A recent case before the Full Bench of the Fair Work Commission has clarified the way compensation is calculated in unfair dismissal cases.

The traditional method

The Fair Work Act 2009 ("the FWA") caps the award of compensation to an employee at 26 weeks' (6 months) income. Traditionally, this has been used as the starting point when calculating compensation, with deductions to be made for factors such as:

any contribution the employee's conduct might have had to their dismissal,
payment received in lieu of notice, and
failure by the employee to mitigate their loss by searching for alternate employment after their dismissal.

What happened in Haigh

However, in the recent case of Brett Haigh v Bradken Resources Pty Ltd T/A Bradken ("Haigh"), the Commission set out a different approach.

Instead of starting at the maximum allowable compensation of 26 weeks' income and then making deductions, the Commission firstly assessed the total amount of compensation the employee should receive based on the employee's actual loss. In this case, factors such as how long the employee would have been employed if not for the unfair dismissal, and how long they have been (and are likely to be) unemployed after the dismissal, led the Commission to calculate that the employee was entitled to compensation equivalent to 12 months' income.

This amount was then capped at the maximum 26 weeks' compensation allowed under the FWA and this is the amount the employee was awarded. This was despite finding that the employee failed to make reasonable attempts to mitigate his loss following his dismissal, the employee's dismissal resulted from misconduct and the fact that the employee had already received five weeks' notice.

The end result for the employee was a much higher amount of compensation than he probably would have received under the traditional method.

Haigh also highlights the fact that under the Fair Work Act, a dismissal can be unfair if it is either harsh, unjust or unreasonable it does not need to be all three! In this case, the dismissal was found to be just and reasonable, but the employee was still eligible for compensation because the dismissal was harsh.

This is terrific news for employees but very tough on employers! This new approach demonstrates that the Fair Work Commission can still award an employee the maximum allowable compensation of 26 weeks' income despite any factors working against the employee, such as their misconduct.

What does this mean for Employers?

Having a valid reason for dismissal will not always be enough to avoid breaching the FWA, if the employer does not follow a sound dismissal process. Therefore it is critical to have appropriate policies and procedures in place to deal with a dismissal.

The decision in Haigh also emphasises the benefits of settling unfair dismissal claims early to avoid risking a larger payout at arbitration.

If you have any queries about unfair dismissal claims, or any other employment issues, please feel free to contact Mitchell Zadow on (03) 8561 3318.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by a member of our Legal Team

For further information contact

Mitchell Zadow

Mitchell is the Managing Principal of our law practice.

He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.

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A recent case before the Full Bench of the Fair Work Commission has clarified the way compensation is calculated in unfair dismissal cases.

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Supreme Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be published on the Supreme Court website for at least 14 days prior to any application being lodged.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself usually does not take long to process the application (maybe another 1 to 2 weeks) and this is completed using the electronic Supreme Court filing system. This means you do not have to go to a Court hearing. The timeframe for processing applications for Letters of Administration is even less, given that there is no Will document for the Court to consider. There is also a general discretion for the Court to raise a 'Requisition' asking for more information before they review the application - this can sometimes delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate or Letters of Administration. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.

You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE:

(03) 8561 3318

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Unfair Dismissal compensation: A new approach

A recent case before the Full Bench of the Fair Work Commission has clarified the way compensation is calculated in unfair dismissal cases.

The traditional method

What happened in Haigh