FWA 4591
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
OSD Pty Ltd
MELBOURNE, 28 MAY 2012
Application for security for payment of costs.
 Ms Lucinda Smith (the Applicant) made an application for an unfair dismissal remedy on 22 December 2011. The Applicant had been employed by OSD Pty Ltd (the Respondent) from 2 February 2011 to 15 December 2011 when her employment was terminated and the Applicant was paid four weeks pay in lieu of notice.
 The application was conciliated by a Fair Work Australia conciliator on 25 January 2012 but the conciliation was not successful.
 On 16 March 2012 the Respondent filed an application for security for payment of costs.
The Legislative Framework
 Section 404 of the Fair Work Act 2009 provides for the making of rules in relation to security for costs as follows:
“The procedural rules may provide for the furnishing of security for the payment of costs in relation to matters arising under this Part.”
 Rule 16 provides as follows:
Note FWA will not ordinarily make such an order before the conclusion of conciliation.
16.2 The security must be of such amount, and furnished at such time and in such manner and form, as FWA directs.
16.3 FWA may, on further application:
(a) reduce or increase the amount of security directed to be given; and
(b) vary the time at which, or manner or form in which, the security is to be furnished.
16.4 Without limiting any other power which FWA may exercise, if FWA directs a person to furnish security for costs in respect of a matter or part of a matter arising under Part 3-2 of the Act, it may order that the matter be:
(a) adjourned until security is furnished; or
(b) adjourned indefinitely.”
 The power to make such an order is discretionary.
Principles relevant to the discretion to make an order for security for costs
 Commissioner Asbury, in Harris v Home Theatre Group Pty Ltd t/a Home Theatre Group 1, sets out a thorough summary of the factors to be considered when considering an application for security for costs. I will not repeat those factors here but I have adopted the approach set out in that decision.
Submissions of the Respondent
 The Respondent submitted that the Applicant’s employment was terminated for poor performance. The Respondent submitted that:
(1) the Applicant’s probationary period had been extended due to poor performance. 2
(2) the Applicant was subsequently given two written warnings and counselled about her performance. 3
(3) the Applicant was given a show cause letter on 14 December 2011 and provided with an opportunity to respond. 4
(4) after the termination of the Applicant’s employment the Respondent discovered emails sent by the Applicant. The Respondent submitted that had it been aware of the emails prior to the termination of the Applicant’s employment it would have been entitled to terminate the Applicant’s employment for serious misconduct. 5
 The Respondent submitted that the Applicant’s unfair dismissal application had no reasonable prospect of success. 6
 The Respondent submitted that costs will be awarded against the Applicant. 7 Further, the Respondent submitted that if an order for costs was ultimately made against the Applicant she would not be able to pay the costs.8
 The Respondent also submitted that it had made a fair and reasonable offer of settlement and the Applicant is “frustrating the process and is not being reasonable.” 9
 The Respondent seeks an order that the Applicant be required to provide $25,000 or such other sum as Fair Work Australia considers appropriate as security for costs and that the unfair dismissal application be adjourned until the security is provided. 10
Submissions of the Applicant
 The Applicant submitted that she was unfairly dismissed and the performance management process “had a pre-determined outcome.” 11
 The Applicant submitted that the performance management process was terminated seven days before it was supposed to end and her replacement had already been engaged. 12
 The Applicant submitted that the matters complained of did not warrant the termination of her employment. She submitted that any failings could be explained by lack of staff, underperforming staff and unrealistic expectations. 13
 The Applicant rejected the allegations of serious misconduct. 14
 The Applicant gained employment on 27 February 2012. 15
 On the material before the Tribunal the Applicant’s case appears to be weak, however, I am unable to conclude that the Applicant’s claim has no reasonable prospect of success or that she instituted the proceedings vexatiously or without reasonable cause.
 It is relevant that an order for security of costs is likely to frustrate the Applicant’s right to litigate her claim.
 It is also relevant that even if the Respondent is successful in defending the claim that an order for costs may not made.
 Other than the fact that the Applicant was out of work for ten weeks, there is no evidence before the Tribunal that there would be a risk that an order for costs in favour of the Respondent could not be satisfied.
 I do not consider it appropriate in this case to make an order for security for costs. The Respondent’s application is dismissed and the matter will be set down for hearing.
L Smith on her own behalf.
L Burns on behalf of the Respondent.
1  FWA 2910 at -
2 Exhibit R1 at [4(b)]
3 Ibid at [8(f)]
4 Ibid at Annexure A
5 Ibid at 
6 Ibid at 
7 Ibid at 
8 Ibid at 
9 Ibid at 
10 Ibid at 
11 Exhibit A1
12 Ibid at 
13 Ibid at 
14 Ibid at 
15 Ibid at [5(v)]
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