Reinstatement

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]

See Fair Work Act 2009 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]

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]

Reinstatement appropriate

Threats of violence to other employees

Galea v Tenix Defence Pty Ltd, PR928494 (AIRCFB, Giudice J, Lawler VP, Bacon C, 11 March 2003).

The employee was alleged to have threatened a former colleague about to give evidence on behalf of the employer.

The Full Bench found that threats of this nature would usually mean that reinstatement would be inappropriate. In this case the Full Bench found that it would be possible for the relationship between the employer and employee to improve. It also found that the threats were not indicative of future behaviour.

Workplace injury and return to work plan

Chetcuti v Coles Group Supply Chain Pty Ltd [2012] FWA 6600 (Roberts C, 18 September 2012).

The employee sustained an injury at work and undertook a return to work plan to enable him to resume his normal duties. After some discussion between the employee and the employer about the employee providing medical evidence, the employee was dismissed for failing to attend meetings and provide medical certificates.

After concluding that the employee was unfairly dismissed, it was found that the employee was restored to health and willing and capable of resuming his duties. The Commissioner ordered his reinstatement.

Misconduct

Regional Express Holdings Ltd T/A Rex Airlines v Richards [2010] FWAFB 8753 (Giudice J, Kaufman SDP, Ryan C, 12 November 2010).

It was found that the employee had deliberately driven a work vehicle in an unsafe manner and had not been honest in a disciplinary hearing. In the first instance it was found that while there was evidence of misconduct, in the circumstances the dismissal was harsh and reinstatement was ordered.

On appeal the Full Bench upheld the decision at the first instance to reinstate the employee with continuity of service but declined to award payment for remuneration lost.

Loss of trust and confidence due to dishonesty

Balfours Bakery v Cooper [2011] FWAFB 8032 (Giudice J, Hamberger SDP, Spencer C, 2 December 2011).

The employee suffered a shoulder injury. He made a claim for income protection insurance and had access to 2 years' income protection. He then made a WorkCover claim. The employer dismissed the employee and claimed that the injury prevented him from returning to work and that he had been dishonest in making both the insurance claim and the WorkCover claim.

The Full Bench found that it was open to the member at first instance to conclude there had been no deliberate dishonesty and therefore no breakdown in trust and confidence.

Workplace injury and subsequent illness

Cook v ACI Operations Pty Ltd [2012] FWA 140 (Hampton C, 22 February 2012).

At the first instance it was found that the employee had been unfairly dismissed. He had been given a full clearance to attend work in relation to the workplace injury.

It was found that the employee could be accommodated back into the workplace without causing the employer unreasonable burden.

Reinstatement NOT appropriate

Redundancy

Ball v Metro Trains Melbourne T/A Metro Trains [2012] FWA 8384 (Roe C, 1 October 2012).

The employee's redundancy was found not to be a genuine redundancy because the employer failed to satisfy the requirements for consultation. The employee sought reinstatement.

It was found that there was not an appropriate position in which to reinstate the employee. The Commission ordered compensation instead.

Occupational health and safety breach

Parmalat Food Products Pty Ltd v Wililo [2011] FWAFB 1166 (Watson VP, Sams DP, Asbury C, 2 March 2011), [(2011) 207 IR 243].

The employee was dismissed for breaching health and safety policy when he placed his arms, head and torso under an unstable load on a forklift. It was held that this was a valid reason for dismissal amounting to serious misconduct.

Breakdown of the employment relationship

Bellia v Assisi Centre Inc T/A Assisi Centre Aged Care [2011] FWAFB 5944 (Drake SDP, Ives DP, Simpson C, 5 September 2011).

The employee was a priest who was dismissed by his employer, an aged care facility. At the first instance reinstatement was ordered.

On appeal reinstatement was found to be inappropriate due to the breakdown in relationship between the employee and the employer and because of the employee's inability to carry out the functions of his pastoral role due to an adverse finding by the Roman Catholic Church.

Disobeying a clear direction and policy

King v Catholic Education Office Diocese of Parramatta T/A Catholic Education Diocese of Parramatta [2014] FWCFB 2194 (Hatcher VP, Drake SDP, Bull C, 10 April 2014).

Decision at first instance [2014] FWC 6413 (Lawrence DP, 3 October 2014).

The employee was a teacher, who was dismissed for transporting students in his car on weekends to participate in surf lifesaving activities, contrary to directions issued by the school, and the policy of the Catholic Education Diocese of Parramatta. At first instance reinstatement was held not to be appropriate because of a loss of trust and confidence.

On appeal, it was found that the Commission had erred in not giving consideration to reinstatement to an alternative non-teaching position at another school in the Diocese or the Diocese's head office. Upon rehearing, the Commission found it was inappropriate to order reinstatement to an alternative position as the positions available were casual or fixed term and at a lower salary level than the teacher's previous position or did not suit the teacher's experience, skills or remuneration. Further, it was held that it was not appropriate to order reinstatement to a party that had not been directly involved in the case.

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]

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

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]

Appointed to another position no less favourable

IGA Distribution (Vic) Pty Ltd v Nguyen [2011] FWAFB 4070 (Boulton J, O'Callaghan SDP, Ryan C, 9 September 2011), [(2011) 212 IR 141].

In the first instance the employer was ordered to reinstate the employee to his former position. The reason given for not reinstating him to another warehouse in the same area was that the other warehouses came under a different agreement.

On appeal the Full Bench found that while there were some differences between the enterprise agreements at the various sites, it was possible to reinstate the employee to a different site on terms that were 'no less favourable'. The 'no less favourable requirement does not require terms and conditions to be the same. It is satisfied if the position is an 'equivalent position' or a 'close substitute'.