FEDERAL COURT OF AUSTRALIA Dafallah v Fair Work Commission (No 2) [2014] FCA 600 Citation: Dafallah v Fair Work Commission (No 2) [2014] FCA 600 Parties: MARIAM DAFALLAH v FAIR WORK COMMISSION and MELBOURNE HEALTH File number: VID 705 of 2012 Judge: MORTIMER J Date of judgment: 6 June 2014 Date of hearing: Heard on the papers Date of last submissions: 11 April 2014 Place: Melbourne Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 17 Solicitor for the Applicant: Mr M Willoughby-Thomas of Martin Willoughby-Thomas Barristers and Solicitors Counsel for the First Respondent: The First Respondent filed a submitting appearance Solicitor for the First Respondent: Australian Government Solicitor Counsel for the Second Respondent: Mr R Millar Solicitor for the Second Respondent: DLA Piper Australia IN THE FEDERAL COURT OF AUSTRALIA MELBOURNE DISTRICT REGISTRY GENERAL DIVISION VID 705 of 2012 BETWEEN: MARIAM DAFALLAH Applicant AND: FAIR WORK COMMISSION First Respondent MELBOURNE HEALTH Second Respondent JUDGE: MORTIMER J DATE OF ORDER: 6 June 2014 WHERE MADE: MELBOURNE THE COURT DECLARES THAT: By failing to follow the process set out in cl 38 of the Health Services Union of Australia — Health and Allied Services, Administrative Officers — Victorian Public Sector — Multi Employer Certified Agreement 2006-2009 in respect of the sequence of verbal and written warnings to be given to the applicant prior to any decision to terminate the applicant's employment, the second respondent has contravened that Agreement. THE COURT ORDERS THAT: 1. Pursuant to s 545(1) of the Fair Work Act 2009 (Cth), that the second respondent pay the applicant compensation in the sum of $10,063.30, representing her economic loss because of the contravention of cl 38 of the Health Services Union of Australia — Health and Allied Services, Administrative Officers — Victorian Public Sector — Multi Employer Certified Agreement 2006-2009. 2. Pursuant to s 545(1) of the Fair Work Act 2009 (Cth), that the second respondent pay the applicant compensation in the sum of $3,000, representing her non-economic loss because of the contravention of cl 38 of the Health Services Union of Australia — Health and Allied Services, Administrative Officers — Victorian Public Sector — Multi Employer Certified Agreement 2006-2009. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA MELBOURNE DISTRICT REGISTRY GENERAL DIVISION VID 705 of 2012 BETWEEN: MARIAM DAFALLAH Applicant AND: FAIR WORK COMMISSION First Respondent MELBOURNE HEALTH Second Respondent JUDGE: MORTIMER J DATE: 6 June 2014 PLACE: MELBOURNE REASONS FOR JUDGMENT INTRODUCTION AND PROCEDURAL BACKGROUND 1 On 4 April 2014 I delivered my reasons for judgment in this proceeding, where I found that, by failing to provide the applicant (Ms Dafallah) with the requisite warnings prior to terminating her employment for poor performance on 1 September 2010, the second respondent (Melbourne Health) contravened cl 38 of the Health Services Union of Australia — Health and Allied Services, Administrative Officers — Victorian Public Sector — Multi Employer Certified Agreement 2006-2009 (the Agreement): see Dafallah v Fair Work Commission [2014] FCA 328. 2 As a result of this contravention, I found that the applicant is entitled to compensation for economic loss, to the equivalent of three months' salary, and a modest amount of compensation for non-economic loss, for the humiliation and distress she has experienced as a result of the second respondent's conduct. I proposed the making of a declaration of the second respondent's contravention of the Agreement, and orders that the second respondent pay compensation to the applicant for her economic loss, in the sum of $12,500, and for her non-economic loss, in the sum of $3000. The compensation for economic loss was calculated on the basis of oral evidence given by the applicant at trial about her approximate annual salary. 3 As I explained in my reasons, the state of the evidence in this proceeding was such that I thought it appropriate to make directions providing the parties with an opportunity to make further written submissions on the proposed form of orders, as well as any submissions the parties may choose to make as to costs. Both the applicant and second respondent filed further written submissions in compliance with those directions. 4 For the reasons that follow, orders will be made requiring the second respondent to pay compensation to the applicant — for economic loss in the amount of $10,063.30, and for non-economic loss in the amount of $3000. The parties took no issue with the proposed form of declaration. In accordance with both parties' submissions, there will be no order as to costs. THE PARTIES' SUBMISSIONS 5 The applicant made no further submissions on the sum I proposed to award for non-economic loss. However, the applicant sought an increased amount of compensation for economic loss, for the three months' salary I found she was entitled to receive as a consequence of the second respondent's breach. The applicant submitted that her annual salary for the financial year 2009-2010 was $57,844 and, therefore, compensation for three months' salary would total $14,461.00. 6 In support of this submission, the applicant sought to rely on a copy of a PAYG payment summary for the period ending 1 July 2009 to 30 June 2010, which was attached to her written submissions filed with the Court. That summary shows a gross payments amount of $40,844, and a reportable fringe benefit amount of $17,000, for that period. The "Payer's name" is recorded as "Melbourne Health". No payee details are recorded on the summary. 7 The second respondent made submissions on the proposed orders for both economic loss and non-economic loss. On economic loss, the second respondent submits that the applicant's evidence on her loss was "vague and unreliable". It submits that a more appropriate basis on which to calculate the applicant's loss is the fact, agreed between the parties in a statement filed pursuant to s 191 of the Evidence Act 1995 (Cth), that "[a]t the time of her termination, Mariam Dafallah was working full-time at Melbourne Health and was paid a base hourly rate of $20.37105". Calculated on the basis of a 38-hour week (pursuant to s 62 of the Fair Work Act 2009 (Cth)), Melbourne Health submits, the total economic loss incurred by the applicant is $10,063.30. In response to the applicant's submissions on her earnings for the 2009-2010 financial year, the second respondent submitted that, having failed to provide reliable evidence on her economic loss at trial, the applicant should not now be allowed to adduce further evidence of her rate of remuneration. 8 In my opinion, going beyond the leave granted in respect of further submissions, rather than addressing itself to the form of orders in respect of non-economic loss, the second respondent submitted that no amount should be awarded for non-economic loss. It contended that there was not the requisite causal connection between the second respondent's breach of the Agreement, which was its failure to provide separate first and second warnings, pursuant to cl 38, in August 2009, and the applicant's loss, which was in the form of humiliation and distress that the applicant claimed she experienced primarily towards the termination of her employment in September 2010. It submitted: The crucial point is that there is no basis for finding that any alleged "humiliation and distress" suffered by the Applicant was because of the issuing of the first and second written warnings in the same document. She may well have been distressed by the fact that performance concerns had been raised, and that her employment was ultimately terminated, but that is not to the point. The raising of performance issues and the ultimate termination of employment do not constitute the contravention which has been found by the Court. … As noted at [173], the distress claimed by the Applicant was "especially towards the end of her employment", which ended on 1 September 2010. The contravention found by the Court occurred over a year earlier, on 10 August 2009. There is no evidentiary basis for concluding that any non-economic loss was suffered as a result of the contravention found by the Court. 9 Both the applicant and second respondent submitted that, in light of the operation of s 570 of the Fair Work Act 2009 (Cth), the parties agreed that there should be no order as to costs. CONSIDERATION 10 No documentary evidence was provided by the applicant either prior to or during the trial to substantiate her claims for economic loss. As I explain at [164] of my reasons for judgment, the applicant's legal representative contended in final submissions that the issue of damages should be determined either by agreement or at a separate hearing. I did not accept that submission, finding that the applicant had ample opportunity to address the gaps in her evidence about her economic loss. By providing a copy of the PAYG summary with her further written submissions, in my opinion the applicant is again seeking to address those gaps by way of additional evidence, filed without leave of the Court after the evidence has closed and indeed after judgment has been delivered. The evidence is not in admissible form and is simply attached to the written submissions. I do not propose to accept or consider that evidence. 11 Even if that evidence were to be considered, it does not advance the applicant's position on economic loss. First, there is a not insignificant forensic difficulty that the PAYG summary does not on its face relate to the applicant. Her name does not appear anywhere on the document, nor are there any other identifying personal details appearing on the summary. Further, $17,000 of the earnings recorded are said to be a "Reportable fringe benefits amount". There is no evidence or further information about to what that reportable amount relates. Without further evidence about the nature of that benefit, it is impossible for the Court to draw any conclusions as to whether that sum should be included in any calculation of economic loss by the applicant. 12 I accept the second respondent's submissions that the appropriate basis upon which to calculate the applicant's economic loss is that set out in the statement of agreed facts, to which I refer at [7] above. The applicant's hourly rate of pay and the number of hours she was working at the time of the termination of her employment were among the few facts upon which the parties could agree in this proceeding. I accept the second respondent's submission that it is appropriate to make this calculation on the basis of a 38-hour week (see s 62 of the FW Act) over a 13-week period. Orders will be made requiring the second respondent to pay the applicant $10,063.30, being compensation for her economic loss. 13 Even if leave were extended to enable the second respondent to challenge my finding that the applicant should receive $3000 by way of non-economic loss (which it has not been), I do not accept the contention there is no or insufficient causal connection between the contravention and that amount of compensation for non-economic loss. As I found at [179] of my reasons, Ms Dafallah gave evidence of being upset at how she was treated during the warning process. I accepted her evidence on this issue and, having observed her in the witness box, in my opinion the distress she was recalling was not trivial. Her evidence disclosed that she worked very long hours, having come to this country as a refugee and needing to support family in Uganda. Her employment at Melbourne Health mattered to her. 14 I have found that the second respondent's contraventions in relation to the warnings resulted in Ms Dafallah's employment being terminated several months earlier than would otherwise have been the case. Had the second respondent adhered to its obligations under cl 38 of the Agreement and provided the staged, sequential process which the Agreement contemplates, allowing for an employee to seek to remedy performance or conduct issues which are of concern to the employer (see [90] of my reasons), then in my opinion the manner in which Ms Dafallah's employment was terminated and which I describe at [75] of my reasons may have been quite different. 15 The contravention in giving unlawful combined warnings, placing her only one warning away from the termination of her employment, clearly distressed Ms Dafallah, and provoked considerable protest from her. That contravention also led prematurely to termination of her employment by the second respondent in a way which may have been less severe if the second respondent had adhered to its obligations under cl 38. 16 It is tolerably clear that the distress experienced by Ms Dafallah, both at the time of the warnings and in the way her employment was eventually terminated, was, as s 545(2)(b) of the FW Act requires, "because of" the second respondent's failure to comply with cl 38 of the Agreement. In my opinion, had she been treated in accordance with cl 38, she would have avoided the shock and distress of being moved immediately to one step away from having her employment terminated, and it would have been more likely than not that, after a properly staged and sequential warning process, her employment would not have been terminated in the manner I described in [75] of my reasons. 17 Accordingly, there will be orders requiring the second respondent to pay the applicant compensation for non-economic loss in the sum of $3000. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer. Associate: Dated: 6 June 2014