A Full Bench of the Fair Work Commission has issued a useful summary of the principles which should be applied in assessing compensation for unfair dismissal.
“ Section 392(2) of the Act specifies a number of matters which must be taken into account in the assessment of compensation in respect of an unfair dismissal remedy application. One of those matters, set out in s.392(2)(c), is “the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed”. This will usually require an estimation of how long the employee would have remained in the relevant employment but for the dismissal. There will necessarily be a speculative element in such an assessment: “[s]uch an assessment is often difficult, but it must be done”. The principles for the assessment of compensation established by this Commission and its statutory predecessors have also required a deduction, as a step in the process, for “contingencies” as a means of taking into account the possibility that the occurrence of contingencies to which the applicant was subject might have brought about some change in earning capacity or earnings. This requirement is referable to paragraphs (c) and (g) of s.392(2), and is usually applied in respect of prospective loss. The point in the assessment process at which any discount for contingencies is made may differ: in most cases the discount is considered after the remuneration the dismissed person would have received if they had not been dismissed has been assessed and the monies earned by them since termination had been deducted, but in some cases it may be appropriate to apply the contingency discount directly to the amount that is estimated would have been earned but for the dismissal before any further deduction is made.
The case also a useful analysis of the circumstances in which reinstatement should be awarded as the remedy.
Anderson v Thiess Pty Ltd (2015) FWCFB 478