Order to restore lost pay

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Introduction

See Fair Work Act 2009 s.391(3) and s.391(4)

The Fair Work Act provides that the Fair Work Commission may, where appropriate, make an order for lost wages in addition to reinstatement.^[1]

Section 391(4) of the Fair Work Act sets out the matters that the Commission must take into account:

any remuneration earned by the employee between the dismissal and making the order, and
any remuneration likely to be earned between making the order for reinstatement and the actual reinstatement.

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.^[2]

Factors that may affect amount ordered

Social security or Centrelink payments will generally not be deducted as 'remuneration' for the purpose of determining the amount for lost pay.^[3] Whether an employee who has received social security payments is obliged to repay those benefits is a matter between the employee and social security and is not a relevant consideration for the purpose of determining the amount of lost pay ordered.^[4]

Workers' compensation payments may be deducted from the amount ordered.^[5]

Any misconduct by the employee that has led to the dismissal may reduce the amount ordered.^[6]

Case examples

Order for lost pay granted

Lawrence v Coal & Allied Mining Services Pty Ltd

Lawrence v Coal & Allied Mining Services Pty Ltd (2010) 202 IR 388.

The employee had breached the safety policy of the employer by removing another person's safety lock. On appeal the majority of the Full Bench found that the dismissal was manifestly harsh due to the employee's long record of exemplary service.

The Full Bench ordered that the employee be reinstated and made an order for lost remuneration. However, 3 months' pay was deducted from the order in light of the breach of the employer's safety policy.

Eng v Goodman Fielder Limited

Eng v Goodman Fielder Limited [2011] FWA 317 (Gooley C, 18 January 2011).

The employee was dismissed for urinating into a drain in the loading zone of his employer's food manufacturing business.

Given the existence of a medical condition and the show of contrition by the employee, the dismissal was found to harsh, unjust or unreasonable.

The employee was reinstated and the employer was ordered to restore lost pay for the full period since the dismissal, less any amount earned by the employee in that period. No reduction was made for the employee's conduct.

Presbury v Australian Rail Track Corporation Limited

Presbury v Australian Rail Track Corporation Limited [2010] FWA 2282 (Watson VP, 31 March 2010).

The employee was dismissed for misconduct on a work trip. The employer alleged the employee breached the Code of Conduct Principles of Behaviour and the Drug and Alcohol Policy.

It was found that termination of employment was not a reasonable response to the conduct of the employee. It was found that the dismissal was harsh, unjust or unreasonable because the employer could not establish that the conduct relating to the Drug and Alcohol Policy had occurred.

The employee was reinstated and an order for lost pay was made, however it was limited to a period of 3 months. The reduction had regard to the amount received during the intervening period, the reasonable efforts that should have been made to find alternative employment and the nature of the employee's conduct that led to the dismissal.

Order for lost pay NOT granted

Serafini v Holcim (Australia) Pty Ltd

Serafini v Holcim (Australia) Pty Ltd [2011] FWA 4214 (Connor C, 4 July 2012).

Appeal upheld in [2011] FWAFB 7794 (Drake SDP, Sams DP, Cloghan C, 10 November 2011), [(2011) 216 IR 1].

The employee was dismissed for aggressive and dangerous driving and a breach of safety rules. It was found on balance that the employee's conduct did not warrant dismissal.

The employee was reinstated but no order for lost pay was granted. It was found that his conduct merited some punishment.

This decision was upheld on appeal.

References

^[1] Fair Work Act s.391(3).

^[2] Kenley v JB Hi Fi, Print S7235 (AIRCFB, Ross VP, Watson SDP, Holmes C, 22 June 2000) at para. 36.

^[3] Steggels Ltd v West, Print S5876 (AIRCFB, Watson SDP, Williams SDP, Smith C, 11 May 2000) at para. 21]; citing Sprigg v Paul's Licensed Festival Supermarket, Print R0235 (AIRCFB, Munro J, Duncan DP, Jones C, 24 December 1998) [(1998) 88 IR 21]; citing Shorten v Australian Meat Holdings (1996) 70 IR 360, 376.

^[4] Jarvis v Crystal Pictures Pty Ltd [2010] FWA 3674 (Cloghan C, 25 May 2010) at para. 74.

^[5] Steggels Ltd v West, Print S5876 (AIRCFB, Watson SDP, Williams SDP, Smith C, 11 May 2000) at para. 21; citing Sprigg v Paul's Licensed Festival Supermarket, Print R0235 (AIRCFB, Munro J, Duncan DP, Jones C, 24 December 1998) [(1998) 88 IR 21]; citing Shorten v Australian Meat Holdings (1996) 70 IR 360, 376.

^[6] Kenley v JB Hi Fi, Print S7235 (AIRCFB, Ross VP, Watson SDP, Holmes C, 22 June 2000) at para. 36.

Updated time

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16 March 2021

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