Small business fails to comply with Fair Work ruling, ordered to pay employee lost wages – and then some

A Victorian small business has been ordered to pay a former employee for lost wages along with civil penalties after it refused to comply with a Fair Work Commission ruling that it had unfairly dismissed one of its employees.

Gippsland Waste (which has since changed its name to Sort Worx) was originally brought before Fair Work by Irene Meadley, who claimed she had been fired from her role after she complained about shift reductions through a joint letter signed by several others.

Gippsland Waste said it had fired her for failing to attend a meeting about bullying allegations made against her, alleging that she bullied others into signing the letter.

In the original ruling, the Fair Work Commission said after examining evidence from two employees who said they were bullied by Meadley, it found “the evidence did not support [the] claim” that Meadley had done so. It did conclude that some of the employees had reservations about the letter but signed it anyway, later feeling remorse for doing so.

The commission found her termination had been unlawful, and ordered Gippsland Waste to reinstate her to her position, despite protestations from then general manager Greg Petrie that the relationship between them had irrevocably broken down.

Instead, the commission stated “the reason for Mr Petrie opposing reinstatement is not that there has been an irretrievable breakdown in the relationship between Ms Meadley and GWS but rather that Petrie disagrees with Meadley’s resort to using representation in relation to workplace disputes and Meadley’s insistence on written communications”.

Gippsland Waste appealed the ruling, but then withdrew its appeal. It did not reinstate Meadley, and so, she took the matter to the Federal Court, which handed down its ruling last month.

In its arguments to the higher court, Gippsland Waste said that since the original ruling was delivered on May 2 this year, and ordered it to reinstate Meadley from April 30, it was a retrospective order, and thus, beyond the powers of the Fair Work Commission.

This argument didn’t impress the Federal Court, which said the order was backdated in order to re-reimburse Meadley for lost pay.

In his ruling, Justice Richard Tracey said Gippsland Waste was “was tardy in complying with some of the orders and has wholly failed to comply with others,” despite being “well aware that it was required to comply with the orders”.

The decision to ignore the original ruling, Tracey continued, was made before the company lost a contract that made it unable to afford to reinstate Meadley, and was “a deliberate decision taken by Greg Petrie”.

Because of this, Gippsland Waste was ordered to pay Meadley $10,000 in civil penalties, as well as $15,045 in redundancy pay, lost wages, notice and accrued leave entitlements, plus interest.

Industrial relations lawyer Peter Vitale tells SmartCompany it’s a very unusual case.

“As Justice Tracey comments, it really demonstrates a complete lack of regard for the authority of the Fair Work Commission.

“Of course, they indicated that they had lost a lot of business and had to make people redundant, but as the Federal Court said, that could have been raised on appeal, and they didn’t go down that route. In fact, they dropped their appeal on the unfair dismissal decision, and one can speculate that might have been for cost reasons.

“But in the end, it’s cost them a whole lot more. By refusing to observe the orders of the commission, or to appeal them in light of difficult business circumstances, they’ve wound up in the Federal Court, with penalties involved.

“They might have thought their former employee wouldn’t chase this up all the way to the Federal Court. But she did.”