Andrew Hill v Fortis Products Pty Ltd T/A Colorguard Steel [2019] FWC 5567

1 Fair Work Act 2009 s.394—Unfair dismissal Andrew Hill v Fortis Products Pty Ltd T/A Colorguard Steel (U2019/818) DEPUTY PRESIDENT SAUNDERS NEWCASTLE, 9 AUGUST 2019 Application for an unfair dismissal remedy – no genuine redundancy – dismissal harsh, unjust and unreasonable – compensation ordered. Introduction [1] Mr Andrew Hill was employed by Fortis Products Pty Ltd T/A Colorguard Steel (Fortis) from 4 September 2017 until 8 January 2019. Mr Hill filed his unfair dismissal application in the Fair Work Commission (Commission) against Fortis on 29 January 2019 (Application). Fortis contends Mr Hill’s dismissal was a genuine redundancy within the meaning of s 389 of the Fair Work Act 2009 (Cth) (Act). Mr Hill denies that assertion and contends that his dismissal was harsh, unjust and unreasonable. [2] I decided that it was appropriate to hold a determinative conference rather than a hearing in this matter. In making that decision, I had regard to the views of the parties, together with the fact that a determinative conference would be the most effective and efficient way to resolve this matter. The determinative conference was conducted in Newcastle on 6 June 2019. Mr Hill represented himself. Fortis was represented by its director, Mr Michael Fitch. [3] Mr Hill gave evidence at the determinative conference. Fortis adduced evidence from Mr Fitch, as well as three of its employees: Ms Kristina Davidge, Administration Assistant, Mr Ljamo Ivanov, Salesman, and Mr Peter Cross, Operations/Site Manager. Background [4] Fortis is a producer and supplier of painted steel. It is a wholly owned subsidiary of MAFF Holdings Pty Ltd, of which Mr Fitch is the sole shareholder and director. Mr Fitch is also the sole director and majority shareholder of Australian Coil Coaters Pty Ltd, Fitch Metals Engineering (AUST) Pty Ltd and Fitch Engineering Pty Ltd. [2019] FWC 5567 DECISION -- 1 of 26 -- [2019] FWC 5567 2 [5] On 4 September 2017, Mr Hill was employed by Fortis to work in its office. Mr Hill was paid annual remuneration of $80,000.00 per annum. His employment was not subject to a written contract. [6] Mr Hill alleges that he was originally employed by Fortis in the position of internal sales person,1 but that his position expanded during his employment to include duties additional to internal sales. [7] On 11 April 2018, Mr Fitch sent an email to Mr Hill (April Email) as follows: “Hi Andrew As part of your functional roles I am now handing over to you the purchasing/stock management. You need to ensure you are forward purchasing coil each month. I think you must be purchasing again within the next week? … Your other roles are: - Key account managegement (sic) (spanline, stereo) - Internal sales supervision (manage Kristina and Michele in this also) - Admin office management - HR Management - Purchasing management - Stock control - Warehouse, logistics, transport management…” [8] On 27 August 2018, Mr Ivanov commenced employment with Fortis as a casual salesperson working two days per week. Within one to two weeks of commencing his employment with Fortis, Mr Ivanov was working five days per week and full-time hours. [9] On 15 October 2018, Mr Fitch sent the following email to Mr Hill, with the subject line “RE: warning” (15 October Email): “Andrew, We are not making any money at present and I will need to cut back on staff soon. At present I am not seeing any value you are adding to the company. You cost me a total of $130,000 per year out of my pocket. There are so many tasks that you have been given the opportunity to carry out effectively including internal sales, stock control, scheduling, HR, etc. and I am getting feedback from everywhere (and most importantly the customers) that you are not performing to their expectation. Steel purchasing is one exception however this only takes max 2 days out of the month for someone to do. 1 Ex A1 at [3]; PN 222 -- 2 of 26 -- [2019] FWC 5567 3 Steel purchasing should be only be 10% of your total time and reducing to 5% soon and then handing over the simple tasks to a junior. I am giving you an opportunity to turn this around but I cannot take too long as I must reduce total labour cost very soon. Don’t think product costing and steel purchasing are a full time position. Up until you joined I did both these tasks and it took up 5% of my total work time and I am happy to take them back as they are extremely simple tasks for me to carry out. You can call me anytime to discuss. Regards…” [10] Two days later, on 17 October 2018, Mr Hill responded to Mr Fitch as follows (17 October Email): “Hi Mike Firstly I have been doing things as necessary to keep the wheels turning but have not communicated that to you. I want you to know that I am on your side and will work closely with yourself and Ivo to align my efforts with whatever is required to make the business succeed. It is my intention to have a strong working relationship with you, one that is good for the business. I’m adaptable, not perfect, always learning and endeavour to be dependable, trustworthy and honest. This can be demonstrated in part by my zero lost time, the additional 900 plus hours I have put in outside normal hours and the generation of records that are transparent to you. There is no way I would be putting in that extra time if it wasn’t constructive. I am also pleased to have Ivo on board and the stability that will bring to the office. Happy to discuss. My goal is to utilise my efforts to help the business to succeed. Regards…” [11] Mr Hill gave evidence, which I accept, that he never received a response from Mr Fitch to his 17 October Email, either by way of email or verbally,2 and that he did not have any discussion with Mr Fitch after 15 October 2018 in relation to the subject of cutting back staff, either orally or in writing.3 2 PN 205 3 Ex A1 at [15]; PN 203-5 -- 3 of 26 -- [2019] FWC 5567 4 [12] In late December 2018, Mr Hill and Mr Fitch had a discussion about the business being overstocked (December Conversation).4 During the December Conversation, Mr Fitch said words to the following effect to Mr Hill:5 “Because of fucking you, I have to go and find millions of dollars. It’s your fault. What have you got to say? If you don’t admit it and say how sorry you are, I’m going to fire you right now!” [13] Mr Hill then apologised to Mr Fitch, who responded to his apology with words to the effect “You come in and work through the Christmas break in your own time and fix it”. Mr Hill then said to Mr Fitch “I haven’t (sic) any time off since I started” and Mr Fitch responded “Well you think about it because I’m going to think about firing you if you don’t”.6 Mr Hill did not work through the Christmas break in accordance with Mr Fitch’s direction. [14] In about late December 2018 or early January 2019, Mr Ivanov became a permanent employee of Fortis.7 [15] On 7 January 2019, Mr Fitch rang Mr Hill about a customer order that was entered late into Fortis’ order list (January Conversation).8 During the January Conversation, Mr Fitch said to Mr Hill “You’re a fucking muddle head”.9 Mr Hill responded to Mr Fitch by saying “I’m not trying to argue with you. I’m trying to find a solution”. Mr Fitch then hung up on him.10 [16] On 8 January 2019, Mr Cross told Mr Hill that his employment was terminated effective from that afternoon. Mr Cross was acting on instructions from Mr Fitch, who made the decision to dismiss Mr Hill.11 Mr Hill alleges that Mr Cross said to him “Mike had it in for you and just wanted to get rid of you” and then handed him his final payslip.12 [17] On 9 January 2019, Mr Hill received his separation certificate from Fortis by email. The separation certificate listed his position as “Operations Manager” and the reason for separation as “Shortage of work”. [18] Fortis paid Mr Hill two weeks’ wages in lieu of notice. [19] The account given by Mr Hill of the December Conversation, the January Conversation and his conversation with Mr Cross at the time of his dismissal are contested. I prefer the evidence given by Mr Hill over that given by Mr Fitch and Mr Cross in relation to these conversations. My reasons for so finding are set out below. 4 Ex A1 at [19] 5 Ibid 6 Ibid 7 PN 600 8 Ex A1 at [21] 9 Ibid 10 Ibid 11 PN 298 12 PN 157-161 -- 4 of 26 -- [2019] FWC 5567 5 Initial matters to be considered [20] Section 396 of the Act sets out four matters which I am required to decide before I consider the merits of the Application. [21] There is no dispute between the parties and I am satisfied on the evidence that: (a) the Application was made within the period required in s 394(2) of the Act; (b) Mr Hill was a person protected from unfair dismissal; and (c) the Small Business Fair Dismissal Code did not apply to Mr Hill’s dismissal. Despite Fortis’ original contention that the Small Business Fair Dismissal Code did apply, Fortis accepted during the determinative conference that it was not a “small business employer” as defined in s 23 of the Act.13 That concession was made after Fortis produced documents in answer to an Order for the Production of Documents and accepted that the total number of employees engaged by Fortis and its related companies at the time of Mr Hill’s dismissal exceeded 15 employees. [22] There is a dispute between the parties regarding the fourth initial matter, being whether Mr Hill’s dismissal was a genuine redundancy. Accordingly, I must decide that question before considering the merits of the Application. Genuine redundancy [23] Section 389 of the Act defines genuine redundancy as follows: “389 Meaning of genuine redundancy (1) A person’s dismissal was a case of genuine redundancy if: (a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and (b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy. (2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within: (a) the employer’s enterprise; or (b) the enterprise of an associated entity of the employer.” 13 See PN 78-79 -- 5 of 26 -- [2019] FWC 5567 6 [24] “Associated entity” has the meaning given by s 50AAA of the Corporations Act 2001 (Cth). The employer no longer required the employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise (s 389(1)(a)) [25] It is necessary to determine whether Fortis no longer required the job of Mr Hill to be performed by anyone because of changes in the operational requirements of Fortis’ enterprise.14 [26] A job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer’s organisation, to a particular employee”.15 Where there has been a reorganisation or redistribution of duties, the question is whether the employee has “any duties left to discharge”.16 If there is no longer any function or duty to be performed by that person, their job becomes redundant.17 [27] An employee’s job may still be genuinely made redundant when there are aspects of the employee’s duties still being performed by other employees.18 The test is whether the job previously performed by the employee has survived the restructure or downsizing, not whether the duties have survived in some form.19 For example, an employer may redistribute all the tasks done by a particular person between several other employees, resulting in the person’s job no longer existing. [28] The reference to “changes in the operational requirements of the employer’s enterprise” in s 389(1)(a) of the Act includes circumstances where an employer restructures its business to improve efficiency, productivity, sales, revenue or some other aspect of performance. The operational circumstances of a business which may give rise to a redundancy will reside in the direct knowledge of the employer. The evidentiary onus is on the employer to provide direct evidence about the nature of the employee’s job and why it is no longer required to be performed as a result of changes in the operational requirements of the employer’s enterprise. [29] If a dismissal is found to be a genuine redundancy within the meaning of the Act, issues such as unfair selection procedures for redundancy are not relevant, because they go to the merits of the claim that the applicant was dismissed harshly, unjustly or unreasonably.20 [30] In its Form F3 Employer Response Form,21 Fortis stated that the reasons for Mr Hill’s dismissal were as follows: 14 s 389(1)(a) of the Act 15 Jones v Department of Energy and Minerals (1995) 60 IR 304 (Jones) at 308 per Ryan J; applied in Ulan Coal Mines Limited v Howarth [2010] FWAFB 3488; (2010) 196 IR 32 (Ulan Coal 1) at [17] 16 Ibid 17 Ibid 18 Dibb v Commissioner of Taxation (2004) 136 FCR 388 at 404-5 19 Kekeris v A. Hartrodt Australia Pty Ltd [2010] FWA 674 at [27] per Hamberger SDP 20 Johnston v Blue Circle Southern Cement Pty Ltd (2010) 202 IR 121 at [48] 21 Ex R1 -- 6 of 26 -- [2019] FWC 5567 7 (a) “Andrew [Hill] was in charge of the coil purchasing. This function has largely diminished over the last 12 months to be something that takes 4 hours per month to complete”; and (b) “Andrew [Hill] was in charge of sale price costing and this function is now largely diminished and standardised.” [31] During the determinative conference, Mr Fitch gave evidence that Fortis was experiencing a down turn in work,22 and that there was not enough work to sustain a fourth job in Fortis’ office.23 Did Fortis no longer require Mr Hill’s job to be performed by anyone because of changes in the operational requirements of Fortis’ enterprise? [32] I accept Mr Hill’s evidence in relation to the duties he performed during his employment with Fortis, including that: (a) he was originally employed by Fortis in the position of internal sales person; (b) his job expanded to include the duties of internal sales, key account management, internal sales supervision and admin office management, all of which he performed in the period leading up to his dismissal;24 (c) Ms Davidge primarily performed the warehouse, logistics and transport management duties, however, “she finished early every day” and so he “would pick up after she left, to tidy up whatever needed to get done”, including in the period leading up to his dismissal;25 (d) he performed stock control in the period leading up to his dismissal; however, Mr Ivanov “was starting to become involved in stock control, and starting to take some of that”;26 (e) he trained Mr Ivanov in the period leading up to his dismissal;27 (f) he had performed human resources management duties for a period before Mr Cross had commenced employment with Fortis and taken on those duties;28 (g) his job had expanded to include coil purchasing duties but those duties had been taken from him just prior to his dismissal;29 22 PN 402 23 PN 400 24 PN 231-2 25 PN 232-3 26 PN 232 27 PN 242 28 Ibid 29 PN 234-37 -- 7 of 26 -- [2019] FWC 5567 8 (h) his job had expanded to include costing duties but those duties had been taken from him at the start of January 2019;30 and (i) when he did perform coil purchasing and costing duties, five percent of his time at work would be spent undertaking purchasing duties and another five percent of his time would be spent undertaking costing duties.31 [33] Mr Hill was a frank and forthcoming witness, who dealt directly with all the matters that were raised with him in cross-examination and gave consistent evidence throughout the proceedings. He was a credible witness. Much of Mr Hill’s evidence about the duties he performed during his employment was consistent with the April Email. Mr Hill’s evidence that he trained Mr Ivanov in the period leading up to his dismissal was not challenged by Fortis. Indeed, Fortis adduced little direct evidence about the nature of Mr Hill’s job at the time of his dismissal. Mr Fitch gave evidence that Mr Hill was no longer required to perform coil purchasing and costing duties at the time of his dismissal. However, performing these duties only took 10 percent of Mr Hill’s time at work. Fortis did not adduce any detailed evidence as to how the remaining 90 percent of Mr Hill’s duties were redistributed amongst its other employees. I accept, however, that Fortis no longer required anybody to do Mr Hill’s job after his dismissal. This finding is supported by the fact that, since Mr Hill’s dismissal, Fortis has only had three employees working in its office. Although the evidence on this topic is limited, I find that following his dismissal Mr Hill’s duties and responsibilities have been undertaken by the other three employees in Fortis’ office and Mr Fitch. [34] However, for the reasons which follow, I am not satisfied that Fortis no longer required Mr Hill’s job to be performed by anyone because of changes in the operational requirements of Fortis’ enterprise. Instead, I find on the balance of probabilities that the real reason for Mr Hill’s dismissal was due to Mr Fitch’s frustration with Mr Hill, including in relation to his performance and attitude to work. [35] First, Mr Fitch’s evidence that there was a downturn in work at the time of Mr Hill’s dismissal was not supported by any financial business records, no employees (apart from Mr Hill) were made redundant in the period from 1 October 2018 to the date of the determinative conference and there is no evidence to suggest that other employees of Fortis had their hours of work reduced as a result of any downturn in Fortis’ business.32 Mr Ivanov gave oral evidence that Fortis had a commercial dispute with one of its customers which led to a slowing down in sales from the end of October or November 2018 until February 2019.33 However, Mr Ivanov also gave evidence that Fortis was busy until the end of October or November 2018,34 it was hard to say whether sales were slowing in December “being short month”35 (sic) and that Fortis employees “didn’t start until 14th, some even later” in January 2019.36 Mr Ivanov’s evidence about Fortis being busy until the end of October 2018 and there being a slow down in sales from the end of October or November 2018 does not support the assertion in Mr Fortis’ 15 October Email that “We are not making any money at present”. 30 PN 234-37 31 PN 240-242 32 PN 322 33 PN 607 34 PN 606 35 PN 608 36 PN 610 -- 8 of 26 -- [2019] FWC 5567 9 Mr Ivanov also gave evidence that “February [2019] was I would say, starting to show some sign of picking up”37 and since March 2019 it has been good.38 I accept this evidence, it is consistent with Mr Cross’ evidence that “the last couple of months have been pretty good months”39 and that Fortis was “busy” at the time of the determinative conference.40 However, I also accept Mr Hill’s evidence that “busyness comes from the weeks prior not from the actual month [in Fortis’ business], because people get orders then you’ve got to do work to, you know, organise steel, paint, schedules and everything else.”41 In short, the evidence that any downturn in the business resulted in a decision to reduce staff numbers in Fortis’ business in January 2019 was unpersuasive. [36] Secondly, I accept Mr Hill’s evidence in relation to the December Conversation and January Conversation. I also accept Mr Hill’s oral evidence that his memory of these conversations is supported by contemporaneous notes. Although the notes were not produced in evidence in these proceedings, I accept Mr Hill’s evidence that all conversations set out in quotation marks in his written evidence (including the December Conversation and January Conversation) were reproduced from notes he took at the time of the conversations and retained by him.42 Further, his evidence was consistent with the contents of the 15 October Email, in which Mr Fitch was clearly frustrated with Mr Hill. It is also consistent with Mr Fitch’s oral evidence that he was becoming increasingly frustrated with Mr Hill’s attitude and work towards the end of 2018 and the start of 2019.43 [37] On the other hand, Mr Fitch’s evidence in relation to the December Conversation and January Conversation was vague and unpersuasive.44 During cross-examination, Mr Fitch struggled to recall specific conversations he had with Mr Hill, for example:45 Q. Do you ever recall him saying to you words to this effect, “Mike, I’m not trying to argue with you; I’m trying to find a solution”? A. No look, to be quite honest, specific conversations, I’m talking to Andrew, especially at this time, you know, as I say, four, five times a day. So, you know, he’s trying to make something that’s there. You know, I don’t put – I’m talking on the phone. I talk on the phone fifty calls a day about this business and about other stuff and not writing down or you know, making notes of every conversation. Certainly, I was at that point in time, I was talking to Andrew, I would say, six, seven times a day, we've got a lot of stock and trying to work out some things with customers, because there was a very - some real issues there. So, you know, look, maybe getting a bit heated. You know, I’m not going to say that you know, I own the business, so I you know, it’s a real thing for me and for the rest of the people. But, I don’t recollect anything like that.” 37 PN 610 38 PN 612 39 PN 547 40 PN 546 41 PN 719 42 PN 421-34 43 PN 357 44 PN 339-40 and PN 335-6 45 PN 356 -- 9 of 26 -- [2019] FWC 5567 10 [38] The terms of the December Conversation and the January Conversation, together with their close proximity to the dismissal date of 8 January 2019, provide strong support for the finding that the real reason for the termination of Mr Hill’s employment was Mr Fitch’s frustration with Mr Hill’s attitude and work performance towards the end of 2018 and the start of 2019. [39] Thirdly, I accept Mr Hill’s evidence that on 8 January 2019, Mr Cross said that the reason for his dismissal was that “Mike [Fitch] had it in for… [him] and just wanted to get rid of… [him]”. Mr Cross denies that he said that to Mr Hill on 8 January 2019, however, I prefer Mr Hill’s evidence in relation to this conversation. In relation to Mr Hill’s dismissal, Mr Cross gave evidence that he couldn’t remember the exact words he said to Mr Hill, “but basically…[he] said we have to let you go and it was pretty short and sweet.”46 On the other hand, Mr Hill gave reliable evidence which, I accept, was supported by contemporaneous notes (see paragraph [36] above). Even if I were to accept Mr Cross’ evidence in relation to what he said to Mr Hill on 8 January 2019, taken at its highest the evidence demonstrates that Mr Hill was given no reason for his dismissal. This does not support Fortis’ contention that Mr Hill’s job no longer existed due to changes in the operational requirements of Fortis’ enterprise. [40] Fourthly, although in his 15 October Email, Mr Fitch states “I will need to cut back on staff soon” and “I must reduce my total labour cost very soon”, I accept Mr Hill’s evidence he did not have any discussion with Mr Fitch, either orally or in writing, after receiving the 15 October Email in relation to the subject of cutting back staff, including by way of response to his 17 October Email, which Mr Hill concluded by saying he was “happy to discuss”.47 Mr Hill’s evidence was consistent and resolute in this regard. On the other hand, Mr Fitch’s evidence was vague and indirect.48 For example, during cross-examination, having given evidence that he had a conversation with Mr Hill after 15 October 2018 about the prospect that somebody’s job would go and asked when that conversation was, Mr Fitch gave the following evidence: “I would say from that [15 October] email onwards, there would be a few - in terms of writing them down, definitely. There’s definitely discussions about what we’re going to have to do with the office, for sure. Absolutely, and you know, there’s just too much – it’s costing us too much for what we need to do there, you know. We’d need to rearrange things. A lot of customers are ringing me and saying that they couldn’t deal with Andrew [Hill]; you have to find someone else. I was taking up the load as well to deal with those customers. So, you know, there was a lot going on and certainly Andrew [Hill] was fully informed and I would probably be talking to him once a day, at least about these issues and other things in the company.” [41] Fifthly, the fact that Mr Ivanov was made a permanent employee of Fortis in about late December 2018 or early January 2019, shortly before Mr Hill’s dismissal, calls into doubt the validity of the contention that a downturn in business was the reason for Mr Hill’s dismissal. 46 PN 518-9 47 PN 454-7 48 PN 445-50 -- 10 of 26 -- [2019] FWC 5567 11 [42] On balance, I consider that the Small Business Fair Dismissal Code form dated 25 February 2019 and signed by Mr Fitch (Form) and the separation certificate provided to Mr Hill are neutral considerations in my determination of the real reason for Mr Hill’s dismissal. [43] During the determinative conference, Mr Fitch gave evidence that he completed the Form.49 In the Form, the “yes” box is ticked following the question: “Did you dismiss the employee because you didn’t require the person’s job to be done by anyone because of changes in the operational requirements of the business”. This supports Fortis’ case that Mr Hill’s dismissal was a genuine redundancy. However, the “yes” box is also ticked for following the question: “Did you dismiss the employee because of the employee’s unsatisfactory conduct, performance or capacity to do the a job?” (the word “the” being crossed out and replaced it with “a”). This supports Mr Hill’s case that he was dismissed on performance grounds. In cross-examination, Mr Fitch gave evidence that his answer to this second question in the Form was true but then proceeded to qualify his evidence by explaining that, having decided that he needed to reduce the number of people in the office from four to three, he then went about selecting the person to go out of those four “based on their skillset, based on what they can do, you know, to be able to keep the business running…”.50 Mr Fitch is not a human resources manager. I consider it plausible that a person in Mr Fitch’s position and with a lack of expertise in human resources could have filled out the Form as he did for the reasons he gave. It follows, in my view, that the way in which the Form was completed by Mr Fitch does not amount to a concession by Mr Fitch that he dismissed Mr Hill for unsatisfactory conduct, performance or capacity to do his job. In all the circumstances, I consider the way in which the Form was completed by Mr Fitch to be a neutral consideration in my determination of the reason for Mr Hill’s dismissal. [44] Mr Cross prepared the separation certificate provided to Mr Hill on 9 January 2019. There is no tick in the box next to “Redundancy” under the heading “Reason for Separation”. Instead, the box next to “Shortage of Work” is ticked as the “Reason for Separation”. The underlying reason for a redundancy may be shortage of work. I can therefore understand how a person who does not have any significant experience in human resources could complete such a document in the way that Mr Cross did. In cross-examination, when asked whether Mr Fitch ever told him the reason or reasons for terminating Mr Hill’s employment, Mr Cross gave evidence that before Christmas, Mr Fitch had told him that “he couldn’t afford to keep four people going in the office”.51 This supports Fortis’ case that the real reason for the termination of Mr Hill’s employment was a shortage of work, but is, in my view, outweighed by the facts, matters and circumstances set out above, which support a finding that the real reason for Mr Hill’s dismissal was due to Mr Fitch’s frustration with Mr Hill, including in relation to his performance and attitude to work. Compliance with any consultation obligation in a modern award or enterprise agreement that applied to the employment (s 389(1)(b)) [45] For there to be a genuine redundancy within the meaning of s 389 of the Act, Fortis must have complied with any obligation in an applicable modern award or enterprise agreement to consult about the redundancy. 49 PN 331-2 50 PN 333- 334 51 PN 536-537 -- 11 of 26 -- [2019] FWC 5567 12 [46] There is no dispute between the parties and I am satisfied that Mr Hill was covered by the Clerks—Private Sector Award 2010 (Award) during his employment with Fortis. [47] Clause 8 of the Award imposes consultation obligations on Fortis in the event of major workplace change leading to redundancies. Clause 8 provides: “8. Consultation about major workplace change 8.1 If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must: (a) give notice of the changes to all employees who may be affected by them and their representatives (if any); and (b) discuss with affected employees and their representatives (if any): (i) the introduction of the changes; and (ii) their likely effect on employees; and (iii) measures to avoid or reduce the adverse effects of the changes on employees; and (c) commence discussions as soon as practicable after a definite decision has been made. 8.2 For the purposes of the discussion under clause 8.1(b), the employer must give in writing to the affected employees and their representatives (if any) all relevant information about the changes including: (a) their nature; and (b) their expected effect on employees; and (c) any other matters likely to affect employees. 8.3 Clause 8.2 does not require an employer to disclose any confidential information if its disclosure would be contrary to the employer’s interests. 8.4 The employer must promptly consider any matters raised by the employees or their representatives about the changes in the course of the discussion under clause 8.1(b). 8.5 In clause 8: significant effects, on employees, includes any of the following: (a) termination of employment; or -- 12 of 26 -- [2019] FWC 5567 13 (b) major changes in the composition, operation or size of the employer’s workforce or in the skills required; or (c) loss of, or reduction in, job or promotion opportunities; or (d) loss of, or reduction in, job tenure; or (e) alteration of hours of work; or (f) the need for employees to be retrained or transferred to other work or locations; or (g) job restructuring. 8.6 Where this award makes provision for alteration of any of the matters defined at clause 8.5, such alteration is taken not to have significant effect.” [48] As I have already found above, the real reason for Mr Hill’s dismissal was due to Mr Fitch’s frustration with Mr Hill, including in relation to his performance and attitude to work. In any event, even if Fortis genuinely made the decision to reduce the number of employees in its office due to a downturn in work, I am not satisfied that it complied with its obligations in clause 8 of the Award. [49] The only evidence of action taken on Fortis’ behalf somewhat akin to consultation is the 15 October Email in which Mr Fitch informed Mr Hill that Fortis will “need to cut back on staff soon.” However, in the 15 October Email, Mr Fitch also stated “I am giving you an opportunity to turn this around but I cannot take too long as I must reduce total labour cost very soon.” It follows that on 15 October 2018, Fortis had not made a definite decision to reduce the number of its employees. I have already accepted Mr Hill’s evidence that he did not receive a response to his 17 October Email nor did he have any discussion with Mr Fitch in relation to the subject of cutting back staff, either orally or in writing, after 15 October 2018. Therefore, Mr Hill was not notified of Fortis’ definite decision to reduce the number of its employees in accordance with clause 8.1(a) of the Award. Further, as Mr Fitch did not respond to Mr Hill’s 17 October Email, I am not satisfied that Fortis promptly considered the matters raised by Mr Hill therein in accordance with clause 8.4 of the Award. I also find on the evidence that there was no discussion with Mr Hill about the introduction of changes, their likely effect on employees, and measures to avoid or reduce the adverse effects of the changes on employees, nor did Fortis comply with its obligation under clause 8.2 of the Award to provide Mr Hill with written notice of all relevant information about the changes including their nature, their expected effect on employees, and any other matters likely to affect employees. It follows that Fortis did not comply with its obligation under the Award to consult with Mr Hill about the alleged redundancy of his position. Was it reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer (s 389(2)) [50] There was no evidence to suggest that Mr Hill may have been able to be redeployed to another position with Fortis or any associated entity of Fortis. As a result, I am not satisfied that it would have been reasonable in all the circumstances for Mr Hill to be redeployed within Fortis’ enterprise or the enterprise of an associated entity of Fortis. -- 13 of 26 -- [2019] FWC 5567 14 Conclusion on genuine redundancy [51] For the reasons given, neither paragraph 389(1)(a) nor (b) is satisfied in this case. Accordingly, I conclude that Mr Hill’s dismissal was not a case of genuine redundancy within the meaning of s 389 of the Act. Was the dismissal harsh, unjust or unreasonable? [52] Section 387 of the Act requires that I take into account the matters specified in paragraphs (a) to (h) of the section in considering whether Mr Hill’s dismissal was harsh, unjust and/or unreasonable. I will address each of these matters in turn below. Valid reason (s 387(a)) [53] It is necessary to consider whether the employer had a valid reason for the dismissal of the employee, although it need not be the reason given to the employee at the time of the dismissal.52 In order to be “valid”, the reason for the dismissal should be “sound, defensible and well founded”53 and should not be “capricious, fanciful, spiteful or prejudiced.”54 [54] The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.55 The question the Commission must address is whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees).56 [55] In cases relating to alleged conduct, the Commission must make a finding, on the evidence provided, whether, on the balance of probabilities, the conduct occurred.57 It is not enough for an employer to establish that it had a reasonable belief that the termination was for a valid reason.58 [56] Due to its primary contention that Mr Hill’s dismissal was a case of genuine redundancy, Fortis did not lead much evidence concerning Mr Hill’s performance or conduct. However, Mr Fitch did give some evidence about Mr Hill’s performance during his employment with Fortis. Most of this evidence was given in general terms without any reference to actual events. The instance in which Mr Fitch’s evidence regarding Mr Hill’s performance was explicit is examined below. [57] During cross-examination, when asked about the December Conversation, Mr Fitch gave evidence that Fortis’ business was overstocked with steel coil and that the quantity of 52 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-8 53 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373 54 Ibid 55 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685 56 Ibid 57 King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213 [24] 58 Ibid -- 14 of 26 -- [2019] FWC 5567 15 steel coil Mr Hill ordered “probably wasn’t the best judgment of his.”59 Mr Fitch also gave evidence that Mr Hill did not work as part of a team or spend much time in the factory (as distinct from the office) and that this conduct contributed to him making the errors in relation to ordering more stock than required.60 Mr Hill does not dispute that Fortis’ business was overstocked around the time of the December Conversation and he was responsible for ordering the steel coil. [58] Mr Hill gave evidence that Fortis’ business was overstocked because in March 2018, there was “a major shift in the way we were able to purchase, use and pay for steel coil” meaning that Fortis had to “place orders with a four-month lead time”.61 Mr Hill alleges that Fortis was “over stocked on some items because sales were less than expected and also because some deliveries had arrived late and cause[d] a glut.”62 Mr Hill also gave evidence that every month he “assessed coil stocks, orders and used whatever information available from customers and external sales staff to determine what… [Fortis] should order. This was summarized and discussed with Mr Fitch every month prior to ordering.”63 Mr Hill’s evidence in this regard was not challenged in any serious way by Fortis and during cross-examination, Mr Fitch gave evidence that “at the end of the day” it was his fault that Fortis’ business was overstocked.64I accept those matters as truthful and reliable evidence. [59] On the basis of the evidence adduced in these proceedings, I am not satisfied that there was any sound, defensible or well-founded reason for Mr Hill’s dismissal related to his capacity or conduct. Accordingly, there was no valid reason for Mr Hill’s dismissal within the meaning of s 387(a) of the Act. Was Mr Hill notified of the reasons for his dismissal and given an opportunity to respond (s 387(b) & (c))? [60] It is necessary to consider and take into account whether Mr Hill was notified of any valid reason(s) for his dismissal and whether he was given an opportunity to respond to any reason(s) related to his conduct. [61] In Crozier v Palazzo Corporation Pty Ltd,65 a Full Bench of the Australian Industrial Relations Commission dealing with a similar provision of the Workplace Relations Act 1996 (Cth) stated the following:66 “As a matter of logic procedural fairness would require that an employee be notified of a valid reason for the termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a 59 PN 345-7 60 PN 351-4 61 Ex A1 at [18] 62 Ibid 63 Ibid 64 PN 345 65 (2000) 98 IR 137 66 Ibid at [73] -- 15 of 26 -- [2019] FWC 5567 16 decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.” [62] The criterion concerning whether an employee was provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity should be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality.67 [63] In light of my finding that there was not a valid reason for Mr Hill’s dismissal related to his capacity or conduct, these factors are not relevant to the present circumstances.68 Was there an unreasonable refusal to allow Mr Hill to have a support person present (s 387(d))? [64] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, it is relevant to consider and take into account whether the employer unreasonably refused the support person being present. [65] There is no positive obligation on an employer to offer an employee the opportunity to have a support person: “This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.”69 [66] The only discussion relating to Mr Hill’s dismissal took place when Mr Cross informed him of his dismissal on 8 January 2019. Mr Hill did not request that a support person be present during this discussion. In those circumstances, I find there was no unreasonable refusal by Fortis to allow Mr Hill to have a support person present to assist at any discussions relating to dismissal. Warnings about unsatisfactory performance (s 387(e)) [67] Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, it is relevant to consider whether the employer warned the employee about the unsatisfactory performance before the dismissal. [68] A warning for the purposes of s 387(e) should clearly identify:  the areas of deficiency in the employee’s performance;  any assistance or training that might be provided; 67 RMIT v Asher (2010) 194 IR 1 at 14-15 68 Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000), [41]; Read v Cordon Square Child Care Centre [2013] FWCFB 762, [46]-[49] 69 Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1542] -- 16 of 26 -- [2019] FWC 5567 17  the standards required. A mere exhortation to improve is not sufficient; and  a reasonable timeframe within which the employee is required to meet such standards.70 [69] In addition, the warning should “make it clear that the employee’s employment is at risk unless the performance issue identified is addressed.”71 [70] In the Form, the “yes” box is ticked following the question “Did you keep any records of warning(s) made to the employee or of discussions on how his or her conduct or performance could be improved?” and Mr Fitch has written under the question “Please find attached”. The 15 October Email is attached to the Form. In the 15 October Email, Mr Fitch refers to Mr Hill’s performance as follows: “There are so many tasks that you have been given the opportunity to carry out effectively including internal sales, stock control, scheduling, HR, etc. and I am getting feedback from everywhere (and most importantly the customers) that you are not performing to their expectation.” [71] The 15 October Email did not clearly identify:  the areas of deficiency in Mr Hill’s performance. The reference in the 15 October Email to “internal sales, stock control, scheduling, HR, etc” did not provide Mr Hill with any meaningful information as to how his performance had been deficient in any of these very broad areas of responsibility. Further, Mr Hill replied to the 15 October Email in his 17 October Email, but did not receive a response from Mr Fitch and gave evidence that he “believed the matter to be resolved”72;  any assistance or training that might be provided to Mr Hill;  the standards required of Mr Hill; or  a reasonable timeframe within which Mr Hill was required to meet such standards. The reference in the 15 October Email to “giving you an opportunity to turn this around but I cannot take too long as I must reduce total labour cost very soon” did not provide Mr Hill with any meaningful guidance as to how long he had to improve his performance. [72] During cross-examination, when asked whether the 15 October Email was the only warning given to Mr Hill during his employment with Fortis, Mr Fitch gave the following evidence:73 70 McCarron v Commercial Facilities Management Pty Ltd t/a CFM Air Conditioning Pty Ltd [2013] FWC 3034, [32] 71 Fastidia Pty Ltd v Goodwin Print S9280 (AIRCFB, Ross VP, Williams SDP, Blair C, 21 August 2000), [43]-[44] 72 Ex A1 at [15] 73PN 337 -- 17 of 26 -- [2019] FWC 5567 18 “Written, yes. Written but certainly verbal. I think it was almost - not constant, but you know. It was certainly made clear that we were going to have to - there’s thing that have to be done for him to not be the one that has to go.” [73] However, when later asked whether he told Mr Hill that his employment was at risk because of what had been happening with the over-stocking of the steel coil, or something to that effect, Mr Fitch answered “no” and gave evidence that he just told Mr Hill “we’ve got to sort it out”.74 Indeed, I have already accepted Mr Hill’s evidence that during the December Conversation about the over-stocking of steel coil, Mr Fitch said to Mr Hill “fix it… I’m going to think about firing you if you don’t” (emphasis added). This appears to be the highpoint of the verbal “warning” given to Mr Hill about the over-stocking of steel coil. [74] The evidence given on behalf of Fortis about the alleged oral warnings given to Mr Hill was very general in nature. I am not satisfied on the evidence that Fortis provided Mr Hill with any oral warning which clearly identified the matters referred to in paragraph [68] above. [75] I find on the evidence that Mr Hill was not given any clear or specific warnings about his alleged unsatisfactory performance before his dismissal. In all the circumstances, I find that that this factor (s 387(e)) weighs in favour of a finding that Mr Hill’s dismissal was harsh, unjust and unreasonable. Impact of Fortis’ size on procedures followed in effecting the dismissal (s 387(f)) [76] Although it is not a small business within the meaning of s 23 of the Act, Fortis is relatively small in size. The most recent payroll activity summary adduced by Fortis in these proceedings (dated 6 March 2019 to 8 March 2019) lists fifteen employees.75 Fortis had about 14 employees at the time of Mr Hill’s dismissal. [77] In the circumstances, I am satisfied that the size of Fortis’ enterprise had an impact on the procedures followed in effecting the dismissal of Mr Hill. Notwithstanding allowances being made for the small size of Fortis’ enterprise, the procedure followed in effecting Mr Hill’s dismissal was “devoid of any fairness”.76 In particular, it was unfair to immediately effect Mr Hill’s dismissal without first giving him a reasonable chance to consider, respond to and then improve any areas of his performance viewed by Mr Fitch as deficient. Absence of dedicated human resource management specialists or expertise (s 387(g)) [78] Fortis does not have any dedicated human resource management specialists or expertise. This undoubtedly had an impact upon the procedures followed in effecting the dismissal. However, it did not excuse Fortis from failing to afford Mr Hill any procedural fairness in connection with the termination of his employment. Other relevant matters (s 387(h)) [79] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant. 74 PN 348-9 75 Ex R4 76 Williams v The Chuang Family Trust t/a Top Hair Design [2012] FWA 9517 at [40] -- 18 of 26 -- [2019] FWC 5567 19 [80] The basis upon which a dismissal may be found to be harsh, unjust or unreasonable, notwithstanding a finding that there was a valid reason for dismissal based upon conduct in breach of employer policy was explained by the Full Bench majority in B, C and D v Australian Postal Corporation T/A Australia Post in the following terms:77 “[41] Nevertheless, it remains a bedrock principle in unfair dismissal jurisprudence of the Commission that a dismissal may be “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason” for the dismissal”: Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1; J Boag & Son Brewing Pty Ltd v John Button [2010] FWAFB 4022; Windsor Smith v Liu [1998] Print Q3462; Caspanello v Telstra Corporation Limited [2002] AIRC 1171; King v Freshmore (Vic) Pty Ltd [2000] Print S4213; Dahlstrom v Wagstaff Cranbourne Pty Ltd [2000] Print T1001; Erskine v Chalmers Industries Pty Ltd [2001] PR902746 citing Allied Express Transport Pty Ltd (1998) 81 IR 410 at 413; Qantas Airways Limited v Cornwall (1998) 82 IR 102 at 109; ALH Group Pty Ltd T/A the Royal Exchange Hotel v Mulhall [2002] PR919205. That principle reflects the approach of the High Court in Victoria v Commonwealth and is a consequence of the reality that in any given case there may be “relevant matters” that do not bear upon whether there was a “valid reason” for the dismissal but do bear upon whether the dismissal was “harsh, unjust or unreasonable”. [42] Broadly speaking, circumstances bearing upon whether a dismissal for misconduct is harsh, unjust or unreasonable fall into three broad categories: (1) The acts or omissions that constitute the alleged misconduct on which the employer relied (together with the employee’s disciplinary history and any warnings, if relied upon by the employer at the time of dismissal) but otherwise considered in isolation from the broader context in which those acts or omissions occurred. (2) The broader context in the workplace in which those acts or omissions occurred. [This may include such matters as a history of toleration or condonation of the misconduct by the employer or inconsistent treatment of other employees guilty of the same misconduct.] (3) The personal or private circumstances of the employee that bear upon the substantive fairness of the dismissal. [This includes, matters such as length of service, the absence of any disciplinary history and the harshness of the consequences of dismissal for the employee and his or her dependents.] [43] The determination of whether there was a “valid reason” proceeds by reference to the matters in category (1) and occurs before there is a consideration of what Northrop J described as “substantive fairness” from the perspective of the employee. Matters in categories (2) and (3) are then properly brought to account in the overall consideration of the whether the dismissal was “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason”. ... 77 [2013] FWCFB 6191 -- 19 of 26 -- [2019] FWC 5567 20 [47] In Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 41 IR 452 Sheppard and Heerey JJ observed (at p 460): “Employers can promulgate polices and give directions to employees as they see fit, but they cannot exclude the possibility that instant dismissal of an individual employee for non-compliance may, in the particular circumstances of an individual case, be harsh, unjust and unreasonable.” [48] Thus, a finding that an employee has failed to comply with policies and procedures does not mean that a dismissal is not harsh, unjust or unreasonable. The Commission has consistently applied the proposition that instant dismissal of an employee for non-compliance with his or her employer’s policies may, in the particular circumstances of an individual case, be harsh, unjust and unreasonable: Kangan Batman TAFE v Hart [2005] PR958003, Ross VP, Kaufman SDP and Foggo C at para [51]; Fearnley v Tenix Defence Systems Pty Ltd [2000] Print S6238, Ross VP, Polites SDP and Smith C (Fearnley) at [61]); Atfield v Jupiters Ltd (2003) 124 IR 217 (Jupiters) at [12]-[13].” Length and quality of Mr Hill’s employment with Fortis [81] Mr Hill was employed by Fortis for one year, four months and four days prior to his dismissal. This is a relatively short period of time. [82] It is clear from the April Email that Mr Hill was given additional responsibilities in April 2018. I am therefore satisfied that Mr Hill’s work performance was of high quality until at least April 2018. During the balance of Mr Hill’s employment with Fortis he did not receive any written warnings, although I accept that Mr Fitch had concerns about Mr Hill’s work performance and attitude in the period leading up to his dismissal. Mr Hill’s personal and economic circumstances [83] Mr Hill is 57 years old.78 He gave evidence that he intended to work for another 12 years before retiring.79 At the time of the determinative conference, Mr Hill had not obtained alternative employment or earnt income from any other source following his dismissal.80 Conclusion on harsh, unjust and unreasonable [84] After considering and taking into account each of the matters specified in s 387 of the Act, my value judgment is that Fortis’ dismissal of Mr Hill was: (a) unjust because, on the evidence before me, there was no valid reason for Mr Hill’s dismissal; (b) unreasonable because Mr Hall was not accorded procedural fairness in the process leading to his dismissal; and 78 PN 663 79 PN 656-9 80 PN 166-7 -- 20 of 26 -- [2019] FWC 5567 21 (c) harsh in its consequences for the personal situation of Mr Hill given his age and the fact that he has not been able to obtain alternative employment following his dismissal. Compensation [85] Having found that Mr Hill was protected from unfair dismissal, and that his dismissal was harsh, unjust and unreasonable, it is necessary to consider what, if any, remedy should be granted to him. Mr Hill did not seek the remedy of reinstatement and I accept that it would be inappropriate to reinstate Mr Hill in circumstances where his relationship with Mr Fitch has clearly deteriorated to a significant extent and Fortis is a relatively small business. Instead Mr Hill seeks the remedy of compensation.81 As a result, I need to consider whether compensation is appropriate. [86] Section 390(3)(b) of the Act provides the Commission may only issue an order for compensation if it is appropriate in all the circumstances. A compensation remedy is designed to compensate an unfairly dismissed employee in lieu of reinstatement for losses reasonably attributable to the unfair dismissal within the bounds of the statutory cap on compensation that is to be applied.82 [87] Having regard to all the circumstances of the case, including the fact that Mr Hill has suffered financial loss as a result of his unfair dismissal, I consider that an order for payment of compensation to him is appropriate. [88] It is necessary therefore for me to assess the amount of compensation that should be ordered to be paid to Mr Hill. In assessing compensation, I am required by s 392(2) of the Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a) to (g) of this subsection. [89] In undertaking this task, I shall use the established methodology for assessing compensation in unfair dismissal cases which was set out in Sprigg v Paul Licensed Festival Supermarket83 and applied and elaborated upon in the context of the current Act by Full Benches of the Commission in a number of cases.84 The approach to calculating compensation in accordance with these authorities is as follows: 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 (remuneration lost). Step 2: Deduct monies earned since termination. Step 3: Discount the remaining amount for contingencies. 81 Originally was seeking to be paid for additional hours worked see F2 at [2.1] 82 Kable v Bozelle, Michael Keith T/A Matilda Greenbank [2015] FWCFB 3512 at [17] 83 (1998) 88 IR 21 84 Tabro Meat Pty Ltd v Heffernan [2011] FWAFB 1080; Read v Golden Square Child Care Centre [2013] FWCFB 762; Bowden v Ottrey Homes Cobram [2013] FWCFB 431 -- 21 of 26 -- [2019] FWC 5567 22 Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment. Step 5: Apply the legislative cap on compensation. Remuneration Mr Hill would have received, or would have been likely to receive, if he had not been dismissed (s 392(2)(c)) [90] Like all calculations of damages or compensation, there is an element of speculation in determining an employee’s anticipated period of employment because the task involves an assessment of what would have been likely to happen in the future had the employee not been dismissed.85 [91] There is a dispute between the parties as to how long Mr Hill would have remained employed with Fortis but for the termination of his employment. [92] As aforementioned, Mr Hill said that he intended remain employed by Fortis for another 12 years before retiring. When asked about Mr Fitch’s increased frustration with him towards the end of 2018, Mr Hill gave the following evidence:86 “I’ve seen him behave exactly the same way with other people. This is not just a me thing. It’s a - when he gets in a mood with people, that’s how he behaves and that’s one reason I don’t want to go back working for him because it’s a characteristic or a trait. One of his traits. It’s not a one-off scenario.” [93] Mr Hill admitted that his relationship with Mr Fitch had deteriorated but gave evidence that he had been “investigating how to tackle that, how to turn that around, on the side.”87 For example, he gave evidence that he would go home and perform searches on the internet such as “Problems in the work environment, what to do about it, how to change it”.88 [94] Mr Fitch submitted that if Mr Hill had not been dismissed on 8 January 2019, he would have remained in employment for another month.89 Mr Fitch’s explanation as to why he believed that Mr Hill would only have remained in employment for another month following his dismissal was as follows:90 “Well, nothing - in all the discussions about the way work should be done or procedures to do the work Andrew is very adamant in his mind the way he wants to do things. So trying to make a change or trying to do something a little bit different to be able to get it out on time or to be able to get it out in a more efficient way really turned out to be impossible to modify those routines and behaviours, you know, that Andrew has. So I don’t think - you know, over time - and I believe he lost a lot of interest and I think that’s fairly obvious late in 2018.” 85 Double N Equipment Hire Pty Ltd v Humphries [2016] FWCFB 7206 at [16]-[17] 86 PN 667 87 PN 671 88 Ibid 89 PN 705 90 PN 709 -- 22 of 26 -- [2019] FWC 5567 23 [95] I accept Mr Hill’s evidence that he was making efforts to repair his relationship with Mr Fitch and he wanted to remain employed by Fitch. However, it is apparent that Mr Hill’s relationship with Mr Fitch had deteriorated towards the end of his employment. Further, Mr Fitch had concerns with Mr Hill’s performance and attitude towards work and was of the view that it was not improving. In my view, that would have likely resulted in Mr Hill’s employment with Fortis coming to an end at some point not too long after his dismissal, notwithstanding the fact that Fortis’ business was busy from about March 2019. In all the circumstances, I find that Mr Hill would have remained employed by Fortis for a period of three additional months if he had not been dismissed on 8 January 2019. [96] In determining the remuneration Mr Hill would have received had he not been dismissed on 8 January 2019, I have taken into consideration the fact that Mr Hill broke his arm on 31 March 2019 and that it was in a cast for six weeks thereafter.91 At the time of the determinative conference, Mr Hill was still seeing a physiotherapist and taking pain medication every day for his broken arm.92 However, I accept Mr Hill’s evidence that, had he remained employed with Fortis and broken his arm on 31 March 2019, he would have only been absent from work for eight to ten working days because he could have used his other hand to talk on the phone and use the computer, which consisted of more than ninety percent of his job.93 I also accept Mr Hill’s evidence that he had not taken any sick leave during his employment with Fortis,94 and at the time he was dismissed he had enough sick leave accrued to cover any such absence.95 [97] Mr Hill’s gross remuneration with Fortis was $80,000 per year. It follows that in three months he would have received $20,000 gross ($80,000/12 x 3 = $20,000). Remuneration earned (s 392(2)(e)) and income reasonably likely to be earned (s 392(2)(f)) [98] As aforementioned, at the time of the determinative conference on 6 June 2019, Mr Hill had not obtained alternative employment or earnt income from any other source following his dismissal. Thus, the only remuneration Mr Hill received in respect of the period from his dismissal with Fortis until the determinative conference on 6 June 2019 was the payment of two weeks’ wages in lieu of notice he received from Fortis on the termination of his employment. However, I am satisfied that Mr Hill would have received the same payment of two weeks’ wages in lieu of notice if he had been dismissed on 7 April 2019, rather than on 8 January 2019. Accordingly, I will not deduct the payment of two weeks’ wages in lieu of notice from the compensation sum payable to Mr Hill. [99] Thus, the sum of $20,000 gross is the amount of remuneration Mr Mr Hill would likely have earned had he not been dismissed by Fortis and instead continued to be employed by Fortis until 7 April 2019. This calculation is intended to put Mr Hill in the position he would have been in but for the termination of his employment.96 91 PN 176-8 92 PN 178 93 PN 179-80, 188-91 94 Ex A1 at [13], PN 718 zero absenteeism 95 PN 181-2 96 Bowden at [24], citing Ellawala v Australian Postal Corporation Print S5109 at [35] -- 23 of 26 -- [2019] FWC 5567 24 Viability (s 392(2)(a)) [100] Fortis is a relatively small business. However, no evidence was adduced on behalf of Fortis that any particular amount of compensation would affect the viability of Fortis’ business. [101] Further, during determinative conference, I provided the parties with a copy of s 392 of the Act97 and invited Mr Fitch to make submissions about s 392(2)(a).98 No submission was made to the effect that an order for the payment of compensation would impact the viability of Fortis’ enterprise. [102] No adjustment will be made on this account. Length of service (s 392(2)(b)) [103] Mr Hill’s relatively short period of service does not justify any adjustment to the amount of compensation. Mitigation efforts (s 392(2)(d)) [104] Mr Hill made efforts to obtain alternative employment following his dismissal on 8 January 2019. In particular, prior to breaking his arm, Mr Hill had been looking at the job search site SEEK and speaking to acquaintances of his to see if they knew of any job opportunities.99 In the period from his dismissal on 8 January 2019 to the date of the determinative conference, Mr Hill applied for between six and eight jobs on SEEK.100 At the time of the determinative conference, Mr Hill had not received any response to those applications.101 [105] In the period between breaking his arm on 31 March 2019 and the determinative conference on 6 June 2019, Mr Hill did not apply for any jobs. In cross-examination, Mr Hill explained why he had not applied for any jobs since breaking his arm, despite giving evidence that he could have returned to work within 8 to 10 working days had he broken his arm during his employment with Fortis, as follows:102 “Basically because nobody will want to employ somebody with a broken arm. It’s an immediate liability, in the eyes of how people think in the – in the workforce.” [106] Mr Hill intended on resuming searching for a job three weeks from the determinative conference.103 97 PN 654 98 PN 712 99 PN 169 100 PN 171-2 101 PN 173 102 PN 183 103 PN 185 -- 24 of 26 -- [2019] FWC 5567 25 [107] In all the circumstances, I am satisfied that Mr Hill acted reasonably to mitigate the loss suffered by him because of the dismissal and do not consider it appropriate to reduce the compensation on this account. Any other relevant matter (s 392(2)(g)) [108] It is necessary to consider whether to discount the remaining amount ($20,000) for “contingencies”. This step is a means of taking into account the possibility that the occurrence of contingencies to which Mr Hill was subject might have brought about some change in earning capacity or earnings.104 Positive considerations which might have resulted in advancement and increased earnings are also taken into account. [109] The discount for contingencies should only be applied in respect to an “anticipated period of employment” that is not actually known, that is a period that is prospective to the date of the decision.105 [110] Because I am looking in this matter at an anticipated period of employment which has already passed (8 January 2019 to 7 April 2019), there is no uncertainty about Mr Hill’s earnings, capacity or any other matters during that period of time. [111] In all the circumstances I have decided that it is not appropriate to discount or increase the figure of $20,000 for contingencies. [112] Save for the matters referred to in this decision, there are no other matters which I consider relevant to the task of determining an amount for the purposes of an order under s 392(1) of the Act. [113] I have considered the impact of taxation, but I prefer to determine compensation as a gross amount and leave taxation for determination. Misconduct (s 392(3)) [114] Mr Hill did not commit any misconduct, so this has no relevance to the assessment of compensation. Shock, distress or humiliation, or other analogous hurt (s 392(4)) [115] I note that in accordance with s 392(4) of the Act, the amount of compensation calculated does not include a component for shock, humiliation or distress. 104 Ellawala v Australian Postal Corporation Print S5109 at [36] 105 Enhance Systems Pty Ltd v Cox PR910779 at [39] -- 25 of 26 -- [2019] FWC 5567 26 Compensation cap (s 392(5)-(6)) [116] The amount of $20,000 is less than half the amount of the high income threshold immediately before the dismissal. It is also less than the total amount of remuneration to which Mr Hill was entitled in his employment with Fortis during the 26 weeks immediately before his dismissal. In those circumstances, I am satisfied that there is no basis to reduce the amount of $20,000 by reason of s 392(5) of the Act. Instalments (s 393) [117] No application was made by Fortis for any amount of compensation awarded to be paid in the form of instalments. Conclusion on compensation [118] In my view, the application of the Sprigg formula does not, in this case, yield an amount that is clearly excessive or clearly inadequate. Accordingly, there is no basis for me to reassess the assumptions made in reaching the amount of $20,000.106 [119] For the reasons I have given, I am satisfied that a remedy of compensation in the sum of $20,000 (less taxation as required by law) in favour of Mr Hill is appropriate in the circumstances of this case. I will issue an order PR711202 to that effect. DEPUTY PRESIDENT Appearances: Mr Hill on behalf of himself. Mr Fitch on behalf of Fortis. Hearing details: 2019. Newcastle: 6 June. Printed by authority of the Commonwealth Government Printer <PR711201> 106 Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32] -- 26 of 26 --