Remedies for unfair dismissal; lost pay

When reinstatement is ordered as the remedy for unfair dismissal, the Fair Work Commission may make an order to preserve continuity of service, and also order the employer to pay lost remuneration. Here is an extract from a case where the Commission looked at the principles which guide the use of these powers.

“Section 391(2)(a) of the Act provides discretion to the Commission to determine if it is appropriate for an order maintaining the Applicant’s continuity of employment and continuous service with the Respondent.

An order for continuity is an exercise of discretion “separate and distinct from the decision to reinstate the employee”. Kenley v JB Hi Fi (unreported, AIRCFB, Ross VP, Watson SDP, Holmes C, 22 June 2000) Print S7235 at para. 27. This means that a person may be reinstated with or without an order for continuity of employment. An order for continuity “ensures that the period specified is taken into account in determining any entitlement to service related benefits”.

In this case the Applicant was a casual employee and was engaged on what could only be considered a regular and systematic basis over a reasonably lengthy period of time. I note that the uncontested evidence of the Applicant’s working pattern (9 hours per day, 5 days per week and 10 days per fortnight including weekends and public holidays)  is more consistent with that of a permanent employee than a casual. In any case, I consider that in the circumstances of this case where the Applicant was a relatively long serving employee, that the absence of an order for continuity would operate as a penalty and adversely affect the Applicant’s entitlements that are based on a period of continuous employment. No submission was made to the effect that if reinstatement were determined to be the appropriate remedy that an order for continuity should not be made. I am unaware of any discretionary reasons why an order for continuity in the circumstances of this case should not be made and I propose to make such an order.

Restoration of lost pay

Section 391(3) of the Act provides the Commission with discretion, where appropriate, to make an order causing the Respondent to pay the Applicant an amount for the remuneration lost, or likely to be lost, by the Applicant because of the dismissal. Section 391(4) of the Act sets out factors which must be taken into account in determining the amount under s.391(3). These factors are:

  • Any remuneration earned by the employee between the dismissal and making the order for reinstatement; and

 

  • Any remuneration reasonably likely to be earned between making the order for reinstatement and the actual reinstatement.

 

As I have indicated, an order to restore lost pay is discretionary. The Commission may take into account ‘all of the circumstances of the case, including the conduct’ of the employee that led to the dismissal. Kenley v JB Hi Fi (unreported, AIRCFB, Ross VP, Watson SDP, Holmes C, 22 June 2000) Print S7235 at para. 36 Any misconduct by the employee that has led to the dismissal may reduce the amount ordered.

I propose to take into account the Applicant’s misconduct on 15 February 2017 as well as his foolish actions on 10 March 2017. I am satisfied the Applicant now understands the seriousness of his actions. However a significant reduction in the amount of lost pay is warranted in all of the circumstances in this case. The deduction will reinforce to the Applicant the necessity of complying with the Respondent’s Standards of Business Conduct. Further, while I am satisfied that there is significant difficulty for the Applicant in securing employment, I am not satisfied that the Applicant has made sufficient efforts to obtain other employment. In the circumstances, I propose to reduce the order that I will make for lost pay by 50%.”

Clements v Downer EDI Works Pty Ltd (2017) FWC 4661 delivered 13 September 2017  Lee C