Unfair dismissal compensation

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Unlike the common law courts in Australia, which as a general rule may order damages for both economic and non-economic loss, the Australian industrial tribunals such as the Fair Work Commission and the Western Australian Industrial Relations Commission are not permitted to include in an award of compensation for unfair dismissal any component which represents compensation for non-economic loss such as reputational harm.

This may also be contrasted with the Federal Court of Australia and the Federal Circuit Court of Australia which can in theory award damages for both economic and non-economic loss such as pain and suffering, reputational harm and humiliation. It should be said though that these courts have been miserly in their use of the power see for example

https://fairworklegaladvice.com.au/general-protections-cases-compensation-for-non-economic-loss/

Here is an extract from a recent decision of a Full Bench of the Fair Work Commission about its powers to award compensation for unfair dismissal together with some observations to the general effect that payment paid to a dismissed employee in lieu of notice, which it is to be assumed is a reference to both statutory and contractual entitlements to pay in lieu of notice should be deducted from any award of compensation for unfair dismissal.

“Mr Guorgi contends that the impact of dismissal on him and on his reputation is so severe that the compensation order should be at the maximum level permitted and should provide for reputational loss.

There is no basis at law for a compensation order to include non-economic factors of that kind. S.392(4) expressly provides that an order must not include a component for shock, distress or humiliation or other analogous hurt caused to the person by the manner of dismissal. We consider the compensation for perceived reputational damage contended for to be of “an analogous nature” and not permitted to be included in a compensation order under s.392 of the FW Act.

There is however one respect in which the Commissioner’s decision was in error. The Commissioner at [169] indicates that Mr Guorgi was paid four weeks’ wages in lieu of notice. Had this been so, the Commissioner would have been correct in making a deduction from the compensation order of that four weeks, as she did. However, through no fault of the Commissioner, it was agreed on appeal by Mr Guorgi and Transdev that this amount had not been paid. Unfortunately the Commissioner had been wrongly advised in Mr Guorgi’s written submissions at first instance that he had been paid four weeks in lieu of notice. It was only on appeal that this matter has been brought before the Commission for correction.”

Guorgi v Transdev Queensland Pty Ltd (2019) FWCFB 898 delivered 13 February 2019 per Clancy DP, Anderson DP and Spencer C