Amount of Compensation

When reinstatement is in issue, the amount of compensation usually sought is the amount lost by the employee between the date of dismissal and the date of reinstatement. When re-employment is in issue, the amount sought would be similar, but the court or tribunal may very this amount, depending largely on whether there was any fault on the part of the employee. When compensation per se is in issue, then the amount will vary depending on the facts of the case. The period of reasonable notice is usually a starting point for a court (or tribunal) assessing compensation. Section 392(2) of the FW Act requires FWA to take into account, among other factors, the amount of remuneration the employee would have received, or been likely to receive, if not for the termination of employment, when determining the amount of compensation to award to the employee. Misconduct on the part of the employee: When making an order for compensation for an unfairly dismissed employee, FWA is required under s 392(3) of the FW Act to reduce the compensation by an appropriate amount on account of any misconduct that contributed to the employers decision to terminate the employees employment. FWA has discretion to determine what an appropriate amount is. Possibility of a large award of damages: Another limitation in the FW Act is that, when deciding a compensation figure for an unfairly dismissed employee, FWA must not include any amount to compensate for any shock, distress or humiliation, or other analogous hurt, caused to the employee by the manner of his or her dismissal (s 392(4)). Furthermore, unfair dismissal compensation orders for both unlawful and unfair dismissals must not exceed the equivalent of six months pay (based on the employees remuneration immediately prior to the termination or the high-income threshold, whichever is lower) (s 392(5)). Under the Work Choices termination regime, similar limitations existed in respect of compensation for an unlawful termination (that is, a dismissal in breach of s 659 of the former WR Act, which prohibited termination on certain grounds including race, sex, age and disability). So, an unlawfully terminated employee was prevented from receiving any compensation for any shock, distress o humiliation he or she may have suffered, and his or her compensation was capped. These limitations do not exist under the FW Act either in respect of unlawful terminations (now under s 772) or general protections terminations. Compensation beyond expiry date of contract possible: Under s 392(2)(c) of the FW Act, when deciding how much compensation should be paid to an unfairly dismissed employee, FWA is required to take into account the remuneration that the employee would have received if he or she had not been dismissed. It appears that the maximum amount of compensation award able under s 392 of the FW Act (ie six months of the employees remuneration) can be awarded even where that period extends beyond the residue of the employees fixed-term contract. This was the finding of the Industrial relations Court of Australia in Clunne v Nambucca Shire Council (1995) AILR 3-182, in respect of a predecessor provision to s 392(2)(c). In this case, it was held that the expression would have received can be treated as including income from employment arising from a renewal of [the employees] contract

which May well have occurred. Note that while employees under fixed-term contracts are excluded from bringing an unfair dismissal claim, they may bring a claim for unlawful dismissal (for a prohibited reason). Further to this, fixed-term contracts will fall outside the statutory exclusion where they have an early termination clause, and so employees under such contracts may be able to access the unfair dismissal jurisdiction. http://www.perthemploymentlawyers.com.au/