Daphne Chung v Royal Rehabilitation Centre Sydney T/A Royal Rehab

[2018] FWC 921

[2018] FWC 921

FAIR WORK COMMISSION

DECISION

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

Daphne Chung
v
Royal Rehabilitation Centre Sydney T/A Royal Rehab
(U2017/11456)

COMMISSIONER RIORDAN SYDNEY, 22 FEBRUARY 2018

Application for an unfair dismissal remedy - costs application.

[1] Ms Daphne Chung (the Applicant) lodged an unfair dismissal claim (U2017/11456) against Royal Rehabilitation Centre Sydney t/a Royal Rehab (the Respondent) on 24 October 2017.

[2] The Applicant was represented by Mr David Bates from Harmers Workplace Lawyers. The Respondent was represented by Mr David Collinge from Gillis Delany Lawyers.

[3] The matter was listed before the Commission on 5 December 2017 for Conference/Directions. Following discussions the Applicant advised that she would be withdrawing her unfair dismissal application. The Applicant filed a Notice of Discontinuance on 7 December 2017.

[4] The Applicant lodged an application for costs in accordance with section 400A of the Fair Work Act, 2009 (the Act) on 20 December 2017.

[5] Following written submissions, the parties consented for the matter to be determined “on the papers”.

Submissions

[6] The Applicant claims that the Respondent deliberately misled the Applicant in relation to the industrial instrument that covered the Applicant. The Applicant submitted that:

“12. In summary, the Respondent:

(a) misled the Applicant by informing her, in writing, on 21 March 2016 that her employment was not covered by an Award or an Enterprise Agreement. This was despite the ongoing operation of an applicable Enterprise Agreement which had covered the Applicant’s employment since 8 March 2010, some six (6) years earlier;

(b) misled both the Applicant and the Commission by answering ‘no’ to question 1.1 on their Form F3, submitted to the Fair Work Commission on 3 November 2017. This was despite the ongoing operation of an applicable Enterprise Agreement which had covered the Applicant’s employment since 8 March 2010 some seven (7) and a half years earlier;

(c) misled the Applicant by failing to disclose the existing of the Alteration Form when it responded to the Applicant’s request for the production of employment-related records on 27 November 2017.” 1

[7] The Applicant also submitted that the Respondent has participated in two conciliations conducted by the Commission in a less than bona fide manner, thereby causing the Applicant to incur additional costs.

[8] The Respondent submitted that before awarding costs that:

“2.4 Two matters must be established: first, unreasonable conduct within the meaning of section 400A in connection with the unfair dismissal claim; and second, that the identified unreasonable conduct caused the incurring of costs.

2.5 The finding of the necessary jurisdictional facts (section 400A(1) and (2)) does not lead automatically to a costs order. It is clear from the wording of the section that the Commission retains a discretion as to whether or not to make an order for costs – which discretion is to be in a manner which is fair and just, and takes into account ‘equity, good conscience and the merits of the matter’.” 2

[9] The Respondent submitted that the relevant industrial instrument which covered the Applicant had no relevance to the unfair dismissal claim. Further, the Respondent claimed that its actions, at worst, may be described as being misconceived rather than manifestly unreasonable.

[10] The Respondent also argued that the Applicant has mistaken the Respondent’s position in relation to the conciliation conferences by suggesting that the Applicant has confused the Respondent’s unwillingness to negotiate with a view that they were unable to negotiate.

[11] Finally, the Respondent submitted that the Applicant incurred legal costs as a result of her assertion that she had been constructively dismissed, not because of any conduct by the Respondent subsequent to the conclusion of the employment relationship.

[12] In response, the Applicant claimed that she was required to incur costs due to the dispute in relation to Award / Agreement coverage on the basis that this circumstance is an important and material fact in relation to whether the Respondent has complied with its obligations, such as the need to consult the Applicant.

[13] The Applicant also repeated the assertions in relation to the Respondent’s inability to negotiate a settlement, claiming that a comment made at the conclusion of the conciliator’s conference supported their assertion.

Legislation

[14] Section 400A of the Act, which deals with cost applications in relation to unfair dismissals, states:

Section 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.

[15] It is also relevant to take note of the following unfair dismissal provisions of the Act.

Section 382

When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a)  the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b)  one or more of the following apply:

(i)  a modern award covers the person;

(ii)  an enterprise agreement applies to the person in relation to the employment;

(iii)  the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

Section 385

What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a)  the person has been dismissed; and

(b)  the dismissal was harsh, unjust or unreasonable; and

(c)  the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d)  the dismissal was not a case of genuine redundancy.

Consideration

[16] I have taken into account all of the submissions that the parties have submitted in this matter.

[17] I have taken into account that the parties are advised by the Conciliator at the commencement of their Conference that the telephone proceedings are confidential and without prejudice. Likewise, the conciliation conference before me was also without prejudice.

[18] I have taken into account that the Applicant has made this costs application, even though they have withdrawn their application prior to the matter proceeding to hearing. Whilst I am unaware of any Applicant previously seeking a costs order in these circumstances, this does not preclude or prejudice the Applicant in these proceedings.

[19] I have taken into account that the Respondent failed to provide accurate information to both the Applicant and the Commission in relation to the industrial coverage of the Applicant. This information was not a difficult question to answer. A cursory glance at either the Enterprise Agreement or the Applicant’s personnel file should have resulted in the correct answer being provided.

[20] I have taken into account the provisions of the Act, especially section 382 and note that the Respondent did not raise any jurisdictional objection in relation to section 382(b).

[21] I have taken into account that the power for the Commission to award costs is purely discretionary 3. I also note that a Full Bench recently held that:

“The discretion is expressed in general, unqualified terms confirmed only by the subject matter, legislation context and purpose.” 4

Conclusion

[22] The Respondent submitted in their F3 response that the Applicant voluntarily resigned her position. Following two unsuccessful conciliation attempts by the Commission, the Applicant withdrew her unfair dismissal application. As a result, it would not have been beyond the realms of industrial jurisprudence for the Respondent to make an application for costs against the Applicant 5.

[23] I am not prepared to countenance the submission in relation to the parties’ discussions during either conciliation process. Those discussions are without prejudice. It is not appropriate for the Applicant to now use these discussions to obtain some form of evidentiary benefit. I will not be party to such an endeavour. I find that the Respondent has acted in a bona fide manner throughout the conciliation conferences by attending and participating in both conciliations.

[24] Whilst the Respondent’s actions in not providing accurate information in relation to the appropriate industrial instrument which covered the Applicant’s employment was unfortunate and regrettable, I am not satisfied that this error could fall within the definition of “an unreasonable act or emission”. The simple fact is that the Respondent did not raise a jurisdictional objection to the Applicant’s unfair dismissal claim based on the provisions of section 382(b) of the Act, ie, the Applicant was not covered by either a modern award or an enterprise agreement. As a result, the question of the Applicant’s industrial coverage in relation to her unfair dismissal is of limited consequence.

[25] I find that the Respondent has not caused the Applicant to incur costs due to any unreasonable act or omission. I have decided not to exercise my discretion in this matter.

[26] The application for costs is dismissed.

COMMISSIONER

<PR600338>

 1 PN12 F6 application filed on 20 December 2017

 2   Respondent submissions filed on 10 January 2018

 3   McKenzie v Meran Rise Pty Ltd PR54692

 4   NSW Trains v Ayub [2017] FWCFB 4801

 5   Ross Davis v JD Pty Ltd [2011] FWA 367

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