Gary Wakeling v Foster Pharmacy Pty Ltd T/A Foster Pharmacy
[2016] FWC 4152
•27 JUNE 2016
| [2016] FWC 4152 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Gary Wakeling
v
Foster Pharmacy Pty Ltd T/A Foster Pharmacy
(U2015/11628)
DEPUTY PRESIDENT GOOLEY | MELBOURNE, 27 JUNE 2016 |
Application for relief from unfair dismissal – costs application dismissed.
[1] On 19 April 2016, I dismissed Mr Gary Wakeling’s application for an unfair dismissal remedy.1
[2] On 3 May 2016, Foster Pharmacy Pty Ltd filed an application for costs under s.400A of the Fair Work Act 2009. It submitted that Mr Wakeling’s failure to settle the matter was unreasonable and caused costs to be incurred.
The Legislative Framework
[3] The Fair Work Commission has the discretion to award costs against a party if certain preconditions are met.
400A Costs orders against parties
(a) 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.
(b) 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.
(c) This section does not limit the FWC’s power to order costs under section 611.
The offers of settlement
[4] On 7 December 2015, one week before the hearing of the matter, Foster Pharmacy made a settlement offer of 26 weeks’ pay less tax in full and final settlement subject to Mr Wakeling signing a deed.2 That letter explained the basis of the settlement offer in particular it set out why Mr Wakeling would not be reinstated. The offer was open until 10 December 2016.3
[5] On 8 December 2015, Mr Wakeling responded, acknowledging that it was a reasonable offer, and sought clarification about the calculation of a week’s pay. In addition it proposed that the settlement be limited to a settlement of the unfair dismissal claim rather than all current and future employment and business related claims, suits, actions etc.4
[6] On the same date Foster Pharmacy replied advising that the offer was $65,340 less tax and the release would exclude claims in relation to his shareholding.5
[7] On 9 December 2015, Mr Wakeling rejected the offer and set out his reasons6. He then put forward three proposals.
- Option 1 – payment of $59,350 with a release settling the unfair dismissal claim and any general protections claim and any anti- discrimination claim.
- Option 2 - payment of $97,350 with a release as set out above but in addition any claim for underpayment of wages and entitlements.
- Option 3 – re-instatement with mediation and a release as set out above.
- This offer was open until midday on 11 December 2015.
[8] On 10 December 2015, Foster Pharmacy rejected the three options and made a counter offer to settle all matters for $650,000 with Mr Foster signing over his shareholding to the current directors and relinquishing all claims to any share ownership.7
[9] On 11 December 2015, Mr Wakeling rejected the offer and proposed to settle his unfair dismissal claim if Foster Pharmacy paid him $42,500. The release only applied to settling the unfair dismissal claim and any general protections claim and any anti-discrimination claim. That offer was open until 3pm the same date.
[10] Foster Pharmacy did not respond to this offer and the matter proceeded to hearing.
Submissions of Forster Pharmacy
[11] It submitted that Mr Wakeling’s refusal to accept the original offer was unreasonable. As a result, the parties and the five staff witnesses had to travel to Melbourne for the hearings and in addition to those costs, Foster Pharmacy was required to engage a locum pharmacist and cover the employees who would have been rostered to work.8
[12] It submitted that the amount offered to Mr Wakeling was the maximum compensation Mr Wakeling could have received had his claim succeeded.9 Unless he was reinstated he could not receive a better outcome.10
[13] It submitted that in this case Mr Wakeling failed to recover any monies.11 Further even if his application had been successful, the prospect of him being reinstated was remote. This was because the breakdown of the working relationship was clear and compelling. It therefore submitted that his refusal was manifestly unreasonable.
[14] It submitted that the subsequent negotiations did little to attempt to resolve the matter. It submitted that Foster Pharmacy was the only party making offers which were reasonable and the original offer ought to have been accepted.
[15] It submitted that, given it offered the maximum available under the Act, Mr Wakeling should have settled. It submitted that the release proposed by it was not unusual or remarkable. That Mr Wakeling sought to preserve his rights to pursue other claims emphasises his unreasonableness. It submitted that it was unclear what contractual claims he could bring. Further it was unlikely he was underpaid given his rate of pay and in any event no claim has been pursued. It submitted that just because Mr Wakeling was seeking reinstatement does not justify his refusal of the offer. Further it submitted that this was not a case where Mr Wakeling was seeking to restore his professional reputation and standing.
Submissions by Mr Wakeling
[16] Mr Wakeling relies upon the course of negotiations to support his contention that he did not unreasonably refuse the settle the matter. He relies on his final offer to settle his unfair dismissal claim for less the amount proposed by Foster Pharmacy which was unanswered.
Consideration
[17] A Full Bench of the Commission considered the approach to applications under s.400A in Roy Morgan Research Ltd v Baker.12 I do not repeat the relevant parts of that decision but it is clear from that decision that the mere fact that Mr Wakeling was unsuccessful in establishing that he was unfairly dismissed does not means that his non acceptance of the offer of settlement was unreasonable.
[18] I do not accept that I need only look at the offer made by Foster Pharmacy on 7 December 2015. I consider it appropriate to consider the totality of the negotiations. If Mr Wakeling had simply rejected the offer my view about his conduct may have been different. Here Mr Wakeling responded to the offer and made counter offers in response to each of the offers made by Foster Pharmacy.
[19] I am not satisfied that Mr Wakeling has acted unreasonably in refusing the settlement offers proposed by Foster Pharmacy. Had Foster Pharmacy made an offer in settlement of Mr Wakeling’s unfair dismissal claim only I would have accepted its submissions. I agree with the submission that, given the evidence about the relationship between Mr Wakeling and his fellow directors, his prospects of being reinstated had he succeeded in his application was remote.
[20] However in this matter Foster Pharmacy sought to settle more than Mr Wakeling’s unfair dismissal claim. It sought to settle all employment matters. I accept that it is not unusual for parties to seek a broader release than a release in relation to the existing litigation. However that the offer included a release that was broader than a release from the litigation on foot means that an assessment of the reasonableness of the offer is not limited to an assessments of his prospects in the unfair dismissal claim.
[21] In this matter Mr Wakeling, in his communication of 9 December 2015, set out the basis of his claim that he had not received his entitlements. In particular, he claimed unpaid annual leave and personal leave. He further made a claim for overtime.
[22] There was no evidence before the Commission in relation to any of these claims. In its original response to the application, Foster Pharmacy objected to Mr Wakeling’s application on the basis that he was not an employee. That objection was not pressed by Foster Pharmacy and the matter proceeded on the basis that Mr Wakeling was an employee. While it was submitted that Mr Wakeling had not yet made any other claims I do not consider this to be a relevant consideration given this litigation and the limitation periods that apply to claims for breaches of contract and the Act.
[23] Mr Wakeling submitted that his employment was regulated by the Pharmacy Industry Award 2010 and that there was no written agreement for an annualised salary was in place.
[24] He submitted that it was not unreasonable for him to seek to carve out his rights to make a claim for underpaid wages and entitlements under the NES. He did, in his proposed release, provide that he could not make a general protections claim or a discrimination claim.
[25] There is no evidentiary basis on which I could find that Mr Wakeling’s additional claims were bound to fail such as to make his desire to exclude them from the settlement unreasonable.
[26] That he was paid a higher hourly rate than provided in the Award is not determinative. The issue of set off was considered by the Full Court of the Industrial Court in Logan v Otis Elevator Co Pty Ltd13 and Full Court of the Federal Court in Poletti v Ecob.14
[27] It is clear that Mr Wakeling’s prospects of succeeding with other claims depend on facts which are not before me.
[28] At no time did Foster Pharmacy agree to exclude these claims from the scope of the settlement. In those circumstances I am not satisfied that Mr Wakeling’s rejection of the settlement offer was unreasonable.
[29] Accordingly the costs application is dismissed.
DEPUTY PRESIDENT
Appearances:
M. Ritchie for the Mr Wakeling.
R. Millar for Foster Pharmacy Pty Ltd
Hearing details:
2016.
Melbourne.
20 June.
1 [2016] FWC 2459 and PR579211
2 Application for costs FP1
3 Grounds in support of the application 2.2
4 Submissions of Mr Wakeling at GW1
5 Ibid GW2
6 Ibid GW4
7 Ibid GW7
8 Ibid 2.4
9 Ibid 2.4.2
10 Ibid 2.5
11 Ibid 2.6
12 [2014] FWCFB 1175
13 [1999] IRCA 4
14 [1989] FCA 779
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