[2022] FWC 1026
The attached document replaces the document previously issued with the above code on 10 November 2022.
Corrections made to two citations.
TF
Associate to Deputy President Beaumont
Dated 11 November 2022
| [2022] FWC 1026 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
ss.375B and 611 - Application for costs against party
Jasmine Chambers
v
Commonwealth of Australia (Bureau of Meteorology)
(C2020/9270)
DEPUTY PRESIDENT BEAUMONT |
PERTH, 10 NOVEMBER 2022 |
Application for costs against party
[1] Ms Chambers (the Applicant) has applied to the Commission for an order that the Commonwealth of Australia (Bureau of Meteorology) (the Respondent) pay the legal costs she incurred in successfully opposing the Respondent’s claim that she was not dismissed. The Applicant’s initial application was a general protections application involving dismissal under s 365 of the Fair Work Act 2009 (Cth) (the Act) (C2020/9270) (general protections application). The order for costs is sought under several sections of the Act. 1
[2] The Commission, as presently constituted, heard the dispute and in a decision dated 29 July 2021 (the Decision) 2 decided that the Respondent had not successfully discharged its onus of establishing that the Applicant had not been dismissed. The matter thereafter was listed for conference. However, the dispute remained unresolved, and a certificate subsequently issued pursuant to s 368(3).
[3] The Respondent’s case was essentially premised upon the argument that the Applicant had not been dismissed given that the end of her employment came about by agreement under clause C.9.36 of the Bureau of Meteorology Enterprise Agreement 2018 (Bureau’s Agreement). 3
[4] Briefly stated, the Applicant previously held the role of General Manager, Global and National Science Relationships, with the Respondent. That position had been made redundant and the Applicant was, for a while, placed on a redeployment period. The redeployment period came to an end in accordance with clause C.9.36 of the Bureau’s Agreement, when the ‘Agency Head’ of the Respondent, with the agreement of the Applicant, terminated her employment pursuant to s 29 of the Public Service Act 1999 (Cth) (Public Service Act).
[5] In the Decision, I found that the critical actions which gave rise to the Applicant’s termination of employment were the restructure of the Respondent organisation such that the Applicant’s role was made redundant, the proposal of the Respondent under clause C.9.36 of the Bureau’s Agreement, 4 and thereafter the action of the Agency Head who determined that there were no reasonable prospects of redeploying the Applicant within the Australian Public Service (APS) and there was insufficient productive work available for the remainder of the retention period with the Respondent. If the Agency Head had not been so satisfied of the factors set out at clause C.9.36(c) of the Bureau’s Agreement, the Applicant would never have been placed to agree to the termination of her employment pursuant to clause C.9.36 of the Bureau’s Agreement.
[6] To recap, clause C.9.36 of the Bureau’s Agreement provided:
Where:
(a) an excess employee has been receiving redeployment assistance from a service provider for two months; and
(b) the service provider advises that there is no reasonable prospect of redeployment in the APS; and
(c) the Agency Head is satisfied that there is insufficient productive work available for the employee with the Bureau during the remainder of their retention period;
the Agency Head may, with the agreement of the employee, terminate the employment of the employee under s 29 of the PS Act. Upon termination, the employee will be paid a lump sum comprising the balance of the retention period (as shortened for the NES under clause C.9.29) and this payment will be taken to include the payment in lieu of notice of termination of employment, plus the employee’s NES entitlement to redundancy pay. 5
[7] The Applicant now seeks orders pursuant to ss 375B and 611 of the Act that the Respondent pay the Applicant’s costs of the proceedings. In respect of her reliance on s 375B of the Act, the Applicant contended in her costs application that the Respondent’s advancement of the jurisdictional objection was an unreasonable act in connection with the conduct and continuation of the dispute within the meaning of s 375B(1)(b), having regard to all relevant circumstances. 6
[8] At a later point, in her submissions, the Applicant observed that s 375B did not limit the Commission’s powers to also award costs under s 611 of the Act. The Applicant therefore submitted that s 611 similarly provides that the Commission may order costs borne by the Applicant against the Respondent if it is satisfied that:
(a) the Respondent responded to the Applicant’s application vexatiously or without reasonable cause; or
(b) it should have been reasonably apparent to the Respondent that its response to the Applicant’s application had no reasonable prospects of success.
[9] Evidently, the Applicant argues that both (a) and (b) apply given what she considers to be the unreasonable acts of the Respondent, which, in part, are detailed at paragraphs [55], [56] and [58] of this decision. It is further noted that the Applicant has relied upon such conduct in support of her costs application under s 375B of the Act.
[10] For its part, the Respondent has essentially raised four counter arguments, which include:
(a) the Applicant failed to fully complete the Form F6 application and this warrants a failure to properly make and/or prosecute the costs application;
(b) the application concerns matters that are now before the Federal Circuit Court and the making of a costs order in favour of the Applicant in such circumstances may ultimately be inconsistent with an order of the Court – which would not be in the interests of justice;
(c) the costs application cannot be expanded to seek orders under s 611 when the application was made pursuant to s 375B; and
(d) the costs application is without merit.
[11] For the reasons that follow, I have determined not to award costs against the Respondent.
[12] It is convenient to deal first with the relevant legislative provisions before turning to the Respondent’s objections to the costs application and the merits of the Applicant’s case.
[13] The starting point in relation to costs of proceedings before the Commission is that each person involved in a matter must bear their own costs. This statutory imperative is said to have derived from the policy purpose that a person is entitled to make or defend an application made under the Act without the risk that a costs order may be made against them. 7 However, there are exceptions to this approach.
[14] Section 375B is one such exception. It provides:
375B Costs orders against parties
(1) The FWC may make an order for costs against a party (the first party) to a dispute for costs incurred by the other party to the dispute if:
(a) an application for the FWC to deal with the dispute has been made under section 365; and
(b) the FWC is satisfied that the first party caused those costs to be incurred because of an unreasonable act or omission of the first party in connection with the conduct or continuation of the dispute.
(2) The FWC may make an order under subsection (1) only if the other party to the dispute has applied for it in accordance with section 377.
(3) This section does not limit the FWC’s power to order costs under section 611.
[15] Section 377 sets out that the application for a costs order in relation to an application under ss 365 or 372 must be made within 14 days after the Commission finishes dealing with the dispute.
[16] It is apparent from the Supplementary Explanatory Memorandum to the Fair Work Amendment Bill 2013 (Cth) 8 (Explanatory Memorandum) that the legislature intended that the power to order costs provided by s 375B can only be exercised where the other party to the dispute makes an application in accordance with s 377, and where there is clear evidence of unreasonable conduct. In Keep v Performance Automobiles Pty Ltd, the Full Bench identified that this approach is entirely consistent with the jurisprudence relating to the other costs provisions in the Act (such as s 611).9
[17] Section 377A of the Act deals with a schedule of costs, it reads:
(1) A schedule of costs may be prescribed in relation to items of expenditure likely to be incurred in relation to matters that can be covered by an order under section 611, 375B or 376 in relation to an application under section 365, including expenses arising from the representation of a party by a person or organisation other than on a legal professional basis.
(2) If a schedule of costs is prescribed for the purposes of subsection (1), then, in awarding costs under section 611, 375B or 376 in relation to an application under section 365, the FWC:
(a) is not limited to the items of expenditure appearing in the schedule; but
(b) if an item does appear in the schedule—must not award costs in relation to that item at a rate or of an amount that exceeds the rate or amount appearing in the schedule.
[18] As the Applicant has, in addition, sought costs pursuant to s 611 of the Act, that section warrants consideration.
[19] The Commission’s general powers to award costs are grounded in s 611, which reads:
611 Costs
(1) A person must bear the person’s own costs in relation to a matter before the FWC.
(2) However, the FWC may order a person (the first person) to bear some or all of the costs of another person in relation to an application to the FWC if:
(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.
Note: The FWC can also order costs under sections 376, 400A, 401 and 780. 10
[20] Section 611 contains no indication of the considerations which the Commission must take into account in deciding how to exercise its discretion. 11 The discretion conferred is expressed in general, unqualified, terms.12 In De Giusti v NSW Trains,13 the Deputy President referred to the observation of the High Court in O’Sullivan v Farrer:
Where a power to decide is conferred by statute, a general discretion, confined only by the scope and purposes of the legislation, will ordinarily be implied if the context (including the subject matter to be decided) provides no positive indication of the considerations by reference to which a decision is to be made. 14
[21] The objects of the Act are set out in s 3; I do not intend to repeat them here.
[22] Relevant, however, are ss 577 and 578 of the Act, which state respectively:
577 Performance of functions etc. by the FWC
The FWC must perform its functions and exercise its powers in a manner that:
(a) is fair and just; and
(b) is quick, informal and avoids unnecessary technicalities; and
(c) is open and transparent; and
(d) promotes harmonious and cooperative workplace relations.
Note: The President also is responsible for ensuring that the FWC performs its functions and exercises its powers efficiently etc. (see section 581).
578 Matters the FWC must take into account in performing functions etc.
In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), the FWC must take into account:
(a) the objects of this Act, and any objects of the part of this Act; and
(b) equity, good conscience and the merits of the matter; and
(c) the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
[23] The matters that therefore require determination are whether the response to the application was made without reasonable cause or vexatiously, whether it should have been reasonably apparent to the Respondent that its response had no reasonable prospect of success, and whether the Respondent caused the costs incurred by the Applicant due to an unreasonable act. Further, the Respondent asserts that procedural deficits warrant the extinguishment of the costs application as do other proceedings on foot in the Federal Circuit Court.
[24] In the present matter, the Commission finished dealing with the dispute when it issued the certificate on 12 August 2021. The Applicant’s costs application was filed on 26 August 2021. Hence, it was within the time period prescribed in s 377.
[25] However, the Respondent contends that making a costs application at this stage of the proceeding is an unusual step which requires strict compliance with procedural requirements. The Respondent submits that the Applicant is required to use the relevant form pursuant to rule 8(2) of the Fair Work Commission Rules 2013 (Rules).
[26] The Respondent explained that the Applicant had failed to fully complete the Form F6 and had instead stated in the Form F6 that a schedule of costs would be provided within 14 days after 26 August 2021, i.e. by 9 September 2021. This, said the Respondent, was in the context where the Form F6 plainly stated that the Applicant should prepare an itemised schedule of costs, in accordance with the table in the Form F6, and that Form F6 pointed the Applicant to relevant legislative provisions as well as the Fair Work Regulations 2009 (Cth) (Regulations).
[27] The Form F6 at paragraph 4 refers to an ‘Itemised schedule of costs’. It states ‘[p]lease complete the schedule below and attach additional pages if necessary’. It then goes on to say that if the application for costs is made pursuant to certain sections (s 375B not being one of them), then the applicant is to see the prescribed schedule of costs contained in Schedule 3.1 of the Regulations. The Form F6 explains that if an item is specified in the schedule, the Commission will not award an amount greater than the relevant sum specified in the schedule.
[28] The Respondent further submits that whilst the Applicant stated on the Form F6 that a schedule of costs would be provided within 14 days after 26 August 2021, none was forthcoming. Additionally, the Respondent points to the Applicant having not provided a schedule of costs in circumstances where directions issued required the Applicant to file submissions and support material by 15 September 2021.
[29] On receipt of the Applicant’s submissions, it became evident that the costs sought were now being sought under ss 375B or 611 of the Act. The Respondent contended that despite now having sought costs under either ss 375B or 611 of the Act, and separate to the requirements of Form F6, the costs that had been described in the Applicant’s supporting affidavit were not itemised as required by Schedule 3.1 of the Regulations. In this respect, the Respondent referred to s 403 of the Act, which it said applies given the costs order sought under s 611.
[30] As was submitted by the Applicant, there is no bar to the determination of the Applicant’s costs application because the ‘Itemised schedule of costs’ in Form F6 was not completed at the time the application was made.
[31] The Applicant’s costs application was filed within the period prescribed in s 377 and whilst an ‘Itemised schedule of costs’ was not provided, its absence is not fatal to the application.
[32] As observed, s 377A sets out that a schedule of costs may be prescribed in relation to items of expenditure likely to be incurred in relation to matters that can be covered by an order under ss 611, 375B or 376 in relation to an application under s 365. It is not apparent that a schedule of costs is prescribed in respect of s 375B.
[33] Further, s 25C of the Acts Interpretation Act 1901 (Cth) (AIA) which, by virtue of s 13 of the Legislative Instruments Act 2003 (Cth), applies to regulations as if they were Acts. Section 25C of the AIA, as of 25 June 2009, provides that where an Act prescribes a form, then, unless the contrary intention appears, strict compliance with the form is not required and substantial compliance is sufficient.
[34] Rule 8(5) of the Rules also provides:
If these Rules require that an approved form be used, it is sufficient compliance if a document is substantially in accordance with the approved form.
[35] Regarding the Applicant’s purported failure to fully complete the Form F6, there are several points to be made.
[36] First, the Applicant has sought costs under either or both ss 375B or 611. There is no prescribed schedule of costs for applications pursuant to s 375B.
[37] Second, the President of the Commission has approved the Form F6 for use in costs applications. 15 The Applicant completed and lodged the Form F6 in the requisite period, and while the ‘Itemised schedule of costs’ was not included with the application, I consider there was, on any reasonable view, substantial compliance with the Form F6 in this case.
[38] Finally, it is to be said that an approach where a determination is firstly made as to whether costs should be awarded and thereafter the issue of the assessment of costs is addressed separately (allowing parties to file materials in respect of the same), is not an unusual course to take and in the circumstances would prejudice neither the Respondent nor the Applicant. In fact, the assessment of costs may prove a lengthy exercise, which might otherwise be avoided if costs are not awarded in any event.
[39] The Respondent referred the Commission to s 403 of the Act, which I considered odd. Section 403 of the Act can be found under Part 3-2 of the Act, which deals with unfair dismissal applications. The section details that a schedule of costs may be prescribed in relation to items of expenditure concerning matters covered by an order under s 611 (in relation to a matter arising under Part 3-2), and ss 400A or 401. The section itself follows s 402, a section which prescribes the timeframe for making applications for costs under s 611 relating to a matter under Par 3-2, or ss 400A or 401. In short, s 403 has no operation in respect of the Applicant’s costs application and the argument relied upon by the Respondent is in this respect misconceived.
[40] To borrow the words of Vice President Lawler, as he was at the time, the ‘arid technical objection’ 16 premised upon the incomplete Form F6, is rejected.
[41] The Respondent observed that the questions that are before the Commission in determining the costs application are now before the Court (the Applicant presumedly having proceeded to the Federal Circuit Court with her general protections claim). It continued that the costs application directly concerns whether it was reasonable for the Respondent to have raised one of the questions that is now before the Court. That is, whether the Applicant was dismissed. The Respondent pressed that the making of a costs order in favour of the Applicant in such circumstances may ultimately be inconsistent with an order of the Court, and from the Respondent’s perspective, would not be in the interests of justice.
[42] The Respondent further submitted that in this matter, the parties had exchanged without prejudice offers during the Commission process and such offers may be relevant to considering the grounds of the application. The Respondent continued that whilst such offers could be canvassed in the context of a costs application, the without prejudice offers concerned matters still in active dispute between the parties in the Court. The Respondent submitted that parsing such offers in respect of issues still in dispute would also not be in the interests of justice and may potentially hinder settlement of Court proceedings.
[43] In respect of ss 375B and 611, it is not apparent that the Act prohibits my dealing with a costs application as contended by the Respondent.
[44] Regarding the application under s 365, I note that I have exercised the Commission’s powers under s 368(3)(b) by issuing a certificate of unsuccessful attempts to resolve the dispute. I have not advised the parties that an arbitration in relation to the dispute or a general protections court application, would not have a reasonable prospect of success. Clearly, I did not consider that to be the case.
[45] The Explanatory Memorandum sets out at paragraphs [56] to [59]:
New Section 375B - Costs orders against parties
56. New section 375B allows the FWC to order costs against a party to a general
protections dismissal dispute (the first party) if it is satisfied that the first party caused the other party to the dispute to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the dispute. New section 375B is similar to the costs orders that are available against parties in relation to unfair dismissal matters (see section 400A).
57. This power to award costs is in relation to the dispute before the FWC and does not include costs associated with a general protections court application.
58. The power to award costs under new section 375B is not intended to prevent a party from robustly pursuing or defending a general protections dispute before the FWC. Rather, the power is intended to address the small proportion of litigants who pursue or defend disputes in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.
59. The FWC's power to award costs under subsection 375B(1) is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission.
[46] As identified in the Explanatory Memorandum, s 375B provides the power to award costs in relation to a dispute before the Commission and does not include costs associated with a general protections court application. In Fadheel v Douglass Hanly Moir Pathology Pty Ltd, 17 it was said that there is little doubt that the Commission has power to make costs orders in respect to a general protections application concerning the application and any subsequent proceedings pertaining to the application, including costs associated with responding to the application, preparing and attending the mandatory conference (see 368), and, if necessary, arbitral proceedings under s 369 of the Act.18
[47] The power to award costs for a general protections court application sits of course with a court as provided by s 570 of the Act. Section 570(1) of the Act provides that a party to proceedings in a court in relation to a matter arising under the Act may be ordered by the court to pay costs.
[48] The Act provides the Commission with power to issue an order for costs against a party where there has been an application made to the Commission under s 365 (when certain pre-requisites are met) and similarly empowers the court to deal with a general protections application and make a costs order pursuant to s 570 of the Act in respect of that same general protections court application. Yet, despite the Act providing no express prohibition on the Commission dealing with an application pursuant to s 375B notwithstanding that a party may have, having received the s 368(3)(a) certificate, commenced proceedings in the court, the Respondent asserts the Commission ought not issue an order for costs against it as such order may be inconsistent with an order of the Court.
[49] Of course, it is not the case that the Respondent has sought an adjournment of the application, but instead justifies the dismissal of the costs application, in part, because of the invocation of an interests of justice principle. I consider that the Applicant was correct when she contended that a decision not to award costs premised only on there being an extant court application on foot would: (a) impose a restriction or limitation on the abovementioned provisions which cannot be located in the text of the Act; and (b) create a manifestly unjust scenario where the Applicant could never recover costs incurred in the Commission, where a conciliation had failed to resolve the dispute and she had subsequently made a general protections court application.
[50] I note that the Respondent referred to the parties having exchanged without prejudice offers during the Commission process and those offers concerned matters still in active dispute between the parties in the court.
[51] The Applicant submitted that she did not seek to rely on any without prejudice statements made during conciliation in support of her case and had not adduced evidence of these matters. Further, the Applicant said that she withdrew paragraph 11 at section 2.2 of the Form F6, accepting that without prejudice statements made during conciliation are not admissible, even in an application for costs. 19
[52] The Applicant added that her materials included evidence of open correspondence from her solicitors to the solicitors of the Respondent, which had placed the Respondent on notice that taking the issues it had to the application under s 365 was unreasonable and that the Respondent was placed on notice of her intention to raise them in respect of costs.
[53] It is evident that the Applicant does not seek to rely on any without prejudice material in support of her application and with respect to the open communication on which she relies, it is not apparent that the Respondent has taken issue with that. To the extent that there are current proceedings on foot before the Federal Circuit Court, again, I do not consider that this circumstance prevents the Commission from determining this costs application. The Respondent speaks of the ‘parsing’ of without prejudice offers while a dispute plays out between the parties in the Court, as not being in the interests of justice and a potential hindrance to the settlement of court proceedings. However, such offers will not be ‘parsed’ and regarding the proposition that the determination of the costs application may prove a potential hindrance to the settlement of the court proceedings, the statement is merely speculative.
[54] The Applicant submitted that throughout 2019 and 2020, before her dismissal, solicitors acting on her behalf and on behalf of the Respondent exchanged correspondence about her employment and claims she had made, that she had been subject to unlawful adverse action in her employment.
[55] In respect of her dismissal, the Applicant referred to correspondence that passed between her and senior human resources representatives of the Respondent, highlighting the following:
(a) The Applicant’s letter to Ms Simone Keenan dated 2 November 2020 in which the Applicant wrote:
i. It has become apparent that the current redeployment process is of little utility, something that is unlikely to change. I feel that I am left with no viable option other than to acquiesce to early termination as described by C.9.36 of the enterprise agreement. Amy Hall raised this type of termination with me in September … I wish to emphasise that the events leading to my termination and dismissal, including where things are now at, have been at the initiative and direction of the Bureau. 20
(b) On 20 November 2020, Amy Hall responded on behalf of the Respondent. In her response, Ms Hall did not take issue with the sentence emphasised above, though she did incorrectly state that the Applicant had ‘requested access to the early separation option’. 21
(c) On 3 December 2020, the Applicant responded by correcting Ms Hall to note that ‘[a]s per my earlier correspondence, the early termination option was first put to me as an option by the Bureau. I did not seek it, and it isn’t correct to suggest that it was initiated by me. You would both be aware of my desire to remain in the Bureau as far back as August last year…’ 22
(d) On 11 December 2020, Ms Keenan made a formal offer to the Applicant to terminate her employment pursuant to clause C.9.36 of the enterprise agreement. Again, in this correspondence, Ms Keenan did not take issue with the sentence emphasised above or clarify that the Respondent considered the termination arose other than at its initiative. 23
(e) On 14 December 2020, the Applicant responded and consented to the termination pursuant to clause C.9.36 of the enterprise agreement. When responding, the Applicant further clarified that ‘… [f]or all the reasons I have previously articulated, this agreement is without prejudice to all of my rights under law and is not to be taken as my agreement to a voluntary redundancy’. 24
(f) On 16 December 2020, Ms Hall sent the Applicant a breakdown of the payment she would receive and again Ms Hall’s correspondence contained an incorrect statement in that it described the payment as being made in connection with a ‘voluntary redundancy’. 25
(g) On 16 December 2020, the Applicant responded, drawing the error to Ms Hall’s attention and asking that the breakdown document be changed to acknowledge that the payment was a ‘termination payment’, not a payment in connection with a ‘voluntary redundancy’. Ms Hall revised the document and sent it back to the Applicant. 26
(h) On 18 December 2020, the Applicant responded again noting that there still remained an incorrect reference in the payment document to a ‘voluntary redundancy’. Ms Hall responded later that day to confirm that the Respondent would not record her termination in their systems as a ‘voluntary redundancy’. 27
[56] The Applicant submitted that it was unreasonable for the Respondent to make its jurisdictional objection in respect to her general protections application in circumstances where:
(a) the Respondent had taken all the steps it had taken which had the consequential effect of causing the dismissal; and
(b) the abovementioned correspondence had passed between the parties and yet:
i. the Respondent did not challenge the Applicant’s caveat that she considered her dismissal arose at the Respondent’ initiative; and
ii. accepted corrections to mischaracterisations of the proposed termination by the Respondent.
[57] The Applicant added that it should have been apparent to the Respondent when it made its jurisdictional objection that the objection had no reasonable prospects of success. In addition, the Applicant referred to the Respondent having to present as a model litigant.
[58] From the Applicant’s perspective, she considered that any employer in the Respondent’s position, properly advised, would have understood that irrespective of whether or not they were successful in relation to their jurisdictional objection, the forms of adverse action relied upon, if not conciliated in the Commission, were going to progress to be resolved in a general protections court application. The Applicant observed that the jurisdictional objection only related to one of the forms of adverse action alleged by the Applicant, with the other forms taking place during her employment. The Applicant submitted that there was no lack of clarity in the law, she was entitled to pursue a general protections court application in respect of such matters even if the Commission found she was not dismissed.
[59] The Applicant argued that by running its jurisdictional objection to a final hearing, the Respondent engaged in unreasonable conduct. It was unreasonable, said the Applicant, because it could have no substantive effect while running up the Applicant’s costs, and the Respondent could only have engaged in that conduct because of a glaring omission or error by its legal advisers or obduracy by its instructing officers in the face of accurate legal advice. The Applicant further argued that the Commission did not need to determine whether the cause of the conduct was the lawyers’ or the instructing officers’ doing. The Applicant explained that the test of unreasonableness of the conduct of a represented party is the standard expected of the litigant, properly advised.
[60] The Applicant has relied upon both s 611(2)(a) and (b) in support of her application for costs, in addition to s 375B.
[61] However, I intend to address s 611(2) first, particularly its latter element, namely s 611(2)(b). The Full Bench of the Commission in Baker v Salva Resources Pty Ltd 28 expressed the following about the phrases ‘should have been reasonably apparent’ and ‘had no reasonable prospect of success’:
• ‘should have been reasonably apparent’ must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test; 29 and
• a conclusion that an application ‘had no reasonable prospect of success’ should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless, 30 or so lacking in merit or substance as to be not reasonably arguable.31
[62] Similarly, in Keep v Performance Automobiles Pty Ltd, 32 a Full Bench summarised the principles relevant to that subsection:
[18] As to s.611(2)(b), the FWC may make a costs order against a person if satisfied that ‘it should have been reasonably apparent’ to that person that their application had ‘no reasonable prospect of success’. The expression ‘should have been reasonably apparent’ in s.611(2)(b) imports an objective test, directed to a belief formed on an objective basis as opposed to the applicant’s subjective belief.
[19] There is Full Bench authority for the proposition that the Commission should exercise caution before arriving at the conclusion that an application had ‘no reasonable prospects of success’. In Deane v Paper Australia Pty Ltd a Full Bench made the following observation about this expression in the context of enlivening a power to award costs under s.170CJ(1) of the Workplace Relations Act 1996:
unless upon the facts apparent to the applicant at the time of instituting the [application], the proceeding in question was manifestly untenable or groundless, the relevant requirement in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available. [endnotes omitted]
[63] Although considering the phrase in the confines of a different statute, in Spencer v Commonwealth of Australia, the High Court said:
In many cases where a plaintiff has no reasonable prospect of prosecuting a proceeding, the proceeding could be described (with or without the addition of intensifying epithets like "clearly", "manifestly" or "obviously") as "frivolous", "untenable", "groundless" or "faulty". But none of those expressions (alone or in combination) should be understood as providing a sufficient chart of the metes and bounds of the power given by s 31A. Nor can the content of the word "reasonable", in the phrase "no reasonable prospect", be sufficiently, let alone completely, illuminated by drawing some contrast with what would be a "frivolous", "untenable", "groundless" or "faulty" claim.
Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is "no reasonable prospect" of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to "no reasonable prospect" can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase "just and equitable" when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes. 33
[64] In Qantas Airways Ltd v Carter, 34 the Full Bench stated that it was clear from the terms of s 611 that the point at which the Commission must determine whether or not an application was vexatious, without reasonable cause or had no reasonable prospect of success, was when the application was made.35 I see no reason to depart from that authority.
[65] The Applicant’s case for an order for costs rests in part on the proposition that the jurisdictional objection lacked merit because in the correspondence between the Applicant and the Respondent, the Applicant had corrected the characterisation of the termination of her employment and had provided a caveat regarding her dismissal. The Applicant submitted that the Respondent accepted the caveat and had not pursued an objection to the characterisation.
[66] For the following reasons, I am not prepared to conclude the application was made without reasonable cause and I am not satisfied, on the material before the Commission, that I could reasonably conclude the application had no reasonable prospect of success.
[67] First, there can be no criticism of the Applicant for placing the Respondent on notice before her departure that she considered the termination of her employment was a dismissal (as understood by reference to s 386 of the Act). However, the proposition that it ‘should have been reasonably apparent’ to the Respondent that its jurisdictional objection ‘had no reasonable prospect of success’ because the Respondent did not challenge the Applicant’s caveat and also accepted corrections to what the Applicant termed as mischaracterisations of the proposed termination by the Respondent, cannot be sustained.
[68] For reasons unknown, the Respondent adopted a certain approach when corresponding with the Applicant about her departure from the Respondent organisation. I do not intend to speculate as to the reason why that approach was assumed because in truth, it is irrelevant. However, to the extent that the correspondence may have reflected the view of the parties regarding the Applicant’s departure, or rather the legality of the departure, it remained simply that – their view.
[69] Whether the Respondent’s jurisdictional objection was manifestly untenable or groundless, did not, and does not, turn on whether the Respondent reacted, challenged or disagreed with the Applicant’s characterisation of the termination of employment leading up to her dismissal.
[70] In my view, the Applicant correctly submitted there was nothing unreasonable about the Respondent deciding not to take issue with her statement in the correspondence that she considered that the termination of her employment arose at the Respondent’s initiative. However, the Applicant proceeds to argue the unreasonable act is that of the Respondent making a jurisdictional objection notwithstanding having not taken issue with the characterisation of the termination in the correspondence. In effect, what the Applicant proposes is that unless the Respondent took issue with the characterisation of the termination in the correspondence, then any subsequent reliance on there having been a dismissal is pursuing an objection without reasonable cause or without reasonable prospect of success, in light of all the circumstances.
[71] The Applicant may consider the Respondent’s filing of the jurisdictional objection unreasonable in the circumstances where it appears the Respondent did not grapple with the Applicant’s characterisation of the termination in the correspondence preceding the dismissal. However, the Applicant’s perspective as to the Respondent’s unreasonableness does not translate to the jurisdictional objection having no reasonable prospect of success.
[72] On any objective basis, the Respondent’s success with its jurisdictional objection depended on the resolution in its favour on a point of law. That point of law required the examination of s 386 of the Act, the authorities that have considered that section, the terms of the Bureau’s Agreement, principles of construction and the conduct of the parties. In respect of the conduct of the parties, what passed between the parties regarding the characterisation of the termination of the employment was not considered to constitute a critical action that gave rise to the Applicant’s termination of employment in the Decision 36. It, therefore, cannot be said that in all the circumstances the jurisdictional objection was manifestly untenable or groundless, particularly in light of the reasons relied upon by the Applicant.
[73] Before considering s 611(2)(a), a further submission of the Applicant warrants consideration. That submission was that properly advised, the Respondent would have understood that irrespective of whether or not it was successful in relation to its jurisdictional objection, the other forms of adverse action relied upon by the Applicant, if not conciliated, were going to progress to be resolved in a general protections court application. The proposition is that the jurisdictional objection was unreasonable because it could have no substantive effect.
[74] The Applicant’s argument is premised on the notion that the jurisdictional objection was futile because the Applicant intended to pursue a general protections court application on grounds other than those concerning the dismissal. This view is of course open to the Applicant, but it fails to further advance the Applicant’s costs application. It is a misconceived submission. Had the jurisdictional objection found favour with the Commission, the Applicant would have been unable to pursue the dismissal component of her claim in the court – the loss of a cause of action in such circumstances is, in my view, of substantive effect.
[75] Turning to s 611(2)(a), the principles concerning the interpretation and application of that section were comprehensively stated in Church v Eastern Health. 37 I adopt the summary of these principles set out by the Full Bench in Chapman v Ignis Labs Pty Ltd:
• An application is made vexatiously when the predominant motive or purpose of the applicant is to harass or embarrass the other party or to gain a collateral advantage.
• An application is not made without reasonable cause simply because the application did not succeed.
• Whether an application is made without reasonable cause may be tested by asking, on the facts apparent to the applicant at the time the application was made, whether there was no substantial prospect of success.
• If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to characterise the application as having been made without reasonable cause.
• In relation to an appeal, the question becomes whether the appeal has no substantial prospect of success. The prospect of success must be evaluated in the light of the facts of the case, the judgment appealed from and the points taken in the notice of appeal. If there is a not insubstantial prospect of the appeal achieving some success, it cannot fairly be described as having been made without reasonable cause.
• An application will have been made without reasonable cause if it can be characterised as so obviously untenable that it cannot possibly succeed, is manifestly groundless or discloses a case where the tribunal is satisfied it cannot succeed. 38
[76] In my opinion, the points I have made at paragraph [72] of this decision are apposite to the argument as to whether the jurisdictional objection was made without reasonable cause. The success of the jurisdictional objection was dependent, in part, on one or more arguable points of law with respect to the characterisation of the termination of employment in light of the terms of the Bureau’s Agreement and their construction. It could not be said that there was no substantial prospect of success. As was observed at paragraph [70] of the Decision:
One may also argue that the actions of the Respondent coalesced with the Applicant’s agreement such that it could not be said that there was a termination of employment at the initiative of the employer because the Respondent’s actions were not critical actions or actions that resulted directly or consequentially in the termination of the employment and the employment relationship. 39
[77] Turning then to the Applicant’s reliance upon s 375B of the Act. The Applicant has relied upon the aforementioned ‘unreasonable acts’ of the Respondent in support of her application under s 375B. It should be evident by now that I do not consider that the Respondent engaged in an unreasonable act by making the jurisdictional objection.
[78] For the sake of completeness, the Respondent argued that the Applicant should not be permitted to rely upon the two limbs on s 611(2) as the section was not referenced or relied upon in the application. I do not consider that the Applicant, having made her application under s 375B, was thereafter limited to reliance upon only that section of the Act. The preferable course would have been for the Applicant to seek permission to amend her application accordingly, nevertheless the Respondent was not prejudiced by the Applicant’s ‘later’ reliance upon s 611(2) given it had ample opportunity to respond to the Applicant’s arguments and evidence. Further, it relied upon the same factual matrix to press all of its costs arguments.
[79] To conclude, I am not satisfied that s 611(2)(a) or (b) have been met and for the reasons stated, I am similarly not satisfied that the Applicant has established that an award of costs is warranted under s 375B. In any event, considering the matters outlined above, I do not consider that this is an appropriate case for me to exercise my discretion to award costs.
[80] The Applicant submitted that the Respondent’s actions were particularly unreasonable given it was subject to the Commonwealth Model Litigant Obligations and pointed to particular obligations which it said were pertinent in this respect. However, such obligations do not appear to me to prohibit the pursuit of a jurisdictional objection in the aforementioned circumstances or to render it an unreasonable act. It could not be said that the jurisdictional objection was manifestly untenable or groundless, or that the Respondent knew a matter to be ‘true’. Whether or not the Applicant was dismissed was a matter of law and fact and in respect of the law there were one or more arguable points.
[81] For these reasons, the application for costs made by the Applicant must be dismissed. An Order 40 giving effect to this decision is issued in conjunction with its publication.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR741218>
Appearances:
W Whitbread of counsel for the Applicant.
S Wright of counsel for the Respondent.
Hearing details:
2022.
Perth (by video):
29 September.
1 Fair Work Act 2009 (Cth) ss 611, 400A and 402.
2 [2021] FWC 4622 (Decision).
3 Affidavit of Jasmine Louise Chambers dated 24 March 2021 (Chambers Statement), [6]; Commonwealth of Australia (acting through and represented by the Bureau of Meteorology) [2018] FWCA 5790 (Bureau’s Agreement); PR700399.
4 Chambers Statement (n 3) [47].
5 Bureau’s Agreement (n 3) C.9.36.
6 Form F6 – Application for costs, 2.2 [9].
7 De Giusti v NSW Trains [2018] FWC 1843, [15].
8 Supplementary Explanatory Memorandum, Fair Work Amendment Bill 2013 (Cth).
9 [2015] FWCFB 1956, [13].
10 Fair Work Act 2009 (Cth) s 611 (emphasis added).
11 Ibid [20].
12 Ibid.
13 [2018] FWC 1843, [20].
14 (1989) 168 CLR 210, 216.
15 Fair Work Commission Rules 2013, r 8(2), sch 1.
16 University of New South Wales [2010] FWAA 9588, [35].
18 Ibid [30].
19 See Bradshaw v BHP Coal Pty Ltd [2014] FWC 4871, [47] citing McKenzie v Meran Rise Pty Ltd (Australian Industrial Relations Commission, Guidice J, Watson SDP and Whelan C, 7 April 2000) [12].
20 Chambers Statement (n 3) [50].
21 Ibid [51].
22 Ibid [52].
23 Ibid [53].
24 Ibid [54].
25 Ibid [57].
26 Ibid [58] – [59].
27 Ibid [60] – [61].
28 (2011) 211 IR 374, 376 [10].
29 Wodonga Rural City Council v Lewis (2005) 142 IR 188, 191–2 [6].
30 Deane v Paper Australia Pty Ltd (Australian Industrial Relations Commission, Giudice J, Williams SDP and Simmonds C, 6 June 2003) [7] – [8].
31 Smith v Barwon Region Water Authority (2009) 187 IR 276, 287 [48].
32 [2015] FWCFB 1956, [18] – [19].
33 (2010) 241 CLR 118, 141 [59] – [60] (Hayne, Crennan, Kiefel and Bell JJ).
35 Ibid [20].
36 Decision (n 2).
37 (2014) 240 IR 377, 383–5 [23] – [33].
38 [2021] FWCFB 932, [14].
39 Mohazab v Dick Smith Electronics Pty Ltd [No 2] (1995) 62 IR 200, 205.