Industrial Relations Commission New South Wales Medium Neutral Citation: Public Service Association and Professional Officers Association Amalgamated Union of NSW (on behalf of Rosanna Ganino) and Roads and Maritime Services [2013] NSWIRComm 1008 Hearing dates: Written Submissions Applicant: 25.07.2012: Respondent: 10 August 2012: Applicant's submissions in reply: 8.10.2012 Decision date: 24 May 2013 Before: Tabbaa C AM Decision: Back pay awarded plus interest Catchwords: Unfair Dismissal application; Mitigation; Right of the employer to deduct from back pay awarded amounts earned by applicant in alternative employment; Right of the employer to deduct from back pay awarded amounts paid to the applicant during the relevant period; Interest to be paid on back pay. Legislation Cited: Industrial Relations Act 1996 Civil Procedure Act 2005 Cases Cited: Sydney Ferries Corporation v The Seamen's Union of Australia, NSW Branch on behalf of Levy (2009) 186 IR 99; [2009] NSWIRComm 126; New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union (on behalf of Grose) and Griffith City Council [2006] NSWIRComm 1137; Council of the New South Wales Bar Association v Einfeld [2009] NSWCA 255 at [23] Category: Principal judgment Parties: Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales (on behalf of Rosanna Ganino) (Applicant) Road and Maritime Services (Respondent) Representation: Ms P Lowson of Counsel (Applicant) Ms K Eastman of Counsel (Respondent) W G McNally Jones Staff (Applicant) Minter Ellison (Respondent) File Number(s): IRC 1141of 2009 DECISION ON MITIGATION BACKGROUND 1The Commission, as currently constituted, issued the following orders on 13 July 2012: ORDERS 1. The Commission orders that the Roads and Maritime Services reinstate Ms Rosanna Ganino to her former position of Senior Solicitor Liability Litigation on terms not less favourable to her than those that would have been applicable if she had not been dismissed. Ms Ganino is to be reinstated as soon as practicable after producing a current practising certificate. 2. The Commission orders that the Roads and Maritime Services pay to Ms Rosanna Ganino remuneration, the quantum yet to be determined, to compensate for the period during which she has been off work. The amount of remuneration will the subject of separate proceedings in order to determine the issue of mitigation of losses by the Applicant. 3. The issue of costs will also be the subject of separate proceedings. 4. The parties are required to observe the following filing schedule in relation to the Mitigation and Costs issues. The Applicant is to file and serve submissions and evidence by 20 July 2012; the Respondent is to file and serve its reply submissions and evidence by 3 August 2012 and the Applicant is file its reply to the Respondent's submissions and evidence by 10 August 2012. Unless either party requests within 7 days of the filing schedules being met that the Commission hear them, the issues will be determined on the papers. 2The issue of costs was settled by agreement between the parties. The parties provided written submissions on the question of mitigation having consented to the matter being determined on the papers. 3The parties were agreed that any award for back pay should have deducted from it all amounts earned by the Applicant in alternative employment. That sum equated to $14,817.00 gross. 4The parties had negotiated a consent Stay Order (in relation to the reinstatement order) in which it was agreed that Ms Ganino would receive her salary without any superannuation contributions being made to First State Super. The Order relating to back pay was stayed without any payment being made. The parties were agreed that any award for back pay should also have deducted from it the amount paid to the Applicant by the Respondent between November 2011 and March 2012 pending the appeal from the Commission's decision given in October 2011. That sum equated to $41,662.27 gross. Submissions of the Applicant 5The Applicant relied on the written evidence given in her affidavit filed on 20 June 2012 which demonstrated her attempts to mitigate her loss. 6The decision of 13 July 2012 noted that Ms Ganino was in receipt of $114,566.00 per annum at the time of her dismissal. She received $41,508.58 upon her termination representing her accrued annual leave and long service leave entitlements to 23 July 2009. 7Ms Ganino has also previously given evidence of the difficulties she had encountered in obtaining legal-based employment up until the proceedings on 14 April 2010. It was submitted that she did not obtain any alternative employment between 23 July 2009 and March 2010. 8It was submitted that Ms Ganino was able to obtain alternative employment with two employers since March 2010, details of which were provided in submissions. Her combined earnings totalled $14,115.00 gross earned in the period between her dismissal and subsequent reinstatement. 9The Applicant submitted that there was no basis to reduce the quantum of back pay by any amount other than the amounts specified in paragraph 3 above. 10Finally, the Applicant submitted that the most appropriate order in the circumstances is an order requiring the Respondent to pay Ms Ganino her salary from 23 July 2009 to the date of her reinstatement as if she had been employed during that period less the amounts earned by her during that period or paid to her by the Respondent in the period November 2011 to March 2012. 11The Applicant is also seeking payment of interest on that back pay pursuant to s 100 of the Civil Procedure Act 2005, to be paid at the Reserve Bank of Australia's cash rate plus 4%. Submissions of the Respondent 12The Respondent pointed out that there is no automatic entitlement to full back pay. It was submitted that, in exercising its discretion in relation to the quantum of back pay, the Commission needs to consider the matters set out hereunder. 13Firstly, the Respondent pointed out that the Commission had found, in its decision of 13 July 2012, that the Applicant had engaged in misconduct but the penalty of dismissal was disproportionate given the circumstances. It was submitted that Ms Ganino had contributed to the then RTA's decision to terminate her employment because of her refusal to participate in the fact finding interview or disciplinary interview in a meaningful way. It was submitted that the Applicant failed provided explanations or vindications for matters peculiarly within her knowledge: Council of the New South Wales Bar Association v Einfield [2009] NSWCA 255 at [23]. In addition, had Messrs Madden, Hopkins and/or Mr Tout had the benefit of the evidence she had provided to the Commission, the findings they had made may well have been different and the option of dismissal may not have been selected. 14The Respondent cited the Full Bench judgment in Sydney Ferries Corporation v The Seamen's Union of Australia, NSW Branch on behalf of Levy (2009) 186 IR 99; [2009] NSWIRComm 126 in support of its contention that it would be inappropriate and unjust for the misconduct findings against the Applicant to be overlooked and for there to be no sanction imposed. In Sydney Ferries, the Full Bench held that it would be inappropriate to make an order for lost remuneration given the circumstances that led to that employee's dismissal: ... It is common practice in unfair dismissal cases where an order for reinstatement is made, for orders of back pay (or, more correctly described, lost remuneration), to be tailored according to any identified culpability of the application as to the circumstances surrounding his/'her dismissal. Thus, in cases where misconduct may be found by the Commission to be proven, but not necessarily justifying dismissal (as is the case here), or in circumstances where a dismissal is found to be too "harsh" (again, as is the case here), a lesser amount, or no amount at all, may be considered as a "penalty" for the applicant's conduct. There is nothing inherently wrong in this approach: see Electricity Commission of New South Wales t/as Pacific Power v Crump (1993) 48 IR 296. In the present case, we do not consider it appropriate or just for Mr Levy to receive back pay given his contribution to the circumstances that led to his dismissal. 15Secondly, it was submitted that the Applicant was obliged to mitigate her loss following the termination of her employment: New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union (on behalf of Grose) and Griffith City Council [2006] NSWIRComm 1137: ... an applicant just cannot sit on his/her hands awaiting the outcome of an unfair dismissal case even if they are seeking reinstatement and believe that they have a good case (at [528]). 16The Respondent submitted that the evidence does not support a finding that the Applicant took appropriate and genuine steps to mitigate her loss. It was pointed out that the Applicant had applied for positions that were neither appropriate, having regard to her qualifications, nor commensurate with the level of responsibility and salary of the position previously held with the Respondent. 17It was submitted that the Commission ought not accept the Applicant's claims that the mere fact that she applied for positions is sufficient to ground the claim that she had attempted to mitigate her loss. She was either overqualified or significantly underqualified for the positions she had applied for. 18Finally, it was pointed out that there were gaps when Ms Ganino failed to take any steps to seek alternative employment and for which no evidence has been provided to explain her inaction - a period of 12 months from 11 August 2011. It was further pointed out that the application made on 11 August 2011 was the only application made in a period of 18 months. 19In conclusion, the Respondent submitted that the most appropriate order to make in the present circumstances is one requiring the Respondent to deduct all amounts already paid or earned by the Applicant when calculating back pay. 20In addition, the Respondent urged the Commission to consider discounting the amount of back pay to be paid to the Applicant to reflect her conduct leading to the termination of her employment and in recognition of her less than genuine efforts to mitigate her loss following the termination of her employment. Submissions of the Applicant in Reply 21The Applicant argued that the Commission did not find that the Applicant was guilty of misconduct because she had not participated in the disciplinary. 22The Appellant argued that: (a)she had not participated in the disciplinary proceedings because of the treatment that had earlier been meted out to her and the fact that she was suspended at the relevant time; (b)the Respondent had not previously relied on her non-participation in the disciplinary process as constituting misconduct. Mr Tout had incorrectly relied on her non-involvement in the process as one of the reasons supporting his decision to terminate her employment in circumstances where: * the Applicant was not advised that it was an allegation of misconduct; * the procedural guidelines were not followed in that regard; * she was not provided with proper notice of the fact that it was to be taken into account. (c)In other words, "unless a matter is identified as misconduct and treated as such in accordance with the Procedure, it cannot be transmogrified into misconduct"; (d)the Commission did not describe the Applicant's conduct as "misconduct"; (e)there was no evidence before the Commission to suggest that a different outcome than termination of employment may have resulted if she had participated in the disciplinary process. It was pure speculation and ignored a number of features of the disciplinary process: (i)Ms Ganino had not been provided with details of the allegations against her or full access to the relevant documents; (ii)The Respondent's misplaced assessment of the so-called "confidentiality" of certain documents resulted in the Applicant, despite her long and exemplary service as a solicitor handling confidential and sensitive material, being refused access, in her home, to a copy of the fact finding and investigation reports. That refusal resulted in a restriction on the explanation she could have provided to he Respondent; (iii)Even if the Applicant had participated in the disciplinary process, she was restricted in her ability to disprove the October 2008 allegations against her as the documents required to disprove those allegations only came to light as a result of a Summons for Production filed in the proceedings; (iv)An accurate account of Mr Tony Stewart's evidence of what transpired in 2008 was obtained during the proceedings before the Commission. The Respondent had relied on the previous evidence Mr Stewart gave to the fact finder. It was pointed out that the questioning by the fact finder was both leading and misleading and in a context where Mr Stewart was worried about his own position; (v)It was only when Mr O'Meally's involvement in signing off on the upgrade position became apparent through documents summoned in the proceedings and cross-examination that sufficient information was available to establish that the allegations were not made out in relation to that upgrade position; (vi)It was not correct to suggest that there were matters well within the Applicant's knowledge. If they were, the Respondent would have withdrawn many of its allegations after hearing her substantial evidence and explanations in these proceedings. In fact, the Respondent withdrew many of the allegations at the end of the 14 hearing days - after all the evidence had been heard; (vii)The hostility harboured by Ms Vickers against Ms Ganino was apparent in the latter's evidence. The explanations provided by the Applicant to Ms Vickers in January 2009 were ignored by the latter but were subsequently supported by Mr Stewart's evidence to the Commission and found to be correct. Ms Ganino was suspended for those matters without warning and without an opportunity given to explain the circumstances. (f)It would be grossly unfair to exercise discretion in a way that would penalise the Applicant for not involving herself in the disciplinary process when she did not do so because the Respondent had suspended her as a result of unfounded allegations against her; (g)The Sydney Ferries case can be distinguished from the present set of circumstances in that a finding was made by Grayson DP `that, despite protestations to the contrary, the Applicant had behaved unprofessionally towards a senior officer in front of passengers and had said to the same senior officer, in the presence of other officers, words to the effect of "you're a fucking loser"; (h)On appeal from his honour's decision, the Full Bench in Levy endorsed the decision finding that the misconduct proven and supporting an exercise of discretion against back pay being ordered: [92] ... Moreover, we are of the opinion that his Honours' decision was entirely appropriate in light of his findings of fact and, given all the circumstances, was a just and reasonable outcome. .... [94] ... We agree unreservedly with the Deputy President that it was conduct which was both "inappropriate and deserving of strong condemnation". 23The Applicant went on to distinguish other authorities that had been cited by the Respondent as upholding the principle in Sydney Ferries. 24It was submitted that the Respondent's action in dismissing the Applicant acted as a serious barrier in her obtaining alternative employment as a legal practitioner. The Applicant rejected the contention that she had failed to mitigate her losses and provided the sequence of events from the decision in her favour from September 2011 through to the July 2012 decision and the fact that she had continued alternative employment during that time. 25The Applicant concluded that the only proper exercise of discretion is to award full back pay to Ms Ganino based on the following: * there is no basis for withholding back pay at all or in part; * there are substantial issues of unfairness in the way in which Ms Ganino was treated from the outset; * none of the allegations of misconduct were made out. LEGISLATIVE FRAMEWORK 26Clause 89, Order for Reinstatement, Re-Employment, Remuneration, Compensation, of the Industrial Relations Act 1996 provides as follows: 89 (3) Remuneration If the Commission orders reinstatement or re-employment, it may order the employer to pay to the applicant an amount stated in the order that does not exceed the remuneration the applicant would, but for being dismissed, have received before being reinstated or re-employed in accordance with the order. 89 (6) Assessment of compensation When assessing any compensation payable, the Commission is to take into account whether the applicant made a reasonable attempt to find alternative employment and the remuneration received in alternative employment, or that would have been payable if the applicant had succeeded in obtaining alternative employment. CONSIDERATION 27An order for back pay is a matter of discretion for the Commission. 28In its decision of 13 July 2012, the Commission found that Ms Ganino's conduct in not participating in the fact-finding/disciplinary meetings was not what one would expect from someone in her position. Many of the allegations made against the Applicant were withdrawn after hearing all of the evidence following 14 days of hearing. In relation to the balance of the misconduct allegations against Ms Ganino, the Commission stated: Having considered all of the above, I find that the nature of the misconduct contained in the remaining allegations relied on by the Respondent is not sufficient to warrant the termination of Ms Ganino. I accept the Applicant's submission that the penalty of dismissal is disproportionate given the circumstances described above and consider the termination to be harsh. 29The Commission therefore had noted that Ms Ganino's behaviour was not what one would expect from someone in the position she held within the Respondent's legal section. I do not propose to discount the back pay to be awarded in that regard. 30The Commission also noted that while some misconduct issues remained, they were not sufficient to warrant termination, albeit they did warrant some form of alternative disciplinary measure. I do not propose to discount the back pay to be awarded in that regard. 31I accept the submission on behalf of the Applicant that the quantum of the back pay should not deter the Commission from making the orders sought as neither the dismissal nor the elapse of time was caused by Ms Ganino. 32While I accept that the dismissal acted as a serious barrier to Ms Ganino obtaining alternative employment as a legal practitioner, I agree with the Respondent's submission that the evidence of the Applicant demonstrated that she had applied for positions that were not appropriate having regard to her qualifications and/or commensurate with the level of responsibility and salary of the position she previously held with the Respondent. I also agree that there were significant periods of inaction by the Applicant as described above. Her termination does not bar her from persisting with applications for alternative employment. 33I propose to exercise my discretion to discount the back pay to be awarded. In exercising that discretion, I have taken into account the period of inaction described above. I have also taken into account the difficulties the Applicant would have experienced in obtaining alternative employment given her termination and the previous level of authority she exercised. ORDERS 34The Respondent shall pay to the Applicant her salary from 23 July 2009 to the date of her reinstatement as if she had been employed during that period less: (1)the amounts earned by her during that period in alternative employment; and (2)the amounts paid to her by the Respondent in the period November 2011 to March 2012; and (3)an amount equivalent to the amount she would have earned during nine (9) calendar months of employment with the Respondent. 35The Respondent shall pay to the Applicant interest on the back pay calculated in paragraph 34 above pursuant to s 100 of the Civil Procedure Act 2005, to be paid at the Reserve Bank of Australia's cash rate plus 4%. 36The payments are to be made within 28 days of the date of this decision. 37Matter IRC 1141 of 2009 is hereby concluded. I Tabbaa AM COMMISSIONER Amendments 27 March 2014 - Catchwords amended. Amended paragraphs: Coversheet/Catchwords DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 March 2014