[2013] FWC 5770

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Fair Work Act 2009

s.394—Unfair dismissal

Stephen Mowlam
R I Brown Pty Ltd



Application for costs

[1] This decision concerns an application for an order for costs by R I Brown Pty Ltd in respect of an application by Mr Stephen Mowlam pursuant to s.394 of the Fair Work Act 2009 (the Act). After hearing the matter the Commission found that the Applicant was terminated for serious misconduct and the application for unfair dismissal remedy was dismissed.

[2] Mr Gray continued to appear, with permission of the Commission, for R I Brown Pty Ltd, the respondent in the initial application and the applicant in the subsequent application for costs. Mr Mowlam continued to represent himself. Mr Mowlam was the applicant in the initial application and the respondent in the subsequent application for costs.

[3] The application for costs arises under s.400A and s.611 of the Fair Work Act 2009 (the Act). The relevant provisions of the legislation state as follows

[4] Section 400A is a new provision that took effect in January 2013.

[5] Mr Gray, in his submissions, points out that the new provision is very board whereas s.611 is connected to the instituting of proceedings and whether the matter is vexatious.

[6] Mr Gray concedes, on a point made by Mr Mowlam, that the new provision came into effect in January 2013. Mr Gray accepts that he is certainly not seeking costs from prior to January 2013.

[7] Mr Gray then further states that although s.400A is broad, the first part of his submissions is that the costs order ought to cover the whole matter because Mr Mowlam had an unarguable case or, in other words, it should have been apparent that he had no reasonable prospect of success from the outset.

[8] Mr Gray refers to the decision in Ron Lever v Australian Nuclear Science and Technology Organisation [[2009] AIRC 784], a decision of Senior Deputy President Drake. Mr Gray states that that is the principal case that deals with the question of dismissal in relation to an employee accessing confidential information and that it is absolutely plain and totally reflects the views that the Commission originally expressed in the initial application, that accessing confidential financial information is unarguably grounds for summary dismissal.

[9] The Commission in response and in exchange with Mr Gray, states at PN1623 of transcript, as follows:

[10] Mr Gray then refers to a letter dated 16 November 2012, which was sent to Ms Soteriou, of Fair Work Australia, which states as follows:

[11] The Commission believes that at this point it should actually set out what has actually occurred in terms of the initial application by Mr Mowlam:

[12] Mr Mowlam lodged an application under s.394 of the Act on 3 November 2012.

[13] The application was in response to a letter from his employer dated 3 October 2012 terminating his services. That letter states as follows:

[14] It is noted that that letter does not refer to serious misconduct. The respondent in the initial matter lodged their form F3 (Employer’s Response to Application for Unfair Dismissal Remedy) on 14 November 2012.

[15] In the form F3 there are six reasons provided for Mr Mowlam’s termination of employment. They are as follows:

[16] Item 2 referred to in the reasons for Mr Mowlam’s termination refers to him accessing company’s confidential financial information but there are other issues: business downturn for example, which Mr Mowlam acknowledged; unsatisfactory performance, which Mr Mowlam states was never raised; untruthful manipulation of time sheets, which Mr Mowlam states, again, was never raised; an assertion that given that the respondent is a small business it is unattainable when the relationship between the applicant in the initial matter and the business owner is irreversibly broken down; and an expression by Mr Mowlam that he would like to have a redundancy package, which he does not deny but states that it was in the context of assisting the company in the period of downturn.

[17] There is also the subsequent letter dated 16 November 2012 , as referred to above, which attempts to clarify that the reasons why the initial respondent did not refer to the serious misconduct. They stated that it was to protect Mr Mowlam’s reputation from association of misconduct to avoid future disclosure of the initial respondent’s reasons for termination to Mr Mowlam’s future employers and to avoid face to face confrontation with Mr Mowlam himself.

[18] After having filed the form F3, the initial respondent then refuses to attend conciliation. So, Mr Mowlam has a letter of termination which does not refer to serious misconduct; he has a document, the form F3, setting out six reasons for his termination; and then a letter dated 16 November 2012 to Fair Work Australia stating that the initial respondent will not attend conciliation.

[19] A further exchange occurred between the Commission and Mr Gray, at PN1624 of transcript, as follow:

[20] In a further exchange between the Commissioner and Mr Gray occurred as follows at PN1633 to 1650 of transcript, as follows:

[21] There were further exchanges between Mr Gray and the Commission regarding the issue of whether not Mr Mowlam was entitled to have his case heard and for the Commission to determine whether or not in fact there had been a breach of the Act.

[22] During submissions there was an issue of whether or not Mr Mowlam sought the sum of $15,000 to settle. Mr Mowlam denies emphatically that he claimed $15,000 but at the commencement of the hearing to deal with the initial s.394 application, the Commission asked the parties to have some discussions during the break. It was at that point, Mr Gray alleged, that he provided Mr Mowlam with a written offer to settle, for $1,450. Mr Gray asserts that Mr Mowlam read the offer and handed it back.

[23] Mr Mowlam states at PN1725 of transcript:

[24] On that issue I find, on the balance of probability that, after several exchanges between Mr Mowlam, Mr Gray and the Commission, Mr Mowlam’s version of events are to be believed.

[25] The Commission rejects any assertion made by Mr Mowlam that Mr Gray may have doctored the document after Mr Gray alleges that Mr Mowlam rejected the settlement offer.

[26] There was an exchange between Mr Gray and the Commission relating to whether or not Mr Mowlam had made a counter offer to settle the matter. The Commission believes that the outcome of that exchange between Mr Gray and the Commission is best clarified in PN1767 and PN1768 of transcript, as follows:

[27] The Commission does not intend to deal with the submissions of Mr Mowlam in this decision. The Commission has read them and understands them.

[28] In looking at the issue of costs and s400A(1) of the Act, with the importance being place upon the words “unreasonable act or omission of the first party in connection with the conduct or continuation of the matter” I am satisfied that Mr Mowlam did not act unreasonably in pursuing his matter under s.394 of the Act.

[29] The Commission does so because it has made it abundantly clear that if Mr Mowlam had been made aware that the sole reason for his termination was serious misconduct then the applicant in the costs matter would have a very strong argument; but there were other reasons. Again, in referencing the form F3, the Commission had to determine whether or not those reasons made up any part of the termination of Mr Mowlam and, due to the respondent in the initial application refusing to attend conciliation, Mr Mowlam, in the Commission’s view, was entitled to pursue his application and have it clarified by the Commission whether or not there were other valid reasons for his termination.

[30] Ultimately, the Commission found that there was a valid reason for the termination but it only did so after dealing with all the other issues that the form F3 had raised. Some of those were never put to Mr Mowlam. Mr Mowlam, in the Commission’s view, was entitled to continue with his application as stated above, to ascertain the exact reason for his termination and he was entitled to conduct it in the manner that he did.

[31] It would be an absurd position to have an employer simply say that “serious misconduct has occurred” and that’s the reason for the termination and expect an employee to simply accept that, if the employee believed that no such conduct occurred. They, in the Commission’s view, are entitled to run their argument.

[32] Members of the Commission, in a number of decisions, have found misconduct has occurred but found that the termination of employment was harsh, unjust and unreasonable as the termination was out of proportion to the misconduct.

[33] The Commission, therefore, rejects the application for costs.


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