s.394 - Application for unfair dismissal remedy

Application for an unfair dismissal remedy - whether compensation is to be paid in instalments. Order amended to permit payment by instalment

• [1] In a decision issued on 14 May 2025[1] I found Orientile Pty Ltd (Orientile) unfairly dismissed Carson Q Zhang and ordered that it pay Mr Zhang $31,652.93 as compensation in lieu of reinstatement. The payment was to be made within 21 days of the decision. Orientile had made no submission on the topic of whether the compensation should be paid in the form of instalments. I granted leave for Orientile to make application that the amount be paid in instalments.

• [2] Orientile has made application for an order under s. 393 of the Fair Work Act 2009 (the Act) that the compensation be paid in monthly instalments over a 12 month period commencing on the first business day of the month following this decision, with payments made on the first business day of each month thereafter.

• [3] Orientile submits that it is a small business facing significant financial strain and that an immediate lump sum payment would jeopardise its ability to meet its financial obligations.

It submits that a 12-month instalment plan reflects a fair balance between compliance with the Commission's order and its business sustainability. It also submits that payment by instalment would not prejudice Mr Zhang.

• [4] In support of its application Orientile provided limited evidence of its financial situation. Three documents issued by Orientile's bank and headed "Business Extra Statement" were provided. The documents identify the bank account details of Orientile by setting out the business name, branch number and account number. They relate to the months of February 2025, March 2025 and April 2025 respectively. Only four figures are provided on each document; the opening balance, total deposits, total withdrawals, and closing balance. Orientile asked that the actual figures remaining confidential. At best, the documents provide a snapshot of the monthly revenue and outgoings in an account held in the name of the business. The total withdrawals closely match the total deposits with the opening and closing balances kept between $6,000.00 and 7,000.00. The statements are of limited assistance in determining the sustainability of the business. No assessment can be made of the outgoings as no breakdown of the withdrawals is provided and so no assessment of the company's financial obligations can be made.

• [5] Mr Zhang opposes the order. He has not worked since he was unfairly dismissed and has had no other income in that period.

• [6] The Act does not indicate what matters should be taken into account when making an order that compensation be paid in instalments. On its face the section provides a broad discretion. It is a discretion that must be exercised in accordance with the objects of the Act. Those objects include the objects at Part 3-2 - Unfair Dismissal, at s. 381(2) which reads:

(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a "fair go all round" is accorded to both the employer and employee concerned.

• [7] Little assistance is provided by the Explanatory Memorandum to the Fair Work Bill 2008 which simply stated in relation to clause 393 of the Bill:

1568. This clause clarifies that FWA can allow an employer to pay an order for lost pay or an order for compensation in instalments.

• [8] In McCarron, James v Commercial Facilities Management Pty Ltd T/A CFM Air Conditioning Pty Ltd [2013] FWC 3577 in ordering that compensation be paid in instalments Bissett C said that when considering the time period for the instalment payments to be made the business needs of the Respondent must be weighed against the needs of the Applicant to access the compensation.

• [9] In other jurisdictions courts have the power to make instalment orders in relation to judgment debts[2]. The question of what is appropriate to take into account when exercising a similar discretion to that afforded by s. 393 has been considered in a number of decided cases. Various courts have observed that the empowering legislation permitting orders for payment by instalments is lacking in guidance[3].

• [10] Matters that have been considered relevant by the Courts, modified for applications for orders for the payment of compensation in instalments under s. 393, are:
• (a) whether the respondent has the means to pay the debt immediately[4];
• (b) whether the respondent is likely to be able to comply with the instalment order[5];
• (c) whether the instalment order will result in the payment of the compensation in a reasonable period of time[6]; and
• (d) the need to balance the rights of the successful applicant to "the fruits of its success" against providing the respondent an opportunity to pay on reasonable terms[7].

• [11] The cases also emphasise that any assessment of the question of whether an instalment order is appropriate required close attention to the facts.[8] I consider these decisions provide some assistance in exercising what is an otherwise a broad discretion under s. 393.

• [12] Turning to the facts here, I found in my earlier decision that Orientile is a small employer. It employed 9 employees at the time that Mr Zhang was retrenched. ​Orientile claims that in late 2024 the business was faltering due to slow sales and financial strain arising from increased operational costs associated with the purchase of a second warehouse. Mr Gao, the principal for Orientile, was aware during the hearing that the maximum compensation I could award was 6 months' pay, or $50,000, and when invited to make a submission on the impact such a payment would have on the viability of the business stated that such a payment would involve a substantial cost on the business but would not affect its viability. The only additional evidence provided by Orientile in support of the application for payment by instalment comprised the brief bank statements already described.

• [13] Applying the considerations above, I find that Mr Zhang is entitled to enjoy the fruits of his successful application in a timely manner. Orientile has the means to pay compensation. I accept on the material that the payment of $31,652.93 is a significant impost on the business. This is borne out by the monthly revenue figures. This justifies, as a matter of fairness, payment by instalment. I do not consider that Orientile needs 12 monthly instalments to make payment. The material suggests that there are sufficient funds coming into the business that it would be reasonable for the payment to be made in 2 instalments.

• [14] Consequently, I will divide the compensation in two, requiring two payments of $15,826.47. I also find that making payments over a two month period is reasonable. Orientile has had 3 weeks since the decision was made. I will amend the order made on 14 May 2025 to require the first payment on 11 June 2025. The second payment will be due on 2 July 2025. An order will issue separately giving effect to this decision.

[1] [2025] FWC 1336

[2] See for example s 6 of the Judgment Debt Recovery Act (Vic) 1984; s 107 of the Civil Procedure Act 2005 (NSW); s. 5 Enforcement of Judgments Act 1991 (SA); and r868 Uniform Civil Procedure Rules 1999 (Qld).

[3] See Peter Sheldon v Steven John Scerri [2011] NSWSC 253 at [16], Hellier Capital Pty Ltd v Albarran [2009] NSWSC 403 at [7], Meat 2 Please v Manna [2022] VSC 144 at [7].

[4] Hellier Capital Pty Ltd v Richard Albarran [2009] NSWSC 403 at [8]; C Tina Pty Ltd v Barham-Floreani [2019] VSC 819 at [22].

[6] Hellier Capital Pty Ltd v Richard Albarran [2009] NSWSC 403 at [10] C Tina Pty Ltd v Barham-Floreani [2019] VSC 819 at [22].

[7] Peter Sheldon v Steven John Scerri [2011] NSWSC 253 at [19]; Chint Australasia v Cosmoluce [2008] NSWSC 1054; C Tina Pty Ltd v Barham-Floreani [2019] VSC 819 at [21].

[8] Hellier Capital Pty Ltd v Richard Albarran [2009] NSWSC 403 at [10] and Peter Sheldon v Steven John Scerri [2011] NSWSC 253 at [24].

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