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COVID-19 a relevant factor when awarding compensation for unfair dismissal – Employment and HR


Australia:

COVID-19 a relevant factor when awarding compensation for unfair dismissal


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The Fair Work Commission (the “FWC”) recently considered the COVID-19 environment to be a relevant factor when awarding compensation to an Applicant who had been unfairly dismissed. DP Boyce referred to the impact of COVID-19 on the job market when determining whether the Applicant had made efforts to mitigate his loss.

Background

The Applicant was employed from 5 February 2019 as a Clerk in the Sea Freight division of Bollore Logistics Australia Pty Ltd (“BLA”). He was advised soon after starting with BLA that he was to take over the supervisor role. His evidence was that he received minimal training and BLA had no written manuals or procedures.

After completing his probationary period, the Applicant raised his concerns about the lack of relevant training for the supervisor role. The Applicant said that after raising these concerns, he was treated differently. He was issued with a first warning letter on 15 October 2019 following what were termed as “unacceptable mistakes.” On 20 January 2020 he was issued with a final warning letter stating that his performance remained unsatisfactory. On that same day, the Applicant received a termination letter which confirmed his dismissal for poor performance.

Unfair dismissal

The Applicant filed an application for unfair dismissal. BLA filed a response but failed to file any witness statements or written submissions and so the Applicant’s evidence was largely uncontested. The Applicant challenged the veracity of the warning letters. His evidence was that his alleged underperformance was partially due to his colleagues’ incapacity and his lack of training. The FWC accepted that there was no valid reason to dismiss the Applicant and found his dismissal to be unfair.

Compensation

The Applicant did not seek reinstatement and so the FWC was required to consider the appropriate amount for compensation. Section 392(2) of the Fair Work Act 2009 (Cth) sets out the criteria to be considered by the FWC which includes:

  • the efforts of the person (if any) to mitigate the loss suffered because of the dismissal; and

  • 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.

The Applicant gave evidence that he had applied for several jobs since his dismissal and had proceeded to a few interviews. However, as soon as he disclosed that he had been dismissed for underperformance, the application process was abandoned by the prospective employers.

COVID-19 implications

DP Boyce expressly stated that the Applicant was “facing a deteriorating job market in the COVID-19 environment.” The FWC found that given the Applicant had made efforts to find alternative work, he had taken reasonable steps to mitigate his loss.

The FWC also expressly stated that “(g)iven the general imposition of the COVID-19 pandemic on the employment market, and the Applicant’s circumstances” he was unlikely to earn any income during the period between the making of the order for compensation and the receipt of the actual compensation.

It is likely that there will be many more FWC decisions to follow which will take into account the impact of COVID-19 on the job market as a relevant factor when awarding compensation.

Read the decision here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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