Fair Work Commission

Introduction

The Fair Work Commission must determine if reinstatement is appropriate before considering any other remedy. It is not until the Commission is satisfied that reinstatement is inappropriate that compensation can be considered.^[1]

What does an order for reinstatement mean?

See Fair Work Act s.391

An order for reinstatement means that the employer must:

• reappoint the person to the position in which they were employed immediately before the dismissal,^[2] or
• appoint the person to another position with terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.^[3]

When ordering reinstatement the Commission does not have to specify a particular position. It can be left to the employer to choose the position and to comply with the order to provide terms and conditions that are no less favourable than those on which the person was employed immediately before their dismissal.^[4]

When is reinstatement not appropriate?

Reinstatement might be inappropriate in a range of circumstances, for example:

• if the employer no longer conducts a business into which the employee may be reappointed^[5]
• if an employee is incapacitated because of illness or injury. The weight to be accorded to ongoing incapacity when considering whether reinstatement is appropriate will depend upon all of the circumstances of the case^[6]
• where there has been a loss of trust and confidence such that it would not be feasible to re-establish the employment relationship^[7]
• where reinstatement of an employee would almost certainly lead to a further termination of the employee's employment (for example, because the employer discovers an act of serious misconduct after the employee's termination)^[8]

Loss of trust and confidence

'Trust and confidence is a necessary ingredient in any employment relationship …'^[9] Where trust and confidence have been lost, reinstatement may be impractical.^[10] The reason for the loss of trust and confidence must be 'soundly and rationally based'.^[11]

An employer who has accused an employee of wrongdoing justifying summary dismissal may be reluctant to change their opinion regardless of a court finding.^[12] Consequently it is important to carefully scrutinise any claim by an employer that reinstatement is impractical because of a loss of confidence in the employee.^[13]

The fact that it may be difficult or embarrassing for an employer to re-employ an employee whom the employer believed to have been guilty of serious wrongdoing or misconduct is not necessarily indicative of a loss of trust and confidence so as to make restoring the employment relationship inappropriate.^[14]

The loss of trust and confidence is a relevant factor to be considered 'but it is not necessarily conclusive'.^[15]

Ultimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive. In making this assessment, it is appropriate to consider the rationality of any attitude taken by a party.^[16]

No positions available

It is common that, by the time a matter is determined by the Commission, the position that was occupied by the employee is no longer available.^[17] This on its own is insufficient for a finding that reinstatement is not appropriate.^[18] The unavailability of a job vacancy is just one factor to be taken into account in determining whether reinstatement is appropriate.^[19]

It is not appropriate to reinstate an employee to a lower position when a position with terms and condition no less favourable is unavailable.^[20] The only appropriate remedy in this case would be compensation.

Sick or injured employee

Reinstatement of an incapacitated employee will not be appropriate when:

• The employee would be unable to perform their contractual obligations in the future, or would have to perform duties radically different to the terms of their employment contracts.^[21]
• It would impose a 'material future productivity burden' or some other 'unreasonable burden' on the employer.^[22]
• It would 'impose an unreasonable burden on other employees'.^[23]

The following matters may be considered in determining whether reinstatement is appropriate:

• The terms of the employment contract; in particular, the inherent requirements of the employee's contractual position.
• Whether the incapacity prevents the employee from fulfilling the inherent requirements of the employee's contractual position.
• The range of duties or actual job performed by the employee prior to dismissal. When the position covers a wide range of duties and the employee is unable to perform only some of those duties it is less likely incapacity will be determinative against reinstatement.
• Whether modified work arrangements are practical and reasonable. This includes the provision of special equipment or modified duties to enable the employee to make a full or substantial contribution to the employer's enterprise. It is often impractical or unreasonable for small employers to provide modified duties.
• The likelihood that the employee will substantially recover from the illness or injury.
• Whether the employer had any statutory duties under workers' compensation or other legislation, and whether those duties were complied with.^[24]

These matters are interrelated and cumulative.^[25] The list is not exhaustive.^[26]

Case examples

Reappointed to their previous position

See Fair Work Act s.391(1)(a)

Reinstatement means 'to put back in place', to restore employment as it 'existed immediately before the termination'.^[27]

'[T]he employee is to be given back his 'job' at the same place and with the same duties, remuneration and working conditions as existed before the termination'.^[28]

Reinstatement is 'meant to be real and practical, not illusory and theoretical'.^[29]

Appointed to another position no less favourable

See Fair Work Act s.391(1)(b)

The 'position' refers to not only pay and other benefits but also to the work performed by the employee.^[30]

Case example

References

^[1] See discussion of Fair Work Act s.390(3) in Holcim (Australia) Pty Ltd v Serafini (2011) 216 IR 1 [24].

^[2] Fair Work Act s.391(1)(a).

^[3] Fair Work Act s.391(1)(b).

^[4] Technical and Further Education Commission T/A TAFE NSW v Pykett [2014] FWCFB 714 (Ross J, Booth DP, Bissett C, 29 January 2014) at para. 53, [(2014) 240 IR 130].

^[5] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter [2014] FWCFB 7198 (Ross J, Gostencnik DP, Wilson C, 21 October 2014) at para. 17; citing Chelvarajah v Global Protection Pty Ltd (2004) 142 FCR 296.

^[6] See for e.g. Cartisano v Sportsmed SA Hospitals Pty Ltd [2015] FWCFB 1523 (Hatcher VP, Smith DP, Roe C, 12 March 2015).

^[7] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter [2014] FWCFB 7198 (Ross J, Gostencnik DP, Wilson C, 21 October 2014) at paras 19–20. See also Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 [48]–[54].

^[8] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter [2014] FWCFB 7198 (Ross J, Gostencnik DP, Wilson C, 21 October 2014) at para. 17.

^[9] Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186; cited in Nguyen v IGA Distribution (Vic) Pty Ltd [2011] FWA 3354 (Bissett C, 3 June 2011) at para. 24; Note: Perkins was decided under legislation with different wording to the current wording, using 'impracticable' rather than 'inappropriate'. The Full Bench in Australia Meat Holdings Pty Ltd v McLauchlan, Print Q1625 (AIRCFB, Ross VP, Polites SDP, Hoffman C, 5 June 1998), [(1998) 84 IR 1 at p. 18], found that the observations in Perkins were still relevant to the question of whether reinstatement was inappropriate.

^[10] Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186; cited in Nguyen v IGA Distribution (Vic) Pty Ltd [2011] FWA 3354 (Bissett C, 3 June 2011) at para. 40.

^[11] ibid.

^[12] Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186, 191.

^[13] ibid.

^[14] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter [2014] FWCFB 7198 (Ross J, Gostencnik DP, Wilson C, 21 October 2014) at para. 27; citing Perkins v Grace Worldwide (Aust) Pty Ltd(1997) 72 IR 186, 191.

^[15] Australia Meat Holdings Pty Ltd v McLauchlan, Print Q1625 (AIRCFB, Ross VP, Polites SDP, Hoffman C, 5 June 1998), [(1998) 84 IR 1 at p. 17].

^[16] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter [2014] FWCFB 7198 (Ross J, Gostencnik DP, Wilson C, 21 October 2014) at para. 28.

^[17] Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 [15].

^[18] ibid.

^[19] ibid.

^[20] ibid.

^[21] ibid., at para. 51.

^[22] ibid.

^[23] ibid.

^[24] ibid., at para. 54. See for e.g. Cartisano v Sportsmed SA Hospitals Pty Ltd [2015] FWCFB 1523 (Hatcher VP, Smith DP, Roe C, 12 March 2015).

^[25] ibid., at para. 55.

^[26] ibid.

^[27] Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539 (McHugh J) [14].

^[28] ibid.

^[29] ibid., at para. 33.

^[30] Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539; cited in IGA Distribution (Vic) Pty Ltd v Nguyen [2011] FWAFB 4070 (Boulton J, O'Callaghan SDP, Ryan C, 9 September 2011) at para. 35, [(2011) 212 IR 141].