Calculating compensation for unfair dismissal

The leading case on the calculation of compensation for unfair dismissal is routinely held to be Sprigg v Paul Licensed Festival Market (1998) 88IR 21. The decision has been refined slightly from time to time, but remains the fundamental statement of the position. For example that authority was re-stated but its  contemporary application was refined to adapt to the particular circumstances of the case in Smith v Moore Paragon Australia Ltd   (2004) AIRC 57 by a Full Bench of the Australian Industrial Relations Commission said as follows:

“It seems to us that the amounts arrived at by the application of Sprigg in the present matter are manifestly inadequate for employees with the length of service of the Appellants, the circumstances of their dismissal and their poor prospects for future employment. This causes us to sound a warning in relation to the application of Sprigg. The guidelines laid down in Sprigg are refined in Ellawalla v Australian Postal Corporation are clearly designed to serve the proper and desirable purpose of fostering uniformity and consistency in decision-making by individual members of the Commission when assessing compensation pursuant to s.170CH(6). However, those guidelines are not a substitute for the words of the Act. By virtue of s.170CH(2), any remedy ordered by the Commission must be a remedy that the Commission considers “appropriate” having regard to all of the circumstances of the case including the matters set out in s.170CH(2). Section 170CH(6) confers a general discretion “if the Commission considers it appropriate in all of the circumstances of the case” to “make an order requiring the employer to pay the employee an amount ordered by Commission in lieu of reinstatement” subject to the Commission having regard “to all of the circumstances of the case including” the matters listed in s.170CH(7) – the same list of matters set out in s.170CH(2) – and subject also to the ‘cap’ provided for in s.170CH(8) and (9). If an application of the guidelines in Sprigg yields an amount which appears either clearly excessive or clearly inadequate, then the member should reassess any assumptions or intermediate conclusions made or reached in applying the guidelines so as to ensure that the level of compensation is in an amount that the member considers appropriate having regard “to all of the circumstances of the case” including the matters listed in s.170CH(7) and subject to the ‘cap’ provided for in s.170CH(8) and (9). In this context it should be borne in mind that the result yielded by an application of the Sprigg guidelines may vary depending upon the particular findings in relation to the various steps including, in particular, step one, which necessarily involves assessments as to future events that will often be problematic.”

And see Ciuzelis v The Pet Cemetery & Crematorium Greenbank (2015) FWC 1187 delivered 24 March 2015 per Simpson C