FWA 7052
SECURITY FOR COSTS
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Anthony Lewis Russell
Due Easy Pty Ltd T/A Hard Rock Excavations
SYDNEY, 22 DECEMBER 2011
Security for Costs.
 This is an Application for Security for Costs by Due Easy Pty Ltd t/as Hard Rock Excavations (“Due Easy P/L”) against Anthony Russell.
 The main proceedings concern the alleged unfair dismissal of Anthony Russell by Due Easy Pty Ltd.
 The unfair dismissal application has been subject to conciliation but remains unresolved.
Security For Costs under the Fair Work Act 2009
 The power to order Security for Costs is found in section 404 of the Fair Work Act 2009 (the Act) and Rule 16 of the Fair Work Australia Rules. The power to order Security for Costs is discretionary.
Costs in Unfair Dismissal proceedings under the Fair Work Act 2009
 Costs can only be awarded in certain circumstances in unfair dismissal proceedings under the Act. Those circumstances are set out in section 611 (2) of the Act and can be summarised as follows.
 Costs can be awarded if the application was made vexatiously or without reasonable cause (s. 611(2)(a)) or if it should have been reasonably apparent to the applicant that the application had no reasonable prospects of success (s. 611(2)(b)).
 There is no automatic entitlement to the award of costs should these matters be proven. The award of costs in unfair dismissal matters is discretionary and each case turns on its own facts. It is also the case that where costs are awarded, it may not be the case that the full amount of costs incurred is covered by the costs order.
The Submissions for Due Easy Pty Ltd t/as Hard Rock Excavations
 Due Easy P/L filed a written submission setting out its case for the granting of a Security for Costs order on the statutory grounds that the unfair dismissal application was made without reasonable cause (s.611(2)(a)) and that it should have been reasonably apparent to the applicant that the application had no reasonable prospects of success (s.611(2)(b)). Attached to the written submission, was an affidavit of Patrick Donovan, solicitor for Due Easy P/L.
 Due Easy P/L submits that an Order for Security for Costs should be ordered for the following reasons:
1. The Applicant in the unfair dismissal proceedings – Anthony Russell, was engaged as a casual employee. Pursuant to s.384(1) of the Act, a period of casual employment does not count towards the employee’s period of employment other than in the circumstances referred to in s.384(2)(i) and (ii) of the Act. There is no evidence from the Applicant of the existence of the regular and systematic basis referred to in s.384(2)(i), nor the reasonable expectation referred to in s.384(2)(ii) of the Act.
2. Due Easy P/L in the unfair dismissal proceedings was a small business employer as defined in the Act at the time of the Anthony Russell’s employment as it only engaged 3 employees at the time of the Applicant’s dismissal. So the minimum qualifying period for an employee to bring an unfair dismissal is 12 months. The Applicant had less than 12 months service as a casual employee.
3. There is no jurisdiction for Anthony Russell to bring the unfair dismissal claim. His claim is without reasonable cause and therefore has no reasonable prospect of success. Due Easy P/L should succeed in its defence and would be entitled to an Order for Costs pursuant to section 611(2)(a) and /or s.611 (2)(b) of the Act.
4. Due Easy P/L sought an order in the amount of $3,500 plus GST as Security for Costs, given the foregoing submissions.
The Submissions for Anthony Russell
 Anthony Russell (the Applicant) was opposed to the Security for Costs application for the following reasons:
1. He was employed by Due Easy P/L for nine (9) months, 16 August 2010 to 16 May 2011, according to his unfair dismissal application.
2. He says that he was employed as a casual employee but had systematic and regular employment and that he had continuous service due to a series of adjoining periods of service in accordance with s. 384(2) (i) and (ii).
3. He says that he has been employed for the minimum employment period as required by the Act.
 There are two issues for consideration in this matter: the length of service of the Applicant and the claim of Due Easy P/L that it falls within the definition of a small business employer.
 As to the Applicant’s length of service, there is conflicting information. In his unfair dismissal application, the Applicant gives his starting date as 16 August 2010. Due Easy P/L asserts that the date is February 2011. In his written material to FWA, on the issue of Security for Costs application, the Applicant denied he was on a three month probation (February to May 2011 when he was dismissed). Instead, he implied that he has had at least two periods of engagement with Due Easy P/L and that the second period is an extension and continuation of his original contract. Again, the implication is that these, at least two separate periods of engagement, would give twelve months service as a casual employee in order to counter the claim of his former employer that he has less than 12 months service as a casual employee.
 The problem with this assertion by the Applicant that he has more than 12 months service is that not only does Due Easy P/L disagree but the assertion is at odds with his own unfair dismissal application wherein he gives a starting date that results in less than 12 months service. Further, there is no evidence from the Applicant to back up his assertion of more than 12 months service.
 The other issue for consideration is the claim by Due Easy P/L that it is a small business employer. In its Form F3 response to the unfair dismissal application, Due Easy P/L recorded that the average number of employees required on projects was 3 to 7.
 Section 23(1) of the Act provides that a small business employer is one that employs fewer than 15 employees.
 The Applicant did not address this issue in his written submissions on the issue of Security for Costs.
 Due Easy P/L has made an application for Security For Costs against the Applicant. The sum of money sought is $3,850 (the security).
 Due Easy P/L has based its claim for Security for Costs on the grounds that it is a small business employer and that the Applicant has less than 12 months service. The uncontested evidence is that Due Easy P/L has 3 to 7 employees and this number of employees meets the statutory requirement for being designated as a small business. Given that uncontested evidence, the Applicant needed to show that he has been an employee of 12 months standing. His own unfair dismissal application asserts that he has less than 12 months standing.
 Rule 16 of the Fair Work Australia Rules 2010, indicates by its non-mandatory language, that the power of FWA to make an order for security for payment of costs is discretionary.
 Having considered all of the material in this matter, I consider that an order for Security of Costs be granted given that Due Easy P/L is a small business employer and the Applicant’s unfair dismissal application states that he has less than 12 months service. An order for the amount of $3,850, as sought by Due Easy P/L, is appropriate. An Order to that effect will also be issued [PR518395].
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