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  1. #1
    Join Date
    Mar 2015
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    6

    Default Can an Employer Choose to Give Compensation Instead of Reinstatement?

    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.

    k8canb

  2. #2
    Join Date
    Aug 2007
    Location
    Melbourne, Australia
    Posts
    456

    Default

    k8canb,

    It sounds like your friend is very ill, in which case I'm not surprised the employer didn't want to reinstate him. There's only a certain level of mental illness that employer can or should be able to cope with. That's just my personal opinion of course

    The threatening tone of the compensation offer doesn't sound very nice.

    I really think your friend should seesome professional (specialist) legal advice would be advisable in t

  3. #3
    Join Date
    Mar 2015
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    6

    Default

    Quote Originally Posted by Moz View Post
    k8canb,

    It sounds like your friend is very ill, in which case I'm not surprised the employer didn't want to reinstate him. There's only a certain level of mental illness that employer can or should be able to cope with. That's just my personal opinion of course

    The threatening tone of the compensation offer doesn't sound very nice.

    I really think your friend should seesome professional (specialist) legal advice would be advisable in t

    Hi Moz,
    Thanks for your reply, although my friend was ill at the time he resigned, he fully recovered in a matter of a month and then asked his employer to withdraw the resignation - which was invalid due to mental incapacity. For the last one year, my friend has alternate employment; however the dispute is ongoing for the last 22 months without any resolution in sight.

    My question was can employer offer compensation without involving the FWC? If this is allowed then many employers can unfairly dismiss employee and workaround unfair dismissal application by offering compensation.

    k8canb

  4. #4
    Join Date
    Apr 2012
    Posts
    196

    Default

    Quote Originally Posted by k8canb View Post
    Hi Moz,
    Thanks for your reply, although my friend was ill at the time he resigned, he fully recovered in a matter of a month and then asked his employer to withdraw the resignation - which was invalid due to mental incapacity. For the last one year, my friend has alternate employment; however the dispute is ongoing for the last 22 months without any resolution in sight.

    My question was can employer offer compensation without involving the FWC? If this is allowed then many employers can unfairly dismiss employee and workaround unfair dismissal application by offering compensation.

    k8canb
    Employers may, and often do offer ex gratia (latin term which means 'money for nothing'') payments for a range of issues. Always however, the employer would include a Deed of Release in such an offer. This means the employee must sign the Deed of Release (which generally means they can't come back and sue or make other demands on the employer) before being paid the ex gratia payment. There is no standard template for a Deed of Release because they are prepared based on the individual circumstances of the issue at hand so you need to get a lawyer or other expert in this field to prepare it for you.
    Tiger

  5. #5
    Join Date
    Mar 2015
    Posts
    6

    Default

    Quote Originally Posted by Tiger View Post
    Employers may, and often do offer ex gratia (latin term which means 'money for nothing'') payments for a range of issues. Always however, the employer would include a Deed of Release in such an offer. This means the employee must sign the Deed of Release (which generally means they can't come back and sue or make other demands on the employer) before being paid the ex gratia payment. There is no standard template for a Deed of Release because they are prepared based on the individual circumstances of the issue at hand so you need to get a lawyer or other expert in this field to prepare it for you.
    Tiger
    Hi Tiger,

    Thanks for your reply, there are no issues on offering ex gratia payments; however such payments should not be to avoid reinstatements. In many unfair dismissal/general protection cases, FWC as well as Federal Courts have awarded reinstatement as well as compensation.

    In my friend's case his employer like to avoid reinstatement by unilaterally offering compensation - this action is without involving FWC. What I want to know is can employers deliberately avoid reinstatement by offering compensation at their will?

    k8canb

  6. #6
    Join Date
    Aug 2007
    Location
    Melbourne, Australia
    Posts
    456

    Default

    Hi k8canb,

    Why should the employer involve the FWC?

    Why was the original the adverse action application closed? What was the outcome?

    Moz

  7. #7
    Join Date
    Mar 2015
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    Default

    Quote Originally Posted by Moz View Post
    Hi k8canb,

    Why should the employer involve the FWC?

    Why was the original the adverse action application closed? What was the outcome?

    Moz
    Hi Moz,

    The point is the employer wants to avoid reinstatement therefore compensation was offered. My friend want reinstatement as his resignation was invalid (even by common law) since he resigned while mentally impaired. My friend's treating psychiatrist (a renowned specialist) has issued a certificate that my friend had no capacity to resign as he was mentally impaired. My friend filed adverse action application and FWC ordered a conference at which the FW Commissioner asked the parties to negotiate reinstatement. Due to the presence of medical certificate it was difficult for employer to deny reinstatement.

    The employer tactically withdrew from negotiations and the adverse action application was closed. FWC could not do anything; they did not even issue certificate stating that the matter was not resolved.

    After this the employer's lawyer sent a letter to my friend offering six months’ salary as compensation and asked my friends to sign a paper clearing the employer of all the liabilities. If it was refused and if the matter is taken to litigation then the employer would ask the judge to award all the costs incurred by the employer.

    My friend refused to accept compensation and the matter has dragged for 22 months without any resolution. My friend suffered many losses like repossession of his car, nine months without any employment, he has to borrow money for his living expenses and also live on credit cards etc.

    The lawyers asked huge sum of money as fees to go to Federal Court, this was not possible due to my friend’s financial situation.

    Hope that answers your questions.

    Finally if employers are allowed to selectively dismiss employees and escape the reinstatement by offering compensation without involving FWC/Federal Court etc. such acts will be acceptable?

    k8canb

  8. #8
    Join Date
    Aug 2007
    Location
    Melbourne, Australia
    Posts
    456

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    Hi k8canb,

    I don't understand why the FWC couldn't do anything.

    Can't your friend just take this back to the FWC?

    If not, perhaps he should speak to a law firm like Slater and Gordon who may handle it on a "no win, no fee" basis (if they think he has a good case).

    Some employers will ignore the law and just do whatever they like, but whether they get away with it is another matter.

    If all else fails, start talking to the press.

    Moz

  9. #9
    Join Date
    Mar 2015
    Posts
    6

    Default

    Quote Originally Posted by Moz View Post
    Hi k8canb,

    I don't understand why the FWC couldn't do anything.

    Can't your friend just take this back to the FWC?

    If not, perhaps he should speak to a law firm like Slater and Gordon who may handle it on a "no win, no fee" basis (if they think he has a good case).

    Some employers will ignore the law and just do whatever they like, but whether they get away with it is another matter.

    If all else fails, start talking to the press.

    Moz

    Hello Moz,

    Thanks for your reply, when the employer withdrew from the negotiations, the FWC told us that unless both the parties consent to continue the negotiations they could not help us. Unfortunately the employer happens to be a Federal Government Department and they can afford the best available legal brains. My friend was unemployed for long time; and was facing bankruptcy and homelessness; fortunately, his friends and relatives helped him to survive and he is now getting his life back. As the case is now 22 month old all the time limits for taking the case back to FWC or Federal case have been elapsed.

    We did contact few high profile lawyers; unfortunately, no one wants to take case of employment Pro Bono basis. We also contacted few of the community organisations for legal help they could not help as most of them have no expertise in employment law. This is a strong case with solid evidence; however, I am sorry to say that the litigation favours only rich people.

    As there is a mental disability is involved we are considering complaining to Human Rights Commission. We are also considering complaining to the Prime Minister about harshly treating a disabled person. We are in a process of meeting our local member of parliament.

    With all these efforts some favourable might come.

    k8canb

  10. #10

    Default

    Hi K8canb

    You may get a favourable outcome in the end but it highlights what is often the situation in cases of dismissal.

    If you can live with the outcome (6 months salary) it is better to move on with your life and look for another position as the litigation can often take up plenty of time and emotional input. As you have pointed out, litigation is expensive and even with a good case the outcome can be uncertain. Here is your friend still struggling 22 months later and only now getting back on his feet and by the sounds of it unlikely to have much success with his case. Will he in the end get more than 6 months pay? Even for the wealthy, litigation is a mixed bag.

  11. #11
    Join Date
    Mar 2015
    Posts
    6

    Default

    Hello Everyone,

    My friend finally managed to get 12 month salary. His employer created a situation such that there was no alternate way but to accept the money and move on.

    Fortunately my friend's mental health has improved and he has not suffered any episode for the last 20 months and he is in contract job which pays much more than the salary of his old job.

    I thank everyone who replied to my posts offering a number of suggestions.

    K8canb

  12. #12
    Join Date
    Aug 2007
    Location
    Melbourne, Australia
    Posts
    456

    Default

    Hi k8canb,

    Thanks for letting us know the outcome. It's probably for the best that your friend has moved on and is getting on with his life, because unfortunately it sounds going back to his previous employer was probably not a realistic prospect for either party due to the deterioration of the relationship.

    It is however very disappointing that the FWC couldn't or wouldn't do more. I can't help wondering whether the fact that the employer was a Federal Govt Dept had some bearing on that.

    Best wishes,
    Moz

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