As is explained in this extract from an unfair dismissal decision of the Fair Work Commission, the termination of the employment of an employee may be regarded as relevantly unfair and warranting a remedy for unfair dismissal even though there may have been a valid reason for it if it is performed in a fundamentally unfair manner, thus
“Conclusion
[339] I have determined that there was a valid reason for the dismissal.
[340] I consider that the Respondent informed Mr Byrom of some of the reasons for the dismissal, but he would have understood it was in respect of all three cash jobs performed by Mr Zahl.
[341] I have determined that Mr Byrom was given an opportunity to respond to all of the reasons for the dismissal, however it was in such a rushed, procedurally unfair way that it was deficient.
[342] There was no unreasonable refusal by the Respondent to allow Mr Byrom a support person.
[343] Mr Byrom’s dismissal was for alleged serious misconduct, not for unsatisfactory work performance.
[344] The Respondent’s enterprise is not small. There was not an absence of a dedicated human resource management specialist impacting on the procedures followed.
[345] In respect of other matters, I have determined that Mr Byrom was largely denied procedural fairness and the Respondent breached some of its own policies in the way it went about dismissing Mr Byrom. I have had regard for Mr Byrom’s length of service with the Respondent.
[346] Overall, notwithstanding that there was a valid reason for the dismissal, the deficiencies in the way the Respondent went around dismissing Mr Byrom so swiftly lead me to the conclusion that the dismissal was harsh, unjust and unreasonable. Having satisfied myself that the dismissal was harsh, unjust and unreasonable, pursuant to s.385(b) of the Act, I find that Mr Byrom was unfairly dismissed.
Remedy
[347] Section 390 of the Act reads as follows:
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.”
[348] Mr Byrom is a person protected from unfair dismissal for the Act’s purposes and is a person who has been unfairly dismissed. Accordingly, I am empowered to exercise discretion as to whether he can be reinstated.
[349] I am satisfied that it is inappropriate to order reinstatement.
[350] I now turn to consideration of compensation.
Compensation
[351] Section 392 of the Act provides:
“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.”
Authorities
[352] The approach to the calculation of compensation is set out in a decision of a Full Bench of Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival Supermarket.24 That approach, with some refinement, has subsequently been endorsed and adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages inc T/A Ottrey;25 Jetstar Airways Pty Ltd v Neetson-Lemkes;26 and McCulloch v Calvary Health Care (McCulloch).27
[353] I have had regard to the above authorities, and I have considered the submission of each party.
The effect of the order on the viability of the respondent
[354] There is no evidence to suggest that an award of compensation would affect the viability of the Respondent’s enterprise.
The length of Mr Byrom’s service
[355] Mr Byrom had seven years and two days’ service which I consider to be a reasonable period of time.
The remuneration that Mr Byrom would have received, or would have been likely to receive, if he had not been dismissed
[356] Noting that I have found that the Respondent had a valid reason to dismiss Mr Byrom, I consider that if he had been afforded procedural fairness and an appropriate period to respond to allegations in writing, and a show cause process to be followed, the employment would have continued for a period of three weeks (beyond his pre-arranged period of two weeks’ annual leave) before he would have been fairly dismissed. The Respondent’s compliance with its own policies would have rendered this an appropriate amount of time. I have determined that an appropriate amount of time would have been two weeks to conclude the investigation, allowing Mr Byrom representation if he sought it, and one week to consider any response from Mr Byrom in respect of a show cause letter that ought to have been issued to Mr Byrom. All of this would have occurred after Mr Byrom’s return from annual leave.
[357] I do not consider it necessary to make provision for any notice not paid to Mr Byrom pursuant to s.117 of the Act. I consider that Mr Byrom’s conduct would reasonably constitute serious misconduct in respect of his awareness of Mr Zahl’s performance of the Hervey Bay job and Mr Byrom’s receipt of the $600 cash payment in June 2023 and his failure to report the matter.
[358] The amount of remuneration Mr Byrom would have received in the three-week period would have been $189,000 / 52 x 3 weeks = $10,903.85. I have taken into account the fact that Mr Byrom had pre-arranged annual leave for a period of two weeks following his dismissal, and I am satisfied that he would have been on annual leave. The three weeks of compensation is for the period beyond the annual leave.
The efforts of Mr Byrom (if any) to mitigate the loss suffered because of the dismissal
[359] Having decided Mr Byrom’s employment would have continued for an additional three weeks beyond his two-week period of annual leave, I need only consider the efforts of Mr Byrom to mitigate his loss in those three weeks. I do not consider it necessary for him to have immediately sought employment in those three weeks and no deduction is made to the award of compensation.
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
[360] Mr Byrom did not earn any remuneration from employment or other work in the above relevant period.
The amount of any income reasonably likely to be so earned by Mr Byrom during the period between the making of the order for compensation and the actual compensation
[361] This factor is not relevant in the circumstances of this matter.
Other relevant matters
[362] I note that Mr Byrom will be entitled to a payment of pro rata long service leave on account of having reached seven years’ service and a finding that the Respondent has unfairly dismissed him.28 I estimate that is a payment of approximately $31,500.
Misconduct reduces amount
[363] Section 392(3) of the Act requires that if the Commission is satisfied that the misconduct of a person contributed to the employer’s decision to dismiss the person then the Commission must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct.
[364] The section requires that consideration be given by the Commission, amongst other things, as to whether a person’s misconduct contributed to the decision to dismiss an employee even if the Commission has found that there was no valid reason for the person’s dismissal. However, if there was no valid reason for the dismissal that may be relevant to the Commission’s decision as to the appropriate amount by which the amount of compensation should be reduced.
[365] I am satisfied that misconduct of Mr Byrom contributed to the Respondent’s decision to dismiss him. Accordingly, I must reduce the amount that would otherwise be ordered by an appropriate amount on account of the misconduct.
[366] In all the circumstances, I am satisfied that the appropriate amount by which to reduce the amount of the order for compensation on account of misconduct is 35%. The amount to be awarded is therefore $7,087.50.
Shock, distress etc. disregarded
[367] I confirm that any amount ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to Mr Byrom by the manner of the dismissal.
Compensation Cap
[368] I must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the applicant, or to which the applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or the high income threshold immediately prior to the dismissal.
[369] The high income threshold immediately prior to the dismissal was $167,500, and the amount for 26 weeks was $83,750. The amount of compensation the Commission will order does not exceed the compensation cap.
Payment by instalments
[370] This is not a relevant consideration.
Order of compensation
[371] I have determined to award Mr Byrom the amount of $7,087.50 and an amount of $779.63 in superannuation at the rate of 11% as it was in the 2023/2024 financial year.
[372] The Respondent is to pay to Mr Byrom the following amounts within 14 days:
(a) $7,087.50 taxed as required by law; and
(b) $779.63 into Mr Byrom’s superannuation account.”
Byrom v Veris Australia Pty Ltd [2024] FWC 2865 delivered 16 October 2024 per Hunt C