This extract from a recent Fair Work Commission appeal by an employer contains a summary of the legal principles which are involved when the Commission is considering reinstatement of employment as a potential remedy for an unfair dismissal, and some observations about the implications of that issue to safety sensitive industries.
“Grounds 4a and 4b – Reinstatement order
[60] Grounds 4a and 4b involve a contention that the Commissioner’s finding that it was appropriate to order reinstatement was manifestly unreasonable or plainly unjust. Ground 4a relies on certain positive findings for Virgin’s case from the Commissioner’s decision below in arguing this ground of appeal.44 In ground 4b, it is alleged that the Commissioner failed to consider or failed to give adequate reasons for rejecting matters which are said to weigh against a decision to reinstate Mr Macnish. We reject grounds 4a and 4b for the reasons that follow.
[61] The question whether to order a remedy in a case where a dismissal is found to be unfair involves the exercise of a broad discretion.45 Section 390(3)(a) provides that any other remedy can only be ordered if the Commission is satisfied that reinstatement is “inappropriate”. The section indicates that some latitude is allowed to the member of the Commission hearing an unfair dismissal case to decide whether they are “satisfied” that reinstatement of the applicant is “inappropriate”. The concept of “satisfaction” as to “appropriateness” of reinstatement contemplates a range of legally permissible outcomes.46
[62] In guiding this discretion, s 390(3) also underscores the primacy of reinstatement as a remedy for an unfair dismissal as the discretion to order a remedy of compensation may only be exercised if the Commission is satisfied that reinstatement is “inappropriate”. Further, one of the objects of Part 3-2 of Chapter 3, in which the unfair dismissal provisions appear, is “to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement”.47 The terminology of primary remedy is simply used to say that it is the first and perhaps foremost remedy.48 The emphasis the Act places on reinstatement as a remedy for unfair dismissal is relevant when considering Virgin’s submissions that the outcome of reinstatement in this case was plainly unjust or unreasonable.
[63] A consequence of the fact that there is a range of permissible outcomes in relation to the question is that an appeal with respect to an order for reinstatement cannot be upheld merely because the Full Bench might have reached a different conclusion. It is necessary for an appellant to demonstrate error in the manner in which the member of the Commission at first instance formed the opinion that reinstatement was appropriate. In this matter, ground 4a seeks
to achieve that outcome by contending that an order for Mr Macnish’s reinstatement was manifestly unreasonable or plainly unjust. Ground 4a relies on the approach of detecting error in the final limb identified in House v The King as follows:49
It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
[64] This is not a case in which it is unclear how the Commissioner reached the conclusion that reinstatement was appropriate. In any event, Virgin has not come close to convincing us that the decision to reinstate Mr Macnish is unreasonable or plainly unjust.
[65] Virgin’s submission relies on a contention that it was unjust or unreasonable for Mr Macnish to be reinstated in circumstances in which he had breached an important safety rule. We do not agree. Safety is of critical importance in aviation and Virgin appropriately says it adopts a strong stance with respect to safety. However, whether the decision to reinstate Mr Macnish was within the range of permissible legal outcomes must be considered in light of the whole of the circumstances. The Commissioner found that Mr Macnish was well-regarded by cabin crew managers; Mr Macnish genuinely and reasonably understood that the eight-hour rule was a guideline; Mr Macnish took reasonable steps to ensure he was not breaching Virgin’s drug and alcohol policies prior to signing-on for duty on 17 December 2023; the steps taken by Mr Macnish included disclosing his consumption of the glass of prosecco to the cabin crew manager on the flight and seeking guidance, checking the DAMP Manual and using a home breathalyser; Mr Macnish was remorseful and demonstrated contrition once he found out he had breached a policy; and Mr Macnish had learnt a lasting lesson. In those circumstances, in our opinion, it was open to the Commissioner to order reinstatement notwithstanding that Mr Macnish had breached the eight-hour rule. The outcome was not manifestly unreasonable or plainly unjust.
[66] In ground 4b, Virgin contends that the Commissioner failed to give adequate consideration to a range of matters that it raised which weighed against a decision to reinstate Mr Macnish. In our opinion, the ground has no merit.
[67] Ten matters are set out in ground 4b which it is alleged the Commissioner failed to consider, or give adequate reasons for rejecting. Most of the matters concern allegations made with respect to Mr Macnish that Virgin either did not seek to substantiate by leading any evidence or, having put forward such evidence as it could uncover, were found to be unsubstantiated. The assumption underlying the Virgin’s submissions is that, when considering reinstatement, the Commissioner was required to separately consider and give weight to its alleged “concerns” in relation to Mr Macnish’s conduct even where the Commissioner had found those concerns to be without foundation or Virgin had not even attempted to substantiate its concerns. The assumption is unsound and must be rejected.
[68] Virgin contends the Commissioner failed to consider, or give adequate reasons for rejecting, its concerns about Mr Macnish turning up to work hungover, that he had misused the FRMS entitlement, his attendance and his drinking more generally (as a result of an incident in
France).50 The Commissioner did not fail to consider those matters. The Commissioner considered the allegations and found that they were either not supported by any evidence or made findings that the allegations were not substantiated.51 In some instances, Mr Macnish’s account was not even challenged by Virgin.52 It is well established that any alleged loss of trust and confidence in an employee must be soundly and rationally based.53 The allegations identified by Virgin were not soundly based. When considering reinstatement, the Commissioner was not required to separately give weight to Virgin’s “concerns” about allegations that were denied by Mr Macnish and the Commissioner found were baseless.
[69] It is also notable that Virgin contends that, in considering reinstatement, the Commissioner failed to consider, as relevant to reinstatement, matters that Virgin itself did not believe warranted dismissal. In relation to Mr Macnish’s alleged breach of the FRMS Manual, for example, Virgin explicitly communicated in the letter of termination that, having considered Mr Macnish’s responses and the mitigating circumstances, it did not believe the incident should contribute to the decision to terminate his employment.54 Similarly, there is no suggestion that the other instances in which Mr Macnish had accessed fatigue entitlements or had attended work late were considered by Virgin to warrant any disciplinary action at all.55 Any “concerns” Virgin held about those matters were evidently not sufficiently serious to be regarded as a reason why Mr Macnish’s employment should not continue.
[70] Finally, Virgin contends that the Commissioner failed to consider, or give adequate reasons for rejecting, its concerns that Mr Macnish would engage in repeated conduct of a similar nature to the breach of the eight-hour rule and was a safety risk, that Mr Macnish was dishonest about his understanding of the eight-hour rule and that the decision would convey to cabin crew that they can breach the eight-hour rule and “get away with it”.56 The Commissioner did not fail to consider those matters. The Commissioner concluded that the decision would not cause Virgin staff to think they can “get away” with breaches of drug and alcohol policies, but rather assist in staff clearly understanding Virgin’s policies.57 The Commissioner recorded Virgin’s submission that it had lost trust and confidence in Mr Macnish but concluded that Mr Macnish had learned a lasting lesson and “will act accordingly if he is reinstated”.58
[71] It is not necessary to say very much about the final matter referred to in ground 4b, that is, that the Commissioner failed to consider, or give weight to, the fact that Virgin had proceeded with the disciplinary processes against Mr Macnish, including the substantiated allegations against him. It was not explained how the fact of the disciplinary process, as distinct from the substance of the allegations, is itself relevant to reinstatement. In any event, we would not infer that the Commissioner did not consider the fact of the disciplinary processes. The disciplinary processes prompted the unfair dismissal proceedings and were discussed extensively by the Commissioner in her decision. It is also not necessary to address at length the contention that the Commissioner failed to consider that Mr Macnish had not “self-referred” the breach of the eight-hour rule.59 For the reasons given with respect to ground 3a, there is no error in the Commissioner’s consideration of whether Mr Macnish had self-reported the breach of policy.
[72] There was no error in the Commissioner’s approach to the question of reinstatement. Grounds 4a and 4b are also rejected.
Conclusion
[73] For the reasons outlined above, permission to appeal should be granted but the appeal dismissed. The Full Bench makes the following orders:
(a) Permission to appeal is granted; and
(b) The appeal is dismissed.”
Appeal by Virgin Airlines Australia Pty Ltd v Macnish [2025] FWCFB 6 delivered 14 January 2025 per Gibian VP, Saunders DP and Slevin DP