This section of an unfair dismissal decision of the Fair Work Commission contains the reasons for decision of the Commission to award compensation for unfair dismissal and thus the legal principles which the Commission uses to do so.
“Remedy
[109] Being satisfied that the Applicant made an application for an order granting a remedy under section 394 of the Fair Work Act, was a person protected from unfair dismissal, and was unfairly dismissed within the meaning of section 385, the Commission may, subject to the Fair Work Act, order the Applicant’s reinstatement, or the payment of compensation to the Applicant.
[110] Under section 390(3) of the Fair Work Act, the Commission must not order the payment of compensation to the Applicant unless the Commission is satisfied that reinstatement of the Applicant is inappropriate, and the Commission considers an order for payment of compensation is appropriate in all the circumstances of the case.
[111] Mr Davis says there is no vacancy with his former employer.47 The employer did not say otherwise. I consider that reinstatement is inappropriate. I will now consider whether a payment for compensation is appropriate in all the circumstances.
[112] Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. A Full Bench has stated that “[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…”48 and so the issue of whether the discretion should be exercised in favour of granting compensation will now be considered.
[113] Where an applicant has suffered financial loss as a result of the dismissal, this may be a relevant consideration in the exercise of this discretion.49
[114] In all the circumstances, I consider that an order for payment of compensation is appropriate in light of the loss that Mr Davis suffered.
[115] Section 392(2) of the Fair Work 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.
[116] There is no evidence before me to indicate that an order for compensation would affect the viability of the employer’s enterprise. This consideration is neutral.
[117] The Applicant’s length of service was less than two years.
[118] I consider that the Applicant’s length of service does not support reducing or increasing the amount of compensation ordered, though it could affect the remuneration that Mr Davis would have received if he had not been dismissed.
[119] 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.”50
[120] I have found there was a valid reason for termination. In the circumstances if Odell had dealt with the matter more prudently, it is likely that Mr Davis would have been dismissed on a date on or around 2 October 2024. Taking into account the factual matrix set out above I consider he most likely would have been dismissed summarily.
[121] The Applicant must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal.51 What is reasonable depends on the circumstances of the case.52
[122] Mr Davis said “I have been traumatised by these events and have not been in a state of mind to apply for another job.” Odell submitted and I accept that Mr Davis had taken no steps to mitigate his loss.
[123] There is no evidence of any earnings from employment or other work since the dismissal.
[124] Given the matters set out above this issue does not weigh in favour or against reducing the amount of compensation.
[125] The cost of the flight from Perth to Brisbane was not incurred after the dismissal. Even if Mr Davis had been employed for a further period as described above, he would likely still have flown back to Brisbane prior to termination. Whether or not Mr Davis might have a remedy in contract, I do not consider this loss appropriate to be compensated in these proceedings.
[126] Mr Davis has also indicated he wishes to be compensated for fees he paid to a paid agent in connection with filing his application. This loss will also not form part of the compensation in these proceedings. If Mr Davis wishes to make an application for costs, he is not prevented from doing so. As he was self-represented in these proceedings, it is noted that he should have regard to the relevant provisions of the Fair Work Act and the material freely and publicly available about those provisions’ operation, including in the Fair Work Commission’s unfair dismissals benchbook.
[127] The established approach to assessing compensation in unfair dismissal cases was set out in Sprigg v Paul Licensed Festival Supermarket (“Sprigg”)53 and applied and elaborated upon in the context of the current Act by Full Benches of the Commission in a number of cases,54 as follows:
Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).
Step 2: Deduct monies earned since termination. Workers’ compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation ordered.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.
Step 1
[128] Mr Davis said he was paid $50 per hour, and worked a minimum of 72, and a maximum 84, hours per week.55 This was consistent with his employment contract which provided that shifts may be up to 12 hours in duration, and working hours would not exceed 84 hours per week.56 This means the gross payment per week would have been $3,600.00.
[129] I have found, above, that Mr Davis would have been employed another week. The amounts that Mr Davis would have received, therefore, are:
Period from 25 September to 2 October: $3,600.00
Superannuation guarantee at 11.5% (the rate in financial year 2024/25): $414.00 Total: $4,014.00
[130] I have estimated this on the basis of my finding that the Applicant would likely have remained in employment for a further period of one week. This estimate of how long the Applicant would have remained in employment is the “anticipated period of employment”.57
Step 2
[131] Only monies earned since termination for the anticipated period of employment are to be deducted.58 In this case, there are no monies to be deducted at this step for monies earned during the anticipated period of employment. However, as stated above, I accept Mr Davis took no steps to mitigate his loss.
[132] Given the short period concerned, that is, one week, and given the time necessary to travel back from Perth to Brisbane, it is not clear that even if Mr Davis had sought to mitigate his loss, he would have obtained remunerative work during the anticipated period of employment, or during the one week following the dismissal on 25 September. Having regard to all of the circumstances above, I will reduce the compensation by 10% in light of Mr Davis’s failure to mitigate. The resultant gross amount is $3,612.60.
Step 3
[133] I now need to consider the impact of contingencies on the amounts likely to be earned by the Applicant for the remainder of the anticipated period of employment.59 No party made any submissions about whether any amount should be deducted for contingencies. Given the short period involved I will not deduct any amount for contingencies.
Step 4
[134] I have considered the impact of taxation but have elected to settle a gross amount of
$3,612.60 and leave taxation for determination.
[135] Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case,”60 including my findings set out above.
[136] I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the Fair Work Act.
[137] If I am satisfied that misconduct of the Applicant contributed to the employer’s decision to dismiss, I am obliged by section 392(3) of the Fair Work Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.
[138] I am satisfied that the misconduct of the Applicant contributed to the employer’s decision to dismiss.
[139] 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 a further 20%.
[140] Applying this reduction to the amount determined at step 4 above, the gross amount of compensation to be ordered, subject to the compensation cap discussed below, is $2,890.08.
[141] I am satisfied that this amount does not exceed the compensation cap provided for in subsection 392(5) of the Fair Work Act.
[142] In light of the above, I will make an order that the Respondent pay the Applicant
$2,890.08 gross, less taxation as required by law, in lieu of reinstatement within 14 days of this decision.
Conclusion and disposition
[143] I am satisfied that the Applicant was unfairly dismissed within the meaning of section 385 of the Fair Work Act.
[144] I have determined to award the Applicant an amount of $2,890.08 gross, less taxation as required by law, as compensation for lost wages.
[145] An order will issue separately, requiring that the amount be paid within 14 days of this Decision.”
Davis v Odell Resources Pty Ltd [2025] FWC 1150 delivered 28 April 2025 per Butler DP