Compensation for breach of enterprise agreement

In a recent decision of the Federal Circuit Court,  the Court held that a University had contravened an enterprise agreement, and the lawyers for the parties agreed that it was appropriate that the contraventions could be in the following terms.

“Counsel have agreed that it is appropriate to make declarations for 13 specific contraventions of s50 of the FW Act (which are contraventions of clause 14 of the EA).

  1. These contraventions are:

(a)          making the findings the subject of the formal censure dated 29 April 2016 against the Applicant;

(b)          issuing the formal censure dated 29 April 2016 to the Applicant;

(c)          directing the Applicant on 29 April 2016 that “[i]n future it is expected that in maintaining your right to make public comment in a professional, expert or individual capacity in an academic field in which you are recognised, it must be in a collegial manner that upholds the University and individual respect.”;

(d)          making the findings, and each of them, the subject of the final censure dated 21 November 2017 against the Applicant;

(e)          directing the Applicant on 24 August 2017 that he was required to keep the disciplinary process confidential;

(f)           directing the Applicant on 27 August 2017 that he was required to keep the disciplinary process confidential;

(g)          directing the Applicant on 19 September 2017 that he was required “to keep the details of the allegations [the subject of the disciplinary proceeding], and all matters relating thereto (including, but not limited to, the formal censure you received on 29 April 2016), strictly confidential.”;

(h)          directing the Applicant on 21 November 2017 that he was required to keep the disciplinary process and the final censure dated 21 November 2017 confidential;

(i)           directing the Applicant on 8 February 2018 that he was required to “keep all matters relating to this disciplinary process strictly confidential, including the existence of the disciplinary process, details of the allegations, this letter, your response and any further correspondence between yourself and the University in relation to this matter.”;

(j)           directing the Applicant on 21 November 2017 that he was required to “[refrain] from criticising other persons or organisations in a manner that is inconsistent with the collegial and academic spirit of the search for knowledge, understanding and truth”;

(k)          directing the Applicant on 21 November 2017 that he was required to refrain from “make[ing] any comment or engag[ing] in any conduct that directly or indirectly trivialises, satires or parodies the University taking disciplinary action against [him].”;

(l)           making the findings, and each of them, the subject of its decision dated 13 April 2018 against the Applicant; and

(m)         terminating the Applicant’s employment on 2 May 2018.”

As a consequence, it fell to the Court to make decisions about the remedies which should be awarded to the applicant, an employee at the material time of the University.

This is how the judge assessed the legal principles applicable to the assessment of past and future economic loss caused by the contraventions.

Past Economic Loss

  1. Before a Court can make an award either for past or future economic loss, an applicant must prove that there has been such a loss (see Construction, Forestry, Mining and Energy Union (CFMEU) v Hail Creek Coal Pty Ltd [2016] FCA 1032 and Goldburg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711).
  2. In this case, Professor Ridd was terminated on 2 May 2018.  He was paid six months’ salary in lieu of notice.  On my calculations, his period of past economic loss should then commence on 2 November 2018.
  3. On the uncontradicted evidence before me, Professor Ridd has not worked for money since his termination, other than in relation to a brief consulting contract for which he was paid $3000.
  4. I accept Professor Ridd’s evidence that he has suffered a loss of income since his termination.  I accept his evidence that he has been actively seeking employment and I will speak of this later in these reasons.
  5. JCU has raised the issue of undertakings and has submitted that a refusal to enter into such undertakings has been a failure to mitigate any loss.  I will deal with this issue when I discuss future economic loss.
  6. I am of the view that Professor should be paid the gross salary and superannuation that he would have paid had he not been terminated.  I fix the dates of his past economic loss as being between 2 November 2018 and 2 September 2019, which is a period of 10 months.
  7. From my reading of the current EA, the full-time salary for this period is $172,527.66.  Superannuation at 17% totals $29,329.70.  My rough calculations are that Professor Ridd is entitled to 5/6 of this amount (as the period of 10 months is 5/6 of a year). That equates to $143,773.05 as salary and $24,441.42 as superannuation.
  8. The methodology that I have used to calculate past economic loss is clear.  I was asked by Counsel to allow the parties to be given leave to make submissions on this aspect.  I will allow them to do so.

Future Economic Loss

  1. This aspect of the compensation claim is probably the most vexing of all of the issues that I must consider.  Having considered all of the authorities to which the parties have drawn my attention, in conjunction with their submissions, I have decided that there are a number of steps that must be taken before I can arrive at any figure for future economic loss.
  2. Those steps are:-
  3. a)           Decide the period that should be covered by future economic loss; that is, decide how long Professor Ridd would have continued working and what he would have earned.
  4. b)           Decide what Professor Ridd would actually earn during this period.
  5. c)           Subtract the latter sum from the former.
  6. d)           Consider the vicissitudes and apply an appropriate discount.
  7. e)           Look at the question of mitigation and what, if any, discounts should be applied because of any failure to mitigate the loss.
  8. f)           Finally, settle upon a figure that is just, fair and reasonable in all the circumstances.”

Ridd v Jmaes Cook University (No 2) (2019) FCCA 2489 delivered 6 September 2019 per Vasta J