McCormick v Mt Pleasant Stud Farm Pty Limited
Cited 1×
Applicant: Sean McCormick
Respondent: Mt Pleasant Stud Farm Pty Limited
Ratio
The applicant's dismissal for redundancy was found to be unreasonable due to lack of consultation with the applicant about the redundancy as required by the Award, notwithstanding that the position was genuinely redundant. Reinstatement was inappropriate given the destroyed employment relationship, and compensation of 8 weeks' remuneration (valued at $2,079.19) was awarded, calculated to cover the consultation period that should have occurred.
Outcome
Resolved
partial
Authority signal
Cited 1×
Signal-weighted score: 0.0
Derived from how later decisions have treated this case. Dark green = leading authority,
green = positively treated, grey = neutral or sparse data,
amber = caution, red = treated negatively.
Key facts · 8
- Applicant employed as Horse Trainer from May 2012
- Applicant sustained workplace injury to shoulder, back and neck on 29 December 2014
- In December 2014, respondent decided to outsource all horse training to external trainers
- Applicant dismissed on 13 February 2015 without consultation
- Respondent received 3 weeks' pay in lieu of notice
- Applicant remained on workers' compensation from dismissal to date of hearing (14 March 2016)
- Earlier decision (14 September 2015) found dismissal was not genuine redundancy due to lack of consultation, though position was genuinely redundant
- Appeal was withdrawn during hearing on 28 October 2015
Factors
For
- Lack of notice and consultation between 4 December 2014 and 13 February 2015
- Respondent's small business size and lack of HR expertise
- Respondent's unfamiliarity with obligations under the Award and the Fair Work Act
- Respondent failed to comply with consultation obligations in the Horse and Greyhound Training Award
Against
- The position of Horse Trainer was genuinely redundant
- Even with consultation, the outcome would likely have been dismissal
- Respondent's stated reason for redundancy was bona fide and not related to applicant's capacity or conduct
- Applicant's injury on 29 December 2014 was three weeks after redundancy decision was communicated on 4 December 2014, undermining causation claim
- Work performed by other employees after dismissal was that of casual Farm Attendants, not Trainers
Legislation referenced
- Fair Work Act 2009 (Cth) s 385
- Fair Work Act 2009 (Cth) s 387
- Fair Work Act 2009 (Cth) s 389
- Fair Work Act 2009 (Cth) s 390
- Fair Work Act 2009 (Cth) s 391
- Fair Work Act 2009 (Cth) s 392
- Fair Work Act 2009 (Cth) s 393
- Fair Work Act 2009 (Cth) s 394
- Fair Work Act 2009 (Cth) s 397
- Fair Work Act 2009 (Cth) s 381(2)
- Horse and Greyhound Training Award
Concept tags · 12
[P]Unfair dismissal (federal)
[P]Genuine redundancy
[P]Redundancy consultation obligations
[P]Compensation for unfair dismissal
[S]Procedural fairness at dismissal stage
[S]Modern award (federal)
[S]Award interpretation — principles
[S]Return to work after compensable injury
[S]Reinstatement
[S]FWC compensation cap (26 weeks)
[S]Small business employer
[M]Psychological/psychiatric workplace injury
Principles · 10
articulates para 42
In a redundancy case where there is no valid reason related to capacity or conduct, subsections (a)-(e) of s 387 are neutral matters; the focus shifts to procedural fairness and consultation obligations.
Test: neutrality of capacity/conduct factors in redundancy
articulates para 49
An employee may remain redundant when aspects or parts of the employee's duties are still performed by other employees; the test is whether the job survives a restructure of the enterprise, not whether some of the duties have survived.
articulates para 62
Where an employee's dismissal is found to be unreasonable due to procedural failure (lack of consultation), compensation should be calculated to cover the period during which consultation should have occurred, even if the ultimate outcome (dismissal) would likely have been the same.
Test: consultation period compensation in redundancy
cites para 30
Despite procedural failures in redundancy consultation, they may have no practical impact on the employee; the Small Business Dismissal Code does not apply to redundancy cases.
The meaning of 'harsh, unjust or unreasonable' in industrial context requires examination of whether termination is harsh (disproportionate to gravity of misconduct or economically harsh), unjust (employee not guilty of alleged conduct), or unreasonable (decided on inferences not reasonably drawn from material).
In a redundancy case, where the employer failed to consult as required by the award, the dismissal is not 'genuine redundancy' under s 389; however, the valid reason for dismissal (s 387(a)) is neutral where the position was genuinely redundant; compensation should be calculated on the basis that employment would have continued only for the period consultation would have taken.
In a redundancy case where dismissal is unfair due to consultation failure, compensation may be limited to the length of time associated with complying with requisite consultative obligations.
In determining genuine redundancy, the test is whether the employee's role or job is no longer required to be performed, not merely whether some duties have been redistributed to other employees.
An employee may be redundant when parts of their duties continue to be performed by others; the relevant test concerns whether the role itself is no longer required.
cites para 62
Compensation should be calculated in steps: (1) estimate remuneration employee would have received if not dismissed; (2) deduct moneys earned since termination (including workers' compensation but not social security); (3) discount for contingencies; (4) calculate taxation impact; (5) apply statutory cap.
Cases cited in this decision · 12
Cited
[2015] FWC 6360
(not in corpus)
"…, in that his dismissal on 13 February 2015, by Mr Rod Hamilton (the ‘respondent’), Owner of Mt Pleasant Stud Farm Pty Ltd, was not a case of ‘genuine redundancy’, within the meaning of s 389 of the Act: McCormick v...…"
Considered
(1998) 88 IR 21
(not in corpus)
"…ttle Mr McCormick’s claim for compensation, given a number of factors which are relevant to the determination of compensation under s 392 of the Act, including the application of the Sprigg formula; see: Sprigg v...…"
Considered
[2012] FWAFB 5241
— UES (Int'l) Pty Ltd v Leevan Harvey
"…factors which are relevant to the determination of compensation under s 392 of the Act, including the application of the Sprigg formula; see: Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21 (‘ Sprigg ’)...…"
Followed
[1995] HCA 24
— Byrne v Australian Airlines Ltd
"…es followed in effecting the dismissal; and (h) any other matters that the FWC considers relevant. The meaning of this expression in an industrial context is often referred to by reference to the well-known passage...…"
Cited
[1995] IRCA 333
— SENATHIRAJAH SELVACHANDRAN v. PETERON PLASTICS PTY LTD
"…nate to the gravity of the misconduct in respect of which the employer acted.’ [40] Additionally, I am not persuaded that the reason for Mr McCormick’s dismissal was ‘unsound, indefensible or unfounded’; see:...…"
Doubted
[2016] FWC 886
— Byrne v Tyco Fire & Security
"…the safety and welfare of other employees). In the circumstances of this case we regard it as a neutral matter with respect to our consideration as to whether Mr Harvey’s dismissal was harsh, unjust or unreasonable.’...…"
Cited
[2004] FCAFC 126
— Dibb v Commissioner of Taxation
"…o be performed by others, or others who have been employed to perform those duties; 3. It is the employee’s role or job that is no longer required to be performed, not necessarily their duties, which is relevant....…"
Cited
[2010] FWAFB 3488
— Ulan Coal Mines Limited v Henry Jon Howarth and others
"…uties; 3. It is the employee’s role or job that is no longer required to be performed, not necessarily their duties, which is relevant. See: Dibb v Commissioner of Taxation [2004] FCAFC 126 and Ulan Coal Mines...…"
Cited
[2010] FWA 3707
(not in corpus)
"…think the respondent is confusing its defence as to whether the applicant’s dismissal was ‘harsh, unreasonable or unjust’ , which is not what the case is about - although it may well be subsequently.’ See also:...…"
Cited
[2010] FWA 6280
(not in corpus)
"…ssal was ‘harsh, unreasonable or unjust’ , which is not what the case is about - although it may well be subsequently.’ See also: Nalevansky v Thought Equity Motion Inc [2010] FWA 3707 , Di Masi v Coastal Fisheries...…"
Cited
[2010] FWA 3125
(not in corpus)
"…e case is about - although it may well be subsequently.’ See also: Nalevansky v Thought Equity Motion Inc [2010] FWA 3707 , Di Masi v Coastal Fisheries Pty Ltd ATFT Sea Empire Unit Trust [2010] FWA 6280 , Iannello v...…"
Applied
[2014] FWCFB 236
— Brett Haigh v Bradken Resources Pty Ltd
"…ch to be adopted by the Commission in calculating compensation in a particular case, is set out in the seminal case of Sprigg and reaffirmed in Ellawala v Australian Postal Corporation [Print S5109] and Haigh v...…"
Archived text (10356 words)
McCormick v Mt Pleasant Stud Farm Pty Limited [2016] FWC 2453 (3 May 2016)
[2016] FWC 2453
FAIR WORK COMMISSION
DECISION
Fair Work Act 2009
s 394
- Application for unfair dismissal remedy
McCormick
v
Mt Pleasant Stud Farm Pty Limited, No 2
(U2015/963)
DEPUTY PRESIDENT SAMS
SYDNEY, 3 MAY 2016
Application for relief from unfair dismissal – earlier finding that applicant’s dismissal not a case of genuine redundancy
– appeal – appeal withdrawn – whether applicant’s dismissal ‘harsh, unjust or unreasonable’ –
applicant not prepared to accept earlier decision as to valid reason – lack of consultation – dismissal found to be
‘unreasonable’– reinstatement inappropriate – compensation – application of ‘Sprigg’ formula
– workers’ compensation payments taken into account – other heads of claims rejected – compensation ordered
– matter concluded.
[1]
In a decision of the Fair Work Commission (the ‘Commission’) as presently constituted, on 14 September 2015, I determined
that Mr Sean McCormick (the ‘applicant’) was a person protected from unfair dismissal, pursuant to
s 385
of the
Fair Work Act 2009
(the ‘Act’), in that his dismissal on 13 February 2015, by Mr Rod Hamilton (the ‘respondent’), Owner of Mt
Pleasant Stud Farm Pty Ltd, was not a case of ‘genuine redundancy’, within the meaning of
s 389
of the Act:
McCormick v Mt Pleasant Stud Farm Pty Limited
[2015] FWC 6360
(the ‘earlier decision’).
[2]
In the earlier decision, the Commission made two specific findings as follows:
1. The applicant’s position as a Horse Trainer was redundant in that Mr Hamilton no longer required the position of Trainer
to be performed by anyone, because of the operational requirements of his business
(s 389(1)(a)
of the Act) and;
2. The applicant’s dismissal was not a case of ‘genuine redundancy’
(s 385(d))
in that Mr Hamilton had not notified or consulted with the applicant, in accordance with his obligations under the
Horse and Greyhound Training Award
(the ‘Award) and
s 389(1)(b)
of the Act.
[3]
Somewhat surprisingly, given that Mr McCormick had successfully resisted the respondent’s objection to his unfair dismissal
application progressing to its merits, Mr McCormick appealed my decision (Matter C2015/6828). It is clear from the grounds of appeal
and the transcript of proceedings before the Appeal Bench (
Watson
VP,
Hamilton
DP,
Johns
C) on 28 October 2015, that Mr McCormick did not, and does not accept my first finding as to the reasons for his dismissal. He insists
(and continues to insist) that he was dismissed because of his workplace injury and that other employees were, and have been employed
to perform a range of duties he had previously performed on the farm and presumably, to which he could have been redeployed.
[4]
In any event, the appeal was withdrawn during the hearing, after His Honour VP
Watson
attempted to focus Mr McCormick’s attention to the next stage of his case; namely, whether his dismissal was
‘harsh, unjust or unreasonable’
, whether the meaning of
s 387
of the Act and, if so, what, if any, remedy should be ordered by the Commission, pursuant to
s 392
of the Act. It is pertinent to point out what His Honour said at PN 71 – 72:
‘I don’t think I can say any more than what I have said. Our approach to this matter is that you were successful in opposing
the employer’s jurisdictional argument and in some respects you may have some disagreement with aspects of that decision. The
case is then due to proceed to the next stage where different questions arise, even though there is some overlap between matters
that were considered in the first decision and will be considered in the second decision.
We do not see any impediment on you giving further evidence in relation to the questions that the Deputy President will be required
to determine, such as whether there was a valid reason for the dismissal and any other factors that are considered relevant to the
fairness of the termination. We don’t see any impediment on you giving evidence in relation to those matters. We do not see
any impediment on you making submissions in relation to those questions. From what Mr Lloyd has said we do not take it that he disagrees
with that general proposition.’
[5]
With the withdrawal of the appeal, the Commission’s findings in my earlier decision remain undisturbed and are unable to be
challenged. These findings are not open to reagitation, let alone reconsideration, simply because Mr McCormick maintains a different
point of view. Regrettably, Mr McCormick interpreted His Honour’s comment above about adducing further evidence, as a ‘green
light’ for him to reopen and reargue the matters already determined by my earlier decision with which he disagreed. This is
a misrepresentation of the proceeding when His Honour used the words
‘we don’t see any impediment on you giving evidence in relation to those matters’
. There is no doubt that His Honour’s reference to ‘those matters’ are to the matters in the next stage of the proceedings
(see paragraph above).
[6]
With the appeal disposed, the Commission issued the following directions on 16 November 2015:
‘A. Further to the mention I conducted in this matter on 16 November 2015, the Fair Work Commission (the ‘Commission’)
directs
as follows:
1. Mr Sean McCormick (the ‘applicant’) is to file with the Commission and serve upon Mt Pleasant Stud Farm Pty Limited
(the ‘respondent’) an outline of submissions and any evidence on which he relies by no later than
close of business, Monday 7 December 2015
. These submissions and evidence are to address the following issues only:
a. Whether the applicant’s dismissal was ‘
harsh, unjust or unreasonable
’ within the meaning of
ss 385(a)
and
387
of the
Fair Work Act 2009
(the ‘Act’); and
b. The remedy to be ordered by the Commission in accordance with
ss 390
,
391
,
392
and
393
of the Act, in the event that the Commission is satisfied that the applicant’s dismissal was ‘
harsh, unjust or unreasonable
’ within the meaning of
ss 385(a)
and
387
of the Act.
B. The matter will be listed for a mention for further programming at 9:30am, Wednesday 9 December 2015.’
[7]
At the foreshadowed mention on 9 December 2015, attempts were made to settle Mr McCormick’s claim for compensation, given a
number of factors which are relevant to the determination of compensation under
s 392
of the Act, including the application of the
Sprigg
formula; see:
Sprigg v Paul’s Licensed Festival Supermarket
(1998) 88 IR 21
(‘
Sprigg
’) and
UES (Int’l) Pty Ltd v Harvey
[2012] FWAFB 5241
(‘
UES v Harvey’
). Having reviewed the material filed by Mr McCormick it was obvious there were, or were likely to be contested facts, in the matter.
Accordingly, for abundant caution, the application was listed for hearing, pursuant to
s 397
of the Act. I note that on the day before the hearing Mr McCormick sought an order for Mr Hamilton to attend the Commission and be
available for cross examination, on what Mr McCormick claimed to be new evidence, he had filed on 4 December 2015.
[8]
Notwithstanding the dubious relevance of much of the material filed by Mr McCormick and the reasons for his request for Mr Hamilton
to give further evidence, the matter proceeded to hearing on 14 March 2016. Mr McCormick continued to represent himself, with the
assistance of his wife, and the respondent continued to be represented by Mr
Lloyd
(solicitor). Written evidence was admitted from Mr McCormick and Mr Wayne Hudd and further oral evidence was given by Mr Hamilton.
[9]
Mr McCormick provided two detailed documents which contained matters largely irrelevant to the present issues to be determined, including
submissions challenging my findings and conclusions in the earlier decision and a significant amount of repetition. The form of the
documents disclose a misunderstanding of the distinction between evidence (to the extent it was relevant) and submissions. While
I accept Mr McCormick was, at all times, unrepresented, this is not a satisfactory explanation in circumstances where Mr McCormick
was simply incapable, or willing to focus on the relevant issues and was doggedly determined to rerun his original case, despite
frequent and clear warnings not to do so.
[10]
Accordingly, I do not intend to extensively canvas or analyse the evidence, submissions and documents that are ultimately immaterial
to the matters to be determined. Nevertheless, I am satisfied that, having been afforded considerable latitude by the Commission,
Mr McCormick has put before me everything he wishes to say about his case. That said, doing the best I can, with the filed material,
I summarise the parties’ positions as follows:
THE EVIDENCE/SUBMISSIONS
[11]
Mr Wayne
Hudd
provided evidence of two phone calls from Mr McCormick on 11 February 2015 about the transfer of three horses from Mount Pleasant
to his property. I agree with Mr
Lloyd
that this evidence is irrelevant to the present proceeding. As earlier mentioned, Mr McCormick continues to challenge the reasons
for his dismissal. Moreover, he now asserts that because of his medical restrictions requiring him not to handle horses, his refusal
to lead horses on 11 February 2015 or lead a horse for a photograph the next day, amounted to a refusal to carry out the employer’s
instructions. This refusal contributed to Mr Hamilton’s decision to dismiss him. Related to this were claims that his dismissal
was influenced by the fact that he had contacted the insurer (Racing NSW) to enquire how he was to carry out his tasks on the farm
with his restrictions. It is patently obvious that these claims are further attempts by Mr McCormick to reagitate matters already
determined. They are irrelevant and, in any event, there was no cogent evidence - only theories - that these incidents contributed
to his dismissal.
[12]
Mr McCormick further stated:
‘It is indeed harsh, unfair and unreasonable that my position was terminated and following my termination the Respondent engaged
three new staff members to carry out these duties.’
The mere fact an employee’s position was terminated does not automatically result in a conclusion that the termination was
‘harsh, unfair or unreasonable’
. The fact that Mr Hamilton engaged casual Farm Attendants to perform some of Mr McCormick’s former duties, does not alter the
conclusion that his role as a Trainer was no longer required (see later paragraph [22]).
[13]
Mr McCormick then raised a number of matters which were, in reality, further attempts to challenge the reasons for his dismissal and
criticise comments I made in the earlier decision. However, I note a particularly glaring inconsistency in Mr McCormick’s earlier
version of events. Despite claiming he was dismissed for an injury he received on 29 December 2014, he said in his evidence/submissions:
‘On the 4th of December, 2014 Rod advised me of his intention to outsource ‘race training’ to allow myself and Mel
Bolwell to concentrate on the “breaking in, handling of foals, pre-training of horses and their general care”, he reiterated
this plan the following day when he had a meeting with myself and Mel Bolwell (an apprentice jockey employed by Mt Pleasant Stud
Farm Pty Ltd).’
[14]
This was precisely the reason why Mr McCormick was made redundant. This conversation was three weeks before his injury. In other words,
how could Mr Hamilton have known Mr McCormick would be injured on 29 December 2014 at the time Mr Hamilton’s operational intentions
were made known to Mr McCormick three weeks beforehand?
[15]
Nevertheless, Mr McCormick submitted that Mr Hamilton had adequate time to consult with him and comply with his obligations under
the Award from 4 December 2014 – 13 February 2015. I agree this is a relevant matter for present purposes, particularly in
respect to considerations under ss (f) and (g) of
s 387
of the Act which I will come to shortly. In addition, for reasons later explained, ss (a)(b)(c)(d) and (e) of
s 387
are either irrelevant and/or neutral factors in this case.
[16]
As to ss (h) of
s 387
– Other relevant matters – Mr McCormick submitted as follows:
‘The disrespect shown not only to me but my entire family by Rod Hamilton in the manner in which he dismissed me, followed
by his request to vacate our home within 3 weeks, instant dismissal of my son’s employment, was indeed harsh, unjust and unreasonable.
At the commencement of my employment I was abled and bodied and relocated my family to Thirlmere to give total commitment to my employer.
At the time of the dismissal I had sustained injuries to shoulder, back and neck at work only 6 weeks prior, my children had just
commenced week 2 of their first term of the school year, his actions were indeed “harsh, unjust unreasonable” and did
not comply with his responsibilities as set out in the Horse and Greyhound Training Award, Residential Tenancy Act, and other legislation.
A ‘trainer’ is not required to be registered with Racing NSW when employed as a ‘trainer’ under the Horse
and Greyhound Award.
Work Cover NSW states your employer cannot dismiss within the first 6 months of injury. Mt Pleasant Stud Farm Pty Ltd failure to
comply with their obligation on how they should have helped [sic] an injured worker return to work following an injury.
I am concerned regarding the lack of transparency and misleading evidence provided by Mr Pleasant Stud farm Pty Ltd in this matter
Mt Pleasant lack of cooperation to conciliate in April 2015 and their reluctance to negotiate effectively following September 2015
My dismissal was not consistent with the Small Business Fair Dismissal Code.’
[17]
In dealing with the remedy, Mr McCormick did not seek reinstatement due to the ‘harshness’ of his treatment by Mr Hamilton.
He said it would be
“very difficult.”
He sought the maximum compensatory benefit of 26 weeks based on his pre injury average weekly earnings (PIAWE) as determined by Workcover
($1,856.42) due to the ‘severity’ of his case. His calculations were set out as follows:
‘Loss of wages over 26 weeks
= $6,033.37
(based on PIAWE of $1,856.42 per Workcover NSW Merit Review, 95% received for first 13 wks (5% of this amount is $92.82 x 13 wks =
$1,206.67 and then reduced to 80% (20% of this amount is $371.28 x 13 wks = $4,826.70)
Loss of superannuation (9% of $66,000) over 26 wks
= $5,940.00
Loss of annual leave ( 2 wk in a 26 week period)
= $2,564.00
Additional 1 weeks termination pay (I would have completed 3 years continuous service as at May 2015)
= $1,282.00
Relocation Costs
= $3,000.00
As a result of my dismissal, I was requested to vacate our home at 260 Bonds Rd that was supplied to me for my family to live in by
Mt Pleasant Stud Farm Pty Ltd hence incurring additional expense.
TOTAL OF ABOVE =
$18,819.37
Plus a contingent figure of $22,602.12 should WIRO’s decision be overruled to compensate for non pecuniary items accommodation,
electricity and motor vehicle for 52 weeks (Accommodation $450, Motor Vehicle $50.32 & Electricity $43)(Note in calculating this
figure it has been taken into account 5% of this amount x 13 wks and 20% of this amount for a further 13 wks has been deducted as
compensation for this amount has been included in the figure for Loss of Wages above.
’
[18]
Under each of the heads of criteria in s 392(2) of the Act, Mr McCormick said:
(a) the effect of the order on the viability of the employer’s enterprise; and
‘The payment of compensation would not affect the viability of this organisation due to Rod Hamilton’s substantial wealth,
asset holdings and his investment at Mt Pleasant Stud Farm Pty Limited.’
(b) the length of the person’s service with the employer; and
‘I commenced at Mt Pleasant Stud Farm Pty Limited in May 2012, I received substantial injuries at work on the 29th December
2014 and now face a future of great uncertainty as a result of my dismissal and injuries sustained in the work place’.
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed;
and
‘I attach Work Cover NSW Merit Review findings dated 18th August 2015, I refer to {Para 107} Pg 14 of 14 (Annexure I). “I
therefore find that Mr McCormick’s Pre-injury average weekly earnings (PIAWE) is $1,856.42(gross)”.’
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
‘Rod Hamilton of Mount Pleasant Stud Farm Pty Limited showed extreme harshness by the unjust and unreasonable actions when issuing
my dismissal and following my dismissal, he advised me immediately after “Sean, you’ve got 3 weeks to sort out your things
and leave the house”, dismissed my son Rory who was employed as a Registered Stable Hand at Mount Pleasant Stud Farm Pty Limited
by outing his separation certificate in our letterbox on the afternoon of 13 Feb 2015.’
(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
‘I have not worked since my dismissal, I currently receive workers’ compensation as a result of my workplace injury. (based
on PIAWE of $1,856.42 per Workcover NSW Merit Review, 95% received for first 13 wks and then reduced to 80%)
(Annexure I).
’
(f) the amount of any income reasonably likely to be so
‘I attach a copy of a recent work cover certificate which confirms I have no work capacity from 3/12/15 to the 15/01/16
(Annexure J)
.’
[19]
In supplementary evidence/submissions, Mr McCormick repeated much of what he had earlier outlined in respect to:
his injury on 29 December 2014;
the circumstances in mid-February 2015 in which he was asked to ‘handle horses’ contrary to his Workcover Certificate
restrictions;
his son’s dismissal;
his employment as a Trainer under the Award;
his belief as to the reasons for his dismissal.
Mr McCormick repeated his earlier submissions as to the criteria to be considered under s 387 of the Act. Mr McCormick did not consider
that any other authorities of the Commission were relevant to his case because his circumstances were ‘unique’. Mr McCormick
insisted that the Small Business Dismissal Code (the ‘Code’) was applicable in this case. He claimed that unlike Mr Hamilton,
he had provided credible corroborated evidence, whereas Mr Hamilton’s case was not credible, his evidence was conflicting and
was not corroborated.
[20]
Mr McCormick submitted that because Mr Hamilton admitted to other persons performing some of his duties, this inferred a strong connection
between his injury and his dismissal. He concluded that the stated reason for his dismissal was ‘misleading’ and not
‘genuine’. Mr McCormick insisted I should revisit the differences between a Trainer under the Award and a Trainer licensed
with Racing NSW. He further believed I was ‘misled’ in reaching my earlier decision.
Evidence of Mr Hamilton
[21]
As the transcript will show, the cross examination of Mr Hamilton got off to a less than civil or conventional start, when Mr McCormick
objected to Mr Hamilton swearing his oath on the Bible (Mr McCormick was of the belief that Mr Hamilton was a ‘non believer’).
Unsurprisingly, such a bizarre objection was overruled.
[22]
Mr Hamilton was asked questions about his understanding of Mr McCormick’s contract of employment as a Trainer under the Award,
as distinct to the definition of a Trainer, licensed with Racing NSW. Mr Hamilton agreed that for the first four months of his employment,
Mr McCormick did not have a Trainer’s licence. In fact, he had actually assisted him in renewing his licence. Mr Hamilton said
that Mr McCormick’s signed contract of employment was binding on both parties.
[23]
Mr McCormick questioned Mr Hamilton as to his duties on the farm from May 2012. Mr Hamilton agreed that other people now performed
some of the duties Mr McCormick had performed before his dismissal. It was Mr Hamilton’s evidence that since Mr McCormick’s
redundancy, there has been no pre training or training of horses on his property. Mr Hamilton noted that he had allowed two 17 year
old girls, employed on the farm, to ride horses in their own time, for recreational purposes. This had nothing to do with training
the horses. Mr Hamilton said that at the present time there are 48 horses on his property. They were cared for by two girls, under
his supervision. Mr McCormick claimed that in July 2015 (five months after his dismissal) he had spoken to three girls on the property.
Mr Hamilton recalled this occasion. He believed that Mr McCormick was basically ‘spying’ on his property, after he had
been dismissed. Mr McCormick was ‘invading his privacy’ by these spying activities. Mr Hamilton agreed that there may
have been three girls visiting at the time, but for the last 12 months there has only been two employed. The third girl was a young
school girl whose father was a friend. She had worked a minimal number of hours in the school holidays because she was a rider.
[24]
Mr Hamilton was asked about the movement of horses, on and off the farm, around 11 February 2015. While he could not recall the details,
he added that horses come and go all the time. When reminded of the names of the three horses, Mr Hamilton recalled they were sent
to registered trainers for training.
[25]
Mr Hamilton acknowledged that he had only made the decision to terminate Mr McCormick’s employment 24 hours beforehand. However,
the decision to make his position redundant was made two months earlier. Mr Hamilton now regrets not giving Mr McCormick notice at
that time. However, he explained that because Mr McCormick was going on a family holiday to China, he chose not to do so to avoid
spoiling his holiday.
[26]
Mr Hamilton strongly denied that his decision to make Mr McCormick redundant, was a ‘knee jerk’ reaction. He did not operate
that way. Mr Hamilton agreed that he had placed advertisements for Stable Hand jobs, requiring ‘experience in riding a horse’.
This was because a person has to have a ‘feeling’ for horses. He observed that Mr McCormick’s son was not a suitable
Stable Hand. His horse handling capabilities were very limited. On one occasion, he had let a horse (Pineapple) get out of its enclosure
by leaving the gate open on the morning the horse was to be picked up and flown to New Zealand for servicing.
[27]
It was Mr Hamilton’s evidence that he did not seek, and had not received any legal or employment advice when he dismissed Mr
McCormick. A number of Mr McCormick’s questions were objected to by Mr
Lloyd
. They included whether Mr Hamilton was a fair person; whether he had underpaid staff; whether he was aware of the
Residential Tenancy Act
; the laws to ‘protect society’; and whether it was unethical and immoral to advertise for casual Farm Attendants, without
mentioning the Award. These objections were upheld. Finally, in answer to a question from me, the following exchange with Mr Hamilton
occurred:
‘What’s your understanding if a person who purports to be a trainer takes a horse on to a New South Wales race track,
are they permitted to do that, do you know?’
‘You have to be a licensed person to take a horse on to a licensed premises, on to a race track. You have to be - the person
who’s in charge of the horse has to be a licensed person with the relevant authority.’
FURTHER SUBMISSIONS
[28]
Mrs McCormick made submissions on behalf of her husband. Mrs McCormick distinguished the decision in
UES v Harvey
by submitting that her husband’s dismissal was because of his workplace injury, and not redundancy. She submitted that Mt Pleasant
farm had nine horses in 2012 and 50 horses in February 2015. The circumstances in this case were unique in that a genuine hardworking
employee had been disadvantaged as a result of being injured in the workplace and being dismissed two days after submitting his Workcover
Certificate, limiting his capacity to carry out his job. The Commission’s order should reflect her husband’s financial
disadvantage and act as a deterrent to Mr Hamilton and other employers who engage in an ‘unfair culture of unfair dismissal’
(sic). After queries from me as to the components of her husband’s claim for compensation, Mrs McCormick said they could not
see why all of the claims should be awarded, as the Commission should
‘set the precedence here’
.
For the Respondent
[29]
In written submissions, Mr
Lloyd
said that because this matter involved a redundancy, ss (a) (b) (c) (d) and (e) of s 387 of the Act are not applicable. In respect
to subsection (f) Mr
Lloyd
submitted that Mt Pleasant Farm is a very small enterprise. Mr Hamilton did not have the benefit of any specialist employment advice
or expertise. In addition, there was no evidence that Mr Hamilton had ever dismissed any employee; he certainly had never dismissed
a Trainer, because Mr McCormick was the first Trainer he had employed. Mr
Lloyd
submitted that this would account for the less than pristine manner in which Mr Hamilton dismissed Mr McCormick on 13 February 2015.
[30]
Mr
Lloyd
put that at the very least, on December 2014 Mr Hamilton had raised with Mr McCormick his intention to outsource all his horse training.
While this intention was found by the Commission to be insufficient in the context of the Award’s consultation provisions,
it was similar to the circumstances in
Di Masi v Coastal Fisheries Pty Ltd ATFT Sea Empire Unit Trust
[2010] FWA 6280
. There the Commission found that despite some procedural failures, they had no practical impact on the employee. In that case, the
applicant has a similar period of employment as Mr McCormick had with Mr Hamilton (two years). The Commission found that the applicant’s
dismissal was not
‘harsh, unjust or unreasonable’
. That case also reinforced the notion that the Code does not apply in cases of redundancy.
[31]
Mr
Lloyd
responded to a number of Mr McCormick’s submissions as follows:
a) The letter of termination was not misleading. It described the correct factual situation and there was no evidence or finding
of any connection between the 11 February Workcover Certificate and the termination letter two days later.
b) It was also incorrect for Mr McCormick to claim that other people had carried out his duties, when the Commission found that the
work performed by others, was the work of casual stud Farm Attendants, not Trainers.
[32]
Mr
Lloyd
noted that Mr Hamilton had explained why he delayed informing Mr McCormick of his redundancy (see paragraph [25]). There was no other
issue which played a part in the decision to terminate his employment, other than Mr Hamilton had ceased horse training functions
at Mt Pleasant.
[33]
Mr
Lloyd
submitted that the engagement of legal representation in respect to the unfair dismissal proceedings had nothing to do with the resources
available to the respondent at the time of the dismissal.
[34]
Mr
Lloyd
further submitted that the matters set out by Mr McCormick as other relevant matters (s 387(h)) were largely not relevant, eg his
son’s employment. The fact was that Mr McCormick and his family continued to live in a house on the farm after his dismissal
for considerably below market rental.
[35]
In
oral submissions
, Mr
Lloyd
noted that it appeared that Mr and Mrs McCormick still do not accept the Commission’s findings in the earlier decision and
continue to assert his dismissal related to his workplace injury. Mr
Lloyd
put that as the Commission found that the position of Trainer was no longer required to be performed by anyone, the case is on ‘all
fours’ with
UES v Harvey
. As Mr
Lloyd
noted, that decision it involved a much larger employer with a HR department. This revealed that it was not just small employers
who make mistakes in the consultation process. Mr
Lloyd
adopted the term ‘neutral’ to describe ss (a)(b)(c)(d) and (e) of s 387 of the Act.
[36]
While Mr
Lloyd
submitted that this was not a case of unfair dismissal, if the issue of remedy arose, Mr McCormick was actually seeking 32 weeks’
pay (26 weeks plus three weeks’ notice already paid, plus two weeks on top). This exceeded the statutory cap. In addition,
Mr
Lloyd
said the Commission has no jurisdiction to order relocation costs. In any event, given the weekly workers’ compensation benefits,
Mr McCormick had, in reality, suffered very limited financial loss, if at all.
[37]
Mr
Lloyd
further submitted that even if Mr Hamilton had complied with his Award obligations, Mr McCormick would have still been made redundant.
The next hurdle Mr McCormick had to overcome was that the role he had performed, was no longer required. Hypothetically, even if
Mr Hamilton had offered Mr McCormick a Farm Attendant position and he had accepted it, it was at a much lower salary than he was
ultimately being paid in workers’ compensation benefits. So even if Mr Hamilton had consulted Mr McCormick and he had accepted
a Farm Attendant position, Mr McCormick would have been unable to establish that he had suffered any financial loss; indeed, he would
have received more on his worker’s compensation benefits.
[38]
In
reply
, Mr McCormick said that he had always been paid higher than the Award and was paid higher at his previous employment. He used to
be a good horseman, but now he is ‘finished’.
CONSIDERATION
Was the applicant’s dismissal ‘harsh, unjust or unreasonable?’
[39]
Section 387 of the Act sets out the matters the Commission is required to take into account when determining whether a person’s
dismissal was
‘harsh, unjust or unreasonable’
. The section is set out as follows:
387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on
the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating
to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory
performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting
the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely
to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.
The meaning of this expression in an industrial context is often referred to by reference to the well-known passage in
Byrne v Australian Airlines Ltd
[1995] HCA 24
at para 128:
‘It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable
but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the
employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences
which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal
and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the
employer acted.’
[40]
Additionally, I am not persuaded that the reason for Mr McCormick’s dismissal was ‘unsound, indefensible or unfounded’;
see:
Selvachandran v Peteron Plastics Pty Ltd
[1995] IRCA 333.
(a) Was there a valid reason for the applicant’s dismissal?
[41]
The words of subsection (a) plainly disclose that a valid reason must relate to ‘the persons capacity or conduct’. In
the ordinary course, a dismissal for reasons of redundancy does not involve any reasons related to an employee’s capacity or
conduct; often described as a dismissal brought about through no fault of the employee concerned. This is the view of the respondent.
It is the finding I made in the earlier decision.
[42]
Unfortunately, Mr McCormick’s evidence and submissions continue to challenge that finding. It is impermissible to do so. In
UES v Harvey
, a case in which the essential facts are not dissimilar to those here, a Full Bench, by majority, said at paras 40 – 42:
‘On the evidence, therefore, we consider Mr Harvey’s dismissal was not a case of genuine redundancy within the meaning
of s.389. However, this is only because UES did not consult with Mr Harvey about the redundancy in accordance with its obligation
in the modern award that applied to Mr Harvey’s employment.
As to whether the dismissal of Mr Harvey was harsh, unjust or unreasonable, we turn to the matters in s.387 of the FW Act.
Valid reason (s.387(a))
As we have already indicated, in our view the reasons for the dismissal of Mr Harvey by UES were not related to his capacity or conduct
(including its effect on the safety and welfare of other employees). Accordingly, there cannot have been and was not a valid reason
for his dismissal related to his capacity or conduct (including its effect on the safety and welfare of other employees). In the
circumstances of this case we regard it as a neutral matter with respect to our consideration as to whether Mr Harvey’s dismissal
was harsh, unjust or unreasonable.’
In
Byrne v Tyco Fire & Security
[2016] FWC 886
(‘
Byrne v Tyco
’)
O’Callaghan
SDP said at para 32:
‘One final comment is appropriate in these circumstances. In a number of respects, Mr Byrne’s circumstances may be regarded
as analogous with those considered in
Harvey v UES Int’l
in that, if the termination of his employment is ultimately regarded as unfair because of a failing in the consultation process, the
Fair Work Commission may not have the capacity to review why Mr Byrne was selected for redundancy and the amount of compensation
may be limited to the length of time associated with complying with the requisite consultative obligations. A copy of that Full Bench
decision will be provided to the parties as it may represent useful guidance if the parties seek to resolve this matter through a
negotiated settlement.’
[43]
Accordingly, I find that ss (a) is a neutral matter in this case. Similarly, as ss (b) (c) (d) and (e) of section 387 are predicated
on a valid reason being found under ss (a), no findings, one way or another, can be made under these subsections. Consistent with
UES v Harvey
, I consider these matters to be neutral in this case.
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting
the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely
to impact on the procedures followed in effecting the dismissal.
[44]
There is no dispute that Mr Hamilton employed a few employees. He is not a human resource specialist. While I accept his statement
that he did not seek any specialist employment or legal advice prior to dismissing Mr McCormick, I was nevertheless critical of his
lack of familiarity with the Award and the Act when effecting Mr McCormick’s redundancy. If he was unaware of his obligations,
he should have been; see: paragraph 139 of the earlier decision. These matters tell in favour of a conclusion that Mr McCormick’s
dismissal was ‘unreasonable’.
[45]
Mr McCormick raised the fact that Mr Hamilton engaged legal representation in these proceedings. This is irrelevant (save for consideration
of permission to appear under s 596 of the Act, which was granted), to the matters which the Commission must take into account under
ss (f) and (g) of the Act. It is patently obvious that access to specialist or legal advice relates to advice on the procedures leading
up to, and including dismissal; not to the engagement of legal representation for any subsequent unfair dismissal proceedings.
(h) any other matters that the FWC considers relevant.
[46]
At the risk of repetition, Mr McCormick’s dismissal was for reasons of redundancy in that Mr Hamilton no longer required his
job to be performed by anyone because of changes in the operational requirements at Mt Pleasant Stud Farm. Specifically, Mr McCormick
was employed and paid as a Trainer. In December 2014, Mr Hamilton decided that all horse training, occasionally conducted on his
property, was to be undertaken by external trainers.
[47]
Returning to other relevant matters in this case, I am satisfied that by failing to consult with Mr McCormick as to his redundancy,
this factor contributes to the unreasonableness of his dismissal. I would add that, in my view, it was reasonable, in all the circumstances,
not to redeploy Mr McCormick to any other position on the farm. Despite Mr McCormick’s insistence that other persons had been
employed since his dismissal, these employees were Farm Attendants, not Trainers – a role which was no longer required.
[48]
The question of whether it was reasonable to redeploy Mr McCormick is not determined by a finding that other employees may have, and
did perform some of the duties associated with the role he had previously performed. Ultimately, this question is answered by the
fact that the role Mr McCormick was employed as, was no longer required to be performed by anyone. Mr McCormick did not seriously
challenge this arrangement. In any event, it is highly unlikely that Mr McCormick would have accepted a Farm Attendant’s role
with its corresponding lower wage rate. Indeed, nowhere in his filed materials does he assert he would have accepted a lower graded
position.
[49]
Three propositions arising from the relevant authorities make manifestly clear that:
1. An employee may still be redundant when aspects or parts of the employee’s duties are still performed by other employees;
2. The test is whether the job survives a restructure of the enterprise, not whether some of the duties have survived and continue
to be performed by others, or others who have been employed to perform those duties;
3. It is the employee’s role or job that is no longer required to be performed, not necessarily their duties, which is relevant.
See:
Dibb v Commissioner of Taxation
[2004] FCAFC 126
and Ulan Coal Mines Limited v Henry John Howarth and others
[2010] FWAFB 3488
.
[50]
It is necessary to address each of Mr McCormick’s alleged ‘other relevant matters’ (See paragraph [16] above).
[51]
Firstly, Mr McCormick claims his dismissal was
‘harsh, unreasonable and unjust’
because of Mr Hamilton’s disrespect to himself and his family, when dismissing him and his son and by Mr Hamilton not complying
with his responsibilities under the Award, the
Residential Tenancy Act
and other legislation. I have already made findings as to Mr Hamilton’s non-compliance with the discrete notification and consultation
provisions under the Award. These are matters I intend to take into account. Whatever were Mr Hamilton’s obligations, as a
landlord under the
Residential Tenancy Act
, this issue is not relevant here. I am unclear what Mr McCormick means by Mr Hamilton’s failure to comply with his obligations
under ‘other legislation’.
[52]
Secondly, I cannot allow Mr McCormick’s criticism of my references in the earlier decision to the industry’s definition
of a Trainer under the Rules of Racing to go without mention. His criticisms were not only wrong, but inconsistent with his own evidence
that Mr Hamilton had assisted him in renewing his Trainer’s licence. I ask rhetorically, if it was unnecessary for him to have
a Trainer’s licence, why did he seek its renewal? In any event, the issue is not that Mr McCormick was employed as a Trainer
under the Award, (which he was) but that he was engaged as, and paid as a Trainer under a contract of employment which references
the Award. In my view, Mr McCormick’s role was not dissimilar to a person being employed as a nurse or a security officer under
the relevant industry Award, but still being subject to that industry’s regulations and licensing requirements. I think it
is undoubted that had Mr McCormick purported to be a Trainer when taking a horse onto a NSW racecourse, that he would have been prevented
from doing so, if he was unlicensed.
[53]
Thirdly, there was no evidence as to Mr McCormick’s allegation that Mr Hamilton had failed to comply with his obligations under
the
Workers’ Compensation Act 1987
(NSW). In any event, even if Mr McCormick has a claim/s under that Act, he is free to pursue such claims according to the provisions
of that Act. Alleged breaches of that Act are not relevant matters under the
Fair Work Act
,
nor does the Commission have any jurisdiction to deal with such matters.
[54]
Fourthly, I am not entirely clear what Mr McCormick means by the
‘lack of transparency and misleading evidence by Mt Pleasant Stud Farm’
. Mr McCormick could never have been in any doubt, (at least from 4 December 2014), that Mr Hamilton intended to outsource all his
horse training to external trainers. Indeed, he conceded as much. While I accept that Mr Hamilton may have not been entirely clear
as to what this intention meant for Mr McCormick’s on-going employment, it does not follow that Mr Hamilton was less than transparent
or gave misleading evidence. I am inclined to accept Mr Hamilton’s evidence that he held off telling Mr McCormick because he
did not want to ruin his holiday to China. While not doubting Mr Hamilton’s sincerity and genuine concern, this was perhaps
not the best course of action, given the circumstances at the time. As to misleading evidence, I made no such adverse findings against
Mr Hamilton in the earlier decision. It is not open to Mr McCormick to make such allegations, in effect to re-agitate issues of credibility;
much less to seek to have the Commission make such findings now in this final part of the case.
[55]
Fifthly, there was no evidence that Mr Hamilton failed to cooperate in conciliation or negotiate effectively after September 2015.
While I strongly recommended the parties enter into negotiations after my earlier decision, this was really directed to Mr McCormick,
given the limitations on compensatory relief that would (and will) be found to exist by virtue of the binding force of relevant authorities
and other statutory limitations. It must be stressed that where a party is unwilling to settle a matter, because of its strong conviction
as to the merits of its case, does not necessarily lead to the conclusion that it was unreasonably unwilling to settle. Put another
way, the mere subjective view that a party was reluctant to negotiate effectively, does not necessarily make it objectively so.
[56]
Sixthly, Mr McCormick’s view that his dismissal was inconsistent with the Code is predicated on his continuing belief that he
was dismissed because of his workplace injury and not redundancy. For the umpteenth time, that belief has not been made out. In any
event, I had already determined that the Code is not relevant to this case. At paragraphs 116 – 117 of the earlier decision,
I said:
While there can be no doubt, the respondent was a Small Business Employer, I do not see how the Code is relevant in the context of
its primary objection based on ‘genuine redundancy’ grounds. This is so, because, shortly stated, the Code deals with
dismissals for cause; that is, involving either the employee’s conduct, including serious misconduct, or capacity to do the
job and the assessment of procedural fairness relating thereto.
As Mr
Lloyd
expressly (and appropriately) eschewed any allegations of conduct, including misconduct, or an incapacity to do the job, I do not
see how reliance on the Code takes the respondent’s case very far at all. I think the respondent is confusing its defence as
to whether the applicant’s dismissal was
‘harsh, unreasonable or unjust’
, which is not what the case is about - although it may well be subsequently.’
See also:
Nalevansky v Thought Equity Motion Inc
[2010] FWA 3707
,
Di Masi v Coastal Fisheries Pty Ltd ATFT Sea Empire Unit Trust
[2010] FWA 6280
,
Iannello v Motor Solutions Australia Pty Ltd
[2010] FWA 3125
.
[57]
It is not open to Mr McCormick to attempt to re-agitate a matter already determined by the Commission. Nor do I apprehend this was
a ground of appeal in his appeal of my earlier decision. The matter was determined. The Code is not applicable to Mr McCormick’s
dismissal.
[58]
For the foregoing reasons, I find that Mr McCormick’s termination of employment for reasons of redundancy on 13 February 2015,
was
‘unreasonable’
and therefore unfair, within the meaning of s 387 of the Act.
Remedy
[59]
I turn now to the question of remedy. Section 390 of the Act requires the Commission to make a finding that reinstatement of an unfairly
dismissed employee would be inappropriate, before considering a compensatory remedy. The section is set out below:
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.
[60]
Mr McCormick did not seek reinstatement and given the seemingly deep contempt he has for Mr Hamilton, as evident in his submissions
and cross examination, it is unambiguously clear that the employment relationship is irretrievably and permanently destroyed. It
follows that, put briefly, reinstatement would be inappropriate. This finding, leads to compensation considerations. Section 392(2)
of the Act requires the Commission, when making an order for compensation, to take account of ‘all of the circumstances of
the case’, including the following mandatory considerations:
(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.
[61]
Subsections 3 – 6 sets out some other matters to be considered when determining a compensatory remedy. These sections are as
follows:
(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.
Note: subsection 392(5) indexed to $68,350 from 1 July 2015
(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.
[62]
The general approach to be adopted by the Commission in calculating compensation in a particular case, is set out in the seminal case
of
Sprigg
and reaffirmed in
Ellawala v Australian Postal Corporation
[Print S5109] and
Haigh v Bradken Resources Pty Ltd t/as Bradken
[2014] FWCFB 236
. Of particular relevance in this case are the following passages from
Sprigg
at page 29:
In assessing the amount of compensation to be awarded the following approach has been adopted by the Court:
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.
STEP 2: Deduct moneys 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 awarded.
STEP 3: The remaining amount of compensation is discounted for contingencies.
STEP 4: The impact of taxation is calculated to ensure that the employee receives the actual amount he or she would have received
if they had continued in their employment.
STEP 5: The legislative cap on compensation is applied. (My emphasis)
Also apposite to this case are the following passages in
UES v Harvey
at paragraphs 34-36:
‘UES also submitted on appeal that the Commissioner erred in concluding that the remuneration Mr Harvey would have received,
or would have been likely to receive, if he had not been dismissed would have been $23,812.16. This figure was based on Mr Harvey’s
employment continuing for “at 8 months (3 weeks) more” but for his dismissal. UES submitted that the Commissioner should
have concluded that Mr Harvey’s employment would have continued for no more than another two weeks. A further two weeks, being
the outer limit of the period it would have taken UES to consult with Mr Harvey about the redundancy in accordance with the relevant
modern award and, thereby, effect a genuine redundancy within the meaning of s.389 of the FW Act.
We think there is also merit in this ground of appeal. If UES had consulted with Mr Harvey about the redundancy in accordance with
the relevant modern award then, on the evidence in the case, his dismissal would have been a genuine redundancy within the meaning
of s.389 of the FW Act. There is no sound reason to believe such consultation would have taken any longer than two weeks or yielded
a result other than his dismissal.
The Commissioner substantially over estimated the remuneration Mr Harvey would have received, or would have been likely to receive,
if he had not been dismissed. That over estimation was integral to the Commissioner’s determination of the amount of compensation
in lieu of reinstatement he ordered UES to pay to Mr Harvey. The Commissioner’s determination as to the amount of compensation
to be paid to Mr Harvey by UES was therefore also affected by error in the decision making process.’
At this juncture, I intend to deal with each of the heads of claim under which Mr McCormick is seeking compensation. For convenience
these are set out again below:
‘Loss of wages over 26 weeks
= $6,033.37
(based on PIAWE of $1,856.42 per Workcover NSW Merit Review, 95% received for first 13 wks (5% of this amount is $92.82 x 13 wks =
$1,206.67 and then reduced to 80% (20% of this amount is $371.28 x 13 wks = $4,826.70)
Loss of superannuation (9% of $66,000) over 26 wks
= $5,940.00
Loss of annual leave ( 2 wk in a 26 week period)
= $2,564.00
Additional 1 weeks termination pay (I would have completed 3 years continuous service as at May 2015)
= $1,282.00
Relocation Costs
= $3,000.00
As a result of my dismissal, I was requested to vacate our home at 260 Bonds Rd that was supplied to me for my family to live in by
Mt Pleasant Stud Farm Pty Ltd hence incurring additional expense.
TOTAL OF ABOVE =
$18,819.37
Plus a contingent figure of $22,602.12 should WIRO’s decision be overruled to compensate for non pecuniary items accommodation,
electricity and motor vehicle for 52 weeks (Accommodation $450, Motor Vehicle $50.32 & Electricity $43)(Note in calculating this
figure it has been taken into account 5% of this amount x 13 wks and 20% of this amount for a further 13 wks has been deducted as
compensation for this amount has been included in the figure for Loss of Wages above.
’
[63]
Mr McCormick seeks the maximum compensation under the Act of 26 weeks’ pay, calculated on his Workcover review figure of $1,856.42
per week. Appropriately, Mr McCormick recognised that consistent with
Sprigg
, a deduction must be made for workers’ compensation payments of 95% of this amount he received in the first 13 weeks and 80%
for the next 13 weeks.
[64]
In my opinion, it is at least arguable that under the
Fair Work Act
, the Workcover PIAWE calculation is not the appropriate
‘amount of remuneration…to which the person was entitled’
in the 26 weeks period of employment before the dismissal; (see
s 392(6)(a)).
It must be remembered that this calculation was made under the express provisions of the
Workers’ Compensation Act 1987
(NSW). Nevertheless, I am prepared to give Mr McCormick the benefit of the doubt and rely on a weekly remuneration figure of $1,856.42.
I will apply the same principle to Mr McCormick’s claim of 9% superannuation on the final compensatory amount.
[65]
However, with respect to the claim for annual leave allegedly accruing during the period after dismissal and a further week because
of continuous service of three years, which would have fallen due on May 2015, both of these claims must fail. I know of no authority,
(nor did Mr McCormick point to any), which supports such claims. This is so because compensation under s 392 of the Act is not inclusive
of leave entitlements which may have accrued, at some unspecified point, beyond the employee’s dismissal. Simply, the employee
had not worked the time to gain the accrual. From the statutory language it is tolerably clear that compensation is based on lost
remuneration, not for the imagined loss of leave not accrued or service with the employment which has not been met.
[66]
The same rationale and statutory exclusion applies to Mr McCormick’s claim for relocation costs. This is not a permissible component
for the purposes of calculating compensation under the Act. The claim for a contingent figure of $22,602.12, based on an assumption
of the decision of WIRO being overturned, is not only bizarre and impermissible, but there is no authority relied upon to support
such a claim. It is even more problematic, given Mr McCormick’s claim is based on a 52 week calculation.
[67]
In dealing with
ss 3
,
4
, 5 and
6
of s 392 of the Act, firstly there was obviously no misconduct (and none alleged) by Mr McCormick. No deduction of the compensatory
amount will be made under this head. Secondly, while Mr McCormick claims that there is no actual claim made for shock, distress or
humiliation, he seeks the maximum amount of compensation because of the ‘severity’ of his dismissal. He speaks of his
shock and distress at being dismissed. ‘Severity’ of dismissal (whatever that may mean) is not a factor under s 392,
although it might be said to be a tangential factor ‘in all the circumstances of the case’. In any event, I consider
Mr McCormick has not experienced any greater levels of shock and distress than other persons, who regrettably are made redundant,
and are unable to find alternative employment in the short to medium term. Moreover, it must be observed that on any view, Mr McCormick’s
post dismissal circumstances, do not disclose any significant financial loss. This is precisely the beneficial purpose of workers’
compensation legislation and for which Mr McCormick has been compensated. That said, I accept unreservedly that Mr McCormick is very
keen to work and has been a passionate and hardworking person all his working life. Given his high work ethic and commitment, it
is understandable he has felt frustrated and upset at his injury and the effect it has had on his family’s circumstances.
[68]
Thirdly, as will be evident shortly, the order I intend to make is not higher than the statutory cap in
ss6.
Fourthly, there were no submissions put for the proposed orders to be paid by instalment (s 393 of the Act). It would not be appropriate
in this case in any event.
[69]
I return to the discrete matters to be taken into account in s 392(2) of the Act and make findings on each one.
(a) The effect of the order on the viability of the employer’s enterprise
Given the order I intend to make, I am confident that the order will have little, if any impact on the viability of Mr Hamilton’s
enterprise.
(b) The length of the person’s service with the employer
Mr McCormick had relatively short service of two and a half years with the respondent. This is a neutral factor in this case.
(c) The remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed
Accepting that Mr McCormick was made redundant on 13 February 2015, I am satisfied that his on-going employment as a Trainer on the
farm, would not have lasted beyond a further two to three weeks; See:
UES v Harvey
and
Byrne v Tyco
. He received three weeks’ pay in lieu of notice. As a result, this is a neutral factor in the case.
(d) The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal
Mr McCormick was injured on 29 December 2014. As I understand it, he remained on weekly workers’ compensation payments, at least
to the date of this hearing (14 March 2016). Obviously Mr McCormick’s injury prevented him from seeking to mitigate his loss.
This is a neutral factor in this case.
(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
Applying the ratio in
Sprigg
, which Mr McCormick concedes is appropriate in his case, the amount of workers’ compensation Mr McCormick received from 13
February 2015 to the date of this decision, is to be deducted from the number of weeks of compensation ordered. I will come to the
total calculation shortly.
(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
Given the consideration in (e) above, this criterion is not relevant in this matter.
(g) Any other matter that the FWC considers relevant
Other relevant matters under this section have been extensively canvassed earlier in this decision. However, as I earlier indicated
I am satisfied that the lack of formal notice and lack of consultation justified a conclusion that Mr McCormick’s dismissal
was
unreasonable
. In all the circumstances of this case, I determine that an amount of eight weeks’ compensation is appropriate. This roughly
equates to Mr McCormick’s submission that he should have been consulted between 4 December 2014 and 13 February 2015; ie. from
the date Mr Hamilton advised Mr McCormick of his intention to outsource all his training to his dismissal, noting this period includes
Christmas and New Year and a period when Mr McCormick was on leave. I again observe that any period of consultation would have unlikely
yielded a different outcome.
CONCLUSION
[70]
Pursuant to s 392 of the Act, and for the reasons herein expressed, I intend to make an order of compensation in Mr McCormick’s
favour of $2,079.19, consisting of:
(a) 5% of $1,856.42 x 8 weeks ($92.82 x 8) = $742.57; and
(b) Superannuation 9% of $1856.42 ($167.08 x 8) = $1,336.62
Total = $2,079.19
[71]
Taxation treatment of these amounts are a matter for the parties. The amounts are to be payable to Mr McCormick, within 14 days of
today’s date. Orders giving effect to my findings are published contemporaneously with this decision. This matter is now concluded
with the Commission being of the view, that the outcome represents a ‘fair go all round’ as required by s 381(2) of the
Act.
DEPUTY PRESIDENT
Appearances
:
Mr S
McCormick
for the applicant
Mr G
Lloyd
of Caldwell Martin Cox Solicitors for the respondent
Hearing details:
2016:
Sydney,
3, 14 March.
Written submissions:
4 December 2015
18 January 2016
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