Dismissed worker paid $74,350 compensation cap

After attempting to rescind his resignation, a worker was found unfairly dismissed and paid the maximum compensation amount, in recent FWC decision. The applicant, aged 58, began working at energy company Viva Energy in July 1989.  After struggling with hearing loss developed over his 30 years of service, the applicant commenced annual leave on 31 May 2019, returning to work on 19 June 2019. Upon his return, the applicant emailed the respondent with his decision to resign from the company. He submitted his departure date to be 12 June 2020, to exhaust his accrued annual and long service leave. The company accepted the applicant’s resignation and approved a portion of his leave request.

In October 2019, the applicant attempted to rescind his resignation, citing changes to his health and personal circumstances. The next day, the respondent terminated the applicant’s employment, effective 31 December 2019.

The company also withdrew its approval of the applicant’s leave, which was set to conclude on 13 March 2020. The applicant filed an unfair dismissal claim, seeking reinstatement and compensation. The Commission found that the applicant had resigned effective 12 June 2020 but was terminated by the respondent effective 31 December 2019.

In considering whether the dismissal was harsh, unjust or unreasonable, the Commission noted that:

• there was no valid reason for the dismissal
• there was no basis for selecting 31 December 2019 as the termination date
• the respondent ignored the fact that it had already approved leave for a period after 31 December 2019
• the applicant was disadvantaged by the fact that his chosen end date of employment was not met

The Commission also considered other factors, such as the applicant’s age, unblemished record of service and difficult in finding alternative work. Ultimately, the Commission was satisfied that the applicant was unfairly dismissed under the Fair Work Act 2009 s 385. The Commission found reinstatement of the applicant was inappropriate. However, satisfied of the applicant’s suffering as a result of the dismissal, it found compensation was a suitable remedy.

The Commission ordered the statutory cap of $74,350 (less taxation plus superannuation) to compensate for the applicant’s remuneration and leave entitlements for the period of 1 January to 12 June 2020.

Key Takeaways for HR:

• Employers must ensure there is a valid reason when dismissing employees
• Employers must take into account accrued leave entitlements when setting a date of employment termination