[2012] FWA 4591

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Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Lucinda Smith
OSD Pty Ltd



Application for security for payment of costs.

[1] 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.

[2] The application was conciliated by a Fair Work Australia conciliator on 25 January 2012 but the conciliation was not successful.

[3] On 16 March 2012 the Respondent filed an application for security for payment of costs.

The Legislative Framework

[4] Section 404 of the Fair Work Act 2009 provides for the making of rules in relation to security for costs as follows:

[5] Rule 16 provides as follows:

[6] The power to make such an order is discretionary.

Principles relevant to the discretion to make an order for security for costs

[7] 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

[8] The Respondent submitted that the Applicant’s employment was terminated for poor performance. The Respondent submitted that:

[9] The Respondent submitted that the Applicant’s unfair dismissal application had no reasonable prospect of success. 6

[10] 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

[11] 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

[12] 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

[13] The Applicant submitted that she was unfairly dismissed and the performance management process “had a pre-determined outcome.” 11

[14] 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

[15] 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

[16] The Applicant rejected the allegations of serious misconduct. 14

[17] The Applicant gained employment on 27 February 2012. 15


[18] 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.

[19] It is relevant that an order for security of costs is likely to frustrate the Applicant’s right to litigate her claim.

[20] It is also relevant that even if the Respondent is successful in defending the claim that an order for costs may not made.

[21] 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.

[22] 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.

Hearing details:

May 18.

 1   [2011] FWA 2910 at [7]-[23]

 2   Exhibit R1 at [4(b)]

 3   Ibid at [8(f)]

 4   Ibid at Annexure A

 5   Ibid at [8]

 6   Ibid at [7]

 7   Ibid at [15]

 8   Ibid at [13]

 9   Ibid at [12]

 10   Ibid at [26]

 11   Exhibit A1

 12   Ibid at [3]

 13   Ibid at [3]

 14   Ibid at [5]

 15   Ibid at [5(v)]

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