How the Fair Work Commission actually calculates compensation
Four inputs: likely remuneration, deductions for income earned since, the employee's own mitigation effort, and the legal cap. Shock and distress are explicitly excluded.
Where the Commission decides compensation is the appropriate remedy, rather than reinstatement, it works through four inputs under section 392 of the Fair Work Act. Its own summary: "the employee's earnings ('remuneration')[,] any deductions we need to make[,] the employee's efforts to reduce their loss[,] the legal limit ('compensation cap')."
The four inputs
- Remuneration: how long the Commission thinks the employee would have kept working for the employer had they not been dismissed, based on length of service, work history, and any performance or behaviour issues.
- Deductions: wages or other income earned since the dismissal, including workers' compensation payments, generally subtracted from the remuneration figure.
- The employee's own mitigation effort: what the person did to reduce their loss, judged against a standard of what was reasonable given their circumstances.
- The legal cap: the lesser of 26 weeks' remuneration or half the high income threshold, covered on its own guide.
What compensation cannot cover
The Fair Work Commission's guidance draws a clear line: "we cannot order compensation for reasons such as pain and suffering, shock, distress, hurt or humiliation." This is a calculation of economic loss connected to the job, not a payment for the experience of being dismissed. Nothing on this site estimates what any individual reader would actually receive; the formula above is how the figure is worked out, not a number this site can supply in advance.