Compensation for unfair dismissal; the basic principles

Here is a part of an unfair dismissal decision which contains a basic analysis of the legal principles which are taken into account when assessing compensation for unfair dismissal.

“Consideration

[26] I have taken into account all of the submissions that have been provided by the parties and I have attached the appropriate weight to the evidence of the witnesses. The fact that an issue is not mentioned in this decision does not mean that it has not been taken into account.

[27] Under section 390(3) of the FW Act, I must not order the payment of compensation to the Applicant unless:

  • I am satisfied that reinstatement of the Applicant is inappropriate; and
  • I consider an order for payment of compensation is appropriate in all the circumstances of the case.

[28] As stated by a Full Bench, “[i]n assessing whether reinstatement is an appropriate remedy, it is obviously relevant as to whether the dismissed employee has obtained alternative employment. Where that new employment is satisfactory to the employee, it will be no remedy at all to reinstate the employee to the pre-dismissal employment to which the employee, for well-founded reasons, has no desire to return.” 3

[29] I am satisfied and find that reinstatement of the Applicant is inappropriate. In the circumstances of this case I find that an order for payment of compensation is appropriate.

[30] Section 392(2) of the FW Act requires all of 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 Respondent’s enterprise;

(b) the length of the Applicant’s service;

(c) the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;

(d) the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant because of the dismissal;

(e) the amount of any remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation;

(f) the amount of any 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; and

(g) any other matter that the Commission considers relevant.

[31] There is no dispute and I am satisfied that an order for compensation would not have an effect on the viability of the employer’s enterprise.

[32] The Applicant’s length of service was only 9 months.

[33] 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.” 4

[34] In this case, the Applicant was made redundant due to a decision by the client (PIMS Group Pty Ltd) to downsize its contract labour workforce. The obligation on the Respondent was to consult with the Applicant before he was made redundant. This did not occur. If the consultation had have occurred at the appropriate time, ie 2 June 2020, then the outcome may still have been the same on the basis that the Respondent may not have had a vacancy until mid-August 2020. Nevertheless, the consultation should have occurred, and it should have taken place face-to-face.

[35] I am satisfied and find that the proper consultation process would have taken no more than 1 week to occur. This would have been ample time for the Applicant to suggest his preference of an appointment closer to home and for the Respondent to undertake the necessary enquiries.

[36] I also note that the Applicant has not deducted from his claim the notice period, redundancy pay or payment of annual leave upon his termination from his claim. It has been held by the Commission that this money would be regarded as income received by the Applicant in his post-employment period.

[37] However, in my view, this is not a case which requires a detailed analysis of the Sprigg formula. Having found that the Respondent had unfairly dismissed the Applicant due to a lack of consultation and its failure to redeploy him, the only consideration is the timeframe that the Respondent should have taken in complying with the Act.

Conclusion

[38] Having taken into account all of the reasons and issues identified above, I am satisfied that if proper consultation had occurred between the Respondent and the Applicant at the time the Applicant was advised that he was being made redundant, the Applicant would have been employed for a further week.

[39] I find that the Applicant is entitled to a remedy of $2,550.00 (taxed at his normal rate) plus his normal superannuation contribution for that week.

[40] I have taken into account the other issues identified in section 392 of the Act and make no adjustment to my Order.

[41] I so Order.”

Kedwell v WorkPac Mining Pty Ltd (2022) FWC 7 delivered 4 January 2022 -perRiordan C