Jasminka (Jazz) Fisher v M & D Employment Services Pty Ltd

[2011] FWA 3290

[2011] FWA 3290

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Jasminka (Jazz) Fisher
v
M & D Employment Services Pty Ltd
(U2010/6626)

COMMISSIONER ROBERTS SYDNEY, 2 JUNE 2011

Application for unfair dismissal remedy - application for costs.

[1] This decision concerns an application lodged by Workers First Australia Pty Ltd on behalf of Ms Fisher on 17 December 2010 pursuant to s.611 of the Fair Work Act 2009 (the Act). The application seeks the making of an order for costs against M & D Employment Services Pty Ltd (the Company or M&D).

[2] The application for costs filed on behalf of Ms Fisher states the following grounds:

“a. The respondent responded to the application vexatiously or without reasonable cause.

b. It should have been reasonably apparent to the respondent that the respondent’s response had no reasonable prospects of success.

c. The respondent refused to accept reasonable offers made by the applicant and otherwise refused to participate meaningfully in negotiations to resolve the application.

d. The respondent’s failure to make available his witnesses for cross examination on the second day of the hearing caused the hearing to be prolonged and was responsible for a third day of hearing being required.”

[3] In later written submissions on behalf Ms Fisher, it was said: “The applicant does not submit that the respondent responded vexatiously. She does submit that the respondent responded without reasonable cause ...”

[4] Section 611 of the Act provides:

“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).”

[5] The application for costs was the subject of directions issued on 21 December 2010 and the parties agreed to the application being decided ‘on the papers’. Both sides complied with directions. Ms Fisher was represented by Mr A Tayler of Workers First Australia Pty Ltd and M&D by Mr C Campbell of Aitken Legal.

Background

[6] Ms Fisher made an application for relief pursuant to s.394 of the Act on 26 February 2010 alleging that the termination of her employment by the Company on 12 February 2010 was harsh, unjust or unreasonable. Ms Fisher’s employment was terminated for alleged breaches of company procedures amounting to misconduct. Ms Fisher’s application for relief was the subject of both unsuccessful conciliation and a jurisdictional motion from the Company. The application then came to me for arbitration and this was conducted in Brisbane on August 18 and 19 and September 15, 2010. My written decision was issued on 3 December 2010 in which I found that there was no valid reason for the termination of employment based on alleged misconduct. My decision went on to find that the termination was harsh and awarded Ms Fisher an amount equating to six weeks’ wages (less tax according to law). I declined to reinstate Ms Fisher.

[7] As the Company relied in proceedings in part on performance issues, I also examined those issues and came to the conclusion that: “On the totality of the evidence and materials before me, most of those allegations appear to be made out, but also, some of the allegations appear to relate to relatively minor matters. Ms Fisher was a good employee overall but appears to have been unable to follow instructions when she did not agree with those instructions totally. This led to conflict with management who, quite rightly, expected their directions to be followed. The total effect was the failure of the company-employee relationship.”

Submissions

Ms Fisher

[8] As part of the application for costs, an affidavit from Mr B Newman, who is described as an ‘Industrial Advocate/Investigator’ of Workers First Australia Pty Ltd, was filed. Mr Newman deposes that he had joint conduct of Ms Fisher’s original application for relief in conjunction with Mr Tayler. Mr Newman represented Ms Fisher at the conciliation referred to above. The Company was represented at the conciliation by Ms J Evans of JE HR Solutions. Both Mr Newman and Ms Evans attended the arbitration proceedings as advisors to Mr Tayler and Mr Bryant respectively, neither Mr Newman nor Ms Evans addressed me during proceedings.

[9] Mr Newman’s affidavit says that Ms Fisher offered to settle the matter at the unsuccessful conciliation on the basis of the payment of six weeks and three days wages for past loss of income plus a further amount equating to three months wages for future loss of income. The Company rejected the offer and advised Ms Fisher that it would be seeking legal advice. “I recall that this appeared to concern the Applicant and I believe it compelled her to continue to be represented by legal representatives in this Matter.”

[10] It was Mr Newman’s understanding that the Company intended to instruct a legal representative to appear at any hearing and to call a significant number of witnesses. He went on to say: “I found the Respondent’s comments to have been made maliciously and vindictively and I believe that they were statements made to incite fear into the Applicant and to discourage the Applicant from proceeding, while at the same time compelling the Applicant to engage extensive Legal advice and Representation to protect her interests in light of the strong assertions being put by the Respondent throughout the life of this Matter. I believe that the offer made at the Conciliation Conference by the Applicant was a fair offer, and that there was at least a possibility that the Applicant would have accepted any counter offer by the Respondent that was reasonable.”

[11] In his affidavit, Mr Newman said that an offer of $1000 had been made by the Company during the hearing before me, which offer was rejected by Ms Fisher.

[12] In submissions in reply to those of the Company, Mr Tayler said the Company had mounted an unsustainable jurisdictional objection and conducted itself in the conciliation in such a manner that its behaviour was unreasonable. “It is submitted this shows conduct designed to try and avoid the claim and increased costs unnecessarily.” He also said: “If the parties’ positions were intractable it was because the respondent was unreasonably refusing to consider that misconduct had not occurred.” It is further asserted that the Company’s conduct during the arbitration proceedings was such that it led to the hearing being prolonged, with attendant costs to Ms Fisher.

[13] It is argued that it should have been apparent to the Company that its response to the substantive application had no reasonable prospect of success. Mr Tayler concedes that “the applicant made no offers after the conciliation conference however this is not because of any intransigence on her part but merely a reflection of the respondent’s refusal to negotiate.”

[14] Mr Tayler went on to argue that Mr Bryant (the Company’s Principal) had been put on notice early in proceedings by myself about what constitutes misconduct and that the Company should have taken note of my comments. Mr Tayler went on to say that the Company was aware of procedural deficiencies in the termination of Ms Fisher’s employment from the outset and, together with the misconceived misconduct allegation, should have known that its response to Ms Fisher’s application for relief “was doomed to fail”.

[15] In further submissions in reply to the Company, Mr Tayler elaborated further on the grounds relied upon in the costs application. He went on to say that the Applicant “does not suggest that costs should follow the event”. However, he argues that in assessing any costs to be awarded, I should take account of the entire process of this matter including the conciliation phase and the jurisdictional objection.

The Company

[16] The Company filed written submission in response to the application together with submissions in reply to those filed on behalf of Ms Fisher.

[17] The Company argues that it was entitled to defend the termination of Ms Fishers’s employment and the findings in my decision of 3 December 2010 do not support an argument “that the matter was defended without reasonable cause”. The approach adopted by the Company was genuine, although misguided, in its dealing with the termination of employment.

[18] The Company further argues that the failure to make a counter offer to that made by Ms Fisher during conciliation does not mean that the failure to settle the matter can be laid at the Company’s door. Ms Fisher made no offer of settlement after the conciliation or during the arbitration proceedings. The final amount ordered by me was far less than the settlement offer made by Ms Fisher during conciliation.

[19] “It seems to be a point made by the Applicant employee that costs were incurred in this matter by, on its view, the Respondent employer intimating that it would seek legal representation. What is a fact in this case is that Ms Fisher engaged solicitors from the very outset and proceeded with those solicitors right up to and including this point of the proceedings. The materials of the Applicant employee do not say that if the Respondent employer had advised that they were not engaging legal representation that she would have acted in this matter herself. It is not trite to say that whether the Respondent employer had legal representation or not, this matter would [not] have resolved, particularly given the attitude taken by the Applicant employee and her representatives to a resolution of this matter.”

[20] The Company, as part of its submissions, filed an affidavit from Mr Bryant. In brief, it was Mr Bryant’s affidavit that he is unfamiliar with industrial relations and associated legal matters and misunderstood the outcome of the conciliation procedure in that he believed the matter was then concluded.

[21] Mr Bryant denies making the statements attributed to him by Mr Newman concerning legal representation for the Company and he was not aware that Ms Fisher would be legally represented at the hearing until the hearing began. He was previously unaware that Mr Newman was associated with a law firm. Ms Evans had never before taken part in a Fair Work Australia conciliation or arbitration. Ms Evans attended the arbitration proceedings to gain experience and did not receive any payment from the Company.

[22] Mr Bryant went on to say that his Company did not receive any offers of settlement from Ms Fisher or her representative following the conciliation conference. No counter offer to the Company offer made during the proceedings was made by Ms Fisher or her representative. Mr Bryant rejects the assertion that the Company acted improperly during the conciliation conference in order to incite fear in Ms Fisher and to consequently cause her to continue with legal representation at significant cost to her.

[23] The Company made further final submissions in response to those on behalf of Ms Fisher and I have paid further regard to those additional written submissions.

Conclusions and Finding

[24] The summaries above of the submissions by the parties are not totally exhaustive but attempt to distil the arguments put forward. I have also paid regard to the materials contained in this matter’s rather extensive file, including all materials relating to the original substantive application and the jurisdictional objection together with my Decision of 3 December 2010. I have also paid regard to the case law cited by each side as it relates to this costs application.

[25] It is clear on the face of the wording in s.611(1) of the Act that there is a presumption against the ordering of costs in FWA matters and the remaining subsections give FWA discretion to order the payment of costs if a Member is satisfied that a party responded to an application vexatiously or without reasonable cause or where FWA is satisfied that it should have been apparent to an applicant that his or her case has no reasonable prospect of success. There is no automaticity in the ordering of costs. In Mr Tayler’s words, costs do not ‘follow the event’ as a matter of course.

[26] It is evident to me that the Company pursued its case in the genuine belief that it had effected the termination of Ms Fisher’s employment in a manner, and for reasons, that were entirely lawful. The Company was entitled to vigorously defend its position during the conciliation phase and was also entitled not to make a counter offer to that of Ms Fisher. Likewise, Ms Fisher was entitled not to make a further lower offer of settlement after the conciliation phase had concluded. The Company did make a low settlement offer during the arbitration proceedings but Ms Fisher did not respond to that offer, apparently preferring to rely on being successful in the arbitration proceedings by way of compensation and reinstatement.

[27] Ms Fisher was legally represented from and including her application for relief. If Mr Bryant made the statements attributed to him during the conciliation conference, such comments would have been entirely appropriate as there could never have been any limitation on M&D’s right to seek legal advice and/or representation. If Ms Fisher viewed such comments, if they were made, in a manner which she found disturbing then that was a matter for her. In any event, the Company did not use legal representation at any stage of the matter’s long progress and no notice of appearance by a legal representative was ever filed on behalf of the Company prior to the costs application.

[28] In my view, it was reasonable for the Company to consider its case to be at least arguable and it was entitled on that basis to resist Ms Fisher’s application and demands. In the end, I found that there was no valid reason for the termination of employment based on alleged misconduct. However, I also found that most of the allegations relating to performance issues and conduct made by the Company were credible and preferred the evidence of Mr Bryant and Mr Wooldridge to that of Ms Fisher. If Ms Fisher’s employment had been terminated for performance issues rather than misconduct, the outcome for her in relation to ‘valid reason’ and consequently ‘harshness’, could well have been very different. The Company’s downfall lay in its misconceived notion of misconduct and its subsequent action in summarily dismissing Ms Fisher.

[29] Having reviewed the transcript of the arbitration proceedings, I am not convinced that proceedings were wilfully delayed or prolonged by any action by Mr Bryant or his company. Mr Bryant was unrepresented at the arbitration hearing and this of itself caused some delays but those delays were not the result of any pattern of conduct by Mr Bryant. Rather, they appeared to arise largely from his inexperience in such proceedings.

[30] According to Mr Newman, an offer of $1,000 was made by Mr Bryant to settle the matter during arbitration proceedings. Ms Fisher made no counter offer and it could therefore be assumed that she was either determined to see the arbitration through or relied on the settlement offer which she made during the conciliation conference. In the end, I awarded Ms Fisher a total of six weeks wages (less tax) and declined her claim for reinstatement. Her settlement offer during conciliation totalled some 19 ½ weeks wages. Therefore the amount awarded by me, putting aside the reinstatement question, was greatly lower than Ms Fisher’s offer. In my view, M&D cannot be held to have acted unreasonably in not agreeing to a claim by Ms Fisher which was so far in excess of the amount finally awarded to her. M&D was entitled to pursue the issues of valid reason and harshness and the claim for reinstatement by way of the arbitration proceedings. Likewise, Ms Fisher was entitled to pursue the same issues at hearing. All in all, I find that this is not a case where I should exercise my discretion to award costs. The application for costs is dismissed.

COMMISSIONER

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