Alison Thurston v Bunbury Medical Imaging [2020] FWC 4840

1 Fair Work Act 2009 s.394—Unfair dismissal Alison Thurston v Bunbury Medical Imaging (U2020/1942) DEPUTY PRESIDENT BEAUMONT PERTH, 25 SEPTEMBER 2020 Application for an unfair dismissal remedy - decision on remedy. [1] It was recently determined that Bunbury Medical Imaging Pty Ltd (BMI) had unfairly dismissed Ms Thurston.1 At the hearing on merits, neither party was positioned to make submissions on remedy. Consequently, directions were issued for the parties to address this point and the matter was listed for a further hearing. [2] Section 390(3) of the Fair Work Act 2009 (Cth) (the Act) provides that the Commission must not order the payment of compensation unless it is satisfied that reinstatement of the person is not appropriate, and an order for the payment of compensation is appropriate in all the circumstances of the case. [3] The question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.2 The degree of bitterness between the parties and the plethora of accusatory statements made, rendered reinstatement inappropriate. Trust and confidence had eroded. In the confines of a small team, Dr Boima, the owner of BMI, and Ms Thurston, appeared quite incapable of establishing a productive and respectful relationship. I was persuaded that they would continue to slavishly provoke the other at the expense of themselves and the work environment. [4] However, with respect to compensation, I have formed the view that in all the circumstances an order for compensation is not appropriate. My reasons for this decision follow. Reinstatement [5] Ms Thurston expressed that there had been a significant loss of trust and confidence between her and BMI. I note that Dr Boima did not disagree with this view. Ms Thurston explained that she considered Dr Boima’s hostility towards her would make it an extremely 1 Thurston v Bunbury Medical Imaging Pty Ltd [2020] FWC 3962. 2 Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186. [2020] FWC 4840 DECISION -- 1 of 9 -- [2020] FWC 4840 2 stressful and uncomfortable working environment. Plus, she had found alternative employment and was no longer living near BMI’s clinic. [6] It was evident from Dr Boima’s submissions that the relationship between him and Ms Thurston was fractious. Dr Boima alluded to Ms Thurston having previously raised false allegations of sexual harassment or conduct of a similar nature. Ms Thurston expressed to the effect that she considered such matters were not relevant to the proceedings on foot. [7] While reinstatement is the ‘presumptive’ remedy, it is not appropriate in all the circumstances to order it,3 and I am reassured that there is no right to reinstatement consequent upon a finding that a person has been unfairly dismissed.4 [8] In the circumstances before me, I am unpersuaded that the relationship between Ms Thurston and the Respondent is tenable. I draw no conclusion as to the truth concerning any assertion regarding sexual harassment or conduct of a sexual nature. However, the fact that both parties appear to acknowledge that such assertions have been raised is of significant concern as far as a relationship premised upon trust, respect and confidence is concerned. It is not the usual course that such accusatory statements are made within the parameters of an employment relationship where both employer and employee respect one another. Both Ms Thurston and Dr Boima through the course of the hearing on merits, and in this hearing, have pressed convincing arguments that their level of tolerance for the other is zero. Reinstatement is clearly not appropriate. Compensation [9] Turning to compensation, its purpose is to provide a person who has been unfairly dismissed with reparation for losses reasonably attributable to the unfair dismissal. It is not intended to be punitive.5 The amount of compensation ordered by the Commission must not include a component for shock, distress or humiliation, or other analogous hurt, caused to the person by the dismissal.6 Ms Thurston seeks the maximum amount of compensation available notwithstanding that three weeks post her dismissal she was gainfully employed albeit working less hours. [10] Section 392 of the Act sets out the criteria to which regard must be had in determining any amount of compensation ordered. It states: 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 3 Hatwell v Esso Australia Pty Ltd [2019] FWC 931, [28]. 4 Nguyen and Le v Vietnamese Community in Australia [2014] FWCFB 7198. 5 Kable v Matilda Greenbank [2015] FWCFB 3512, [17]. 6 Fair Work Act 2009 (Cth) s 392(4). -- 2 of 9 -- [2020] FWC 4840 3 (2) In determining an amount for the purposes of an order under subsection (1), the FWC 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 the FWC considers relevant. Misconduct reduces amount (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. (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; -- 3 of 9 -- [2020] FWC 4840 4 (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. [11] In determining the amount of compensation, all the circumstances are to be considered, including those prescribed by s 392(2) of the Act. The ‘Sprigg’ formula is to be applied to arrive at an appropriate amount.7 The method for calculating compensation under s 392 is also informed by the decision of the Full Bench in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc.8 [12] In Haigh v Bradken Resources,9 the Full Bench reaffirmed the principles set out within Sprigg, and the steps that need to be taken into account when assessing compensation. The first of those steps is to estimate the amount the employee would have received, or would have been likely to receive, if the employment had not been terminated; the second step being to deduct moneys earned since termination; the third, to make deductions for contingencies; fourth, to calculate any impact of taxation; and fifth, to apply the legislative cap.10 [13] The Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries11 noted that identification of the starting point for assessment ‘necessarily involves assessments as to future events that will often be problematic’. Further, the Full Bench emphasised there was an overarching requirement to ensure that the level of compensation was an amount considered appropriate, having regard to all of the circumstances of a case. [14] The notion of ‘taking into account’ a matter (such as those factors described in s 392 of the Act) connotes a genuine consideration of the relevant provision and the apportionment of the appropriate weight in the circumstances.12 In Construction, Forestry, Mining and Energy Union v Hamberger and Another,13 Katzmann J pointed out that ‘[t]o take a matter into account means to evaluate it and give it due weight’14 and that ‘mere advertence will not be enough.’15 7 See Ellawala v Australian Postal Corporation (AIRCFB, Print S5109, 17 April 2000), [33]; see Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. [2013] FWCFB 431. 8 [2013] FWCFB 431. 9 [2014] FWCFB 236. 10 Ibid [10]. 11 [2016] FWCFB 7206, [17]. 12 Lewis v Glendale RV Syndication Pty Ltd T/A Glendale Care Bundaberg [2014] FWC 1086. 13 (2011) 195 FCR 74. 14 Ibid [103]. 15 Ibid. -- 4 of 9 -- [2020] FWC 4840 5 Remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed [15] Ms Thurston gave evidence that she had received $45.00 per hour and had worked a 38 hour week when at BMI. She stated that her annual salary was $88,920.00 plus $9,334.00 superannuation. [16] The question of the anticipated period of employment can be a particularly vexed issue, requiring an exercise of judgment on what would be reasonable considering all the circumstances. It is particularly vexed in the circumstances of this matter because Dr Boima was unequivocal in his evidence that Ms Thurston’s performance was plainly deficient. [17] Throughout the course of the merits hearing, Dr Boima verbalised he had significant concerns about Ms Thurston’s work performance over an extended period and provided various examples. Further, Ms Nicholls spoke of Ms Thurston’s absenteeism, and her observation that the relationship between Ms Thurston and Dr Boima had broken down. I reiterate my observation from the prior decision concerning Ms Nicholls’ account. She was believable, and her evidence was insusceptible to emotive assertion. [18] During the hearing on remedy, Ms Thurston conceded that her performance had not been one hundred percent after the passing of her daughter. However, it is apparent from the evidence that Ms Thurston’s work practices at the time of the dismissal were, according to Dr Boima, no different from her practices adopted during the last two years of her employment. Dr Boima clearly considered that those practices were inefficient. [19] Concerning the merits of the matter, I found that there was little in the way of probative evidence before me to demonstrate the extent of the purported absenteeism, the duties Ms Thurston had been derelict in, the instructions that had been provided to Ms Thurston concerning the inadequate number of staff meetings and lack of attempts to generate business, or the mishandling or sharing of sensitive, financial and personal company information. [20] In such circumstances, I could not reasonably find that Ms Thurston’s work performance was so deficient that it gave rise to a valid reason for her dismissal. However, it does not follow that that there were no performance issues or problems with her ongoing absenteeism. [21] Ms Thurston contends that she would have held her position with BMI for a minimum of 2-3 years. I am unpersuaded that this would have been the case in light of issues with Ms Thurston’s performance and absenteeism, and when one considers the fractious relationship that had developed between Dr Boima and Ms Thurston. [22] Based upon the evidence and having regard to the submissions of the parties, I have reached the conclusion that Ms Thurston’s employment would have continued for a period of six weeks. This period represents the time it may have taken to have informed Ms Thurston of her work performance issues and her absenteeism, to have addressed the same by way of a performance management process, and to have ended her employment with the requisite notice paid out in lieu. -- 5 of 9 -- [2020] FWC 4840 6 [23] In short, the six weeks would have proved ample time for Ms Thurston to demonstrate improvement in both attendance and her work focus. She admits that her performance was not one hundred percent. However, while not wanting to adopt a fatalistic stance, in the sense that the outcome inevitably would have been the same, after that six weeks I am persuaded that the employment relationship would have ended. Not because Ms Thurston’s performance was incapable of improvement per se, but because she clearly had no respect for Dr Boima, her manager, and he similarly held none for her. Perhaps within that six weeks both Ms Thurston and Dr Boima may have changed their views. However, I think it unlikely. [24] The anticipated employment period is therefore six weeks. The effect of the order on the viability of the employer’s enterprise [25] BMI submitted that it is a small business and that for the period of March 2020 to September 2020, it had experienced a sharp decline in business, between 10-36%. I do note therefore that one can surmise from Dr Boima’s submissions, that BMI may not enjoy sound financials at this juncture. However, that falls well short of evidence establishing adverse consequences of a compensation order on BMI’s viability. [26] Based on the lack of probative evidence, no concern persists that the order that I may make in the circumstances will affect the viability of BMI’s enterprise. Length of the person’s service with the employer [27] Ms Thurston had been in employment for just under five years. I consider this a not insignificant period of service and have considered this factor. The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal [28] Ms Thurston obtained employment within three weeks of the cessation of her employment. It can therefore be inferred that effort was exerted to mitigate her loss. The amount of remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation [29] As noted, Ms Thurston gave evidence that she was able to secure new employment within three weeks of her dismissal. Ms Thurston was dismissed on 10 February 2020 and provided a payslip from her new employer dated 3 March 2020 to 31 August 2020. Her hourly rate with the new employer was $40.00 per hour and she had secured 32 hours per week. Twenty-seven weeks have passed since the dismissal and the date of the order. Over that period wages would have totalled $34,560.00 based upon the above figures, and the superannuation contribution equalled $3,283.20. Any amount of income reasonably likely to be earned during the period between the making of the order and the actual compensation [30] I am satisfied that between the making of the order and the actual compensation being provided, Ms Thurston is reasonably likely to have earned $2560.00 (gross) and -- 6 of 9 -- [2020] FWC 4840 7 $243.20 superannuation– based on fourteen days being the requisite period between making the order and the actual compensation. Misconduct and shock, distress or humiliation [31] I do not consider there has been any misconduct which would require me to reduce the amount of compensation. I do not include any component by way of compensation for shock, distress or humiliation caused by the manner of the dismissal. Compensatory cap [32] The amount of compensation the Commission may order is capped. If the appropriate quantum of compensation initially assessed exceeds that cap, then the Commission must reduce the amount to the amount of the cap. [33] The Act stipulates that the compensation cap is the lesser of:  the amount of remuneration received by the person, or that he or she was entitled to receive (whichever is higher) in the 26 weeks before dismissal; and  half the amount of the high income threshold immediately before dismissal.16 [34] For the purpose of s 392(5) of the Act, I am satisfied the amount is $48,683.70. I have considered that under the Applicant’s employment contract she was entitled to superannuation contributions at 9.5%. Any other matter that the Commission considers relevant [35] The remuneration that Ms Thurston would have received or was likely to have received would include payment for the period worked on notice, or the payment received in lieu of notice. The letter of termination refers to the provision of Ms Thurston’s salary for a fortnight but does not oblige her to work. I am satisfied that this period is open to be characterised as a notice period. However, given Ms Thurston’s length of service, she was entitled to three weeks’ notice (not two weeks), keeping in mind that the parties did not direct attention to Ms Thurston’s age. [36] Notice is payable at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum notice period. While inadequate notice was provided and can be deducted from the length of service or otherwise considered under the anticipated period of employment, I note that in the circumstances of this matter it has little bearing on a compensatory amount. CONCLUSION AND ORDERS [37] Reinstatement is not an appropriate remedy in this case. The calculation for compensation is set out in the following table. 16 Fair Work Act 2009 (Cth) ss 392(5), (6). -- 7 of 9 -- [2020] FWC 4840 8 [38] For the reasons I have given earlier, and on the basis of the calculations completed, I observe that BMI is not required to make any compensatory payment to Ms Thurston. In determining the amount for the purpose of the order, I have taken into account all of the circumstances of the case including the criteria set out in s 392(2) of the Act. DEPUTY PRESIDENT Appearances: Ms A Thurston, Applicant Dr D Boima, Respondent Compensation Calculation Gross Total Gross Amount (inclusive superannuation) Anticipated employment period 6 weeks x 38 hours a week x $45 (gross) = $10,260.00 Superannuation @ 9.5% = $974.70 $10,260.00 $11,234.70 Notice period Nil $0.00 $0.00 Deduct monies for misconduct $0.00 $0.00 $0.00 Deduct monies earned since termination $34,560.00 $37,843.20 Deduction for contingencies 0% as no significant element of future economic loss (no basis for any deduction for contingencies) $0.00 $0.00 Calculate any impact of taxation To be taxed according to law Apply the compensation cap Last six months amount of remuneration received by Ms Thurston Half the amount of the high income threshold = $74,350.00 $48,683.70 $48,683.70 TOTAL $0.00 -- 8 of 9 -- [2020] FWC 4840 9 Hearing details: 2020: Perth; September 9. Printed by authority of the Commonwealth Government Printer <PR722645> -- 9 of 9 --