Jason John Ives v Link-Up (Qld) Aboriginal Corporation

[2021] FWC 6331

[2021] FWC 6331

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Jason John Ives
v
Link-Up (Qld) Aboriginal Corporation
(U2020/9167)

COMMISSIONER HUNT BRISBANE, 12 NOVEMBER 2021

Application for an unfair dismissal remedy – application for costs pursuant to s.400A of the Fair Work Act 2009 – costs incurred – unreasonable act to continue application while costs were being incurred by the other party.

Introduction

[1] This decision concerns an application by Link-Up (Qld) Aboriginal Corporation (Link-Up) made on 7 April 2021 seeking an order for costs against Mr Jason Ives pursuant to s.400A of the Fair Work Act 2009 (the Act).

[2] On 24 March 2021, I dismissed Mr Ives’ unfair dismissal application. 1 A costs application made by a party must be made within 14 days after the Fair Work Commission (the Commission) determines the matter, or the matter is discontinued.2 I am satisfied the costs application was made within 14 days after I determined the matter on 24 March 2001.

[3] Directions were issued requiring the parties to file written evidence and submissions. A telephone hearing was conducted on 14 May 2021. Mr Ives represented himself, while Link-Up was represented by Mr Robert Reed of Counsel, instructed by Ms Patricia Thompson, CEO of Link-Up.

Relevant legislation and principles

[4] The costs application is brought under s.400A of the Act which provides:

“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.”

[5] The Act provides the general rule that parties must bear their own costs in proceedings before the Commission. 3 The Act also facilitates exceptions to this general rule and empowers the Commission to award costs in specific circumstances. However, such power is to be exercised with caution and in clear cases.4 It is only in rare and exceptional circumstances that costs will be awarded.

[6] In Gugiatti v SolarisCare Foundation Ltd 5, the Full Bench noted that s.400A “is concerned with unreasonable acts or omissions in connection with the ‘conduct or continuation’ of a matter already instituted, not with whether it was reasonable to have instituted a matter in the first place.”

[7] In Roy Morgan Research v Baker 6, the Full Bench held that “a reasonable person will determine if and how to respond to an offer of settlement after considering all of the circumstances of the case including the terms of settlement in relation to the relief sought; the relative strength of the parties cases; the likely length and cost of proceeding to hearing if the matter does not settle; and adverse consequences of acceptance of a settlement rather than prosecuting or defending the primary application.”

[8] Section 400A was inserted into the Act by of the Fair Work Amendment Act 2012. The Explanatory Memorandum to the Fair Work Bill 2012 provides:

“168. Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.

169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.

170. The FWC's power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.

171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party.”

Evidence of Ms Patricia Thompson

[9] In support of its application, Ms Patricia Thompson, the Chief Executive Officer of Link-Up made a written statement on 29 April 2021. Ms Thompson noted that Mr Ives was dismissed from his employment with Link-Up on 12 June 2020 for reasons of serious misconduct. Mr Ives lodged an unfair dismissal application in the Commission on 3 July 2020.

[10] Ms Thompson stated that following directions issued by me on 30 July 2020 in the first instance matter, nominating a hearing date of 22 September 2020, the Board of Link-Up approved a without prejudice settlement offer to be put to Mr Ives. She stated that the Board had confidence it could successfully defend the unfair dismissal claim, but it wanted to avoid the stress and further cost of a hearing. The following offer was made to Mr Ives:

“31st July 2020

Your ref: 4030472

Peta Willoughby
Special Counsel
Norton Rose Fulbright Australia

…

“Without Prejudice Save as to Costs”

Dear Ms Willoughby

RE: LINK-UP (QLD) ABORIGINAL CORPORATION ats JASON IVES: U2020/9767 [sic]

Offer to Settle

I note that directions for the conduct of this matter to hearing have been issued by the FWC. In an effort to finalise the matter before either party incurs further time and expense, Link-Up (Qld) Aboriginal Corporation (Link-Up) offers to settle Mr Ives’ unfair dismissal claim on the following terms:

1. Link-Up pays Mr Ives 8 weeks’ wages, subject to taxation in accordance with the relevant law.

2. Mr Ives is given the opportunity to resign effective from 12 June 2020.

3. Link-Up will provide Mr Ives with a Statement of Service.

4. Acceptance of the offer in 1-3 above to be in full and final settlement of all matters related to the dismissal and the employment, except for workers compensation matters.

5. The settlement terms to be formalised in a Deed of Settlement, drawn by Link-Up, to include the usual terms such as confidentiality as to the settlement and the negotiations, and a mutual non-disparagement provision.

6. Payment of the net amount in 1 above, after withholding tax, to be paid to Mr Ives within 14 days of his signing the Deed of Settlement.

Reasons for Mr Ives to Accept the Offer

In the view of Link-Up, the settlement offer is generous and worthy of acceptance by Mr Ives for the following reasons;

•  Link-Up has strong prospects of successfully defending the claim. The contest at hearing would largely hinge on the credit of Ms Struckett and Mr Ives. Link-Up is confident that Ms Struckett’s credibility would not be shaken and that the FWC is unlikely to accept that the complaints made by her were fabricated.

•  Even if Mr Ives was successful, the FWC would not order reinstatement. Mr Ives has lost the trust and confidence of the Board and the CEO, Link-Up is a small organisation, and Ms Struckett remains employed by Link-Up.

•  Even if Mr Ives was successful, his only remedy would be compensation, with a cap of 26 weeks, an amount rarely awarded. He has been paid 5 weeks’ pay in lieu of notice, and given his admissions as to certain conduct, and the prospect of further findings of less than proper conduct, any compensation award would surely be further reduced by operation of s.392(3) of the Act.

Time for Acceptance

The offer set out above is open for acceptance for a period of 14 days from its receipt.

Costs

The settlement offer set out above is made in accordance with the principles in Calderbank v Calderbank [1976] Fam 93 and, in the event that the offer is not accepted, Link-Up reserves the right to bring his letter to the attention of the FWC on the question of costs.

I look forward to hearing from you.

Yours Sincerely

Patricia Thompson
Chief Executive Officer”

[11] Ms Thompson stated that at the time the settlement offer was made, Mr Ives was legally represented by Norton Rose Fulbright. On 5 August 2020, by letter from that firm, Mr Ives rejected Link-Up’s settlement offer.

[12] The application proceeded to hearing on 22 September 2020. In preparation for, and being represented at the hearing, Link-Up incurred legal costs and disbursements. The legal costs incurred were paid to Mr Reed in accordance with an invoice issued by him on 28 September 2020. Those legal costs are set out, and broken down by specific items of work, in the schedule at Item 4 in Link-Up’s Application for Costs.

[13] Ms Thompson advised that Link-Up also incurred disbursements of $275.00 for a medical report by Dr Browne, Ms Struckett’s treating general practitioner, as to the effects of Mr Ives’ conduct on Ms Struckett’s health. The medical report was annexed to a statement of Dr Browne filed by Link-Up in the proceedings. Ms Thompson stated that although Mr Ives had expressed a desire to cross-examine Dr Browne, after the hearing commenced on 22 September 2020, he informed the Commission that he no longer wished to do so.

Submissions of Link-Up

[14] Link-Up submitted it is well established that a failure to accept a reasonable offer to settlement may constitute an unreasonable act for the purpose of s.570(2) of the Act. 7 Link-Up submitted there was no reason why the same principle should not apply to determinations under s.400A of the Act.

[15] In such a case, Link-Up advised that the Commission would assess the reasonableness of a refusal in light of the circumstances that existed at the time the rejection occurred. Those circumstances include the terms of the offer, the stage of the litigation when it was made, and the understanding of the parties as to the strengths and weaknesses of their respective cases. 8

[16] Link-Up advised that at the time of the rejection of the settlement offer, the allegations against Mr Ives were well canvassed in lengthy correspondence between Link-Up and Mr Ives’ then lawyers. Link-Up stated that Mr Ives was well aware of the strengths and weaknesses in his case, which relied almost solely on his credit. Link-Up submitted that Mr Ives was, or ought to have been, aware that his prospects were poor, particularly where he had not advanced any reasons why Ms Struckett would have made false complaints against him.

[17] It is Link-Up’s position that at the time, Mr Ives should have realised that the settlement offer was a reasonable one which he should accept in light of his poor prospects of success in the application. Link-Up stated that not only was the monetary offer reasonable, but the chance to resign and receive a statement of service was of value. Mr Ives’ rejection of the offer was, according to Link-Up, an unreasonable act which caused an avoidable expenditure of time and legal costs by Link-Up.

[18] Link-Up accepts that an award of costs involves the exercise of a discretion, however, Link-Up submitted that there is nothing in this case which would cause the Commission not to exercise a discretion in favour of Link-Up once it determines that Mr Ives had engaged in the unreasonable act of rejecting the settlement offer.

[19] Link-Up submitted that Mr Ives should pay Link-Up’s legal costs incurred after the rejection of the settlement offer on 5 August 2020, in the amounts set out in the costs application, being a total of $17,270.00. It is submitted that those costs are reasonable and allowable.

[20] Regarding the decision of the Commission, Link-Up noted that the following was determined:

(a) Of the 13 allegations of misconduct alleged against Mr Ives, 10 were established; 9

(b) Those findings involved an acceptance of Ms Struckett’s evidence over that of Mr Ives;

(c) Mr Ives repeatedly breached the Code of Conduct 10 and engaged in bullying and harassment;11

(d) Much of the conduct was offensive, insulting or demeaning 12 and some conduct was “grotesque”;13

(e) There were numerous valid reasons for dismissal. 14

Submissions and Evidence of Mr Ives

[21] Mr Ives made the following submissions:

“1. While I acknowledge the decision handed down by the Fair Works Commission in my matter against Link-Up (Qld) I still believe I had a strong case for unfair dismissal against the organisation.

2. The Matter had been independently investigated, then abandoned when Link-Up did not like the outcome. The manner that the investigation had been conducted was unfair as I was required to attend an interview on short notice and was not provided with any of the allegations beforehand.

3. The alleged allegations put to me by the Independent Investigator were different to the allegations stated in the Show Cause letter, and in fact new allegations had been added. It is possible that they were not known to Link-Up by the time of my interview with the Independent Investigator. I believe Link-Up actively solicited complaints against me in a process to provide the appearance of procedural fairness in circumstances where they had already made a decision about my future employment. This was objectively inappropriate and unfair.

4. The alleged allegations were Ms Struckett stated other people had been present where never verified by the witnesses that Ms Struckett stated where present, but for one alleged incident where the Link-Up CEO was the only one to hear it in a room full of people.

5. I still maintain that during my time at Link-Up there was a workplace culture of robust banter at all levels that included joking, swearing and repeated use of extremely offensive language within the workplace and in text messages between employees. Such as the jpeg sent by the Link-Up CEO to my private mobile phone.

6. I stated in previous statements that Link-Up staff often engaged in humour, banter and teasing to help cope with the sensitive and stressful nature of their jobs and none of it was intended to be harmful or nasty.

7. Once becoming aware that Ms Struckett had become upset, though I wasn’t aware at what she was saying at the time, I immediately apologised to her.

8. In my opinion, even if the alleged allegations were true, I believe they are at the lower end of the scale of seriousness.

9. I have worked all my life since the age of eighteen years of age. This is the first time in thirty-two years that I have had allegation of this manner aimed at me and been dismissed from a job. I felt that I had a strong case to defend my rights and reputation as my dismissal was harsh and unjust. While I accept the decision from The Fair Works Commission, I maintain that I thought I could have been successful.”

[22] During the costs application hearing, Mr Ives stated that he had pursued the application as he was trying to clear his name. He stated that he didn’t prosecute it for the remedy of money being awarded to him. He considered he had a strong case and didn’t believe the allegations.

[23] In response, Link-Up submitted that Mr Ives ought to have known, with the allegations before him and the credibility Ms Struckett would bring to her evidence, that he was skating on very thin ice. If Mr Ives had been concerned about his reputation, Link-Up had offered to him in the settlement offer the ability to have his dismissal converted to a resignation, and the provision of a statement of service.

[24] Mr Ives stated at the hearing that he was living in Townsville and paying board with a relative. He receives $629 per fortnight in Centrelink payments. He is looking for work. He agreed in cross-examination he has a strong family network in Townsville.

Consideration

[25] As the costs application has been made under s.400A of the Act, and not under s.611 of the Act, it is not appropriate for the Commission to determine if the unfair dismissal application was made by Mr Ives vexatiously or without reasonable cause, or that it should have been reasonably apparent to Mr Ives that his application had no reasonable prospect of success.

[26] As the Full Bench in Gugiatti v SolarisCare Foundation Ltd 15 observed, s.400A(1) establishes two preconditions for the making of an order for costs under the subsection (in addition to the requirement in s.400A(2)). The first is that the Commission must be satisfied that a party engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter. The second is that such act or omission caused the other party to the matter to incur costs. Once these preconditions are satisfied, a discretionary power to order the payment of such costs is enlivened.16

[27] Having regard to the information known to Mr Ives as of 31 July 2020, and the accurate representations made by Link-Up as to the likelihood of the Commission being satisfied as to Ms Struckett’s credibility when tested against his own, I am satisfied that Mr Ives engaged in an unreasonable act or omission by continuing his application and electing not to accept the very generous offer made by Link-Up which included a statement of service and the conversion of the dismissal to a resignation.

[28] Where Mr Ives asserted that he pursued his application because he wanted to clear his name, his position by 31 July 2020 was unreasonable. He couldn’t have reasonably considered the Commission might accept his evidence, particularly relevant to his continued use of the term “gumby” to Ms Struckett, that it meant something other than a slur towards her. Mr Ives knew when the offer was put to him that Link-Up had evidence of a text message sent by him to Ms Struckett referring to her as “Homer”, which I found to more than likely be a reference to the fictional cartoon character, Homer Simpson. 17 At around the same time he had sent a text to another employee, calling her “gumby”.

[29] The offer made to Mr Ives included the payment of eight weeks’ pay on top of the five weeks’ pay made to him on termination. If Mr Ives wanted to clear his name, the provision of the statement of service and the conversion of the dismissal to a resignation was the tool he needed to increase his chances of future employment and for the allegations and findings against him to be side-lined and not aired in public. His failure to accept the offer to made to him was unreasonable.

[30] As to the second matter, I consider that, but for Mr Ives’ unreasonable act to not accept the offer made by Link-Up on 31 July 2020, Link-Up would not have incurred the costs of preparing for and attending the hearing of the unfair dismissal application.

[31] Therefore, I am satisfied that the second precondition – the causal connection between Mr Ives’ acts and omissions, and the costs incurred by Link-Up – to the exercise of the Commission’s discretion to order costs under s.400A(1) is met.

[32] As the power to order costs is enlivened it is necessary to consider whether I should exercise my discretion to do so.

[33] In the circumstances, I propose to grant the costs application. I have had regard to the nature of the work conducted by Link-Up, declared on its website as follows:

“Link-Up (Qld) aims to bring a sense of peace, identity and belonging to Aboriginal and Torres Strait Islanders who have been separated from their family and culture.

We provide support to reunite you with your people and country where contact has been lost due to forced removal, fostering, adoption or institutionalisation.”

[34] The work Link-Up does is important, and by Mr Ives’ unreasonable actions in failing to accept the offer made to him on 31 July 2020, it has had to redirect substantial funds to legal representation.

[35] I have had regard to Mr Ives’ limited means and note that at the time of the hearing he was in receipt of Centrelink benefits. He would be unable to pay to Link-Up a substantial amount of money, nor could he do so in a short time frame.

[36] I have determined that Mr Ives is to pay to Link-Up the amount of $2,275. This will need to be paid by Mr Ives to Link-Up in fortnightly payments of $50.00 according to the following schedule. If Mr Ives has increased capacity to pay the amount of $2,275 to Link-Up earlier than 25 August 2023, he should consider doing so:

Instalment:	Date:	Amount payable:	Balance owing after payment of amount payable:
1.	3 December 2021	$50	$2,225
2.	17 December 2021	$50	$2,175
3.	31 December 2021	$50	$2,125
4.	14 January 2022	$50	$2,075
5.	28 January 2022	$50	$2,025
6.	11 February 2022	$50	$1,975
7.	25 February 2022	$50	$1,925
8.	11 March 2022	$50	$1,875
9.	25 March 2022	$50	$1,825
10.	8 April 2022	$50	$1,775
11.	22 April 2022	$50	$1,725
12.	6 May 2022	$50	$1,675
13.	20 May 2022	$50	$1,625
14.	3 June 2022	$50	$1,575
15.	17 June 2022	$50	$1,525
16.	1 July 2022	$50	$1,475
17.	15 July 2022	$50	$1,425
18.	19 July 2022	$50	$1,375
19.	12 August 2022	$50	$1,325
20.	26 August 2022	$50	$1,275
21.	9 September 2022	$50	$1,225
22.	23 September 2022	$50	$1,175
23.	7 October 2022	$50	$1,125
24.	21 October 2022	$50	$1,075
25.	4 November 2022	$50	$1,025
26.	18 November 2022	$50	$975
27.	2 December 2022	$50	$925
28.	16 December 2022	$50	$875
29.	30 December 2022	$50	$825
30.	13 January 2023	$50	$775
31.	27 January 2023	$50	$725
32.	10 February 2023	$50	$675
33.	24 February 2023	$50	$625
34.	10 March 2023	$50	$575
35.	24 March 2023	$50	$525
36.	7 April 2023	$50	$475
37.	21 April 2023	$50	$425
38.	5 May 2023	$50	$375
39.	19 May 2023	$50	$325
40.	2 June 2023	$50	$275
41.	16 June 2023	$50	$225
42.	30 June 2023	$50	$175
43.	14 July 2023	$50	$125
44.	28 July 2023	$50	$75
45.	11 August 2023	$50	$25
46.	25 August 2023	$25	$0

[37] A costs order to this effect will be separately issued.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR735750>

 1   [2021] FWC 1595.

 2 Section 402 of the Fair Work Act 2009.

 3 Section 611(1) of Fair Work Act 2009.

 4   Roberts v Ngaanyatjarra Health Service[2016] FWC 4875.

 5    [2016] FWCFB 2478 at [61].

 6    [2014] FWCFB 1175.

 7 Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221; FCAFC 20 at [166]; and McDonald v Parnell Laboratories (Aust) (No 2) (2007) 164 FCR 591 at 598-599.

 8   Cf HSU v Jackson (No 5) [2015] FCA at [46]-[47].

 9   Decision at [331], [333]-[336], [349]-[350], [354]-[356], [359]-[360], [362]-[364], [366]-[369]; [370]-[372].

 10 Decision at [336], [350], [356], [364], [369], [372]; [390].

 11   Decision at [331], [336], [364], [369].

 12   Decision at [336], [362]-[363], [369].

 13   Decision at [349], [355].

 14   Decision at [374]; see also [390] as to their seriousness.

 15    [2016] FWCFB 2478

 16 Ibid at [43].

 17   [2021] FWC 1595 at [338].