Remedies for unfair dismissal

This extract from an unfair dismissal case contains useful dicta about the circumstances in which it is appropriate to order reinstatement of employment and continuity of service and back pay for an unfair dismissal.

“Is reinstatement of the Applicant inappropriate?

[108] The Applicants seek reinstatement to their previous positions. The Respondent opposed

reinstatement. Messrs. Driver and Franco gave evidence about their loss of trust and confidence

in the Applicants. They said, amongst other things, that they regarded the actions of the

Applicants as lacking in honesty and as being deliberately undertaken for financial advantage.

Mr. Driver pointed to the need to have trust in the Applicants given that they worked relatively

independently.

[109] The Applicants said that there was a reasonable chance that the employment relationship

could be restored with the necessary level of mutual trust. They pointed to the evidence of Mr.

Driver to the effect that the Applicants could be suitably directed to ensure that sales transfers

did not occur in the future without managerial approval.128

 

[110] A Full Bench of the Commission has identified the following propositions relevant to

the impact of a loss of trust and confidence on the appropriateness of an order for reinstatement:

  • Whether there has been a loss of trust and confidence is a relevant consideration in

determining whether reinstatement is appropriate but while it will often be an

important consideration it is not the sole criterion or even a necessary one in

determining whether or not to order reinstatement.

  • Each case must be decided on its own facts, including the nature of the employment

concerned. There may be a limited number of circumstances in which any ripple on

the surface of the employment relationship will destroy its viability but in most cases

the employment relationship is capable of withstanding some friction and doubts.

  • An allegation that there has been a loss of trust and confidence must be soundly and

rationally based and it is important to carefully scrutinise a claim that reinstatement

is inappropriate because of a loss of confidence in the employee. The onus of

establishing a loss of trust and confidence rests on the party making the assertion.

  • The reluctance of an employer to shift from a view, despite a tribunal’s assessment

that the employee was not guilty of serious wrongdoing or misconduct, does not

provide a sound basis to conclude that the relationship of trust and confidence is

irreparably damaged or destroyed.

  • The fact that it may be difficult or embarrassing for an employer to be required to reemploy an employee whom the employer believed to have been guilty of serious

wrongdoing or misconduct are not necessarily indicative of a loss of trust and

confidence so as to make restoring the employment relationship inappropriate.”129

[111] The Full Bench concluded that, “[u]ltimately, 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.”130

[112] In my view having regard to the circumstances leading up to the terminations and

reasons for the terminations and notwithstanding the views expressed by Messrs Driver and

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Franco, I do not consider that the level of trust and confidence cannot be restored to make the

relationship viable and productive. I consider that reinstatement is the appropriate remedy. I am

satisfied that I should make an order reappointing each of the Applicants to the position in

which they were employed immediately before the dismissal within fourteen days of the date

of this decision pursuant to s.391(1)(a). An order to that effect will accompany this decision.

[113] My preliminary view is that I should also make an order to maintain the continuity of

the employment and the period of continuous service of each of the Applicants with the

employer pursuant to s.391(2). However, I propose to allow the Respondent a period of seven

days to make any submissions as to why such an order should not be made. The Applicants

should reply to any submission to that effect within three days after any submission by the

Respondent.

Reinstatement – is it appropriate to make an order to restore lost pay?

[114] Section 391(3) of the FW Act provides that, if the Commission makes an order for

reinstatement and considers it appropriate to do so, the Commission may also make any order

that the Commission considers appropriate to cause the employer to pay to the Applicant an

amount for the remuneration lost, or likely to have been lost, by the Applicant because of the

dismissal.

[115] Section 391(4) of the FW Act provides that, in determining an amount for the purposes

of such an order, the Commission must take into account:

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(a) the amount of any remuneration earned by the Applicant from employment or other

work during the period between the dismissal and the making of the order for

reinstatement; and

(b) the amount of any remuneration reasonably likely to be so earned by the Applicant

during the period between the making of the order for reinstatement and the actual

reinstatement.

[116] An order to restore lost pay does not necessarily follow an order for reinstatement. The

Commission may only make an order if it considers it appropriate to do so and only make an

order that the Commission considers appropriate.131 Where an employee has engaged in

misconduct, the Commission may refuse to make any order to restore lost pay.132

[117] I consider it to be appropriate in the circumstances to make an order to restore lost pay.

Such amount should take account of each of the matters referred to in s.391(4). Mr Lewin has

taken reasonable steps to mitigate his loss. He obtained comparable employment from 1 May

  1. His earnings should be taken into account in accordance with s.391(4)(a). I note that the

parties had indicated an intention to file Agreed Facts as to the employment of Mr. Lewin postdismissal.133 Mr. Comer had made only limited efforts to obtain further employment by the time

of the hearing. Ms. Philippe had not applied for alternative employment at the time of the

hearing. Ms. Philippe’s pregnancy may have impacted on her capacity to mitigate loss through

alternative employment. I consider that any amounts payable to Mr. Comer and Ms Philippe

should be reduced given the limited attempts to mitigate their loss. Given the conduct engaged

in by each of the Applicants that resulted in the terminations I also consider it appropriate to

reduce that amount otherwise payable to Mr. Comer and Ms. Philippe by an amount of 20%. In

the case of Mr. Lewin I consider it relevant that he was the only one of the Applicants who

stood to gain any benefit from the sales transfer and in his case the relevant amount should be

reduced by an amount of 35%.

[118] The parties are directed to confer and provide agreed orders as to the amount of lost pay

for each of the Applicants within seven days from the date of this decision. In the absence of

agreement, brief written submissions should be provided to enable me to determine the

appropriate amount to be included in any order.”

 

Comer and Others v Rentokil Initial Pty Ltd [2023] FWC 2032 delivered 28 August 2023 per Roberts DP