Introduction

Under the Fair Work Act (2009) (the “FW Act”) the Fair Work Commission (“FWC”) has the discretion to order the reinstatement of an employee who has been unfairly dismissed.

While orders for reinstatement are not often made by the FWC due to the breakdown in trust and confidence between the employer and employee, a recent decision by the Full Bench of the Commission demonstrates that reinstatement may be ordered in circumstances where trust and confidence can be restored to a sufficient level to make the employment relationship viable and productive.

Background

The Applicant was employed as a shift feeder by the Respondent (a food producer and manufacturer) for a period of 23 years. The Applicant was also a union delegate and a work, health and safety representative. On 20 November 2020, the Applicant was dismissed from his employment due to allegations that he had not completed work and had falsified records between the period of 20 – 21 October 2020.

In the original decision, the FWC found no evidence to support the Respondent’s allegations against the Applicant. The FWC determined that there was no valid reason for the dismissal of the Applicant, and that his dismissal was harsh, unjust and unreasonable. However, the FWC held that reinstatement would not be appropriate due to the unresolved nature of the issues which gave rise to the allegations, and that:

• the loss of trust in the employment relationship would “likely affect the prospects of a healthy working relationships being re-established”; and
• it was likely that further allegations would “be put to the Applicant should he be reinstated” that would lead to his work being highly

The FWC made an order for compensation of $9,200.

The Applicant then appealed to the Full Bench of the FWC, contending that the original decision maker had erred in finding that reinstatement was inappropriate on the basis that:

• there was no evidence before her upon which such finding could be made; and
• the matters upon which she relied did not support such finding.

Decision

The Full Bench of the FWC accepted that reinstatement may be inappropriate in a range of circumstances including the loss of trust and confidence. However, the ultimate question was whether there could be a sufficient level of trust and confidence restored to make the relationship viable and productive, and in making this assessment it was appropriate to consider the rationality of any attitude taken by a party.

The Full Bench found that in its original decision the FWC had erred by giving unnecessary weight to the allegations that were ultimately not proved against the Applicant and their impact on the employment relationship. As these matters could not be proved, they could not rationally or soundly underpin a loss of trust and confidence let alone dismissal.

The Full Bench held that it was erroneous to take into account the “further allegations” to be put to the Applicant, as they could not form a “sound or rational basis” resulting in a loss of trust and confidence. The Full Bench also found that the original FWC decision did not consider the fact that none of the Respondent’s witnesses indicated that there would be an ongoing scrutiny of the Applicant’s work practices.

Ultimately, the Full Bench ordered the Respondent to reinstate the Applicant’s employment, make payment in respect of backpay and recognise the Applicant’s continuity of service.

Key takeaways

• While reinstatement is not a common remedy, employers should be aware that it can be ordered by the FWC in certain circumstances;
• Employers who oppose reinstatement have the onus to prove there has been a loss of trust and confidence; and
• Allegations of misconduct by themselves will not be enough to defeat a claim for reinstatement.