[2009] AIRCFB 844 [2009] AIRCFB 844 Download Word Document AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION DECISION Workplace Relations Act 1996 s.120 - Appeal to Full Bench Patrick Wilson v IGA Distribution (WA) Pty Ltd (C2009/2504) SENIOR DEPUTY PRESIDENT DRAKE DEPUTY PRESIDENT HAMILTON COMMISSIONER GRAINGER MELBOURNE, 11 SEPTEMBER 2009 Appeal against decision [2009] AIRC 442 of Commissioner Williams at Perth on 6 May 2009 in matter number U2008/5743 – Decision on Remedy [1] On 1 September 2009 we handed down a decision in which we found that there was no justification for the summary termination of Mr.Wilson’s employment, and that the termination was harsh, unjust or unreasonable within s.652 of the Workplace Relations Act 1996. We dismissed all other grounds of appeal. We decided to determine the issue of remedy ourselves, and directed the parties to provide written submissions within seven days in relation to what orders should follow our determination in this regard 1 . [2] Written submissions were received from the appellant and respondent on 9 September 2009. In summary, the appellant sought reinstatement, and that the appellant should be placed in the position he would have been if the termination had not occurred. The respondent submitted that no order for any remedy sought by the applicant should be made, as the Full Bench had found that there was nothing in the respondent’s conduct that was harsh, unjust or unreasonable other than the summary dismissal, and had accepted that there had been payment in lieu of notice. [3] Section 635 of the Workplace Relations Act 1996 provides: ‘(1) The principal object of this Division is: (a) to establish procedures for conciliation in relation to certain matters relating to the termination or proposed termination of an employee’s employment in certain circumstances; and (b) to provide, if the conciliation process is unsuccessful, for recourse to arbitration or to a court depending on the grounds on which the conciliation was sought; and (c) to provide for remedies appropriate to a case where, on arbitration, a termination is found to be harsh, unjust or unreasonable; and (d) to provide for sanctions where, on recourse to a court, a termination or proposed termination is found to be unlawful; and (e) by those procedures, remedies and sanctions, and by orders made in the circumstances set out in Subdivision D, to assist in giving effect to the Termination of Employment Convention. s.635(2) The procedures and remedies referred to in paragraphs (1)(a) and (b), and the manner of deciding on and working out such remedies, are intended to ensure that, in the consideration of an application in respect of a termination of employment, a “fair go all round” is accorded to both the employer and employee concerned. Note: The expression “fair go all round” was used by Sheldon J in re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95.’ [4] Section 654 of the Workplace Relations Act 1996 provides: (1) Subject to this section, the Commission may, on completion of the arbitration, make an order that provides for a remedy of a kind referred to in subsection (3), (4) or (7) if it has determined that the termination was harsh, unjust or unreasonable. (2) The Commission must not make an order under subsection (1) unless the Commission is satisfied, having regard to all the circumstances of the case including: (a) the effect of the order on the viability of the employer’s undertaking, establishment or service; and (b) the length of the employee’s service with the employer; and (c) the remuneration that the employee would have received, or would have been likely to receive, if the employee’s employment had not been terminated; and (d) the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination; and (e) any other matter that the Commission considers relevant; that the remedy ordered is appropriate. (3) If the Commission considers it appropriate, the Commission may make an order requiring the employer to reinstate the employee by: (a) reappointing the employee to the position in which the employee was employed immediately before the termination. (b) appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination. (4) If the Commission makes an order under subsection (3) and considers it appropriate to do so, the Commission may also make: (a) any order that the Commission thinks appropriate to maintain the continuity of the employee’s employment; and (b) subject to subsections (5) and (6) – any order that the Commission thinks appropriate to cause the employer to pay to the employee an amount in respect of the remuneration lost, or likely to have been lost, by the employee because of the termination. (5) In determining an amount for the purposes of an order under paragraph (4)(b), the Commission must have regard to: (a) the amount of any income earned by the employee from employment or other work during the period between the termination and the making of the order for reinstatement; and (b) the amount of any income reasonably likely to be so earned by the employee during the period between the making of the order for reinstatement and the actual reinstatement. (6) If, as a result of an application under section 663, a court has awarded an amount of damages for a failure to give notice of a termination as required by section 661, any amount ordered to be paid by the Commission under paragraph (4)(b) in respect of the termination is to be reduced accordingly. (7) If the Commission thinks that the reinstatement of the employee is inappropriate, the Commission may, if the Commission considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay the employee an amount ordered by the Commission in lieu of reinstatement. (8) Subject to subsections (9), (10), (11) and (12), in determining an amount for the purposes of an order under subsection (7), the Commission must have regard to all the circumstances of the case including: (a) the effect of the order on the viability of the employer’s undertaking, establishment or service; and (b) the length of the employee’s service with the employer; and (c) the remuneration that the employee would have received, or would have been likely to receive, if the employee’s employment had not been terminated; and (d) the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination; and (e) any misconduct of the employee that contributed to the employer’s decision to terminate the employee’s employment; and (f) any other matter that the Commission considers relevant. (9) An amount ordered by the Commission under subsection (4) or (7) to be paid to an employee may not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the employee by the manner of terminating the employee’s employment. (10) If the Commission is satisfied that misconduct of the employee contributed to the employer’s decision to terminate the employee’s employment, the Commission must reduce the amount it would otherwise fix under subsection (7) by an appropriate amount on account of the misconduct. (11) In fixing an amount under subsection (7) for an employee who was employed under award-derived conditions (see subsection 642(6)) immediately before the termination, the Commission must not fix an amount that exceeds the total of the following amounts: (a) the total amount of remuneration: (i) received by the employee; or (ii) to which the employee was entitled; (whichever is higher) for any period of employment with the employer during the period of 6 months immediately before the termination (other than any period of leave without full pay); 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. (12) In fixing an amount under subsection (7) for an employee who was not employed under award-derived conditions (see subsection 642(6)) immediately before the termination, the Commission must not fix an amount that exceeds: (a) the total of the amounts determined under subsection (11) if the employee were an employee covered by the subsection; or (b) the amount of $32,000, as indexed from time to time in accordance with a formula prescribed by the regulations; whichever is the lower amount. (Note: Section 654(12)(b) indexed to $50,700 from 1 July 2007) (13) For the avoidance of doubt, an order by the Commission under paragraph (4)(b) or under subsection (7) may permit the employer concerned to pay the amount required in instalments specified in the order. Section 654(3) – Reinstatement [5] We have had regard to relevant decisions including Phillis v. Australian Department of Defence 2 , Vdoukakis v. Cussan 3 , and McNair v. ABB Australia 4 . A decision as to whether reinstatement is appropriate is to be made on the evidence before us. We will now deal with the factors in s.654. Firstly, an order of reinstatement would not in our view affect the viability of the respondent (s.654(2)(a)). Secondly, the length of service is not inconsiderable, at 6-7 years (s.654(2)(b)). Thirdly, factors such as the remuneration that the applicant would have earned are of limited assistance (s.654(2)(c). There has been some degree of mitigation of loss, although possibly not sufficient (s.654(2)(d)). In relation to other matters, we have already found that there was a valid reason for termination (s.654(2)(e)). In our decision of 1 September 2009 we said: ‘Having concluded that IGA was Mr Wilson’s correct employer we have examined the pick standards applied to Mr.Wilson. We have concluded that there was nothing unfair in the standard that was applied to Mr. Wilson and with which he failed to comply. Mr Wilson was asked to comply with the standards, he was given an opportunity to do so and he failed. It was open to IGA to conclude that there was a valid reason for the termination of Mr. Wilson’s employment and for it to proceed to act on that conclusion. We can discern no error in Commissioner Williams’ conclusion that “..... the applicant did not maintain the performance standards required of him by the respondent and that in all the circumstances this was a valid reason for the Applicant’s termination.”’ 5 [6] In our view reinstatement would not be appropriate, given the existence of the valid reason for termination of employment, the nature of that valid reason for termination, and all the other circumstances of the matter. [7] We have also considered in the alternative whether we should make an order in lieu of reinstatement pursuant to s.654(7), having regard to relevant decisions including Ellawalla v Australia Postal Corporation 6 , Sprigg v Paul’s Licensed Festival Supermarket 7 , Enhance Systems v James Cox 8 , and Smith and Kimball and Moore Paragon 9 . [8] We will now deal with the factors in s.654(8). Firstly, an order of compensation would not in our view affect the viability of the respondent (s.654(8)(a)). Secondly, the length of service is not insubstantial, at 6-7 years (s.654(8)(b)). Thirdly, in our view, given the continued failure of the appellant to comply with performance standards, the appellant would not have earned more than the notice that was payable in the event of termination with notice (s.654(8)(c)). Fourthly, there has been some degree of mitigation of loss, although possibly not sufficient (s.654(8)(d)). Fifthly, we have had regard to all the circumstances surrounding the termination of employment (s.654(2)(e)). [9] In all the circumstances of this case, it would have been fair for the respondent to give the appellant the required notice of termination and to terminate his employment following the expiry of that notice. In this case the appellant was paid in lieu of notice 10 . An order requiring the respondent to pay the appellant an amount in lieu of reinstatement pursuant to ss.654(7) would not be appropriate. We have decided not to issue an order for payment of any monetary amount. BY THE COMMISSION: DEPUTY PRESIDENT Appearances : Mr Guy Stubbs of Counsel for the applicant Mr Patrick Wilson Ms Erica Hartley and Ms Jennifer Bradbury of Freehills, solicitors , for the respondent Hearing details: Perth 2009 14 July Final written submissions on remedy: Mr Patrick Wilson (appellant) on 9 September 2009. IGA Distribution (WA) Pty Ltd (respondent) on 9 September 2009. 1 Drake SDP, Hamilton DP, Grainger C, 1 September 2009, AIRCFB 808, paragraphs 24-26 and Drake SDP, Hamilton DP, Grainger C, 10 September 2009, PR989193 , correction to decision. 2 Lawler VP, Harrison SDP, Holmes C, 5 September 2003, PR937132 3 Duncan SDP, O’Callaghan SDP, Redmond C, 23 July 2004, PR949780 4 Harrison SDP, Duncan SDP, Richards C, 9 June 2004, PR947746 5 At paragraph 19 6 Vice President Ross, Senior Deputy President Williams, and Commissioner Gay 17 April 2000 Print S5109 7 Justice Munro, Deputy President Duncan, Commissioner Jones 24 December 1998 Print R0235 8 Senior Deputy President Williams, Senior Deputy President Acton, Commissioner Gay 31 October 2001 PR910779 9 PR942856 10 PN398 Printed by authority of the Commonwealth Government Printer <Price code C, PR989208>