Compensation for unfair dismissal for casual employees

What follows is an extract from a recent Fair Work Commission case which deals with the issue of compensation for an employee who was a casual employee for unfair dismissal.

“REMEDY

Having determined that the Applicant’s dismissal was unfair, it is necessary to consider the question of remedy. As required by s. 390 of the Act, I am satisfied that the Applicant was protected from unfair dismissal and that he was unfairly dismissed. I am also of the view that the Applicant should have a remedy for his unfair dismissal. The parties agree that their relationship has irretrievably broken down and cannot be re-established. I share their view and have concluded that reinstatement is not an appropriate remedy. I have made the necessary findings that are prerequisite to awarding compensation.

In relation to the assessment of compensation, s. 392 of the Act 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.”

I turn now to the particular criteria I am required to consider in deciding the amount of compensation to be awarded to the Applicant for his unfair dismissal.

The effect of the order on the viability of the Respondent – s. 392(2)(a)

There is no evidence that the order I propose to make will have an effect on the viability of Downer.

Length of the Applicant’s service – s. 392(2)(b)

The Applicant had been employed by Downer for just 1 year 11 months and two weeks at the point his hours were reduced and he was removed from the roster.

Remuneration the Applicant would have or would likely have received – s. 392(2)(c)

The Applicant was included in a roster which ran until 31 December 2018. But for his dismissal I can see no reason why the Applicant would not have remained in employment for at least that period. I am not able to conclude that the Applicant’s employment would have continued past that date. The Applicant was a casual employee and the Respondent could have taken steps to employ additional ESSOs thereby reducing his hours or some other incident may have occurred whereby the Applicant’s employment came to an end.

The Applicant provided payslips evidencing that he had earned an amount of $41,726.99 in the 26 week period prior to his removal from the roster and maintained that this amount should form the basis for calculation of compensation. This equates to an average of $1,604.00 per week.

The difficulty in assessing the remuneration that the Applicant would have received had he not been dismissed is that the date of his dismissal is unclear. In the Decision granting the Applicant a further period in which to make his application, I decided that the Applicant’s employment had ceased by at least 15 October 2018. However, the Applicant lost remuneration as a result of being removed from the roster, with such loss commencing on 20 August 2018 when he was available to commence work. I see no reason why assessment of the Applicant’s lost remuneration should not start from the point the Respondent repudiated the employment contract rather than the point at which the Applicant accepted the repudiation.

Accordingly, I find that had the Applicant not been dismissed he would have earned $28,872.00 in the period between 20 August 2018 and 31 December 2018 when the current roster concluded.

The Applicant’s efforts to mitigate loss – s. 392(2)(d)

Notwithstanding his difficulty in obtaining alternative employment, the Applicant rejected offers from the Respondent to work certain shifts. In my view his refusal was unreasonable and had he worked those shifts more work may have been offered. I have also had regard to the fact that the Applicant made a choice to stop seeking work and draw on his superannuation. In all of the circumstances I am not satisfied that the Applicant made reasonable attempts to mitigate his loss and I have deducted an amount of 25% from the compensation awarded to the Applicant for that failure.

The amount of any remuneration earned since dismissal – s. 392(2)(e)

The Applicant has earned no remuneration since his dismissal and no deduction is made in relation to this matter.

The amount of any income reasonably likely to be earned during the period between the making of the order for compensation and the actual compensation – s. 392(2)(f)

Given the period over which I have assessed compensation, based on my view about the likely period that the Applicant would have remained in employment, this matter is not relevant to the calculation of compensation.

Any other matter that the FWC considers relevant – s. 392(2)(g)

I consider that the Applicant’s intransigent and at times belligerent attitude played a significant role in the situation in which he found himself. I have deducted a further amount of 25% from the award of compensation to reflect this. In making this deduction I have also had regard to the fact that the Applicant’s legal advice left much to be desired and doubtless contributed to his attitude.

Deduction for misconduct

The Applicant did not engage in misconduct and the conduct complained of by the Respondent has been dealt with under s. 392(2)(g).

ORDERS

I conclude as follows:

  1. An order for the payment of compensation in the amount below would not affect the viability of Downer’s business.
  2. The period of the Applicant’s employment was just under two years and no deduction from compensation should be made on this basis.
  3. But for the dismissal, the Applicant would likely have earned an amount of $28,872.00.
  4. Given the length of the period over which I have assessed compensation on the basis of how long the Applicant would have remained in employment and the other deductions I have made, I make no deduction for contingencies.
  5. I have decided to make a deduction of 25% ($7218.00) for failure of the Applicant to mitigate loss.
  6. The Applicant had no earnings from other sources during period over which I have assessed compensation and I make no deduction on this basis. I make no deduction for income likely to be earned during the period between the making of my order and the actual compensation.
  7. I have decided to make a deduction of 25% for the contribution that the Applicant made to the termination of his employment ($7218.00).
  8. I make no deduction in respect of misconduct.
  9. The amount of compensation is less than the compensation cap calculated in accordance with s. 392(5) and s. 392(6).

In all of the circumstances of this case I consider that it is appropriate that I make an Order for compensation. The Order will issue with this Decision and will require Downer to pay compensation to the Applicant in lieu of reinstatement of a gross amount of $14,436.00 to be taxed according to law. The order will require the payment to be made within 14 days of the date of this Decision.”

Birchley v Downer EDI Mining Pty Ltd (2019) FWC 6336 delivered 20 September 2019 per Asbury DP