This portion of a Fair Work Commission decision in an unfair dismissal case deals with the matters the Commission often takes into account when determining the factors involved when determining how much compensation an employee found to have been “Compensation night be taken into account in determining an amount?
[66] Section 392(2) of the Act requires all the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement, including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the Applicants’ service with the employer; and
(c) the remuneration that the Applicants would have received, or would have been likely to receive, if the Applicants had not been dismissed; and
(d) the efforts of the Applicants (if any) to mitigate the loss suffered by the Applicants because of the dismissal; and
(e) the amount of any remuneration earned by the Applicants 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 Applicants during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the Commission considers relevant.
[67] I consider all the circumstances of the case below.
Effect of the order on the viability of the Respondent’s enterprise
[68] There is no evidence regarding the viability of the Respondent’s business. Therefore, I am not satisfied that an order for compensation would have an effect on the viability of the employer’s enterprise.
Length of the Applicants’ service
[69] The Applicants length of service was 8 years and a further two years as founding Directors investing in a start-up business. This is not an insignificant period. Both Applicants were close to the end of their working careers and planned to see the new majority shareholders buy them out after 12 months. It is reasonable to conclude on the evidence that the Applicants would have exited their careers with Pepper Leaf after 12 months with their entitlements paid out. These factors are relevant considerations in terms of expected duration of employment and length of employment in the business.
[70] For the reason of length of employment and expectations of a mutually agreed exit from the business compensation at the highest level is appropriate. The maximum compensation under the Act is 26 weeks,44 and I consider the maximum is appropriate in the circumstances of this matter.
Remuneration that the Applicants would have received, or would have been likely to receive, if the Applicants had not been dismissed
[71] As stated by a majority of the Full Court of the Federal Court,
“[i]n determining the remuneration that the Applicant would have received, or would have been likely to receive… the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have
received, or would have been likely to receive, if there had not been the actual
termination.”45
[72] There is no credible evidence that termination of employment was likely, rather the earn out after a minimum of a year would have been the reasonable expectation of earnings. There is no evidence that the Applicants intended to leave the business without a proper earn out as agreed in principle. The Applicants were on a salary of $168,000 per year, therefore 26 weeks would amount to $84,000 for each of the Applicants.
Efforts of the Applicants to mitigate the loss suffered because of the dismissal and amount of remuneration earned by the Applicants from employment or other work during the period between the dismissal and the making of the order for compensation
[73] The Applicants must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal.46 What is reasonable depends on the circumstances of the case.47
[74] Mr Kahil is still ill after the liver transplant and is in no state to find work outside of the business he founded. His circumstances ought not to weigh against him in these circumstances. Mr Cincotta similarly was looking at finishing his career with Pepper Leaf. The level of personal investment and the effect of the conduct of the Rewardle Directors at Board level and with the dismissal has left him with little to no prospects for employment outside the business he founded. These circumstances also should not weigh against Mr Cincotta.
Amount of income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation
[75] The Applicants provided no evidence of likely income from the date of the dismissal until the order for payment of compensation. I treat this as a neutral consideration.
Other relevant matters
[76] There are no other relevant factors.
The order of compensation
[77] An order of 26 weeks’ pay is awarded and this figure is $84,000 gross to be taxed according to law. The Respondent is ordered to make the payment of compensation to the Applicants within 14 days of the order. The applicable tax is to be forwarded to the ATO.
[78] I am satisfied that the amount of compensation is appropriate to the circumstances of this case and the criteria for deciding compensation under s.392(2). Misconduct is irrelevant,48 the figure does not include an amount for shock, distress etc,49 and the compensation does not exceed the cap.50
[79] An order will be issued for the payment of the net sum ($84,000 less tax) within 14 days of this decision into the Applicants’ bank account. Superannuation on this compensation is also payable directly into the Applicants nominated superannuation fund in accordance with the Superannuation Guarantee requirements.”
Cincotta v Pepperleaf.Com.Au Pty Ltd [2025] FWC 3272 delivered 31 October 2025 per Yilmaz C