Court scathing of employer for delaying stay application of reinstatement order

The Technical and Further Education Commission (the Employer) was refused a stay of a Fair Work Commission (the Commission) order when it applied to the Federal Court (the Court) three business days after reinstatement was to take effect.

Background

The Employer was ordered to reinstate a dismissed employee by 25 June 2014, after the Commission found the employee had been unfairly dismissed.

The Employer had previously unsuccessfully argued in the Commission, that the employee had been made genuinely redundant and could not access the unfair dismissal laws.

The Employer lodged an application with the Court staying the Commission's order, three business days after it was required to reinstate the employee.  The Employer had been paying the employee's salary but did not allow her to attend work to perform her duties. 

There was correspondence between the parties following the Commission's decision in which the employee indicated she would present herself for work on 27 June 2014. 

However on 26 June 2014 after 6.00pm, the Crown Solicitors Office on behalf of the Employer advised the employee that she was not required to attend work the following day as it had been instructed to commence proceedings in the Court and seek a stay of the Commission's orders. 

However, it did not commence these proceedings until 30 June 2014. 

Findings with respect to delay

The Court was scathing of the Employer, finding it was in breach of the Commission's order for failing to reinstate the employee and for making the stay application after the reinstatement was to take effect.

The Court noted that non compliance with the Commission's order amounted to an offence under the Fair Work Act 2009 (Cth) (the FW Act).   Further, the Employer's failure gave "rise to a serious matter" as it "involved is a deliberate decision to disobey an order of the Commission." 

The Court then considered the principles for stay of a Commission decision and order. 

Principles for stay

The Court determined that exceptional circumstances must exist to grant a stay of the Commission's decision and order. 

The Employer argued that:

• a provision of the FW Act, Commonwealth legislation, requires the Employer to consider redeployment opportunities for there to be an genuine redundancy and to thereby be excluded from the unfair dismissal laws;
• there is a Constitutional principle that the Commonwealth cannot legislate with respect to some state government operations; and
• this Constitutional principle was breached by the above provision in the FW Act.   

The Employer also argued that if the Commission found that the employee could be redeployed, it was upon the Commission to identify and establish a position the employee could be redeployed into.

Court Findings

The Court found that although the Employer had an arguable case it was not overwhelming.  It also found that the balance of convenience was against the Employer for the following reasons:

• considerable circumspection is required before an interim stay is granted based on the Constitutional invalidity of a statutory provision;
• the facts did not support the Employer's argument that the employee was to be reinstated into a position which did not exist;
• even if the position did not exist, there is no significant prejudice in giving the employee paid employment; and
• there is no difficulty in interpreting the words "conditions which were no less favourable".

To the contrary, the prejudice to the employee in granting the stay was clear.  Although the employee was being, paid, she had not worked for almost two years notwithstanding she wanted to remain in employment.  

Even if the Employer was entitled to a stay, the Court said it would exercise its discretion in refusing the application due to the delay to its delay in applying. The Court said:

"The order was made by Commissioner McKenna on 16 June 2014.  It was at that time that TAFE should have moved.  Waiting for two weeks, until such time as it had already committed an offence under the Fair Work Act, was a delay which is simply inexcusable in an application such as the present, where urgent relief is sought.  I dismiss the application."

Lesson

This case highlights the importance of employers ensuring that they comply with their obligations when making employees redundant. Further, if an employer wants to challenge a Commission order, they must ensure their stay applications occur prior to the commencement of the order to which it relates.

If you would like more information about the case, please contact National Workplace Lawyers on +61 2 9233 3989. 

National Workplace Lawyers

Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.