The Fair Work Commission has shed some light on when it may be appropriate to order the reinstatement of an unfairly dismissed employee.

Two employees lodged an application in the FWC for unfair dismissal. The employer conceded they had been unfairly dismissed. The Full Bench of the Commission determined that reinstatement was inappropriate and made some useful comments along the way.

Under the Fair Work Act, reinstatement is the primary remedy for unfair dismissal and orders for compensation are only to be made where the FWC considers reinstatement is inappropriate.

So, when is it inappropriate?

The Full Bench provided useful guidance on typical situations where reinstatement is not appropriate, including where:

  • the employer has discovered serious misconduct after termination that in itself would have justified the termination;
  • the business no longer exists (well, duh);
  • the employee was injured or incapacitated; or
  • there has been a loss of trust and confidence.

Loss of trust and confidence is the basis most commonly argued against reinstatement. The Full Bench ruled that if you want to rely on this argument the onus is on you to demonstrate it was “soundly and rationally” based. Further, if you believe that the ex-employee is guilty of serious wrongdoing or misconduct, but the FWC disagrees, it will find against you on trust and confidence. Which sounds a bit weird, but it underlines the point that your "trust and confidence" isn't just what you say it is.

So, employers fronting up to the Commission take note: come armed with a good argument if you don't want reinstatement to be ordered.