This extract from a recent decision by a very senior Commissioner of the Fair Work Commission in an unfair dismissal case deals with the manner in which compensation for unfair dismissal may be calculated.
“REMEDY
[44] Having found that each of the Applicants were unfairly dismissed it turns to me to
determine an appropriate remedy. None of the Applicants seek reinstatement and I therefore do
not consider reinstatement reasonable.
[45] I shall therefore consider compensation.
[46] Section 392 of the FW Act sets out those matters to which the Commission is required
to have regard in the determination of an appropriate amount of compensation. It states:
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
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(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.
[47] I have considered the matters under s.392 in relation to each of the Applicants, again
noting that the Respondent has failed to participate in proceedings or file any evidence or
submissions. I have no more than the evidence and submissions of each of the Applicants on
which to make findings.
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[48] Further, I am satisfied that each of the Applicants was employed by the Respondent
pursuant to the 2020 Award at the time of their dismissal. The 2020 Award came into effect on
13 April 2020 and replaced the Educational Services (Post Secondary Education) Award 2010
(the 2010 Award). Beyond changes in clause numbers, the classification and progression
arrangements as would have applied to each of the Applicants did not vary between the 2010
Award and 2020 Award.
[49] The Applicants submit, and I accept, that each was employed as a Tutor/Instructor
(clause B.4.1(b) of the 2020 Award) and would have commenced at Level 2 with progression
to Level 7. Further, I accept that, in accordance with clause B.5 of the 2020 Award each
Applicant would have progressed to the next pay point each 12 months of completed
employment.
[50] I have accepted that each of the Applicants was dismissed on or about 9 December 2021
and the 2020 Award came into effect from 13 April 2020 I need only be concerned with the
rates of pay in the 2020 Award for the purposes of determining compensation.
[51] The relevant casual rates of pay under the 2020 Award between 1 July 2021 – 30 June
2022 as applied to the Applicants are as follows:
1 JULY 2021 – 30 JUNE 2022
Casual daily rate3 Casual hourly rate4
Level 2 $256.07 $ 51.21
Level 3 $261.13 $52.23
Level 4 $266.24 $53.25
Level 5 $277.01 $55.40
Level 6 $284.19 $56.84
Level 7 $290.73 $58.15
[52] The relevant casual rates of pay under the 2020 Award between 1 July 2022 – 30 June
2023 are as follows:
1 July 2022 – 30 July 2023
Casual daily rate3 Casual hourly rate4
Level 2 $267.84 $53.57
Level 3 $273.14 $54.63
Level 4 $278.49 $55.70
Level 5 $289.75 $57.95
Level 6 $297.26 $59.45
Level 7 $304.10 $60.82
3 As provided in clause 15.2 the daily rate is paid where the engagement is for 5 hours
or more.
4 As provided in clause 15.2 the hourly rate is paid where the engagement is for less than
5 hours.
In relation to each of the Applicants
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[53] For the sake of brevity the following matters apply equally to each of the Applicants
and should be read in conjunction with the specific findings below in relation to compensation.
[54] Each of the Applicants was dismissed from their employment on or about 9 December
- For the purposes of the calculation on remedy I have accepted that their employment was
terminated on 9 December 2021.
[55] At the time of termination of employment COVID-19 restrictions on where work could
be performed were coming to an end. It is apparent from the jurisdiction decisions that the
COVID-19 restrictions had some impact on the working arrangements of the Applicants to
varying degrees. To the extent this was canvassed in the jurisdiction decisions and submissions
in relation to each Applicant I have taken this into account. In the jurisdiction decisions Deputy
President Young found specific hours of work for the Applicants. I have used those hours of
work for the purposes of determining compensation. To this extent I have assumed that, had the
Applicants remained in employment, their hours of work would not be less than what was found
in the jurisdiction decisions.
Application of the compensation cap (s.392(5))
[56] The compensation cap is to be calculated by reference to the total remuneration received
or to which the person was entitled (whichever is greater) in the 26 weeks immediately prior to
dismissal or, if the person was on leave without pay or not on full pay the amount determined
in accordance with the regulations.
[57] I have calculated the compensation cap based on the hours of work of the Applicants as
determined in the jurisdiction decisions where this is clear. Otherwise I have used the “best
estimate” as provided by the Applicants in their submissions to the matter before me. The
precise calculation is set out in the detailed findings below.
The effect of an order on the viability of the Respondent (s.393(2)(a))
[58] As previously stated in this decision the Respondent has declined to participate in
proceedings. Given the lack of information before the Commission it is not possible to conclude
that the order I propose to make in relation to each Applicant will affect the viability of the
Respondent’s business.
Any other matters (s.392(2)(g))
[59] There are no other matters beyond those set out below in relation to any Applicant.
Reduction for misconduct (s.392(3))
[60] There is no evidence of misconduct and I have not made any deduction for this reason
from any Applicant.
No payment for shock humiliation and distress (s.392(4))
[61] I have made no payment for this purpose.
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Stefania Taverna
The remuneration Ms Taverna would have received had her employment not been terminated
(s.392(2)(b) & (c))
[62] I am satisfied that at 9 December 2021 – the time of dismissal – Ms Taverna had
completed in excess of 11 years’ service with the Respondent. While the Applicants’
representative suggests that Ms Taverna would only have been employed for a further 26 weeks
there is nothing in the evidence before me to suggest such a short period of future employment
given her length of service. I am therefore satisfied that her employment would have continued
for a further 12 months.
[63] At the time of her dismissal in December 2021 Ms Taverna was paid at Level 7 under
the 2020 Award at $58.15 per hour. On 1 July 2022 her rate of pay would have increased to
$60.82 per hour.
[64] Ms Taverna’s hours of work were subject to some dispute in the hearing before Deputy
President Young who ultimately found that she “prefer[red] the evidence of Ms Taverna as to
the hours she worked during the period” of February 2021 – December 2021. Unfortunately,
this does not assist me in determining Ms Taverna’s likely future hours of work. The
Applicant’s representative submits that it is reasonable to assume that Ms Taverna was working
15.38 hours contact hours (or 2 shifts) per week (based on 800 face to face teaching hours being
equivalent to one year of full-time experience) and this would have continued.
[65] Clause 14.3(c)(ii) of the 2020 Award states that each contact hour by the tutor/instructor
will count as 1.25 hours of work. Ms Taverna’s contact hours of 15.38 per week therefore must
be multiplied by 1.25 in recognition of this provision. I have, for this reason, based my
calculations below on 19.225 hours of work per week.
[66] I am satisfied that Ms Taverna’s earnings for the 12 months I consider she would have
remained in employment to be:
10 December 2021 to 30 June 2022
19.225 hours/week x $58.15/hour x 29 weeks = $32,420.08
1 July 2022 to 9 December 2022 +
19.225 hours/week x $60.82/hour x 23 weeks = $26,893.08
= $59,313.16
[67] In the 12 month period after her dismissal, Ms Taverna’s evidence is that she earned no
income for the period 9 December 2021 – 26 June 2022. From 27 June 2022 – 17 November
2022 Ms Taverna earned an amount of $9,412.50. This should be deducted from her future
earnings to assess her lost income.
$59,313.16 – $9,412.50 = $49,900.66
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[68] Ms Taverna’s lost income for the period I consider she would have remained employed
is therefore $49,900.66. She would also have received an amount of 10.5% superannuation for
this period.
Attempts by Ms Taverna to mitigate her loss (s.392(2)(d))
[69] I am satisfied that Ms Taverna has made all reasonable attempts to mitigate her loss. I
have therefore not reduced the amount I will otherwise order.
Application of the compensation cap (s.392(5))
[70] Had Ms Taverna been paid the appropriate rate in the 6 months prior to 9 December
2021 she would have received (based on the use of the same hours of work per week as
determined above):
9 June 2021 to 30 June 2021
19.225 hours/week x $56.73/hour x 3 weeks = $13,483.30
1 July 2021 to 9 December 2021 +
19.225 hours/week x $58.15/hour x 23 weeks = $25,712.48
= $39,195.78
[71] The compensation cap in relation to Ms Taverna is therefore $39,195.78. I can order no
greater payment than this amount.
[72] I have found that Ms Taverna’s lost remuneration is $49,900.66. This is more than the
compensation cap. I shall therefore order that Ms Taverna be paid an amount of $39,195.78
plus 10.5% superannuation. An order7
to this effect will be issued with this decision.
Teresa Delfino
The remuneration Ms Delfino would have received had her employment not been terminated
(s.392(2)(b) & (c))
[73] I am satisfied that, at 9 December 2021 – the time of dismissal – Ms Delfino had
completed in excess of 13 years’ service with the Respondent. While the Applicants’
representative suggests that Ms Delfino would only have been employed for a further 26 weeks
there is nothing in the evidence before to suggest such a short period of future employment
given her length of service. I am therefore satisfied that her employment would have continued
for a further 12 months.
[74] At the time of her dismissal in December 2021 Ms Delfino was paid at Level 7 under
the 2020 Award at a rate of $58.15 per hour. On 1 July 2022 her rate of pay would have
increased to $60.82 per hour.
[75] In the jurisdiction decision in relation to Ms Delfino Deputy President Young said “I
find that in her employment with the Respondent Ms Delfino regularly worked 4 days per week
for 6.5 hours per day other for occasional variations and in periods of lockdown”. Despite the
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submission of the Applicants’ representative, I am not prepared to find that Ms Delfino would
have worked fewer hours than those found by Deputy President Young. The Deputy President
had available to her the written and oral evidence of Ms Delfino as well as that of the
Respondent. I accept and adopt her findings in this respect. There is nothing before me to
suggest that this pattern of work would change.
[76] I am therefore satisfied that Ms Delfino would have continued to work 26 hours per
week. I have not based my calculations on a reduced number of hours for lockdown as, by the
end of 2021 lockdowns had almost ended.
[77] For the reasons given above in relation to Ms Taverna, I have adjusted the hours for
which Ms Delfino would be paid by 1.25, taking into account the provisions of clause 14.3(c)(ii)
of the 2020 Award.
10 December 2021 to 30 June 2022
32.5 hours/week x $58.15/hour x 29 weeks = $54,806.38
1 July 2022 to 9 December 2022 +
32.5 hours/week x $60.82/hour x 23 weeks = $45,462.95
= $100,269.32
[78] I therefore find that Ms Delfino lost earnings, for the period I consider she would have
remained employed had she not been dismissed, to be $100,269.32.
Attempts by Ms Delfino to mitigate her loss (s.392(2)(d))
[79] Since her dismissal Ms Delfino has not worked but has been in receipt of social security
benefits. This is not an amount that I have taken into account, any overpayment of social
security benefits arising from the amount I have decided to award being a matter for Ms Delfino
and Services Australia.
[80] Ms Delfino has provided no evidence of attempts to mitigate her loss through seeking
other employment. I have therefore reduced the amount of lost earnings by 15%. I consider this
amount reasonable in circumstances where Ms Delfino has continued her efforts to resolve her
underpayment claim but has otherwise taken no steps to find alternative employment. It is
reasonable in this case to expect Ms Delfino would seek to offset the effects of the loss of her
employment with the Respondent with alternative work. This reduces the lost earnings amount
to $85,228.93.
Application of the compensation cap (s.392(5))
[81] Had Ms Delfino been paid the appropriate rate in the 6 months prior to 9 December
2021 she would have received (based on the use of the same hours of work per week as
determined above):
9 June 2021 to 30 June 2021
32.5 hours/week x $56.73/hour x 3 weeks = $5,531.18
1 July 2021 to 9 December 2021 +
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32.5 hours/week x $58.15/hour x 23 weeks = $43,467.13
= $48,998.30
[82] The compensation cap in relation to Ms Delfino is therefore $48,998.30.
[83] I have found that Ms Taverna’s lost remuneration is, less the mitigation deduction,
$85,228.93. This is more than the compensation cap. I am therefore statutorily required to
reduce the amount of compensation payable to Ms Delfino to $48,998.30. She would also be
entitled to 10.5% superannuation. An order8
to this effect will be issued with this decision.
Karlee Hunt
The remuneration Ms Hunt would have received had her employment not been terminated
(s.392(2)(b) & (c))
[84] I am satisfied that, at 9 December 2021 – the time of dismissal – Ms Hunt had completed
just over 6 years’ service with the Respondent. While the Applicant’s representative suggests
that Ms Hunt would only have been employed for a further 26 weeks there is nothing in the
evidence before to suggest such a short period of employment given her length of service. I am
therefore satisfied that her employment would have continued for a further 12 months.
[85] At the time of her dismissal in December 2021 Ms Hunt would have been paid at Level
7 under the 2020 Award at a rate of $58.15 per hour. On 1 July 2022 her rate of pay would have
increased to $60.82 per hour.
[86] Ms Hunt’s hours of work were subject to some dispute in the jurisdiction hearing before
Deputy President Young who ultimately found that “Ms Hunt has worked between 1-4 shifts
per week for 6.5 hours per day” except for periods when she took leave. In light of this finding
I consider it reasonable to calculate Ms Hunt’s anticipated earnings based on her working 2.5
shifts per week of 6.5 hours per day (equivalent to 16.25 hours per week). For the reasons given
above this needs to be multiplied by 1.25 giving 20.31 paid hours per week.
[87] In her witness statement filed in these proceedings Ms Hunt says that, from at least
March 2022, she has not been fit for work due to her health. Absent any other evidence I take
that this was the case from 1 March 2022. Ms Hunt can therefore not have lost any income from
the period commencing 1 March 2022 as she would not have been earning an income during
that period even if her employment had continued. Ms Hunt’s statement confirms that, as at
November 2022, she was still unfit for work due to a medical condition. I shall therefore
consider Ms Hunt’s lost remuneration only for the period 9 December 2021- 28 February 2022.
10 December 2021 to 28 February 2022
20.31 hours/week x $58.15/hour x 11.6 weeks = $13,699.91
Attempts by Ms Hunt to mitigate her loss (s.392(2)(d))
[88] Given the period between the cessation of her employment and when she became
medically unfit for work was a period of just over 11 weeks I have determined not to make any
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deduction from Ms Hunt’s lost remuneration due to any perceived failure to mitigate her loss
by seeking alternative employment.
[89] In reaching this conclusion I have also taken into account that Ms Hunt was engaged in
attempts to recover underpayments from the Respondent, a process that did not provide any
clarity to Ms Hunt until May 2022 when the Fair Work Ombudsman issued a compliance notice
on the Respondent.
Application of the compensation cap (s.392(5))
[90] I am satisfied that the amount of lost wages I have calculated for Ms Hunt is less than
the compensation cap (given it is calculated on 11.6 weeks pay).
[91] An order9
that the Respondent pay to Ms Hunt an amount of $13,699.91 plus an amount
of 10.5% for superannuation will be issued with his decision.
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CONCLUSION
[92] For the reasons given above I shall issue orders each of which will require the
Respondent to pay, within 21 days of this decision, compensation of:
- For Ms Taverna: $39,195.78 plus 10.5% superannuation.
- For Ms Delfino: $48,998.30 plus 10.5% superannuation.
- For Ms Hunt: $13,699.91 plus 10.5% superannuation.”
Delfino and others v Melbourne College of Hairdressing Beauty and Natural Medicine Pty Ltd [2023] FWC 761 delivered 4 April 2023 per Bissett C