Andrew Rennie v Degani Bowen Hills T/A Degani

[2017] FWC 5494

[2017] FWC 5494

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Andrew Rennie
v
Degani Bowen Hills T/A Degani
(U2017/7944)

DEPUTY PRESIDENT DEAN SYDNEY, 18 DECEMBER 2017

Application for an unfair dismissal remedy - application for costs.

[1] On 3 October 2017 I issued a decision with respect to an application made by Mr Rennie for unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act). In that decision I made a finding that Mr Rennie had not completed the minimum employment period and was not a person protected from unfair dismissal. 1

[2] On 17 October 2017 Degani Bowen Hills T/A Degani (Degani) made an application pursuant to s.400A of the Act for costs against Mr Rennie. On 18 October 2017 directions were issued for the parties to file written submissions and to advise their views on whether a hearing should be held or the costs application determined ‘on the papers’. Mr Rennie submitted the costs application should be determined ‘on the papers’, Degani requested the matter be listed for hearing.

[3] The matter was listed for hearing by telephone on 14 November 2017. At the hearing Mr Jakes with Mr Lane appeared for Degani and Mr Rennie appeared on his own behalf.

[4] For the reasons set out below, I find that there is no clear evidence of conduct by Mr Rennie that in my view could reasonably be considered an unreasonable act or omission of the type contemplated by s.400A of the Act. Accordingly, Deganis’s application for costs is dismissed.

Relevant legislation

[5] Degani’s application for costs is made only under s400A of the Act. 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.”

[6] The Explanatory Memorandum to the Fair Work Bill 2012 provides the following with respect to s.400A of the Act:

“168. Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.

169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.

170. The FWC’s power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.

171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party.”

Background

[7] Mr Rennie filed his unfair dismissal application on 24 July 2017, following the termination of his employment by Degani on 21 July 2017. It was subject of conciliation by a Fair Work Conciliator on 17 August 2017. The matter remained unresolved and was allocated to me to determine Degani’s jurisdictional objection.

[8] In his unfair dismissal application, Mr Rennie stated that he had been employed by Degani from 18 January 2017 to 21 July 2017, a period in excess of 6 months. In its response to Mr Rennie’s application Degani asserted that Mr Rennie had been employed from 24 January 2017 to 21 July 2017, a period less than 6 months.

[9] The matter was listed for a hearing to determine the date on which Mr Rennie commenced employment with Degani and the date on which his dismissal took effect. The hearing took place by telephone, and was short in duration.

[10] At the hearing on 22 September 2017 Mr Rennie gave evidence that he could not recall the date he commenced employment with Degani and that it was either 18 or 24 January 2017. Degani submitted evidence of Mr Rennie’s date of commencement of employment in the form of a copy of Mr Rennie’s contract of employment noting his start date as 24 January 2017, a copy of Mr Rennie’s payment summary indicating a start date of 24 January 2017, email correspondence noting Mr Rennie’s commencement date of 24 January 2017 and evidence from the CEO, Mr Lane, that Mr Rennie commenced his employment on 24 January 2017.

[11] I made a finding that Mr Rennie commenced employment on 24 January 2017 and the termination of his employment took effect on 21 July 2017. As Mr Rennie’s employment had not met the minimum employment period, his application was dismissed on 3 October 2017.

Submissions

[12] Degani submitted that Mr Rennie caused cost to be incurred due to an unreasonable act or omission in connection with the conduct or continuation of the matter. It submitted that it ought to have been apparent to Mr Rennie that the application had no reasonable prospects of success in light of the weight of evidence supporting Degani’s assertion that the applicant was employed for a period less than six months.

[13] Degani submitted an agreement had been reached between the parties at the conciliation conference on 17 August 2017, and that the failure of the settlement to eventuate was an unreasonable act on Mr Rennie’s part which caused Degani to incur costs. It submitted that the offer remained open to Mr Rennie throughout the course of the proceedings and that Mr Rennie should have known that his case was weak and should have accepted the settlement offer.

[14] Mr Rennie submitted that he has fallen into financial hardship as a result of being dismissed from his employment and that it would be unfair and unfeasible for a costs order to be made against him in circumstances where he was availing himself of his right to make an application for unfair dismissal.

Consideration

[15] It is a well-accepted principle that each party bears its own costs in relation to a matter before the Commission. 2 In Roberts v Ngaanyatjarra Health Service³, it was relevantly said: ‘As a general rule each party must bear their own costs in proceedings before the Commission … the power to order costs … should be exercised with caution and only in clear cases.’ It is only in rare and exceptional circumstances that costs will be awarded.

[16] There are limited exceptions to this rule, such as s.400A of the Act. Even if this section is enlivened, the Commission retains a discretion as to whether or not to award costs.

[17] The power under s.400A to award costs can only be exercised if there is clear evidence of ‘unreasonable act or omission’ by a party. The Explanatory Memorandum supports this view.

[18] As the Full Bench said in Gugiatti v SolarisCare Foundation Ltd 4, section 400A ‘is concerned with unreasonable acts or omissions in connection with the ‘conduct or continuation’ of a matter already instituted, not with whether it was reasonable to have instituted a matter in the first place.’5

[19] Jurisdictional objections to unfair dismissal applications can be a difficult concept for unrepresented applicants to fully understand. Mr Rennie clearly held the view, rightly or wrongly, that he was entitled to make an unfair dismissal application. To this end, he said in his brief written submission: ‘I have the right to apply for unfair dismissal, and after a hearing with you and Degani, you came to the decision that my application was unsuccessful’.

[20] While it may be arguable that Mr Rennie ought to have known that his case was weak, I am not convinced that Mr Rennie caused Degani to incur costs because of any unreasonable act or omission in connection with the conduct or continuation of the matter.

[21] The hearing was conducted by telephone and the costs of Degani ought to have been minimal. It was revealed during the hearing that the schedule of costs sought by Degani included costs of administrative and other staff collating documents and preparing for the hearing. Clearly, these are not costs that Degani paid to a lawyer or paid agent for advice and representation, and would not be the subject of a costs order in any event.

Conclusion

[22] In all of the circumstances, I find that this is not a case where I should exercise my discretion to award costs. Accordingly, Degani’s application for costs is dismissed.

DEPUTY PRESIDENT

Appearances:

K Jakes, with D Lane for Degani.

A Rennie on his own behalf.

Hearing details:

2017.

Sydney (by telephone):

November 14.

 1   [2017] FWC 4906.

 2 Section 611(1) of Fair Work Act 2009.

3 [2016] FWC 4875.

 4   [2016] FWCFB 2478.

 5 Ibid at [61].

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