Andrew Kim v Orc International Pty Ltd

[2016] FWC 3876

[2016] FWC 3876

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Andrew Kim
v
ORC International Pty Ltd
(U2015/13199)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 16 JUNE 2016

Application for relief from unfair dismissal.

[1] On 19 February 2016, I dismissed¹ Mr Andrew Kim’s application for an unfair dismissal remedy.

[2] On 4 March 2016, ORC International Pty Ltd made an application for costs under s.400A of the Fair Work Act 2009. ORC alleged that Mr Kim’s unreasonable refusal to accept that he had not been dismissed caused it to incur costs.

[3] Mr Kim appealed the decision in the substantive matter and on 16 March 2016 I stayed² the costs application pending the outcome of the appeal.

[4] On 6 May 2016, the Full Bench determined not to grant Mr Kim permission to appeal and dismissed the appeal.³

Submissions of ORC

[5] ORC submitted that it made its costs application within 14 days of the date of the decision.

[6] It submitted that on 1 September 2015, Mr Kim was involved in an altercation with his supervisor and the parties subsequently engaged in correspondence about the incident and Mr Kim’s employment. It submitted that ORC repeatedly advised Mr Kim that his casual employment had not been terminated. On 22 September 2015, Mr Kim sent ORC an email in which he advised that he would lodge an unfair dismissal application if ORC did not accede to his demands with respect to how the incident was to be investigated. Mr Kim attached a password protected document to his email but did not respond to the request that he provide the password. Mr Kim lodged his application on 28 September 2015. On 6 November 2015, ORC sent Mr Kim further correspondence advising him that his employment had not been terminated.

[7] In a letter dated 27 January 2016, ORC’s solicitors sent Mr Kim a letter advising why ORC considered it had not terminated Mr Kim. It advised Mr Kim that his application had no reasonable prospects of success and that if the Commission dismissed his application then it would apply for costs under s.611(2) of the Act. There was an offer to settle the matter and Mr Kim was advised that if his claim was not successful then it would apply under s.400A of the Act for costs on the basis that he had unreasonably continued the matter after such an offer was made.

[8] After the decision was issued, ORC’s solicitors again wrote to Mr Kim advising that ORC would seek costs under s.400A of the Act. It advised that it would accept a payment in full and final settlement of its costs application. While this letter is dated 2 February 2016 this must be an error as the decision was not issued until 29 February 2016. However that letter advised that the offer was open until 4 February 2016.

[9] It submitted that Mr Kim made no genuine attempt to engage in settlement negotiations and sought the payment of monies in excess of the Commission’s jurisdiction. It submitted that as a result of his unreasonable conduct it incurred costs post 6 November 2015 and at the costs hearing it sought an order that Mr Kim pay ORC $5000 towards its costs plus the costs of the costs application on scale. It submitted that, in reducing the amount of costs sought from $15,000 to $5000, it had regard to the fact that Mr Kim was unrepresented and that it did not seek costs of the appeal. ORC submitted that it had not provided copies of bills because they were charged on a general file and may disclose privileged information.

Submissions in reply by Mr Kim

[10] Mr Kim submitted that there was no evidence before the Commission to substantiate the costs claimed.

[11] Mr Kim submitted that until the Form F3 was filed on 7 October 2015, he was unaware that he had been banned from the roster. He submitted that the conciliation of this matter failed because ORC relied on false and misleading statements in the F3. He submitted that the claim, that there was no work available for Mr Kim, was false. He submitted for this reason he had no option but to continue his case as while ORC advised that he had not been dismissed it did not offer him any shifts. He said he read other cases and considered that his situation was similar.

[12] He submitted that the documents produced by ORC in response to the notice to produce supported his contention that the F3 contained false and misleading statements.

[13] He submitted that the letter sent by ORC on 6 November 2015 should not be accepted as evidence that his employment was ongoing. He referred to my questioning of ORC about the delay in conducting the investigation.

[14] Mr Kim submitted that, in an attempt to resolve the matter, he had asked for a proper investigation, and if that had been done in a timely fashion, the matter would not have had to been referred to the Commission.

[15] Mr Kim agreed with Ms Lydia Smith, who gave evidence for ORC, that it would not be appropriate to progress the investigation whilst the matter was before the Commission.

[16] Mr Kim submitted that, in its letter of 4 November 2015, ORC made reference to the allegation that he had not provided shift availability since 21 September 2015. He submitted that I found against ORC in relation to this allegation. He submitted he did not consider the offer set out in the letter of 4 November 2015 seriously because the letter contained this false allegation. He submitted that his rejection of this offer was reasonable. He further submitted that the offer was premised on ORC’s claim that his application had no reasonable prospects of success. He submitted that his application was not manifestly untenable or groundless.

[17] He submitted therefore that the claim based on s.611 was not made out.

[18] He submitted that he rejected their offer because he “knew” his case had merit and it would be difficult for ORC to succeed in a claim under s.611.

[19] He submitted that when ORC made their offer on 27 January 2016 they had not yet filed their additional witness statement which was not filed until 28 January 2016. He submitted that that offer was made while ORC was intentionally withholding material evidence.

[20] Mr Kim submitted that while he was initially seeking remedies not permissible under the Act, that was remedied after he was advised of his error at the mention.

[21] Mr Kim said he had conducted himself reasonably at all times.

The Legislative Framework

[22] The Commission has the discretion to award costs against a party if certain preconditions are met.

[23] Section 400A of the Act provides as follows:

“400A Costs orders against parties

(1) The FWC may make an order for costs against a party to a matter arising under this Part (the first party) for costs incurred by the other party to the matter if 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 matter.

(2) The FWC may make an order under subsection (1) only if the other party to the matter has applied for it in accordance with section 402.

(3) This section does not limit the FWC’s power to order costs under section 611.”

Consideration

[24] Was there an unreasonable act or omission by Mr Kim in connection with the conduct or continuation of the matter? In other words, was Mr Kim’s decision to reject the offer of settlement unreasonable?

[25] The starting point is that each party bears his or her own costs.

[26] A Full Bench of the Commission considered the approach to applications under s.400A in Roy Morgan Research Ltd v Baker.⁴ I do not repeat the relevant parts of that decision but it is clear from that decision, that the mere fact that Mr Kim was unsuccessful in establishing that he was dismissed does not mean that his non-acceptance of the offer of settlement was unreasonable.

[27] I do not accept that the submission I should have regard to ORC’s decision not to seek costs in relation to the appeal. It is not relevant to the matters I have to determine.

[28] I do not accept that Mr Kim behaved unreasonably in refusing to participate in the meeting foreshadowed in the letter of 6 November 2015. By this time he had lodged his unfair dismissal application. This was a proposal for him to abandon his claim. It cannot be considered to be a settlement proposal.

[29] I accept Mr Kim’s submission that it was not unreasonable for Mr Kim to refuse to settle this matter on the basis of ORC’s contention that his claim had no reasonable prospect of success. I do not consider that Mr Kim’s case was manifestly untenable. As I stated in my decision, it is often difficult to determine when a casual employee’s employment is in fact terminated. However while this claim was foreshadowed in the letter of 27 January 2016 it was not pressed in either the application or the hearing.

[30] Mr Kim was put on notice on 27 January 2016 that ORC did not simply rely upon s.611 but it also relied upon s.400A. However, they did not set out in the letter, in the same detail as ORC explained its application under s.611, the reason why he was at risk of having costs awarded against him.

[31] Mr Kim was offered $1500 to settle his claim. This is what is usually described as a commercial settlement. It was premised on ORC’s strongly held view that Mr Kim’s case had no reasonable prospect of success.

[32] There was no evidence that Mr Kim responded to this offer.

[33] I accept that given ORC had advised on 21 January 2016 that it intended filing additional material that it was not unreasonable for Mr Kim to receive that material prior to responding to the proposed offer. That material was filed at 12.46pm on 28 January 2016 which was four hours prior to deadline given to Mr Kim to respond.

[34] In effect Mr Kim was being asked to abandon his claim. Just because his claim failed, I do not consider his decision to not settle his claim was unreasonable particularly given the very limited period of time Mr Kim was given to respond to the offer. Effectively Mr Kim, an unrepresented party, was given one day to respond to the offer. This would not have provided him with time to seek advice in relation to the offer.

[35] I therefore find that Mr Kim’s non-acceptance of the offer of settlement was not unreasonable and as such the necessary prerequisites for making a cost order have not been satisfied.

[36] Given that finding, it is not necessary to address the submission that his failure to accept the offer to settle a costs claim was unreasonable.

[37] ORC’s application for costs is therefore dismissed.

DEPUTY PRESIDENT

Appearances:

A. Kim on his own behalf.

A. Maher for the Respondent.

Hearing details:

2016.

Melbourne:

15 June.

1 [2016] FWC 1029

2 PR 578056

3 [2016] FWCFB 2642

4 [2014] FWCFB 1175

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