Full Bench excludes social security payments from compensation assessment

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Full Bench excludes social security payments from compensation assessment

A Full Bench of the Fair Work Commission has granted a former employee leave to appeal the amount awarded to her arising from a successful unfair dismissal claim. In doing so, the FWC reaffirmed the concept that social security payments should not be included as remuneration for the purposes of determining appropriate monetary compensation.

Initially, the former salesperson employed by a real estate agency had been granted a sum of $10,000 by Deputy President Dean, who found that the employee had been terminated for harsh, unjust, or unreasonable reasons. In her decision, she determined that the evidence did not support a valid reason for the dismissal in relation to her capacity or conduct. DP Dean noted that considerable friction existed between the employee and the agency owner, suggesting it was unlikely that her employment would have continued for any longer than six (6) months from her termination on 26 May 2020.

In submissions before DP Dean, the employee had sought relief to the amount of $65,736, the equivalent of 22 weeks’ pay. In contrast, the Deputy President granted her $10,000.00, approximately equal to four (4) weeks’ pay.

The appeal to the Full Bench comprising Vice President Catanzariti, Deputy President Anderson, and Commissioner Bissett centred upon the initial decision to include Jobseeker payments of $6,325.50 that the employee had received between her termination and commencing new employment. As summarised in the Full Bench decision,

“It can be gleaned from the decision that the Deputy President, in determining compensation, took into account the Jobseeker payments received by Ms Smith following the termination of her employment…It is not remuneration earned by Ms Smith from employment post the termination of her employment or remuneration that should otherwise be taken into account”.

The Full Bench noted that DP Dean should have applied the approach endorsed in previous decisions, including Bowden v Ottrey Homes Cobram and District Retirement Villages [2013] FWCFB 431 and Ellawala v Australia Post Corporation [2000] AIRC 1151, which determined social security payments do not constitute “monies earnt since termination”, and therefore should not be included in determining appropriate compensation to terminated employees.

The compensation quantum has been referred back to DP Dean for her determination. We will advise you when the matter has been resolved.

MS v Fearon Howard Real Estate Pty Ltd T/A Ray White (Balmain) [2021] FWCFB 581 (5 February 2021)

For queries about compensation assessments, managing dismissals, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 WAL LAW, 0417 622 178 or via email to dean.cameron@workforceadvisory.com.au

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.

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