Can an employer successfully apply for its costs, where a former employee has been found to have engaged in unreasonable behaviour in relation to the conduct or continuation of an unfair dismissal claim causing those costs to be incurred?

As a general rule, the Fair Work Act 2009 (Cth) provides that parties in proceedings before the Fair Work Commission are to bear their own costs.

Is this however always the case?

This matter was recently dealt with by a Full Bench of the Commission in the matter of Gugiatti.

The Facts

The Worker (who was unrepresented) brought an unfair dismissal claim against the Employer in the Fair Work Commission (Commission). The Employer objected, claiming that the Worker:

  • was employed for a “specified period of time” and had not been dismissed;  and
  • had not yet served the minimum employment period of six months, to enable him to bring such a claim (i.e. the Employer claiming that it was a “small business employer”).

The Commission upheld the Employer’s objections, however the Worker sought to appeal the decision.

A Full Bench of the Commission (Full Bench) refused permission for the Worker to appeal.

The appeal decision noted that there were various difficulties which arose in relation to the Worker’s conduct relating to the appeal including the:

  • seeking of adjournments; and
  • non-compliance with directions to provide outlines of submissions in support of the appeal.

The Employer made an application for its costs.

The Worker subsequently failed to file and serve submissions in response to the costs application, and again sought a further adjournment of the proceedings on medical grounds.

It was noted by the Full Bench that subsequent correspondence provided by the Worker displayed a ” … very high degree of literacy“. It was noted in the correspondence that the Worker disclosed that he was soon to graduate with a Bachelor of Laws. This correspondence included submissions for the application for an adjournment on medical grounds in circumstances where the Worker requested that various parts of the medical certificates he had provided to the Commission be redacted if they were to be provided to the Employer. This was rejected by the Commission which indicated that the submissions in relation to the application and the medical reports in full would be sent to the Employer.

The Full Bench subsequently refused the Worker’s adjournment application after receiving a short submission in response from the Employer opposing it.

The Full Bench was not satisfied that the Worker was suffering from a medical incapacity warranting the adjournment. It also considered  that the literacy, level of detail and sophistication contained in the Worker’s submissions supported a conclusion that he was readily capable of responding to the costs application.

The Worker was subsequently directed to provide written submissions in response to the Employer’s costs application within 14 days.

One day after the Worker’s submission was due, noting that it had not been filed, the Worker corresponded with the Commission requesting a three month adjournment, and providing medical certificates from his doctors.  This included a certificate which claimed that the Worker was not fit to participate in the proceedings for another three months, at which time he would be re-assessed. Despite this request, the Full Bench refused to grant the adjournment.

The Decision

The Full Bench ultimately determined that it could not order costs against the Worker in relation to the outcome of the appeal in that it could not be found that the appeal was brought without reasonable cause or that it would have been reasonably apparent to the Worker that the appeal had no reasonable prospects of success. This was because whilst the Worker’s grounds for appeal were “unsupported allegations”, that had they been supported by proper submissions from the Worker and the benefit of an appeal book, they may have been considered arguable, it was held.

On the other hand, the Full Bench relied on another costs provision contained in the Fair Work Act (section 400A) relating to unfair dismissal claims, to support a finding that costs should be awarded in the Employer’s favour against the Worker.

The Full Bench found that the Worker had engaged in various unreasonable acts or omissions, including those associated with him not attending a hearing, causing the Employer to incur costs.

Ultimately, the Worker was ordered to pay $2,500 on account of the Employer’s attendance at a second hearing and associated with making its costs application.

Conclusion

While decisions such as that referred to above usually turn on their own facts, this case shows that unfair dismissal claims are not always a “one way street” for former employees.

If a former employee causes their former employer to incur costs because of their unreasonable acts or omissions in proceedings, then they may well face a costs order. Costs orders may also be made against a former employer who does the same.

Although such costs orders are rarely made, this decision shows that they are possible. The decision also goes to demonstrate how unrepresented claimants in particular, need to be careful in relation to how they conduct themselves in statutory unfair dismissal proceedings.

This information is intended to provide a general summary only and should not be relied on as a substitute for legal advice.

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