Compensation for unfair dismissal

When assessing the amount of compensation which should be awarded to an employee found to have been unfairly dismissed, the decision maker must assess the remuneration which the employee would have been likely to have received had he or she not been dismissed. This is how that is determined.

“Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed

[93] 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.” 24

[94] When calculating the remuneration that the Applicant would have received or would have been likely to receive, if the Applicant had not been dismissed, the intention is to put the Applicant in the financial position he or she would have been in but for the unfair dismissal. Where the Commission forms the view that the Applicant would have stayed in his or her former job for a number of years, the remuneration may include long service leave and potential bonuses.25

[95] The Applicant submitted that the Applicant’s employment would have been likely to continue for a further period of 5 years and the amount of remuneration that the Applicant would have received or would have been likely to receive during that period is $233,869.50 plus superannuation of 10.5% amounting to $258,425.80.

[96] The evidence before the Commission, as confirmed in hearing by the Applicant, is that the Applicant earned a salary of $46,773.90 per annum plus superannuation.

[97] I find that the period the Applicant’s employment was likely to continue but for the dismissal was approximately 10 weeks and that during that period he would have received $8,994.98 plus superannuation. I also find that the Applicant ought to have been paid 2 weeks’ notice amounting to $1,799.00 plus superannuation. This totals an amount of $10,793.98 plus superannuation.”

Extract from Frankish v Itradegolf Pty Ltd (2023) FWC 53 delivered 9 January 2023 per Dobson DP