Worker had found alternative employment but resigned due to a work injury
The Fair Work Commission (FWC) recently dealt with a remedy hearing for a poultry processing worker who was found to have been unfairly dismissed after a successful appeal to the Full Bench.
The worker had been employed for almost three years as a casual employee when he was dismissed in October 2024.
The employer had initially succeeded in defending the unfair dismissal application, but the Full Bench later upheld the worker's appeal and quashed the original decision.
The worker argued he was entitled to compensation for the period he would have remained employed had he not been dismissed.
The employer contended it was in acute financial distress with frozen bank accounts and substantial debts, and that any compensation order would merely accelerate liquidation. The employer had lost its sole contract with a major client in August 2025, leaving it without revenue.
The case required the FWC to determine an appropriate amount of compensation, taking into account the worker's efforts to mitigate his loss, his earnings from alternative employment, and the effect of any compensation order on the employer's viability.
Three years of casual employment ended
The worker was engaged as a casual employee by the employer at a poultry processing facility operated at Mareeba in Queensland.
The worker commenced employment on 15 October 2021 and was terminated on 8 October 2024, a period of almost three years served as a casual employee.
The worker provided payslips showing his year-to-date earnings for the 2024/2025 financial year were $30,87.23, representing an average of $2,375.09 per week.
The worker accepted that his weekly earnings fluctuated according to the volume of work performed under the piece rate system in place.
The employer stated in its response that the worker's average weekly earnings were $2,241.32, which the worker agreed was probably accurate, taking into account the fluctuations.
The employer claimed the worker's weekly earnings ranged between $169 and $3,802, although it produced no evidence on the worker's earnings to support that submission.
Following his dismissal, the worker said he looked for other work in the Mareeba area. While prepared to do any work, he said he was hindered in his job-seeking efforts by being unable to obtain a reference from the employer due to having been dismissed for fraud.
The worker was ultimately successful in finding employment with a banana farm in the Mareeba area, starting work on 9 December 2024.
Alternative employment and work injury
The worker worked as a casual employee for the banana farm up until 27 June 2025, when he resigned because of an injury he sustained to his arm, which he said required rest to recover.
The worker said he had not worked since 27 June 2025 and remained on workers compensation but only received payment for medical expenses. His earnings from work for the banana farm in the period from 9 December 2024 until 27 June 2025 was $27,527.47.
His average weekly earnings for the 28-week period of his employment with the banana farm was $983.12.
A union secretary gave written evidence that he was advised on or about 8 August 2025 by a senior union delegate that the employer's contract to provide services at its Mareeba facility had been terminated.
This was subsequently confirmed when the secretary called the facility manager, who also informed him that former poultry deboners employed by the employer would be offered employment with the facility operator directly.
The employer furnished evidence of its financial position following the loss of its contract.
The evidence included a debt recovery notice for an overdue sum of $352,763.92 from the Australian Taxation Office dated 21 May 2025, an email from the Queensland Revenue Office for outstanding payroll tax liability dated 25 August 2025, a final premium notice from WorkCover Queensland for $27,068.93 dated 7 June 2025, and an email from lawyers dated 1 August 2025 advising the employer to seek advice from an insolvency practitioner.
Reinstatement found inappropriate
The FWC examined whether reinstatement was inappropriate. The worker did not seek reinstatement as his role no longer existed because the employer lost its contract to provide services on or about 8 August 2025.
The Commissioner stated: "In these circumstances, I am satisfied that reinstatement is inappropriate." The Commissioner also noted: "Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate."
The Commissioner stated: "As noted by the Full Bench, '[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one...'. Having found that [the worker] was unfairly dismissed and noting that [the worker] was unemployed for several weeks following his dismissal, I consider that an order for payment of compensation is appropriate."
The Commissioner found there was nothing in the material filed by the employer that persuaded the FWC that a payment of compensation would be inappropriate.
The FWC examined the effect of any compensation order on the viability of the employer's enterprise.
The employer submitted that it was in acute financial distress, claimed all of its bank accounts had been frozen since early 2025, its sole contract was terminated on 8 August 2025, leaving it without revenue, and the company carried substantial liabilities.
The employer also referred to legal advice received, which stated that it was probably insolvent and recommended immediate action regarding liquidation.
Limited evidence of financial distress
The Commissioner found: "Put at its highest, [the employer's] limited evidence before me indicates it may have outstanding debts with the ATO and QRO. Beyond its submissions, there was no probative evidence going to the overall financial state of [the employer]. For example, a detailed financial statement, balance sheet or similar documentation was not produced in evidence. Nor was any owner, Director or Officer of [the employer] called to give evidence."
The Commissioner noted: "I also note that despite receiving advice from EDA Layers on 1 August 2025 that it should seek advice from an insolvency practitioner, there is no evidence that [the employer] has done so or taken further action regarding its financial position. In all of these circumstances, [the employer] has not provided sufficient evidence that would establish that an award of compensation would affect its viability."
The FWC examined the remuneration the worker would have received but for dismissal. The worker contended that had he not been dismissed, there was no reason to believe he would not have continued to be employed for the longer term.
However, he accepted that the employer lost its contract on 8 August 2025, at which point all employees ceased employment. He properly conceded that had he not been dismissed on 8 October 2024, he would have lost his job in any event on or about 8 August 2025.
Anticipated period of employment calculated
The Commissioner found: "I find that had [the worker] not been dismissed by [the employer] on 8 October 2024 it is likely that he would have remained employed by [the employer] up until 8 August 2025."
The FWC was prepared to accept the employer's figure of $2,241.32 as the worker's average weekly earnings, which the worker agreed was accurate taking into account the wide fluctuations in weekly earnings.
The Commissioner stated: "I am satisfied that in applying the average weekly earnings rate of $2,241.32 to the 44-week period between 8 October 2024 and 8 August 2025, [the worker's] anticipated earnings for that 44-week period is $98,618.08."
The FWC then examined the worker's efforts to mitigate his loss following dismissal.
The worker said he made various unsuccessful job applications in the wake of his dismissal, hampered by the absence of a reference due to his dismissal for fraud.
While the worker did not provide evidence of his job applications, the Commissioner found his evidence to be credible in circumstances where he secured casual employment in December 2024 with the banana farm.
Mitigation efforts examined
The worker said he subsequently resigned from his employment with the banana farm on 27 June 2025 in order to recover from a work-related injury sustained to his arm.
Beyond that assertion, he provided no evidence that he was incapable of working in the period between 27 June 2025 and 8 August 2025 or that he took steps to find other suitable employment in the wake of his resignation on 27 June 2025.
The Commissioner stated: "I am not satisfied that [the worker] has taken reasonable steps to mitigate his loss in the period after 27 June 2025. In circumstances where his average weekly earnings with [the banana farm] were $983.12, I intend to make a deduction for the 6-week period from 27 June 2025 to 8 August 2025 of $5,898.72. This reflects [the worker's] failure to take reasonable steps to mitigate his losses between 27 June 2025 and 8 August 2025."
The FWC examined the income earned since dismissal. The worker secured alternate employment on 9 December 2024, earning $27,527.47 between that date and 27 June 2025 when he resigned from that employment.
The Commissioner stated: "It is appropriate to make a deduction of those earnings from the compensation otherwise calculated above."
As to income likely to be earned in the period between making the compensation order and payment of compensation, the Commissioner was satisfied the worker was unlikely to earn any income.
Compensation formula applied
The FWC applied the established approach to calculating compensation. The Commissioner stated: "I have estimated the remuneration [the worker] would have received, or would have been likely to have received, if [the employer] had not terminated his employment to be $98,618.08 on the basis of my finding it is likely [the worker] would have remained in employment for a further period of 44 weeks."
The Commissioner found the worker received earnings in the anticipated period of employment after his date of dismissal of $27,527.47, and it was appropriate to make a deduction for that income.
The Commissioner also found the worker did not take reasonable steps to mitigate his losses in the period between 27 June 2025 and 8 August 2025 and made a deduction of $5,898.72. The amount of compensation calculated was consequently reduced to $65,191.89.
The Commissioner stated: "I do not consider it appropriate to deduct an amount for contingencies." The Commissioner considered the impact of taxation but elected to settle a gross amount of $65,191.89, which was to be subject to normal taxation.
The Commissioner stated: "I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s392(2) of the Act."
Compensation capped by statute
The FWC examined whether any deduction for misconduct was appropriate.
The Commissioner stated: "As the Full Bench in its Appeal Decision found that the alleged misconduct was not established, I am not satisfied that misconduct of [the worker] contributed to the employer's decision to dismiss him. No deduction for misconduct is appropriate."
The FWC examined the statutory cap on compensation. At the time of the worker's dismissal the high income threshold was $175,000, meaning the compensation cap was $87,500.
Based on the worker's average weekly earnings prior to dismissal of $2,241.32, the Commissioner estimated the amount of compensation he was entitled to receive in the 26-week period prior to dismissal was $58,274.32.
As the latter figure was less than the high income threshold, $58,274.32 acted as the cap in awarding compensation.
The Commissioner concluded: "In light of the above, I will make an order that [the employer] pay $58,274.32 gross less taxation as required by law to [the worker] in lieu of reinstatement within 14 days of the date of this decision."
The Commissioner stated: "I am satisfied that reinstatement would be inappropriate and that an award of compensation is appropriate." The FWC ordered the employer to pay the compensation amount within 14 days.
