 9.5% of $16,381.91.

Consideration

[6] STE’s first ground of appeal is without merit. It is not factually in dispute that STE employed Mr Perry from 1 April 2019 to 16 December 2019, a period of 8 months and 15 days. The proposition that Mr Perry’s six month probationary period is to be disregarded for the purpose of s 392(2)(b) of the FW Act, which requires that account be taken of “the length of the person’s service with the employer” for the purpose of the assessment of compensation for a person found to have been unfairly dismissed, has no basis in the text of the statute or in any case authority. The Deputy President properly took into account Mr Perry’s length of service as required by s 392(2)(b), found it to be a short period of service, and reduced it by one week’s pay on that score.

[7] STE’s contention that the calculation of the compensation amount of $16,381.91 was incorrect is also without merit. In relation to the deduction of four weeks’ pay in lieu of notice, Mr Perry’s termination payslip shows that the amount actually paid on this score was in fact $6,057.69 - the amount deducted by the Deputy President in his calculation. The discrepancy between this amount and the weekly salary of $2,019.23 is explained by the following note in the payslip: “This is 4 weeks less the 5 days annual leave”. The five days’ annual leave referred to, which involves paying out a statutory NES entitlement, is accounted for separately in the payslip. It is apparent therefore that Mr Perry was in fact only paid out three weeks’ salary in lieu of notice. The deduction of the amount of $6,057.69 by the Deputy President was correct; the only error was to describe this as constituting four weeks’ pay in lieu of notice. STE’s calculation of 5.4 week’s pay as amounting only to $10,903.85 is incorrect because of the matter we have just discussed, and because it is calculated on base salary only, not the full remuneration package as determined by the Deputy President in paragraph [41] of the decision (quoted above). There was no contention advanced by STE that there was any error in the Deputy President’s finding as to the value of the remuneration package.

[8] STE’s contention that the Deputy President miscalculated the superannuation amount is correct. Both the decision and the order make it clear that the Deputy President intended to order an amount equating to 9.5 percent of $16,381.91. However, the amount of $2,457.29 is actually 15 percent of $2,457.29. The amount should have been $1,556.28.

[9] We consider that it is in the public interest to grant permission to appeal to correct this error. We uphold the appeal to this extent. Pursuant to s 607(3)(a) of the FW Act, we will correct the order to substitute $1,556.28 for the superannuation amount of $2,457.29. The correction order will be published in conjunction with this decision (PR721762).

VICE PRESIDENT

Appearances:

Mr J Schmidt on behalf of SAM Technology Engineers Pty Ltd.
Mr S Perry on his own behalf.

Hearing details:

2020.
Sydney (via video-link):
7 August.

Printed by authority of the Commonwealth Government Printer

<PR721761>

 1   [2020] FWC 2134

 2   PR720092

 3   See Sprigg v Paul Licensed Festival Supermarket Print R0235, (1998) 88 IR 21.

 4   [2020] FWC 2134 at [45](a)

 5   Ibid at [45](b)

 6   Ibid at [48]

 7   Ibid at [51]

 8   Ibid at [56]