Compensation for covid dismissal

This extract from a very recent unfair dismissal decision of the Fair Work Commission contains the Commission’s reasoning in determining that an employee who was dismissed because he was unable to meet the inherent requirements of the job because he worked in the Victorian prisons’ system and was unvaccinated against covid 19 was entitled to compensation for unfair dismissal because in dismissing the employee the Department had not followed its own policies in not considering whether other duties might be “suitable” for the employee.

“[83] The Policy specifically states that Managers must consider reasonable adjustments or alternative duties where available for employees such as Mr Necovski, who could not be vaccinated because of a contraindication to the available vaccines. I have not been persuaded that the Respondent gave Mr Necovski’s case specific consideration. There was no documentary evidence as to whether there was any consideration of other duties that might have been suitable for Mr Necovski. On the evidence presented, I cannot conclude that an effort contemplated by the Policy was made to consider reasonable adjustments or suitable alternative duties for Mr Necovski. The fact that neither of the letters of dismissal made any reference to these considerations serves to confirm my conclusion. That Mr Necovski was dismissed in circumstances where this obligation under the Policy was not fulfilled is a relevant matter and a reason to conclude that the dismissal was unfair, because Mr Necovski was deprived of investigations being undertaken on his behalf.

[84] On the question of redeployment more generally, the Respondent submitted that it is not reasonable to expect an employer in the long-term 53 to redeploy to a whole new job a person who was not able to perform the inherent requirements of the job that they were employed to perform. In specific reference to Mr Necovski, it was also stated that any jobs he was likely to be capable of performing required vaccination. As to these matters, while I accept there was not an absolute obligation to redeploy Mr Necovski, it is reasonable to have expected the Respondent to at least have considered the prospect through some sort of a process.

[85] Having considered the various matters arising in relation to s.387(h) of the Act, I am satisfied they weigh in favour of a finding that Mr Stock’s dismissal was unfair.

Conclusion

[86] I have made findings in relation to each matter specified in s.387 of the Act as relevant. I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable. 54 I am satisfied there was a valid reason for the dismissal but have concluded that the dismissal of Mr Necovski was unreasonable because the Respondent has not persuaded me that it considered reasonable adjustments or suitable alternative duties for Mr Necovski in accordance with the Policy. Nor have I been satisfied that specific consideration was given to the redeployment of Mr Necovski. Accordingly, I find that Mr Necovski’s dismissal was unfair.

Remedy

[87] In the circumstances where I have found Mr Necovski was protected from unfair dismissal at the time of being dismissed and that he has been unfairly dismissed, s.390 of the Act prescribes that a remedy is available. Accordingly, I am required to determine whether to order the reinstatement of Mr Necovski or, if I am satisfied that reinstatement is inappropriate, an order for compensation if I am satisfied that such an order is appropriate in all the circumstances. 55

[88] Mr Necovski submitted reinstatement is an eminently sensible and realistic solution because he had a very good work record, enjoyed his work, had a good relationship with his co-workers and employer and there is no risk of a breakdown in the relationship. As to his vaccination status, Mr Necovski said he would continue consulting with his medical specialist to see whether a different vaccination might be available in the near or the distant future.  He submitted there is “a very real chance” that he will be fully vaccinated “at some point in the future.”

[89] The Respondent submitted reinstatement would not be the appropriate remedy because it cannot, on the basis of what it submitted is a lawful and reasonable policy based on clear expert advice, safely allow Mr Necovski to return to his role, and there are no other appropriate roles available that he is able to perform, while unvaccinated. The Respondent submitted that in circumstances where the Policy remains in place, the case against reinstatement is compelling.

[90] Having regard to these submissions and the circumstances of this case, I am satisfied it is inappropriate to order the reinstatement of Mr Necovski. Firstly, there is advice from Professor Visvanathan dated 1 August 2022 before the Commission outlining that Professor Visvanathan has extended Mr Necovski’s exemption from vaccination for a further six months (i.e. until 1 February 2023). 56 There is no indication that the underlying reasons behind this will change and therefore I cannot be satisfied, given the fact that the Policy remains in place, Mr Necovski will again be able to perform the inherent requirements of the job that he was originally employed to perform. Therefore, I am not satisfied it is possible to reappoint Mr Necovski to the position of a YJW.57

[91] Nor am I satisfied that it would be possible to appoint Mr Necovski to another position on terms and conditions no less favourable than those on which he was employed immediately prior to his dismissal. 58 I have considered Ms Huffer’s evidence on what was occurring within Corrections Victoria, what had been reported to her about Youth Justice and the broad circumstances in which the Respondent found itself. While a general commentary, Ms Huffer gave the following evidence in response to a question about the extent to which the Respondent considered whether Mr Necovski could have performed work from home duties as follows:

“So, the decision around whether or not people could perform alternative duties or have reasonable adjustments made to their role was primarily made by Youth Justice. But I can give some general comments about that. First of all, in the case of all of our custodial facilities, including Corrections Victoria’s prisons and Youth Justice facilities, the roles of the Youth Justice workers and prison officers are frontline worker roles, and they involve one-on-one engagement in the case of young people. In the case of Youth Justice working with the young people, there’s supervision, looking after their safety and wellbeing. That doesn’t have a significant number of elements in it that would allow for a reasonable adjustment to be made for any of that work to be performed from home. So, given that there are a reasonable number of people within those facilities who had exemptions of some description, there would not have been enough work to provide some people with alternative duties or reasonable adjustments.” 59

[92] When asked what specific analysis was undertaken for employees that presented with medical contraindications or objections, Ms Huffer replied:

“So, more broadly, it was considered that they were frontline workers, but it was also considered whether their exemptions were temporary and whether there was work available for them to undertake. In some cases, so for example, I’m not sure about Youth Justice, I don’t believe there was any alternative duties, there certainly was for some people within Corrections Victoria, because there were short term data entry work and various other things like that. But at the same time, my understanding and Youth Justice’s understanding of Mr Necovski’s skills were that his background was face-to-face with youth.” 60

[93] No evidence was put before me suggesting Mr Necovski had transferable qualifications and skills suitable for other ongoing work with the Respondent. Mr Necovski did not, for instance, persuade me that he has qualifications or experience in policy, administration or management. The prospect of temporary data entry only arose in the context of Corrections Victoria. Ultimately, I am not persuaded it would be possible to find a sustainable ongoing position for Mr Necovski while he is only able to perform work outside of the Respondent’s premises.

[94] I must therefore consider whether it is appropriate in all the circumstances to make an order for payment of compensation 61 and if so, what that amount should be.

[95] 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. I am not persuaded the material before me suggests otherwise. Section 390(3)(b) of the Act is therefore satisfied. Section 392 of the Act sets out the criteria for deciding an amount of compensation. The assessment of compensation I am required to undertake is directed towards the remuneration lost in consequence of Mr Necovski having been unfairly dismissed.

[96] Section 392 provides 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.”

[97] In considering each of the criteria in s.392 of the Act, it is useful to refer to the statement of principles to be applied in the assessment of compensation by the Full Bench of the Commission in Johnson v North West Supermarkets T/A Castlemaine IGA (Johnson): 62

“[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:

“[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.” 63

(my emphasis, references omitted)

[98] In Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Darren Nurcombe, 64 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 would have been received if the dismissal had not occurred – s.392(2)(c)

[99] Mr Necovski argued that, if alternative duties had been found for him, he would have been able to perform them from 22 February 2022, but relevantly for the purposes of s.392(2)(c), that he would have been able to perform them indefinitely from 9 June 2022 onwards. Mr Necovski outlined that his income varied according to the number of weekends and holidays he worked and that while his base salary was $56,566, his actual income, including penalty rates, for the 2020/2021 financial year, was $70,487.

[100] The Respondent submitted that it is likely that if the Applicant had remained employed, his remuneration would have remained at nothing as he was unable to work outside of his home in line with the mandatory vaccination policy. The Respondent argued that Mr Necovski would have remained on a period of unpaid leave.

[101] In the alternative, the Respondent submitted that if it had been able to source alternative duties for the Applicant (which the Respondent does not admit was possible), any such duties would likely be temporary and there would be no guarantee they would have lasted from the time of dismissal to the time of decision of the Commission. The Respondent submitted that it is further unlikely that Mr Necovski would have been able to perform any such alternative duties on an ongoing remote basis, as the Respondent requires all its workers to attend the workplace on occasion which requires them to be vaccinated.

[102] 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”. 65 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.66

[103] I am satisfied that even if the Applicant had remained employed by the Respondent, he would not have been able to perform the duties required of his role, due to the Respondent’s mandatory vaccination policy and evidence put forward by the Applicant indicating he remains unable to be vaccinated against COVID-19 for the foreseeable future. 67

[104] I have outlined evidence of the viability of a YJW being assigned reasonable adjustments or suitable alternative duties above at [91]–[92]. Ms Huffer could not give an account of whether the proposition of any alternative roles, was ever mentioned to Mr Necovski. Nor was she aware of the Respondent having engaged with Mr Necovski to assess whether or not he had any alternate skills, for instance, to see that he might have been able to do data entry or writing case notes. However, her evidence more generally was:

“There was a lot of work done within Youth Justice in general, to consider whether it was reasonable to be able to provide a reasonable adjustment for alternative duties. Given the number of staff that they had with exemptions, that was not going to be possible to do that for everyone.” 68

[105] Ms Huffer was asked how many staff there were with exemptions, and she replied:

“I’m not sure exactly. I would say 20 to 30 perhaps. But that’s not accurate…” 69

[106] Noting these matters, my assessment is that Mr Necovski would have remained in employment with the Respondent for a further period of no more than two weeks. I consider this would have provided adequate time for meaningful dialogue and an exchange of information regarding Mr Necovski’s skill set to have occurred, together with dialogue as to whether there were either any other suitable roles or reasonable adjustments or alternative duties available to him. While, as indicated above at [93], I am not persuaded anything would have materialised, I consider Mr Necovski was entitled to such a process and have noted that the Respondent had committed to this in the Policy. During this two-week period, I consider no more than the base salary would have applied because I consider it highly unlikely that the dialogue would have occurred other than during normal business hours. Based on the Mr Necovski’s base salary ($56,566), the gross remuneration he would have received for such a 2-week period would have been $2,175.61 (excluding superannuation)). This is the starting point.

Remuneration earned – s.392(2)(e) and income reasonably likely to be earned – s.392(2)(f) & (g)

[107] 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.

[108] It is not disputed that Mr Necovski has not earned any income since the dismissal. Mr Necovski received a lump sum Work Cover payment of $15,186.30 on 31 August 2022 but I have not taken this into account because this payment was in respect of the period following his adverse reaction to the first vaccine (21 October 2021 to 23 February 2022).

Viability – s.392(2)(a)

[109] The parties agree and I am satisfied that an order by the Commission in relation to Mr Necovski’s employment has no effect on the viability of the Respondent’s enterprise.

Mitigation efforts – s.392(2)(d)

[110] Mr Necovski stated that he applied for many jobs following his dismissal. He gave evidence that he first sought to apply for ‘better jobs’ that would be considered a ‘step up’ rather than the same and has advised that he had attended interviews. Having been unsuccessful, Mr Necovski applied for other jobs that were ‘not as good’ as his former role with the Respondent.

[111] Mr Necovski applied for, and ultimately accepted on 24 July 2022, a role he had formerly held at Jigsaw Blue, a provider of Disability Support Services. This was 6.5 weeks after the termination of his employment. At the time of the hearing, Mr Necovski was still waiting for the ‘NDIS Worker Screening Check’ process to be completed so he could recommence paid employment. He does not appear to have otherwise sought to mitigate his loss by seeking other employment in the meantime.

[112] The Respondent submitted that Mr Necovski has not made proper attempts to mitigate his loss, both immediately after the termination of his employment and since he has gained casual employment at Jigsaw Blue. The Respondent submitted that it is unreasonable for the Applicant to await commencement at Jigsaw Blue without actively seeking other work.

[113] As held by the Full Bench in McCulloch v Calvary Health Care Adelaide, 70 the reasonableness of an applicant’s efforts taken to mitigate loss depends on the circumstances of the case. The question in applying this factor is whether Mr Necovski has acted reasonably. While I would normally consider a failure to continue to make efforts to mitigate loss to be a matter that weighs against a person seeking compensation,71 in all the circumstances of this case, I do not consider Mr Necovski has acted unreasonably because he pursued various avenues and has been required to continue to seek medical advice regarding his vaccination status. I therefore do not consider any deduction in the amount of compensation to be awarded is warranted.

Length of service – s.392(2)(b) and any other matters – s.392(2)(g)

[114] Mr Necovski was employed by the Respondent for approximately 2 years, from 25 May 2020 to 9 June 2022. It is necessary to take this into account but as it is not an extensive period of time, there will be no material adjustment either way on account of this factor alone.

[115] Whilst Mr Necovski concedes that an order of compensation is in lieu of reinstatement rather than an order to compensate the costs of an Applicant, he nevertheless submitted that he (and his family) have born the entire cost of this proceeding, which has been brought against “a well-resourced” Government department. The Respondent submitted that to the extent Mr Necovski suggests he should be compensated for having borne the cost of the proceedings himself, this is also an irrelevant consideration, as the purpose of compensation concerns salary related matters, not reimbursement of expenses.

[116] As for potential vicissitudes, Mr Necovski submitted that there is a degree of evidence to suggest that he would be promoted (being his substantial overtime work) and no evidence that he would not continue working. These matters are disputed by the Respondent, which outlined that staff are booked for overtime by the rostering office based on their availability and being booked for overtime has nothing to do with assessing a staff member’s ability for other positions, which would require a merit-based process under the Public Administration Act 2004. The Respondent submitted that there was no evidence to suggest Mr Necovski would have been promoted had he kept working and that Mr Necovski would not have been able to perform his duties in other positions in line with the Respondent’s mandatory vaccination policy.

[117] That Mr Necovski has borne the costs of this proceeding does not weigh upon the assessment of compensation and I do not consider there is any basis for any deduction for contingencies in this matter. It will be left to the Respondent to deduct taxation required by law.

Misconduct – s.392(3)

[118] As has been admitted by the Respondent, this matter does not relate to any misconduct of Mr Necovski. Therefore, s.392(3) of the Act is not relevant and I will not make any reduction on account of this factor in the proposed compensation.

Compensation cap: s.392(5) & (6) and Instalments: s.393

[119] The amount of compensation proposed must not, and does not exceed the compensation cap and I do not consider that there is any reason for compensation to be made by way of instalments.

Shock, Distress: s.392(4)

[120] While I accept Mr Necovski is aggrieved by the manner of his dismissal, the amount of compensation calculated must not and does not include a component for shock, distress, humiliation or other analogous hurt caused to him as a result.

Conclusion

[121] I am satisfied that Mr Necovski was protected from unfair dismissal, that the dismissal was unfair and that order for compensation is an appropriate remedy in all the circumstances. 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. 72 In this case, I consider the appropriate amount of compensation to be awarded to Mr Necovski equates to $2,175.61 less taxation as required by law. An order requiring the payment of this amount plus the requisite amount of superannuation within 14 days will be issued with this decision.”

Necovski v Department of Justice and Community Safety (2022) FWC 3155 delivered 29 November 2022 per Clancy DP