ACT Employment Law - Can Employer Choose to Give Compensation Instead of Reinstatement?

[k8canb]

My friend suffers from Bipolar Disorder. When he was on leave, he suffered mental health incapacity and unknowingly resigned from his position. The employer accepted the resignation in one day and asked my friend to come and sign the separation papers, which my friend complied to. While signing the papers my friend wrote some unwanted matters but employer disregarded that and my friend went home.

When my friend realised his mistake, he unsuccessfully tried to get his job back. The employer said no. A medical certificate from a treating psychiatrist was submitted. The certificate said that my friend was suffering severe mental health incapacity and he did not have the capacity to resign from his job. The employer disregarded the medical certificate.

My friend filed an adverse action application and Fair Work Australia arranged a conference and asked both the parties to negotiate the reinstatement. The employer tactically withdrew from negotiations and the adverse action application was closed.The employer then unilaterally sent a letter offering a six month salary as compensation with a threatening note that if the offer was refused then it would go further to court, then the employer will ask the judge to award all the costs.

This action by the employer resulted in my friend spending one month in mental facility. However, the matter is not yet resolved.

I am wondering how an employer can unilaterally offer a compensation to avoid reinstatement under Employment Law.

 

[JS79]

Fair Work Australia can make an order for the employer to reinstate the position.

Your friend needs to seek legal advice to write a letter back to the employer stating the compensation required in lieu of reinstatement. In this letter the lawyer may calculate exactly how much compensation he needs due to the fact that he can't be reinstated to the position.

See Get Connected with the Right Lawyer for You
to get connected to a local employment lawyer.

 

[k8canb]

Fair Work Australia can make an order for the employer to reinstate the position.

Your friend needs to seek legal advice to write a letter back to the employer stating the compensation required in lieu of reinstatement. In this letter the lawyer may calculate exactly how much compensation he needs due to the fact that he can't be reinstated to the position.

See Get Connected with the Right Lawyer for You
to get connected to a local employment lawyer.

Hi JS79

Thanks for your reply.
The issue here is the employer wants to avoid reinstatement by offering compensation. This is after withdrawing from the negotiations ordered by FWC.

Is it possible for the employer to pay compensation to escape reinstatement? If this is allowed then many employers will selectively dismiss their employees and offer six months pay as compensation. I could not see anything in FWA 2009 about employer can decide unilaterally to pay compensation instead of reinstatement without involving FWC. Are there any cases similar to my friend's case?

 

[Serge Gorval]

If your friend filed an GP claim and a section 369 certificate was issued due to inability for the dispute to be resolved, your friend had 14 days to make a Federal Circuit Court application, otherwise it would be deemed out of time and an application would need to be made (medical attention is generally good grounds).

The FCCA seldom awards costs for the employer in GP claims and further, a resignation made in haste is not deemed effective.

 

[k8canb]

If your friend filed an GP claim and a section 369 certificate was issued due to inability for the dispute to be resolved, your friend had 14 days to make a Federal Circuit Court application, otherwise it would be deemed out of time and an application would need to be made (medical attention is generally good grounds).

The FCCA seldom awards costs for the employer in GP claims and further, a resignation made in haste is not deemed effective.

Hi Serge,
Thanks for your reply, as the negotiations failed due to the employer unilaterally withdrawing, FWC could not issue us any certificate. The employer unilaterally offered six months pay as compensation and my friend rejected as he wants reinstatement as while he was mentally impaired.

The employer continued the process and it has dragged for 22 months and still going on. We are planning to go to Human Rights Commission as the case amounts to discrimination of a disabled employee. We are also planning to talk to our local member of parliament.

The main purpose of my post was to know whether an employer can unilaterally offer compensation and avoid reinstatement. If such things are allowed then Fair Work Act 2009 becomes ineffective in protecting employees.

 

[Serge Gorval]

The issue with the AHRC is that they do not have legislative powers to make orders or award compensation by way of a determination. and considering that this has dragged for 22 months, I doubt the employer will be willing to negotiate all of a sudden in a different commission.

In respect to reinstatement vs compensation, although the FWA envisages that reinstatement is the preferred remedy, it is unlikely to be made particularly in the case of small/medium businesses as the employment relationship has almost always broken down to the point of no repair.

Without looking at the docs, my suggestion would be to get a start on an FCC application.

 

[k8canb]

The issue with the AHRC is that they do not have legislative powers to make orders or award compensation by way of a determination. and considering that this has dragged for 22 months, I doubt the employer will be willing to negotiate all of a sudden in a different commission.

In respect to reinstatement vs compensation, although the FWA envisages that reinstatement is the preferred remedy, it is unlikely to be made particularly in the case of small/medium businesses as the employment relationship has almost always broken down to the point of no repair.

Without looking at the docs, my suggestion would be to get a start on an FCC application.

Hi Sergi,

Thanks for your reply and due to personal reasons, I could not reply to your message earlier than this. The matter is still continuing.

The employer is a large Federal Government agency and they employ some 20000 people. The matter has now become a prestige issue for the employer's HR and they somehow want to prevent reinstatement and are happy to offer six months’ salary (less tax) as compensation.

In the meanwhile from the last one year, my friend has been working as non-ongoing position and his health has fully improved. The issue is the Australian society, state and Federal Governments are trying hard to keep mentally disabled people employed. However, the actual happenings are totally different, and that is sad.

I will let the forum know the final outcome.

Thanks again for your post.