An employer has been hit with a $10,000 penalty after failing to reinstate an employee.

In Meadley v Sort Worx Pty Ltd [2013] FCA 1012, the Fair Work Commission decided that Gippsland Waste unfairly dismissed an employee, Ms Meadley, and ordered that she be reinstated and paid compensation.

Gippsland Waste, a small company of 6 employees, decided it could not comply with the reinstatement order as Ms Meadley’s job no longer existed. This was because Gippsland Waste, after the Commissions’ orders were made, lost its waste management contract with East Gippsland Council.

Gippsland Waste also failed to pay Ms Meadley compensation in line with the Commission’s orders (although this default was later rectified).

Ms Meadley brought proceedings in the Federal Court of Australia for non-compliance with the Commission’s orders.

The Court held that Gippsland Waste ought to have reinstated Ms Meadley before it lost its contract with the Council. By failing to reinstate her, the Court noted Ms Meadley had lost the opportunity to receive redundancy benefits after Gippsland Waste lost its contract. The Court accordingly ordered Gippsland Waste to pay Ms Meadley compensation for those lost benefits.

The Court also ordered Gippsland Waste to pay Ms Meadley a $10,000 penalty, finding the employer had made a deliberate decision to not comply with the Commissioner’s orders before it lost its contract with the Council. The Court acknowledged Gippsland Waste’s precarious financial position, and the low likelihood of it re-offending, but indicated that these factors were outweighed by the need for general deterrence and to maintain public confidence in workplace protections under the Fair Work Act 2009 (Cth). 

In a more recent case, Vickery v The Trustee for Roderick Trust t/as Encompass Books & Anor [2014] FCCA 546, an employer was also ordered to pay $10,000, and its director $1000, in penalties for failing to comply with a compensation order made by the Commission.

These cases send a clear message that employers should not disregard the consequences of Fair Work Commission proceedings. Employers should obtain legal advice about defending and managing the outcomes of those proceedings as soon as they became aware that a claim has been made.

Please contact the Workplace Relations, Employment and Safety team if you would like further information about Fair Work Commission proceedings and orders.