General protections claims; what can be added on?

This interesting portion of a Federal Court of Australia decision in a general protections dismissal claim deals with additional claims pursued in the case by a former employee for inter alia compensation for breaches of the Fair Work Act in relation to other statutory entitlements including to be paid out accrued annual leave.

 

“Mr Dorsch’s damages claims

445    By reason of the foregoing, Mr Dorsch has only been successful with respect to his claim that there was an impermissible delay in the making of his annual leave payment. HEAD Oceania accepted that this comprises a breach of both s 90(2) of the FW Act and of his contract. By reason of this, Mr Dorsch is entitled to damages under contract and by operation of s 545(2)(b) of the FW Act. Neither party submitted to me that I should treat the damages to be awarded any differently by reason of the dual claim in contract and under the FW Act arising from the same facts.

446    HEAD Oceania submitted that Mr Dorsch suffered no damage because he was paid his annual leave entitlement in full. Therefore, no remedy is available in respect of this claim. Mr Dorsch rejected this submission. He contended that the delay in being paid his annual leave deprived Mr Dorsch of the use of money and resulted in him selling off his German life insurance and pension insurance. This compounded his stress, and added to his financial position which contributed to him developing his major depressive disorder.

447    In his closing submissions, counsel for HEAD Oceania did not accept that Mr Dorsch had established a link between the delay in being paid accrued annual leave and Mr Dorsch having to sell his German life insurance and pension insurance. If this submission were not accepted, HEAD Oceania submitted that the evidence would not satisfactorily answer why selling the insurance policy would crystallise some loss. Further, HEAD Oceania submitted that, on the evidence, there did not appear to be any differentiation between Mr Dorsch becoming unemployed as opposed to him not having to hand the amount of annual leave that was payable on termination. Given the same, HEAD Oceania contended that it was “too long a leap” to attribute the loss of future prospective earnings from a life insurance and pension policy held overseas.

448    It is difficult to assess the claim for damages arising from this breach. Mr Dorsch did not identify in his schedule of loss a specific claim for damages (both economic and non-economic) that he claims arises specifically (and only) from this claim. This was curious given it was known at the commencement of the hearing that this was the one aspect of the claim that was admitted.

449    As to the potential economic loss claim, I note that I have only accepted that there was a delay of three months in paying Mr Dorsch his accrued annual leave entitlement of $8,022.82. I note that Mr Dorsch’s claim, when he prepared his affidavit evidence, was that he had been deprived of his accrued annual leave (claiming he was not paid all that he was entitled to, quite aside from the delay) (comprising $22,965) and long service leave entitlements (comprising $13,365), and that I have rejected these claims. Mr Dorsch’s evidence in this regard was in general terms. By way of illustration, he deposed:

  1. The termination and the refusal to pay unused annual leave, long service leave and the other deductions from my final pay, left me in serious financial distress and hardship. I found it very difficult to service loans, make mortgage payments and keep up with my living expenses, whilst also providing financial support to my mother who is dependent on me.
  2. I was forced to sell off my German life and pension insurance, which would have been otherwise due for payout in 2033. I was also forced to fully withdraw my Hong Kong Mandatory Provident Fund. Due to such an early pay-out of my life insurance and pension insurance, I have suffered a huge loss of interest and dividends. I have also suffered a loss of my life insurance payout in the event of death, pension and retirement security. I estimate that I have lost my German Life Insurance a total of around EUR 35,000. I estimate that I have lost EUR 125,000 by withdrawing my Hong Kong Mandatory Provident Fund.

450    As can be seen from the above, the estimated loss is asserted to have arisen from a combination of factors, the termination of his employment (and, it may be inferred, the consequential loss of salary), as well as what he claims to be the refusal to pay “unused annual leave” and long service leave (in total over $35,000), the scope of which this breach does not relate to. Mr Dorsch provided no evidence as to what his actual financial commitments were between December 2021 and March 2022 (when he received the payment for his accrued annual leave). Accordingly, it is not possible to determine whether the delay in making the $8,022.82 payment, quite apart from the fact of his loss of salary and the other unpaid claimed amounts, had a causal connection with him being “forced” to withdraw from the Hong Kong Fund or had an effect on his German life insurance. I note in this regard that Mr Dorsch did not assert that he was “forced” by HEAD Oceania to make these financial decisions but rather he felt that he had no choice, in the circumstances, but to do as he did. Without proper evidence, I cannot come to any conclusion as to what economic loss he suffered as a result of this breach.

451    In a similar way, Mr Dorsch’s non-economic claim was asserted without reference to any particular evidence. Whilst both parties made submissions regarding the extent to which I should accept their respective experts, this is not an issue that I need to resolve. The deficiency is evident not only from Mr Dorsch’s evidence extracted above, but also from the evidence of his medical expert, Dr Samuels. Even if I were to accept Dr Samuels’ evidence, no particular attention is given to what impact the delay in making the annual leave payment had on his mental health or any condition he developed said to be causally related to any breach. Further, it was Dr Samuels’ understanding that Mr Dorsch had been “paid out his annual leave but not any long service leave”. It may be accepted that Mr Dorsch was acutely distressed by the fact of and manner in which his employment came to an end. It may also be accepted that he suffered mental distress as a result of the effect the termination of his employment had on his financial circumstances. However, it is very difficult to unscramble the egg to work out what level of that distress was associated with the delay in the payment of the annual leave, particularly when there was the associated distress related to the purported amount he claimed he was entitled to (but about which I have found there to be no breach). Ms Terry’s evidence was also at a level of generality and concerned the fact of financial stress and mental distress generally following the termination.

452    The assessment of general damages requires me to make findings as to the harm Mr Dorsch suffered as a result of the delay in receiving his accrued annual leave entitlement. I am unable to deduce from the evidence of either expert how their evidence assists me in making this finding. Mr Dorsch did not assist me in this regard. Section 545(2)(b) confers a power on the Court to make orders awarding compensation for loss that a person has suffered because of the contravention. It may be accepted, and was not disputed, that that power includes compensation for non-economic loss. Mr Dorsch made no submission as to the amount he was seeking by way of general damages in this regard.

453    By reason of the evident distress Mr Dorsch suffered in the immediate aftermath of his termination and the fact of him suffering financial strain, I am able to infer that Mr Dorsch suffered some distress by reason of the delay in paying the payment. In the circumstances, it is my view that HEAD Oceania should be ordered to pay Mr Dorsch a modest amount of general damages to compensate him for the unlawful delay in paying his accrued annual leave entitlement. I have taken into account the limited probative general evidence as the distress he suffered as a result of his financial circumstances after the termination of his employment. I award the sum of $10,000 as compensation for the distress he suffered from the delay in making the payment.

454    As to the damages claims otherwise, I have found that HEAD Oceania took no adverse action against Mr Dorsch, save for the delay in paying him his annual leave entitlement. I have found that none of the other purported action was taken for a prohibited reason and therefore it was not unlawful and nor did it constitute a breach of contract. Therefore, it is unnecessary to determine whether Mr Dorsch has suffered any loss or damage as a result of these unsuccessful claims.

455    As observed by Mortimer J, as her Honour then was, in Milardovic v Vemco Services Pty Ltd (Administrators Appointed) [2016] FCA 19 at [293], where findings have been made in a trial so that other issues no longer fall for decision, it is a matter for the trial judge to determine whether she or he should go on and determine those issues, citing Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd [2010] VSCA 355; 31 VR 46 at [103] and Housden v Boral Australian Gypsum Ltd [2015] VSCA 162 at [154]–[155].

456    It is my view that the multifarious bases upon which Mr Dorsch’s claims have failed, the number and intertwining of those claims and the ultimate findings I have made that HEAD Oceania is not liable with respect to the adverse action claims render it not only artificial but impossible to make any determination of the nature and amount of compensation Mr Dorsch might have received if I had found the other way. This is particularly so given there were so many different permutations of his adverse action claims (based on numerous different purported exercises of workplace rights) and there was no corresponding identification in the pleading, evidence or submissions, as to how, if one or more combinations of those claims were successful, the damages claim could unfold. The number and complexity of the claims in this case is much greater than in Milardovic and I agree with Mortimer J that if I were to engage in the labyrinthine task of assessment it would be akin to fixing penalties in circumstances where no contraventions had been proven.

Conclusion

457    For these reasons, I am not satisfied that Mr Dorsch has proven any of his claims except the claim under s 90(2) of the FW Act and the associated contractual claim that he was not paid his annual leave in full when the employment ended for which I will award $10,000 of general compensation. I will need to make the necessary declaratory and compensatory orders. Neither party addressed me on costs. Further, the issue of civil penalty remains for which timetabling orders will be necessary.

458    Accordingly, I order that the parties confer regarding the appropriate orders to be made by the Court giving effect to these reasons and the further timetabling of the outstanding issues.”

 

 

Dorsch v HEAD Oceania Pty Ltd [2024] FCA 162 delivered 29 February 2024 per Raper J