[2012] FWA 6684 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mrs Michelle McKerrow
v
Sarina Leagues Club Incorporated T/A Sarina Leagues Club
(U2010/14622)
COMMISSIONER ASBURY |
BRISBANE, 7 AUGUST 2012 |
Application for unfair dismissal remedy - Finding that dismissal was unfair - Compensation appropriate - Assessment of compensation.
Introduction
[1] By a decision released on 21 February 2012 1, I found that Ms Michelle McKerrow was unfairly dismissed by Sarina Leagues Club Inc. trading as Sarina Leagues Club (the Club). I also decided that an order for payment of compensation to Ms McKerrow was appropriate in all of the circumstances of the case.
[2] Further Directions were issued requiring Ms McKerrow to file in Fair Work Australia and serve on the Club, an affidavit setting out evidence in relation to the criteria in s.392 of the Fair Work Act 2009 (the Act) that are required to be considered in deciding the amount of compensation for the purposes of an order. The parties were also directed to advise whether they wished to cross-examine the deponents. A number of extensions of time in which to comply with these directions were granted.
[3] Two affidavits affirmed by Ms McKerrow on 28 February and 13 March 2012 were filed in relation to the compensation matter. An affidavit sworn by Mr Gary Hill on 5 March 2012 was filed on behalf of the Club. No cross-examination of the deponents was required by either party.
Legislation
Section 392 of the Act deals with remedy of compensation and criteria for determining amounts as follows:
392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), FWA must take into account all the circumstances of the case including:
(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 FWA considers relevant.
Misconduct reduces amount
(3) If FWA is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, FWA 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 FWA 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 FWA 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 395(5) indexed to $59,050 from 1 July 2011
(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.
Consideration
Approach to deciding compensation
[4] Ms McKerrow has claimed loss of $18,008.72 including 10 weeks lost wages, 16 weeks at the amount of the difference between her wages at the Club and in her new employment and 16 weeks at $220.00 with respect to additional travel costs.
[5] The approach to deciding compensation I have followed in this case, is that set out in a Decision of a Full Bench of Fair Work Australia in Tabro Meat Pty Ltd v Kevin Heffernan 2 rather than adopting the calculations or approaches proposed by the parties. I have also considered relevant evidence in the affidavits of Ms McKerrow and Mr Hill, in relation to the criteria for deciding the amount of compensation set out in s.392(2).
The effect of the order on the viability of the employer’s enterprise - s.392(2)(a)
[6] Ms McKerrow said in her affidavit of 28 February 2012 that the Club holds Directors and Managers insurance and that the policy will cover any damages the Club is ordered to pay in these proceedings. Accordingly, any compensation order will have no effect whatsoever on the Club. Mr Hill said that the Club does hold such insurance but would be financially affected by making a claim as premiums on the Club’s policy would rise substantially.
[7] There is insufficient evidence from the Club about the effect of any order on its viability for me to give further consideration to this matter. It appears that the insurance will cover any order for compensation and there is no evidence about what if any impact an increase in insurance premiums which may follow a claim against the policy, would impact on the viability of the Club.
The length of service with the employer - s.392(2)(b)
[8] It is not in dispute that Ms McKerrow commenced employment with the Club on 28 September 2009 and was dismissed on 17 November 2010 so that her length of service with the Club was approximately 13.5 months.
Remuneration that would have been received - s.392(2)(c)
[9] In the unfair dismissal proceedings, the Club contended that Ms McKerrow was guilty of serious misconduct variously described as misappropriation of money and fraud or gross misuse of the Club’s funds. These allegations expanded during those proceedings to include assertions that Ms McKerrow was responsible for other money that was missing from the Club prior to her dismissal.
[10] In the Decision issued on 21 February 2012, I found that there was no valid reason for the dismissal of Ms McKerrow and that on the balance of probabilities, she had not engaged in the misconduct alleged by the Club. I also found that the decision to dismiss Ms McKerrow was unjust because on the evidence advanced by the Club, Ms McKerrow was not guilty of the alleged misconduct, and unreasonable because it was based on inferences that could not reasonably have been drawn from the material before the Club. Further, in relation to matters said to have been discovered after the dismissal, I found that if they could properly be described as after acquired knowledge, they were not sufficient to establish misconduct on the part of Ms McKerrow
[11] I also found that it was probably correct that Ms McKerrow was made a scapegoat for missing money, and that the circumstances in which she was dismissed would have been known to members of the Club and persons in the community.
[12] Other than the matters the Club relied on to justify the dismissal, there was no evidence of any issues in relation to Ms McKerrow’s conduct, capacity or work performance to indicate that her employment would not have continued for some time. Ms McKerrow said that she had no intention of leaving her employment and the position suited her because:
● She had previously worked in pubs and clubs;
● Her shift was 6.00 am to 3.00 pm allowing her to pick up her children from school;
● The Club was located 15 minutes from her home which meant she had a ten minute drive to work; and
● She enjoyed her work.
[13] In his affidavit in these proceedings, Mr Hill continued to press allegations about Ms McKerrow which were found by me to have been misconceived and without substance, and to have led to Ms McKerrow being unfairly dismissed. Mr Hill has raised nothing in his affidavit upon which I could make a finding that Ms McKerrow would not have continued in her employment for the foreseeable future. Accordingly, I find that but for her unfair dismissal, Ms McKerrow would have continued in her employment for at least a period of two years.
[14] In her affidavit of 28 February 2012, Ms McKerrow said that her gross income was an average of $1,334.15 gross and $1,035.00 nett per week. This was said to be derived from her group certificate for the period of employment between 1 July 2010 and 17 November 2010.
[15] In his affidavit of 5 March 2012, Mr Hill said that Ms McKerrow was employed on a salary of $52,000 per year based on a 40 hour week at $25 per hour. This equated to a weekly payment of $1,000.00 gross and $805.00 nett. Appended to Mr Hill’s affidavit were weekly pay slips indicating Ms McKerrow’s usual weekly pay was a gross amount of $1,000.00 and a nett amount of $805.00 and that on some occasions Ms McKerrow took five hours time off in lieu in a particular week giving her 45 hours pay. According to Mr Hill the last pay slip for the period 15 to 21 November 2010 indicates that Ms McKerrow was paid a combination of weekly pay and termination pay. This was said by Mr Hill to have caused Ms McKerrow’s figures to be inflated and very misleading. Mr Hill also asserted that Ms McKerrow had knowingly made a misleading statement in relation to her income.
[16] In her further affidavit dated 13 March 2012, Ms McKerrow said that she relied on the group certificate to determine her average pay as she was unable to locate any payslips. Having seen Mr Hill’s affidavit and the payslips appended to it, Ms McKerrow said that she accepted that her usual weekly pay was $805.00 nett. Ms McKerrow also stated that she was entitled to time off in lieu of overtime during her employment with the Club, and it was difficult for her to estimate the value of those payments without having payslips to hand. Ms McKerrow denied the allegation that she had been dishonest and said that she was doing the best she could with documents at hand.
[17] I accept Ms McKerrow’s reasons for the error in stating her wages and do not accept that she was being misleading. I do so, on the basis that the Club chose not to cross-examine Ms McKerrow in relation to the contents of her first affidavit and the proposition that she had deliberately provided misleading information was not put to her. I also accept that Ms McKerrow acknowledged the error and withdrew her assertion about her weekly wage.
[18] On the basis of the pay slips appended to the affidavit of Mr Hill I accept that Ms McKerrow’s gross weekly wage was $1,000.00 and she received an amount of $90.00 per week in the form of superannuation contributions. Those contributions are part of remuneration for the purposes of calculating compensation 3 and there is sufficient evidence before me about the superannuation contributions received by Ms McKerrow during her employment with the Club and in her new employment, to include those amounts in the compensation calculations.
[19] There is insufficient evidence about the payment of time off in lieu of overtime upon which I could base any conclusion about whether it formed part of Ms McKerrow’s remuneration, or the value that could be attributed to such payment, and I have not included time off in lieu of overtime in the calculation of compensation.
[20] Accordingly, the remuneration Ms McKerrow would have received or would have been likely to receive if she had not been dismissed, is $104,000 in wages and $9,360.00 in superannuation - a total of $113,360.
Mitigation - s.292(2)(d)
[21] Ms McKerrow said in her affidavit that it took her ten weeks to obtain alternative employment. Ms McKerrow also said that when she was dismissed by the Club and made a scapegoat for missing money, she was unable to find work in Sarina and had to search further afield in Mackay. In response to this, Mr Hill continued to assert that Ms McKerrow had engaged in dishonest behaviour and that such behaviour had contributed to her dismissal.
[22] Given that Mr Hill’s assertion is contrary to the findings in my decision in relation to Ms McKerrow’s unfair dismissal application, I have not taken that assertion into account. I also accept that:
● Ms McKerrow was employed in a position where she was handling money and her skills and experience are such that this is the type of position she would seek in her efforts to mitigate the loss of her employment;
● Given the failure of the Club to establish that Ms McKerrow had engaged in the conduct it alleged, it is not unreasonable that Ms McKerrow would have attempted to obtain similar employment to that she held with the Club;
● The Club has a Board made up of members of the community, and members of the community are also members of the Club;
● Members of the Club’s Board made serious allegations of a criminal nature against Ms McKerrow and it is more probable than not that these allegations were known to the membership of the Club;
● Ms McKerrow was dismissed at the time that amounts of money had gone missing from the Club; and
● In the decision in relation to her unfair dismissal application I accepted that Ms McKerrow had probably been made a scapegoat for the missing money and that members of the Club general community would believe that she had some involvement.
[23] I am of the view that Ms McKerrow has made reasonable attempts to mitigate the loss suffered because of her dismissal. I also accept that it would reasonably have taken Ms McKerrow at least ten weeks to obtain alternative employment, given the circumstances surrounding her dismissal. Accordingly, an adjustment in the amount of compensation for failure to take reasonable steps to mitigate loss of employment is not appropriate in this case.
Remuneration earned between dismissal and compensation order - s.392(2)(e)
[24] Ms McKerrow said that in the employment that she obtained ten weeks after her dismissal, she earns $48,950.00 per annum which means that her gross fortnightly salary is $1,882.69 (nett $1,552.65). Pay slips appended to Ms McKerrow’s affidavit also indicate that she receives fortnightly superannuation contributions of $169.44. Assuming that Ms McKerrow commenced employment in the week commencing 24 January 2011, she has earned an amount of $73,424.97 in wages and $6,608.16 in superannuation, between her dismissal and the date of the order for compensation.
[25] Therefore, in the period between the dismissal and the compensation order, the difference between the remuneration Ms McKerrow would have earned had she not been dismissed, and the remuneration earned from the employment she obtained ten weeks after her dismissal, is $33,326.87.
Remuneration likely to be earned between the making of the order and the actual compensation - s.392(2)(f)
[26] The time between the making of this order and the actual compensation will be 21 days and during that time Ms McKerrow will be likely to earn $2,824.00 in wages and $254.16 in superannuation.
[27] These amounts should be deducted from the amount in [25] above, resulting in an amount which is the difference between the remuneration Ms McKerrow would have earned had she not been unfairly dismissed and the total amount earned between the dismissal and the actual compensation. This is an amount of $30,248.71.
Other relevant matters
[28] Given that the starting point for the assessment of compensation in this case is the assumption that but for her unfair dismissal, Ms McKerrow would have continued in her employment with the Club for a period of two years, the amount likely to be earned by Ms McKerrow during the period between the actual compensation and the expiration of that two year period should also be deducted from the compensation payable to Ms McKerrow.
[29] The period between the dismissal of Ms McKerrow on 17 November 2010 and the date on which the actual compensation awarded to Ms McKerrow will be paid in accordance with the Order which will accompany this Decision, is 92 weeks. The period Ms McKerrow would have been likely to remain in her employment with the Club had she not been unfairly dismissed is 104 weeks or a further period of 12 weeks.
[30] In that further 12 week period, Ms McKerrow will likely earn wages of $11,296.14 and superannuation contributions of $1,016.64. When these amounts are deducted from the amount of $30,248.71, the resulting amount of compensation is $17,935.93
[31] I am also of the view that the additional travel to and from work required to be undertaken by Ms McKerrow in the employment she obtained after her unfair dismissal, is a relevant matter in deciding the amount of compensation for her unfair dismissal.
[32] Ms McKerrow states that as a result of being dismissed by the Club and being made a scapegoat for missing money she was unable to obtain work in Sarina due to her reputation being tarnished. Ms McKerrow was able to obtain employment in Mackay, and is now required to travel 45 km to and from work in her private vehicle. Ms McKerrow contends that using the formula allowed by the Australian Taxation Office for Business Travel and based on additional travel of 60 km per day, the cost to her is $44.40 per day or $220.00 per week. Ms McKerrow further maintains that the additional travel is not a situation she is happy with, and she would not be incurring these costs but for her unfair dismissal by the Club.
[33] The difficulties Ms McKerrow would have faced in obtaining other employment are apparent from the conduct of representatives of the Board of the Club during the hearing of the unfair dismissal application and after the release of the Decision in that matter. Notwithstanding my findings that Ms McKerrow was not guilty of fraud or misappropriation, the Club has continued to level these allegations in the further proceedings in relation to compensation.
[34] As set out in the decision of 21 February 2012, the representatives of both parties engaged in a series of communications with each other and the Tribunal, by which I was made aware that there were charges of fraud brought against Ms McKerrow in the Magistrates Court, in relation to the same matters that were subject of the unfair dismissal proceedings. In his affidavit in these proceedings of 5 March 2012, Mr Hill continued to assert dishonesty on the part of Ms McKerrow and said that he was required to attend the Mackay Magistrates Court on 8 May 2012 to give evidence against Ms McKerrow in a criminal matter on a charge of fraud.
[35] An Affidavit sworn on 8 May 2012 by Mr Drazen Kozaric, a Solicitor in the employ of Wallace and Wallace Lawyers, was filed on behalf of Ms McKerrow stating that on that date an email was received from the Solicitor representing Ms McKerrow in relation to the fraud charge, stating that the charge was dismissed. The email, appended to Mr Kozaric’s affidavit, is in the following terms:
“We confirm we act for Ms Michelle McKerrow on a single count of Fraud. This matter allegedly arose from Ms McKerrow’s employment with the Sarina Leagues Club.
Following the receipt of the Police Brief of Evidence the matter was listed for trial commencing the 8th day of May 2012. We confirm on Friday the 4th day of May 2012 the Officer in Charge of Police Prosecutions, Sergeant Scott advised our office that the Police would be offering No evidence in relation to this matter.
A member of our office appeared with Ms McKerrow on even date before Mr Risson in the Mackay Magistrate’s Court. We confirm that the Police Prosecutor offered no evidence on the charge of Fraud, the charge was dismissed and Ms McKerrow was discharged.”
[36] Given the tenacity with which the Club has ventilated its allegations against Ms McKerrow, I do not doubt that she had difficulty obtaining other employment in Sarina and was compelled to travel to Mackay to do so. In my view, there is a direct relationship between the additional expenditure on travel to and from work, and Ms McKerrow’s unfair dismissal and the compensation order should take this into account.
[37] However, I am not satisfied that Ms McKerrow should receive the full amount set out in the formula for business travel used by the Australian Taxation Office for travel to and from work. In my view it is appropriate to include a component for travel of $50.00 per week. This reduced amount takes into account factors such as that Ms McKerrow may have used her car for other purposes on the days upon which she also used it to travel to work, and that generally employees are responsible for travelling to and from work, and cannot claim such travel and related vehicle expenses as a tax deductible expense.
[38] It is also the case that Ms McKerrow would have had 8 weeks of annual leave, some 20 public holidays and periods of carer’s leave available to her during the two year period I have found she would have remained in employment, but for her dismissal. Accordingly, on the basis of my assessment that Ms McKerrow would have remained in employment with the Club for a further period of two years, and the periods of leave available to her during those two years, I have assessed that Ms McKerrow will have additional travel expenses for approximately 88 weeks in that period. I therefore allow the amount of $4,400.00 for additional travel expenses resulting from Ms McKerrow’s unfair dismissal.
[39] When that amount is added to the amount I have assessed in accordance with other criteria required to be considered, the resulting amount is $22,335.93. This amount is below the cap established in s.392(5) and s.392(6) of the Act.
Misconduct reduces amount - s.292(3)
[40] For the reasons set out in the decision of 21 February 2012, Ms McKerrow did not engage in misconduct, and I am not satisfied that there should be any reduction in the amount of compensation on this ground. Given that there was no evidence of uncertainty in relation to Ms McKerrow’s continuing employment, I do not intend to make any deduction for contingencies.
Amount of compensation
[41] I am satisfied that in all of the circumstances of this case, an order for payment of compensation of $22,335.93 should be made. Accordingly an Order will issue requiring Sarina Leagues Club Inc. to pay to Ms McKerrow an amount of $22,335.93 less taxation deductions required by law, within 21 days of the date of this Decision.
COMMISSIONER
3 Tabro Meat Pty Ltd v Kevin Heffernan [2011] FWAFB 1080 at [21].
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