Cook's compo slashed to ensure employer's viability

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Cook's compo slashed to ensure employer's viability

The FWC has drastically reduced a compensation payout to a dismissed employee after considering the employer's financial position.

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The FWC has drastically reduced a compensation payout to a dismissed employee after considering the employer's financial position.

The commission found reinstatement was inappropriate given the employer's poor treatment and underpayment of the applicant. 

Facts and background


In August 2018, the FWC ruled that Barldhir Singh was unfairly dismissed from his job as a cook at Indian Food Catering’s restaurant. He began his employment in September 2016 and was terminated in March 2018. 

The employer alleged various misdemeanours by Mr Singh to justify the dismissal: drinking while at work, providing free food to friends and family, harassing other staff members and refusing to work as a chef. The FWC found the alleged misconduct had been put together retrospectively to justify Mr Singh’s dismissal. 

The commission estimated that Mr Singh was being underpaid by several hundred dollars a week for the hours he was putting in.

It ruled in the August that the employer did not have a valid reason for terminating Mr Singh’s employment and, accordingly, the dismissal was unfair.

At the conclusion of the August decision the judge indicated there was insufficient information for a decision regarding the appropriate remedy. 

After both parties had filed written submissions, it became clear that there were some contested facts, especially in relation to the financial health of the respondent. The judge ordered the parties to attend a further hearing.

The law


According to s390 of the Fair Work Act, the FWC may order an employee’s reinstatement or payment of compensation if the employee was unfairly dismissed. The FWC can only order the payment of compensation if reinstatement is inappropriate. 

In issue


The issue to be determined was which remedy would be appropriate for Mr Singh. The other issue was how much the employer should pay if compensation was found to be the appropriate remedy.

Arguments


The respondent argued that Mr Singh wouldn’t have been employed for much longer with the company even if he had not been dismissed. This was argued on the grounds that Mr Singh was unhappy with his pay and the respondent was in no position to offer a pay rise.

The respondent also presented evidence of its poor financial position, revealing that the company was operating at a loss and therefore would struggle to pay compensation. 

Considerations


The commission considered the fact that Mr Singh was not seeking reinstatement and his poor treatment during his employment, deciding that compensation was the appropriate remedy. 

It did not accept the respondent’s argument that Mr Singh’s employment would have ended soon, regardless of his dismissal. Mr Singh was already being paid below the award and his desire for higher pay was perfectly reasonable. The commission also pointed out that the employer had applied for a 457 visa for Mr Singh in February 2018. This implied the plan was for his employment to continue. 
 
The commission said it was reasonable to assume that if Mr Sing had not been dismissed he would have remained employed by the respondent for at least a further two years.
 
Using the applicant’s salary of $56,000 a year, this yields a gross remuneration lost figure of $112,000.

The commission accepted that Mr Singh was unable to obtain other employment and therefore no deductions were made on the grounds that he had received remuneration since his dismissal. 

However, the commission reduced the amount by 30 per cent to make an allowance for contingencies.

The commission further reduced the amount because of the risk to the viability of the respondent’s enterprise. 

Decision


It determined the employer would pay Mr Singh $18,000 in six monthly instalments of $3000 each instead of reinstating him. 

Read the judgment


Baldhir Singh v Indian Food Catering

See also: Cook sacked for demanding pay for long hours
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