Is reinstatement or compensation the right remedy?


Is reinstatement or compensation the right remedy?

Should an unfairly dismissed employee be reinstated or awarded compensation? These four cases illustrate how the Fair Work Commission determines an appropriate remedy.


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Should an unfairly dismissed employee be reinstated or awarded compensation?

These four cases illustrate how the Fair Work Commission determines an appropriate remedy.

Reinstated after redeployment option ignored

The Fair Work Commission (Justice Cambridge) reinstated a worker who had rejected voluntary redundancy and was then made redundant after the employer failed to redeploy him.

The employer had failed to properly manage the redeployment process and reinstatement was justifed.

The employer argued the dismissal was a case of genuine redundancy because the requirements contained in s389 of the Act had been satisfied. Specifically, the employer said it would not have been reasonable in all the circumstances for the applicant to have been redeployed.

This argument was rejected as the worker was suitably qualified for a position and had met the employer’s own stipulated requirements for redeployment to that position. However, the employer had not acted on that set of facts.

Other employees had been allocated to relevant redeployment positions and the commission said this  ignored the provisional nature of all the offers of redeployment. It was found the applicant had been wrongly excluded from the preferred list.

The commission added: “Regrettably, the grievance procedure failed to provide any proper or just consideration of the matter. The rejection of the applicant’s grievance without any reason provided at the time, or subsequently discovered, represents the perpetration of a manifest injustice upon the applicant.”

S v Patrick Stevedores Holdings Pty Ltd [2016] FWC 3522 (2 June 2016) 

Employment not abandoned – compensation

An employer argued abandonment of employment had occurred. The employee had requested leave to visit his mother who was critically ill and in a coma in the Philippines.

The employer did not approve the leave request as the employeee had exhausted his entitlements, could not provide a return date, no notice was provided, and the timing did not suit the operational requirements of business. The employee proceeded to travel to the Philippines.

The employer terminated the employee on his return, stating that as there was no communication from the worker his position had been filled by someone else.

The FWC determined the employee was “terminated on the employer’s initiative” as per s386(1)(a) of the Act. Although there was a valid reason for dismissal, it was harsh in the circumstances.

The employee had not abandoned his employment, however he was absent without authorisation and this could be viewed as serious misconduct. The employer’s failure to give the employee a chance to respond to the threat of dismissal and the employer’s disproportionate reaction to the employee not presenting for work in the circumstances made the dismissal harsh.

Compensation of $512 was ordered.

L v Phillip Arcidiacono t/a Rose Cleaning Service [2016] FWC 3260 – Kovacic DP Canberra 25 May 2016

Failure to explain pay cut justified compensation

The Fair Work Commission (deputy president Hamilton) considered a company-wide pay-cut was justified. However, failure to explain the change to one employee justified unfair dismissal compensation for that employee.

The employee was on leave at the time of the announcement.

The FWC commented: “This is not an appropriate manner to approach such a serious issue as a 10 per cent reduction in pay for an employee. The employer should have advised Mr P of the problems that the company had, and provided other relevant details, as well as the opportunity to ask questions and consider the issue, and to respond.

"He should, in other words, have been treated as other employees were. I also note that there is strong support in the Act, awards and authorities for consultation before such drastic steps are taken. For example sections 387(b), (c) and (d) of the Fair Work Act 2009 refer to various forms of procedural fairness, and these are factors which must be given weight in considering the fairness or otherwise of a termination of employment. In this case the factors referred to in ss387(b) and (c) weigh against the employer."

Compensation of two weeks' pay ($3259) was ordered.

P v Wellpark Holdings Pty Ltd [2016] FWC 3188 (14 June 2016) 

Single safety breach didn't justify dismissal

The FWC (deputy president O’Callaghan) ruled a safety breach was serious and arguably justified dismissal. However, the employer had relied on alleged previous warnings that were not clear or precise and the commission felt this fact tipped the decision in favour of the employee.

Compensation was awarded.

The commission noted:

“To the extent that Mr A was dismissed because he breached the BGC requirement to report near-misses and because BGC no longer had confidence in him to work safely, this does not reflect a performance consideration. Notwithstanding this, it is clear that Mr A was disciplined relative to three separate safety issues. As I have already set out, one of these, relating to an incident where a large rock fell against his truck, involved a deliberate failure to report a near-miss.

"I am not satisfied that this verbal warning specified that termination of employment would follow from repetition of that behaviour. The first incident related to his failure to stop at a stop sign in 2013. Notwithstanding that it was a first and final warning, I do not think that warning could reasonably be relied on to underpin the termination of employment decision because of the significant time that then elapsed. The third incident involving a bent tow bar has not been established to me to be of sufficient significance or relevance to this matter, so as to represent a significant factor in the termination of employment decision.”

Compensation of two and a half weeks pay, less tax, was ordered.

A v BGC Contracting Pty Ltd [2016] FWC 2821 (25 May 2016)

The bottom line: Reinstatement is justified if there is a reasonable chance a wronged employee can resume work without major disruption to the business. Otherwise compensation will be awarded.

See also: Unfairly sacked: health no barrier to reinstatement

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