Delando Corporation Ltd v Mr Stephen Stojovski

[2012] FWA 10339

[2012] FWA 10339

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay

Delando Corporation Ltd
v
Mr Stephen Stojovski
(C2012/4958)

DEPUTY PRESIDENT HARRISON NEWCASTLE, 6 DECEMBER 2012

Application for costs - written submissions - application refused.

[1] This matter arose by application of the Delando Corporation lodged on 17 August 2012 pursuant to s.120 of the Fair Work Act 2009 (“the Act”).

[2] Section120 states:

Variation of redundancy pay for other employment or incapacity to pay

(1) This section applies if:

(a) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119; and
(b) the employer:
(i) obtains other acceptable employment for the employee; or
(ii) cannot pay the amount.

(2) On application by the employer, FWA may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that FWA considers appropriate.
(3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.

[3] The application sought an exemption from payment of seven weeks pay on the grounds that other employment was provided, or incapacity to pay.

[4] The application further advised that the employer is covered by the Social, Community, Home Care and Disability Services Industry Award MA000100 (“the Award”).

[5] The application was opposed by Mr Steven Stojovski, the employee subject to the application, who asserted that the alternative employment provided to him was not suitable alternative employment so as to justify an exemption or reduction in redundancy payment.

[6] Mr Stojovski was represented in the matter by Mr Lou Stojanovski of Keystone Lawyers,

[7] The matter was ultimately settled between the parties and a Form F50 Notice of Discontinuance lodged by the Applicant on 13 November 2012.

[8] In an email dated 14 November 2012 Mr Stojanovski advised that his client did not consent to the discontinuance of the matter and foreshadowed an application for costs.

[9] Directions were issued on 14 November 2012 affording the employee’s solicitor to particularise his claim for costs.

[10] A Form F6 Application for Costs was lodged by Mr Stojanovski on 23 November 2012, which set out Grounds in the following terms:

Grounds:

(i) The Employer has sought to file a discontinuance of the proceedings commenced by it by way of application dated 18August 2012. The discontinuance was not consented to by the Employee.

(ii) The Employer seeks to discontinue the proceedings on the basis of a ‘settlement agreement’. This misconceives the true position as there was no agreement reached between the parties. Simply the Employer paid voluntarily the Employee's full redundancy entitlements without notice, in contradiction of the orders it was seeking by commencement of these proceedings. See annexed and marked "A" is a copy of Employee's pay slip dated 13 November 2012 showing 7 weeks redundancy payment made by the Employer after commencement of these proceedings.

(iii) The Employee was brought to Fair Work Australia by the Employer's proceedings. Those proceedings sought to vary the Employee's redundancy entitlements under section 120 of the Fair Work Act, for an amount less than the Employee's 7 weeks entitlement.

(iv) The Employee disputed the application by the Employer. The Employee sought the full entitlement of his redundancy in accordance with the Employer's letter of termination dated 8 August 2012, annexed and marked B. The Employer's termination letter dated 8 August 2012 confirmed the Employee's entitlement to 7 weeks redundancy.

(v) The Employer refused to pay the Employees redundancy entitlements in accordance with its representation in Annexure B. The Employer pleaded in the proceedings it had found alternate employment for the Employee at reduced hours (which was never accepted by the Employee) and/or incapacity to pay (which was not pressed in the evidence submitted by the Employer).

(vi) The Employee sought legal representation from Keystone Lawyers in defence of the proceedings. The Employee incurred the cost of obtaining legal advice and his legal representative appeared before Fair Work Australia on two occasions, together with daily advice and correspondence with the Employer. The Employee has incurred $1,200 plus GST in legal cost. Annexed and marked C are copies of the invoices rendered and paid by the Employee. The Employee will also be liable for preparation of these submissions. The likely amount of legal costs will excess $1,200 plus GST, but is simply seeking $1,200 plus GST from the Employer.

(vii) Since there was no agreement for settlement, yet a voluntary payment by the Employer of the Employee's full redundancy entitlements, the Employee has been put to the expense of defending legal proceedings which were clearly commenced vexatiously or without reasonable cause. Given the letter annexed and marked "B" the Employer had no reasonable prospect of success and was a debt admitted by the Employer's payment of the Employee's full entitlement of his 7 weeks redundancy payment.

(viii) Accordingly the Employee makes application under clause 611 of the Fair Work Act for the Employee [sic] to pay the Employee's costs incurred in the proceedings.

[11] Section 611 of the Act states:

611 Costs

(1) A person must bear the person’s own costs in relation to a matter before FWA.
(2) However, FWA may order a person (the first person) to bear some or all ofthe costs of another person in relation to an application to FWA if:

(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) FWA is satisfied that it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.

Note: FWA can also order costs under sections 376, 401 and 780.
(3) A person to whom an order for costs applies must not contravene a term of the order.
Note: This subsection is a civil remedy provision (see Part 4-1).

[12] The contention that the matter had no reasonable prospect of success and that the payment was a debt admitted by payment is not sustainable.

[13] The matter did not proceed past conciliation; the outcome of an arbitration on the matter is, in my view, by no means certain.

[14] The employer had a statutory right to seek an exemption or reduction and, having found alternative employment, had, on the face of the proceedings and the material filed in accordance with Directions, an arguable case.

[15] Fair Work Australia must be satisfied that the application was either vexatious or that it should have been reasonably apparent to the applicant that the application had no reasonable prospect of success.

[16] The reasons for withdrawal and payment to the employee may be many and varied and are not material to a decision on costs at this point in the proceedings.

[17] The costs incurred by Mr Stojovski were of his own volition.

[18] I am not satisfied that the application was either vexatious or without reasonable prospect of success.

[19] The application for costs is refused and the matter concluded.

DEPUTY PRESIDENT

Appearances:

Ms B Owen (Applicant)

Mr L Stojanovski

Solicitor

Keystone Lawyers

Written submissions:

23 November 2012

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