Compensation for unfair dismissal

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“The amount of compensation has to be considered in the context of the statutory criteria and the authorities. In this regard, I note the comments in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Allan Humphries [2016] FWCFB 7206 at [16] (which was cited with approval in Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Nurcombe [2017] FWCFB 429 at [42]):

“[16] The well-established approach to the assessment of compensation under s.392 of the FW Act, taking into account the matters specified in s.392(2), is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket. This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages. Under that approach, the first step to be taken in assessing compensation is to consider s.392(2)(c) – that is, to determine what the applicant would have received, or would have been likely to receive, if the person had not been dismissed. In Bowden this was described in the following way:

“[33] The first step in this process – the assessment of remuneration lost – is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:

‘… we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.’

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the ‘anticipated period of employment’…”

[17] The identification of this starting point amount “necessarily involves assessments as to future events that will often be problematic”. Once this first step has been undertaken, various adjustments are made in accordance with s.392 and the formula for matters including monies earned since dismissal, contingencies, any reduction on account of the employee’s misconduct and the application of the cap of six months’ pay. This approach is however subject to the overarching requirement to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case.” (footnotes omitted; my underlining)

While I have considered the statutory criteria and the principles discussed in the authorities, I also note there are some atypical aspects to this case which do not, for the reasons to which I referred earlier, lend themselves to, or indeed reasonably allow, the strict application of the usual formulations and considerations concerning compensation orders. The timing of the year also meant the applicant lost the benefit of payment for the cluster of public holidays over the Christmas/New Year period.

Against the background of what was before me and again noting the absence of any material from the respondent concerning matters which usually arise, and having regard to what I consider was an unfair dismissal of an employee stemming, root and branch, from issues integrally related to non-payment of wages, I have determined in the exercise of discretion, having regard to the circumstances as to what is before me, and a consideration of the statutory criteria and authorities, that the applicant should have a compensation order in a rounded amount of $12,000 as an unfair dismissal remedy. Were it not for my mitigation-related reservations, resulting from the overseas trip (albeit a pre-arranged one), I would have given consideration to making an order in the proposed amount of $16,800.

In determining that an amount of $12,000 for a compensation order is appropriate having regard to all the circumstances of the case, there is no cause to reduce the amount on account of misconduct and the amount does not contain any component for shock, distress or humiliation, or other analogous hurt, caused to the applicant by the manner of the dismissal. It is not misconduct for an employee to comment to a contractor words to the effect that he would not work for the respondent without being paid. Further, and for the avoidance of doubt, the compensation amount does not contain (and nor could it) any component designed to address any aspect of the applicant’s underpayment allegations.”

Gauntlett-Gilbert v Elite Essential Trades Pty Ltd (2018) FWC 3221 delivered  8 June 2018 per McKenna C