Employee wins unfair dismissal case, gets compensation for child care costs incurred while looking for a new job

A fitness centre has been ordered to pay the childcare costs accrued by a former employee during her search for work after the staff member was found to have been unfairly dismissed in a decision that has been dubbed “perfectly legal but quite unusual.”

In a Fair Work Australia decision handed down last week by Deputy President Greg Smith, Grace Wong was awarded of $7901.36 after her dismissal by Nytro Pty Ltd, trading as Nitro Gym in Kilsyth, was deemed unfair. Part of the compensation included childcare costs for the time she was looking for work.

Wong worked on a permanent part-time basis at the gym for nine months, from October 2010 to July 2011.

She claimed for a loss of remuneration of more than $5500, lost super and further annual leave estimated at just under $1000, plus childcare costs incurred while looking for and taking up new employment. Wong also alleged that Nitro had underpaid her annual leave and tannual leave loading.

Smith found that Wong was terminated harshly, unjustly and unreasonably, due to:

• Wong originally being told she had been made redundant –  although this lacked supporting substance;
• Wong not being informed that her termination was the result of misconduct; and
• Wong not being advised of or given the chance to respond to any reason related to her performance.

Smith opted for compensation for Wong rather than reinstatement, due to “circumstances surrounding the termination and the size of the business, together with the employer deciding not to attend the proceedings.”

“I have decided to include in an order payment of compensation of the amount actually lost by Ms Wong during her period of unemployment which totals $6,522.14,” Smith said.

“I have … reached the conclusion that I will not take into account what is said to be an underpayment of annual leave entitlement.

“I am prepared to take into account some of the additional child care costs. This is a cost incurred directly as a result of the termination of employment.”

Kathryn Dent, director at People+Culture Strategies law firm, says the ruling is “perfectly legal but quite unusual”.

“The Act does allow Fair Work Australia to consider any other matters when making an order for compensation, and that’s where the childcare component of the compensation has been formulated,” Dent said.

“It’s a broad discretion by Fair Work, but not one we’ve seen exercised.”

Dent noted that the employer might have been able to better defend itself, and present a more forceful argument in its favour, had it appeared at the final hearing.

She says now there is a case showing that childcare costs might be included in an order, businesses ought to pay better attention to this element when looking at offers of settlement from an applicant.

But she adds that the onus will remain on the applicant to show that the costs were directly linked to an unfair dismissal.