FWC recognises difficulties faced by older workers in securing new employment
The Fair Work Commission (FWC) recently dealt with an unfair dismissal case involving a worker who was terminated by his employer after more than three years of service.
The worker argued that his dismissal was unfair, claiming he had intended to remain with the employer until retirement age. He maintained that his termination had significant impacts on his personal life, including his ability to care for his dependent daughter.
The employer contended that the worker's performance was substandard, which led to the decision to terminate the employment relationship. However, they provided limited examples to support this claim, with most being outdated and not relevant at the time of dismissal.
The case began when the worker filed an unfair dismissal application under section 394 of the Fair Work Act 2009. On 7 March 2025, the FWC found that the worker had been unfairly dismissed by his employer, a retail business operating multiple outlets in Western Australia.
The worker had been employed at the employer's Warnbro store for over three years prior to his dismissal, working between 28 to 38 hours per week at an hourly rate of $25.65. The FWC described this duration as "neither an exceptionally short period nor an exceptionally long period of employment."
Following the unfair dismissal finding, both parties submitted materials about the appropriate remedy. The worker filed on 14 March 2025, the employer responded on 19 March 2025, and a determinative conference was held on 25 March 2025.
The worker stated he did not want his job back, telling the FWC he "did not feel comfortable returning to the work environment and would feel concerned about his future with the employer having engaged in this process."
The employer agreed that reinstatement wasn't appropriate. They stated the Warnbro store had no capacity for more staff and noted the store's lease was ending, with no decision yet made about renewing or closing.
Another complication was the worker's lack of a current licence, which made working at the employer's other locations impossible. After considering these factors, the FWC concluded reinstatement wasn't the appropriate remedy.
The FWC explained that finding reinstatement inappropriate doesn't automatically mean compensation should be awarded, citing precedent case law from Nguyen v Vietnamese Community in Australia: "[T]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one..."
When considering compensation, the FWC was required to take into account multiple factors under section 392(2) of the Fair Work Act, including the effect on the employer's business viability, the worker's length of service, and his efforts to find new work.
The worker stated his termination had a significant impact on his mental health and ability to support his daughter. However, the FWC reminded him that under section 394(2) of the Act, it "cannot award any form of payment for hurt, distress, or humiliation."
To determine the compensation amount, the FWC applied the "Sprigg formula" derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul's Licensed Festival Supermarket. This four-step process includes estimating lost wages, deducting any earnings since termination, considering contingencies, and calculating tax impacts.
The FWC found that "in all probability, [the worker] would have remained in employment with [the employer] for a time no less than the maximum compensation cap of 26 weeks." This led to an estimated lost income of $20,007 based on his hourly rate and typical working hours.
The worker testified that despite applying for over 100 jobs using various methods, he hadn't secured any employment since his dismissal. The FWC found his evidence about these efforts reliable, concluding: "I am satisfied that [the worker] has taken reasonable steps to mitigate loss."
The FWC accepted the worker's evidence that his age (approaching 60) may have affected his ability to find new employment, noting he had undergone additional training and looked beyond retail into other fields such as cleaning.
When assessing the impact on the employer's business, the FWC stated: "I have considered the submissions of [the employer] in relation to the potential impact that this order may have on the viability of [the employer's] operation... I am not satisfied that an Order of the amount determined will have an impact on viability."
However, recognizing the business circumstances, the FWC permitted payment in instalments "in the interests of ensuring compliance."
The final order required the employer to pay "$20,007 (gross), plus superannuation, and less taxation, as required by law, to [the worker], in lieu of reinstatement," to be paid in four instalments.
The FWC confirmed that "the amount to be ordered does not include payment for shock, distress, or humiliation caused by [the worker's] dismissal" in accordance with the Fair Work Act.
