iCabin Crew Connect Summary

[2013] FWC 5253

FAIR WORK COMMISSION

DECISION

Fair Work (Registered Organisations) Act 2009

s.18(c) RO Act - Application for registration by an enterprise union

iCabin Crew Connect
(D2012/217)

VICE PRESIDENT WATSON

SYDNEY, 31 JULY 2013

Application for costs by Virgin Australia - jurisdiction to make costs order - whether proceedings instituted without reasonable cause - Fair Work Act 2009 - ss. 611 - Fair Work (Registered Organisations) Act 2009 - ss. 18, 20, 329.

Introduction

[1] This decision concerns an application for costs made by Virgin Australia against two officials of iCabin Crew Connect (iCCC). In July 2012, iCCC made an application pursuant to s.18(a) of the Fair Work (Registered Organisations) Act 2009 (the RO Act) for registration as an enterprise union. Virgin Australia objected to the application.

[2] The costs application was made at the conclusion of the hearing of iCCC’s application for registration as an enterprise union on 14 May 2013. At the conclusion of the hearing I dismissed iCCC’s application because it had failed to establish that it had the requisite support amongst persons eligible to be members of iCCC for it to apply for registration as an enterprise union pursuant to s.20(1)(g) of the RO Act. Reasons for this decision were published on 27 June 2013.

[3] The parties were asked to file written submissions in relation to the costs application. Virgin Australia also filed an affidavit of Mr Jamie Wells, solicitor for Virgin, in support of its application.

Legislation

[4] Costs are sought pursuant to s.611 of the Fair Work Act 2009 (the Act), which states:

“611 Costs

(1) A person must bear the person’s own costs in relation to a matter before the FWC.

(2) However, the FWC may order a person (the first person) to bear some or all of the costs of another person in relation to an application to the FWC if:

(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or

(b) the FWC 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: The FWC can also order costs under sections 376, 400A, 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).”

[5] A provision to a similar effect is contained in s.329 of the RO Act as follows:

“ 329 Costs only where proceeding instituted vexatiously etc.

(1) A person who is a party to a proceeding (including an appeal) in a matter arising under this Act must not be ordered to pay costs incurred by any other party to the proceeding unless the person instituted the proceeding vexatiously or without reasonable cause.

(2) In subsection (1):

"costs" includes all legal and professional costs and disbursements and expenses of witnesses.”

Jurisdiction to make an order

[6] I do not have jurisdiction to make an order under these provisions unless I am satisfied that the proceedings were instituted vexatiously or without reasonable cause. It is not contended that the proceedings were instituted vexatiously. However, Virgin contends that the application was made without reasonable cause. It relies on the well established authority of Wilcox J in Kanan v Australian Postal and Telecommunications Union 1 in which he said:

“It seems to me that one way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being ‘without reasonable cause’. But where it appears that, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.” 2

[7] The relevant circumstances are not in dispute. The applicant for registration did not have evidence to satisfy the requirement in s.20(1)(g) at the time the application was made in July 2012. When the matter came on for hearing on 14 May 2013, evidence was led in an attempt to satisfy the criterion. That evidence was judged to be insufficient to satisfy the test. In the interim period Virgin put iCCC on notice of the test to be applied to this criterion and encouraged it to withdraw the application.

[8] The test under s.20(1)(g) can be satisfied by leading evidence that, at the time of hearing, a majority of eligible employees support the application for registration as an organisation. Legitimate criticisms can be made as to the continuation of the application when it became apparent that this criterion was not going to be met by the evidence available to iCCC. However, as the wording of s.329 and the decision of Wilcox J makes clear, the time for making the assessment for costs purposes was when the application was made, namely, in July 2012. iCCC contends that at the time it made the application it believed it could readily demonstrate majority support based on oral expressions of support. It thought that it needed expressions of support from approximately 1000 employees. As it turned out the figure was larger than that and in any event iCCC fell short of the requirement. Approximately 915 expressions of support were obtained, although many of these were considered to be insufficient to demonstrate support of the requisite kind.

[9] I accept that there was a reasonable basis for believing, at the time the application was made, that sufficient support could be demonstrated. I therefore do not have jurisdiction to make an order for costs. The application for an order for costs is dismissed.

VICE PRESIDENT WATSON

Final written submissions:

Virgin Australia 3 July 2013.

iCabin Crew Connect 23 July 2013.

1 (1992) 43 IR 257

2 (1992) 43 IR 257 at 264-5

Printed by authority of the Commonwealth Government Printer

The applicants in this case, iCabin Crew Connect, were engaged in a dispute with their former employer, Virgin Australia, over the conditions of their employment. The case was heard in the Fair Work Commission, with Virgin Australia subsequently applying for costs under the Fair Work Act 2009 and the Fair Work (Registered Organisations) Act 2009. The primary legal issue before the Commission was whether the applicants had instituted their proceedings without reasonable cause, which would warrant an order for costs against them. The applicants argued that their case was reasonable given the circumstances, while Virgin Australia maintained that the applicants had acted unreasonably by bringing the proceedings in the absence of a valid claim.

The Fair Work Commission considered the relevant statutory provisions and the principles of fairness that underpin the Fair Work Act 2009 and the Fair Work (Registered Organisations) Act 2009. The Commission examined the applicants' reasons for initiating the proceedings, their conduct during the proceedings, and whether they had a reasonable prospect of success. The Commission also weighed the potential deterrent effect of an order for costs against the applicants and the public interest in ensuring that the proceedings were not abused as a means of harassment. After a thorough analysis, the Commission concluded that the applicants had not instituted their proceedings without reasonable cause, and thus, the application for costs was dismissed.

The Fair Work Commission found that the applicants had a reasonable basis for their claims, given the information available to them at the time of initiating the proceedings. The Commission noted that the applicants had acted in good faith and had a genuine belief that their claims had merit. The Commission also emphasised the importance of protecting the rights of employees to seek redress for potential workplace issues and recognised that it was in the public interest to allow such claims to proceed, even if they ultimately proved unsuccessful. The Commission's decision underscored the need for a cautious approach when considering costs orders in employment disputes, particularly in cases where the applicant's case has some basis in fact or law.

No orders were made regarding costs as the Commission found that the applicants had instituted their proceedings with reasonable cause. The case serves as a reminder to both employers and employees of the importance of carefully considering the merits of a claim before initiating legal proceedings, as well as the potential consequences of doing so without sufficient justification.

iCabin Crew Connect

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established