Remedies for unfair dismissal; reinstatement

Reinstatement for unfair dismissal is rarely awarded by the Fair Work Commission, even where an employee wins an unfair dismissal case resounding. Here are the basic principles.

“The remedy of reinstatement

[46] In Nguyen v Vietnamese Community in Australia (Nguyen), 41 a Full Bench of the Commission gave detailed consideration to the remedy of reinstatement in unfair dismissal proceedings. The Full Bench there observed (references omitted):

“[17] Reinstatement might be inappropriate in a whole range of circumstances, for example if such an order would be futile such as where reinstatement of an employee would almost certainly lead to a further termination of the employee’s employment because the employer has since discovered that the employee engaged in an act of serious misconduct which was only discovered after the employee’s termination or if the employer no longer conducts a business into which the employee may be reappointed. The fact that the employer has filled the position previously occupied by the dismissed employee would rarely, of itself, justify a conclusion that reinstatement was not appropriate…

[19] Reinstatement may be inappropriate 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.

[20] The most common argument advanced in support of the proposition that reinstatement is inappropriate is the proposition, variously expressed, that there has been a loss of trust and confidence such that it would not be feasible to re-establish the employment relationship.

[27] The following propositions concerning the impact of a loss of trust and confidence on the question of whether reinstatement is appropriate may be distilled from the decided cases:

  • 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 re-employ 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.

[28] 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.

[47] There is no challenge in this appeal to these observations, with which we agree.”

Moszko v Simplot Australia Pty Ltd (2021) FWCFB 6046 delivered 10 November 2021 per Catanzariti VP, Saunders DP and Wilson C