Here is a section of an unfair dismissal decision of the Fair Work Commission which contains a very useful example of how the Commission calculates compensation for unfair dismissal.
[159] The Full Bench has noted that the question of whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one, and whether an applicant has suffered financial loss may be a relevant consideration.52
[160] I am of the view that in all the circumstances of this case, it is appropriate to order compensation. My reasons and assessment of the amount are set out below.
[161] The long-established approach to assessing compensation in unfair dismissal matters was set out in Sprigg v Paul Licensed Festival Supermarket (Sprigg),53 which the Full Bench of this Commission has since applied under the current Act.54
[162] I summarise the Sprigg formula as follows:
1. Estimate the remuneration that employee would have received if the employer had not terminated the employment;
2. Deduct monies earned since termination;
3. Discount the remaining amount for contingencies;
4. Calculate the impact of taxation.
[163] While Sprigg sets out the method, I must nevertheless take account of all the circumstances of the case and of the specific criteria listed in s 392.55
[164] The overall consideration is that the level of compensation must nevertheless be appropriate (that is, neither clearly excessive nor clearly inadequate) having regard to all the circumstances of the case.56 My consideration follows.
Section 392(2)(a) – Viability
[165] KAB did not make submissions regarding this factor, though I do note that KAB’s profits are below its expectations. However, there is no evidence that KAB are in liquidation. As such, I am not persuaded that my consideration of this factor means that I should not make an order for compensation.
Section 392(2)(b) – Length of service
[166] KAB submits that Mr Mullins employment from on or about 29 August 2022 until 12 April 2024 is a very short period of employment during which it has been identified there were significant issues with performance of his work and conduct at least in the last six to ten months.
[167] Noting Mr Mullins submits he commenced employment on 29 August 2022, I am satisfied that Mr Mullin’s length of service is 1 year, 7 months and 2 days. This is a relatively short period of time and has been taken into consideration.
Section 392(2)(c) – Remuneration the person would have received
[168] As stated by a majority of the Full Court of the Federal Court in the He v Lewin57 (as quoted in Zeng v Conrock Australia Pty Limited)
“[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.”
[169] It is clear that KAB had concerns regarding Mr Mullins’ performance, and that the relationship between he and Mr Fraser had become strained. In this environment, had Mr Mullins not been summarily dismissed for serious misconduct/gross negligence, it is likely that KAB would have initiated a formal performance management process at some stage.
[170] It is of note however, that in response to performance issues raised as a part of the disciplinary process that led to his dismissal, Mr Mullins expressed his willingness to work with KAB and do whatever was in his power to address their concerns. I expect that he would have taken a similar approach to any formal performance process and would have done his best to meet KAB’s expectations. I therefore consider that had KAB initiated an appropriate process in the future and afforded him this opportunity he may well have been able to meet their expectations and remained in employment.
[171] However, I have also taken account of the significant breakdown in the relationship between Mr Mullins and Mr Fraser, a consequence of which may well have been that it was impossible for Mr Mullins to have met KAB’s expectations. Consequently, I consider it likely that Mr Mullins would have exited the organisation either voluntarily, or following a properly identified and managed performance process in the future.
[172] Taking the above into consideration, I believe that Mr Mullins was likely to have remained in KAB’s employment for another 12 to 18 months. I note however that Mr Mullins did commence a new job on 6 November 2024. On that basis, I consider his loss to be the 29 weeks between his dismissal and the commencement of his new employment.
Section 392(2)(d) – Efforts to mitigate loss
[173] It was Mr Mullins’ evidence that he had been on job seeking websites daily to locate alternative employment.58 Further that he had utilised his network to see if any jobs suitable to his qualifications and experience are available.59
[174] At the time of the hearing, Mr Mullins had been unable to obtain alternative employment and remained unemployed. Mr Mullins submitted that this was partly because he is an accountant specialised in manufacturing accountancy and as such, there are limited roles available in these fields.60
[175] KAB submitted that Mr Mullins has provided no evidence of his attempts to mitigate his loss, other than mere assertion in his statement that he has been looking at websites such as SEEK and asking people who may be able to assist with employment. KAB states a search on Google for ‘inventory accounting jobs in Brisbane’ returned results on SEEK for some 64 jobs as of 17 July 2024. Furthermore, there are jobs listed with equivalent or similar salaries to that of Mr Mullins at the time of termination. As such, Mr Mullins bears the onus of taking reasonable steps to minimise the impact of the dismissal, KAB submits that “mere looking” does not constitute reasonable steps or any substantial effort to find work.
[176] During the hearing Mr Mullins was referred to the list of inventory accountant jobs in Brisbane, as compiled by Ms Sutton, and was asked whether the jobs were suitable. Mr Mullins stated that out of the 22 jobs, only two jobs were suitable for his experience as the other jobs were not in manufacturing. When asked, Mr Mullins confirmed that though he was a manufacturing accountant, he had previously dealt with inventory management accounting, project accounting and cost accounting as other duties in his role. It was then put to Mr Mullins his statement of being unable to find similar employment is not accurate as he has experience in inventory accounting and cost accounting. Mr Mullins conceded that those roles would be in his experience but not what he would want to do. When asked if he would be able to do these jobs, Mr Mullins agreed he would.
[177] Mr Mullins further stated that he has not been applying for jobs he says he believes he is not suitable for, or a job that is in a head office in the city. Mr Mullins went on to state that he wants to do something he has been doing his whole life — working in a factory, half an hour’s drive from his home.
[178] On 3 January 2025 I sought further submissions from the parties regarding Mr Mullins’ efforts to mitigate his losses since the hearing.
[179] Mr Mullins states that according to the records accessed on or about 5 January 2025, he had applied for 26 positions through SEEK between 20 August 2024 and 30 October 2024, one of which he was successfully employed for. Mr Mullins states that his SEEK records only go back as far as 90 days, and as such he is unable to retrieve all his applications, but he estimates that he applied for a further 10 positions from the date of the hearing to 1 November 2024. Further, Mr Mullins states he had attended seven (7) interviews between the hearing and the date Mr Mullins was offered the position with KB Seafood Co Pty Ltd.
[180] With respect to Mr Mullins’ supplementary statement, KAB notes that since the hearing Mr Mullins has applied for roles not limited to that of a “management accountant,” despite
being critical of evidence tendered by KAB of advertised roles that may be available to him to apply for as an accountant advertised online. It is also noted, that the position Mr Mullins has obtained is a full-time role as a Cost Accountant with KB Seafood Co Pty Ltd based at Morningside (10 min drive or 5km in distance from his home at Camp Hill).
[181] KAB submit that Mr Mullins has demonstrated that with a broader search for work he was able to secure employment in an accounting role, within approximately 9-10 weeks following the hearing of the matter on 16 August 2024, close by to where he resides. As such, KAB submits that there is a reasonable inference to be drawn that Mr Mullins made no real attempt to mitigate his loss and apply for work prior to the hearing of this matter and did not make reasonable efforts until after the hearing of this matter concluded.
[182] Mr Mullins submits that when considering his career specialisation and that he was in the later stage of his career, it is beyond reasonable to expect that he mitigates his loss by looking for work outside of his field of specialisation. Mr Mullins argues that as a late-career specialist, it was reasonable for him to have attempted to find work within his specialised field. Once that opportunity had been afforded to him, it would then become reasonable to expect him to broaden his parameters. Mr Mullins looked for work within his specialised field for four months without success. Following that, it became reasonable to expect he would broaden his search and look for work outside of his specialised field, which he did.
[183] Whilst I acknowledge Mr Mullins submissions and preferences, I did not find his explanation as to why he did not apply for other work that he was both capable and experienced to do, as a sufficient barrier to him mitigating his loss.
[184] Taking the above into consideration, I find that Mr Mullins did not make all reasonable attempts to find alternative employment, particularly in the period between his dismissal and the hearing. I have balanced this finding with the consideration that Mr Mullins’ capacity to find alternative employment may have been impacted by his age, and by the fact that he was not able to provide prospective employers with a letter of reference or statement of service from KAB. I have also considered the additional loss that Mr Mullins has incurred because of accepting a role at a lessor rate of remuneration than his role with KAB. Taking all of these factors into consideration, I find it appropriate to reduce the amount of compensation awarded to Mr Mullins by 30%.
Section 392(2)(e) & (f) – Remuneration and income earned
[185] As indicated above and the absence of any submissions from either party, noting KAB submit that any income earned by employment prior to hearing should be considered, Mr Mullins has been employed and has received income in new employment since 6 November 2024. Mr Mullins says that his current salary is $85,000 per annum plus superannuation.
[186] I am satisfied that the total earned by Mr Mullins from employment or other work during the period since the dismissal is $21,250, however as this amount was wholly earnt outside of the period I have identified as Mr Mullins’ loss, it will not be deducted from the total.
Section 392(2)(g) – Any other matter
[187] Mr Mullins states that his legal costs at the time of his statement are about $8,950 and that by the end of the hearing they will total about $13,000 to $15,000.61
[188] KAB submit, and I accept, that costs are subject to s.402 of the Act and that the time for consideration of an application for costs should be considered at the conclusion of the entire proceeding.
[189] It is unclear whether Mr Mullins seeks cost, however in any event a person must bear their own costs in relation to a matter before the Commission per s. 611(1) of the Act.
Section 392(3) – Contribution to dismissal by misconduct not relevant
[190] KAB contends that Mr Mullins’ conduct constitutes serious misconduct and gross negligence for which any amount of compensation should be reduced by 100% considering his conduct.62 As I have not found this to be the case, Mr Mullins’ compensation will not be reduced in this regard.
Section 392(4) – Shock, distress etc disregarded
[191] I have not ordered an amount of compensation for shock and distress.
Taxation
[192] Consistent with prior decisions,63 I propose to order payment of a gross (that is, before tax) amount of compensation, to be taxed according to law.
Section 392(5) Compensation Cap
[193] Based on the material provided, Mr Mullins earned a weekly pay of $2,221.15 per week. I accept this figure.
[194] Under s 392(5) the compensation cap is the lesser of 26 weeks of Mr Mullins’ pay or half the amount of the high-income threshold.
• $83,750 is half the amount of the high-income threshold that applied immediately before Mr Mullins’ dismissal, which was $167,500.
• $57,749.90 is 26 weeks of Mr Mullins’ weekly pay.
[195] The compensation cap that applies to Mr Mullins is therefore $57,749.90.
Calculations
My calculations are set out in the following table:
Step 1 – Remuneration if employee had not been dismissed Amount
• Weeks wages per week $2,221.15
• Projected further weeks of employment (loss) 29
Total Remuneration $64,413.35
Step 2 – Discounts
s 392(2) (Mitigation of Loss) 30%
s 392(3) Deduction for Misconduct 0
Step 3 – Discount other contingencies 0
Total after deductions $45,089.34
Step 4 – Taxation – To be taxed according to law To be taxed according to law
Step 5 – s 392(5) Apply compensation cap $45,089.34
Conclusion on Remedy
[196] Having weighed each of the considerations under section 392, I intend to issue an order that the Respondent, KAB, pay to the Applicant, Mr Justin Mullins, the sum of $45,089.34 gross, taxed in accordance with law. An order to that effect will be issued separately and concurrently with this decision.”
Mullins v KAB SEATING PTY. LTD.- [2025] FWC 371 delivered 11 February 2025 per Durham C