Jessica Wheatland v Recoveries and Reconstruction (Aust) Pty Ltd
[2020] FWC 6937
•21 DECEMBER 2020
| [2020] FWC 6937 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.526—Stand down
Jessica Wheatland
v
Recoveries and Reconstruction (Aust) Pty Ltd
(C2020/8292)
DEPUTY PRESIDENT SAUNDERS | NEWCASTLE, 21 DECEMBER 2020 |
Applications for costs – applications dismissed.
Introduction and background
[1] On 11 November 2020 Ms Jessica Wheatland (nee Stevenson) filed an application for the Fair Work Commission (Commission) to deal with a stand down dispute. Ms Wheatland named her employer, Recoveries & Reconstruction (Aust) Pty Ltd, as the Respondent to the application.
[2] Ms Wheatland was stood down (without pay) from her employment with the Respondent on 27 March 2020. She remains stood down (without pay).
[3] The Respondent contends that it was entitled to stand down Ms Wheatland in accordance with s 524 of the Fair Work Act2009 (Cth) (Act). Ms Wheatland contends that the Respondent did not have any right to stand her down pursuant to s 524 of the Act.
[4] Ms Wheatland sought the following relief in her Application:
1. Payment of gross wages to be calculated from the date of the initial stand down notice to the date this matter is finalised at my salary rate of $65,000 per annum as confirmed in my employment contract including all superannuation that would have been required to be paid by the employer during that time. This also includes the four public holidays that fell on 10th April 2020, 13th April 2020, 8th June 2020 and 5th October 2020 at the public holiday rate of pay as stated on the Fairwork website under requirements during a stand down period;
2. Payment of $30,000 in compensation for funds accessed from the remaining balance of the refinance of my property that was received to pay out personal loans, upgrade to my vehicle and air conditioning for my property that has been unable to proceed as the funds instead were required to assist with living expenses during the stand down periods;
3. Payment of $10,000 for superannuation which was accessed on 14th October 2020 to assist with living expenses;
4. Payment of annual leave entitlements that have accrued to the date this matter is finalised including leave loading;
5. An independent and unbiased review of my past pay slips to confirm if any leave loading or public holidays remain unpaid and if so payment of the leaving loading and/or public holiday pay owed;
6. Payment of $25,000 for emotional trauma caused by the psychological distress of this ordeal unfairly and unlawfully inflicted by the employer;
7. Payment of any additional and unforeseen expenses incurred as a result of this matter.
[5] The Commission has jurisdiction to deal with a dispute about the operation of part 3-5 (stand down) of the Act. 1 There is no doubt that the Application concerns a dispute about the operation of part 3-5 of the Act. Accordingly, the Commission has jurisdiction to deal with the Application.
[6] I determined that it was appropriate to deal with the Application, in the first instance, by listing it for conciliation. 2 The conciliation took place, by telephone, on 16 November 2020. Ms Wheatland represented herself in the conciliation. The Respondent was granted permission to be represented by Mr Moschoudis of counsel, instructed by Mr Ashley Carter, in the conciliation. Ms Wheatland did not object to such permission being granted.
[7] The Respondent did not file a response to the Application. It did, however, participate in the conciliation and outline its opposition to the Application. The Respondent also made a without prejudice financial settlement offer to Ms Wheatland during the conciliation. The Respondent also agreed to allow Ms Wheatland to have a period of seven days following the conciliation to obtain legal advice in relation to the offer made to her by the Respondent. After obtaining such advice, Ms Wheatland declined the offer.
[8] On 23 November 2020 my Associate wrote to Ms Wheatland and asked whether she wished to discontinue her Application in the Commission in circumstances where she had rejected the offer made by the Respondent and the Commission does not have the power to grant the relief sought by Ms Wheatland in her Application.
[9] On 2 December 2020 Ms Wheatland discontinued her Application in the Commission with the intention of commencing proceedings in the Federal Circuit Court seeking lost wages for the stand down period.
[10] On 3 December 2020 the Respondent indicated, in writing, its intention to make an application for costs against Ms Wheatland.
Costs applications
[11] The Respondent brings its costs application pursuant to s 611(2) of the Act. In particular, the Respondent contends that Ms Wheatland brought her Application without reasonable cause, and it would have been reasonably apparent to Ms Wheatland and her legal advisers that her Application had no reasonable prospects of success. It is submitted by the Respondent that Ms Wheatland had no arguable case to seek the relief sought by her in her Application, and Ms Wheatland should have been aware, on the basis of legal advice received by Ms Wheatland before filing her Application, that the Commission did not have the power to grant the relief sought by her.
[12] Ms Wheatland contends that at the time she filed her Application she had strong prospects of proving that her stand down was not in accordance with s 524 of the Act. At the very least, Ms Wheatland contends that there was, and is, a clear factual contest between the parties in relation to whether there had been a stoppage of work and on this basis, it cannot be said that the Application was so obviously untenable that it could not possibly succeed. Ms Wheatland says that she discontinued her application when she learned that the Commission did not have the power to make an order for compensation sought by her in her Application. Nevertheless, Ms Wheatland submits that her Application clearly sought a determination that the stand down was unlawful.
[13] Ms Wheatland also contends that, at the time she made her Application, she was self–represented and was not in receipt of legal advice. Ms Wheatland further submits it was not unreasonable for her to commence her Application on the assumption that the Respondent would submit itself to the arbitration process and abide by any recommendations made by the Commission as to compensation.
[14] Ms Wheatland submits that conciliation is a voluntary process and there is no legal requirement for the Respondent to attend or to brief counsel to appear, particularly in circumstances where two of its directors, Mr Ashley Carter and Mr Nicholas Carter, are both legal practitioners admitted to the Supreme Court of New South Wales. Ms Wheatland contends that the proper course for the Respondent to have taken would have been to file a response to the Application setting out its objections to the Application, rather than consenting to participate in a voluntary conciliation and briefing counsel for that purpose.
[15] Ms Wheatland contends that the Commission should have regard to her financial circumstances in deciding whether or not to exercise its discretion to make costs order. In that regard, Ms Wheatland points to the fact that she has been required to access $10,000 of her superannuation due to financial hardship during the period of being stood down and she has incurred significant costs in attempting to negotiate a resolution with the Respondent and responding to the Respondent’s costs application.
[16] Ms Wheatland submits that the Respondent’s costs application was made vexatiously or without reasonable cause and it should have been apparent to the Respondent, whose managing director is a solicitor, that the application for costs had no reasonable prospects of success. Ms Wheatland submits that the Respondent’s costs application is merely a tactic to intimidate her into resigning from her employment. On this basis, Ms Wheatland seeks an order for costs incurred in responding to the Respondent’s costs application.
[17] The Respondent denies the application for costs by Ms Wheatland and submits that Ms Wheatland’s conduct in making her application for costs against the Respondent provides further support for the proposition that the Respondent should be entitled to its costs on the basis that:
• Ms Wheatland’s Application was brought without reasonable cause and she had no reasonable prospects of success; and
• Ms Wheatland’s application for costs against the Respondent further exacerbates Ms Wheatland’s improper conduct in both commencing these proceedings and in making her application for costs against the Respondent which is brought without any reasonable cause, particularly having regard to the fact that Ms Wheatland’s application for costs against the Respondent is brought after she had received legal advice.
[18] The parties consented to my determination of the costs applications on the papers.
[19] In determining the costs applications I have had regard to the Application including the documents attached to it, the Respondent’s submissions dated 7 December 2020 and 14 December 2020, the statement of Mr Ashley Carter dated 7 December 2020 including the documents attached to it, and Ms Wheatland’s submissions dated 10 December 2020 including the document attached to those submissions.
Relevant legal principles
[20] Section 611(1) of the Act establishes a general rule that parties in proceedings before the Commission must bear their own costs. There are a number of provisions in the Act which operate as exceptions to this general rule and allow costs to be awarded in specific circumstances. Section 611(2) of the Act is one such exception.
[21] Section 611(2) of the Act provides as follows:
“(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.”
[22] The relevant principles concerning the interpretation and application of s 611(2)(a) were comprehensively stated in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing 3and may be summarised as follows:
• An application is made vexatiously when the predominant motive or purpose of the applicant is to harass or embarrass the other party or to gain a collateral advantage.
• An application is not made without reasonable cause simply because the application did not succeed.
• Whether an application is made without reasonable cause may be tested by asking, on the facts apparent to the applicant at the time the application was made, whether 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 characterise the application as having been made without reasonable cause.
• In relation to an appeal, the question becomes whether the appeal has no substantial prospect of success. The prospect of success must be evaluated in the light of the facts of the case, the judgment appealed from and the points taken in the notice of appeal. If there was not insubstantial prospect of the appeal achieving some success, it cannot fairly be described as having been made without reasonable cause.
• An application will have been made without reasonable cause if it can be characterised as so obviously untenable that it cannot possibly succeed, or manifestly groundless, or discloses a case where the tribunal is satisfied cannot succeed.
[23] In relation to s 611(2)(b), the relevant principles were summarised by the Full Bench in Baker v Salva Resources Pty Ltd 4as follows (footnotes omitted):
“[10] The concepts within s.611(2)(b) ‘should have been reasonably apparent’ and ‘had no reasonable prospect of success’ have been well traversed:
• ‘should have been reasonably apparent’ must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test; and
• a conclusion that an application ‘had no reasonable prospect of success’ should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable.”
Consideration
Respondent’s application for costs against Ms Wheatland
[24] The Commission is not a court. It cannot exercise judicial power. As a result, the Commission cannot make a binding declaration or determination as to whether an employer has acted lawfully in standing down an employee in accordance with s 524, nor can it order an employer to pay an employee any remuneration due to that employee because of the employer’s non-compliance with s 524 of the Act. Only a court can make such orders. 5 It follows that the Commission does not have the power to grant the relief sought by Ms Wheatland in her Application. However, that does not necessarily mean that Ms Wheatland made her Application without reasonable cause or that it should have been reasonably apparent to Ms Wheatland that her Application had no reasonable prospects of success.
[25] The Commission’s power to deal with a dispute about the operation of part 3-5 is broad. Section 526(2) of the Act provides that the Commission may deal with such a dispute by arbitration, but it is clear from the statutory note to the provision that the Commission may also deal with such a dispute by mediation, conciliation, making a recommendation, or expressing an opinion. It is common practice for disputes about the operation of part 3-5 of the Act to be listed before the Commission for conciliation in the first instance. In such a conciliation the parties may agree to settle the dispute by the employer agreeing to make a payment to the employee in respect of all, or part, of the remuneration that would have been paid to the employee had he or she not been stood down. There is nothing inappropriate or unreasonable about the Commission’s jurisdiction under s 526 being used for such a purpose. That is precisely what happened in the present case.
[26] Ms Wheatland was not legally represented in the conciliation conference before the Commission. She is now legally represented. It is also the case, as is apparent from paragraph [32] of Ms Wheatland’s response to question 2.2 in her Application, that Ms Wheatland received some advice from Law Access and Legal Aid prior to filing her Application. But it does not matter whether Ms Wheatland received advice, or ought to have received advice, prior to filing her Application about the extent of the Commission’s powers to grant relief in a stand down dispute, because it was reasonable for Ms Wheatland to file her Application and seek to reach agreement with the Respondent in conciliation before the Commission. The situation may have been different had Ms Wheatland pressed for her dispute to be arbitrated by the Commission in circumstances where the relief she was seeking in such an arbitration was beyond the power of the Commission. That did not happen. As soon as Ms Wheatland rejected the Respondent’s offer and was asked by the Commission whether she wanted to discontinue her Application in order to seek relief from a court of competent jurisdiction, she informed the Commission (and the Respondent) that that was her intention. It would have also been open to Ms Wheatland to seek to amend her Application to seek relief from the Commission within its powers.
[27] There are bona fide disputes between Ms Wheatland and the Respondent as to whether she was lawfully stood down under s 524 of the Act. There are real questions to be determined as to whether (i) there was a “stoppage of work” within the meaning of s 524(1)(c) of the Act, as distinct from a slow down in work, and (ii) Ms Wheatland could not “usefully be employed” because of any stoppage in work, particularly having regard to the fact that other employees of the Respondent in different offices continued to work and were not stood down.
[28] I do not accept the Respondent’s contention that Ms Wheatland’s application for costs against the Respondent further exacerbates Ms Wheatland’s improper conduct in both commencing these proceedings and in making her application for costs against the Respondent. First, Ms Wheatland did not engage in any improper conduct by filing her Application and participating in conciliation before the Commission in an attempt to resolve her stand down dispute with the Respondent. Secondly, although I have found that Ms Wheatland should not be awarded any costs, her claim for costs was, in my view, reasonably arguable. My reasons for reaching these conclusions are set out below.
[29] By reason of the matters identified in the previous five paragraphs, I am not satisfied that Ms Wheatland made her Application without reasonable cause, nor am I satisfied that it should have been reasonably apparent to Ms Wheatland that her Application had no reasonable prospects of success.
Ms Wheatland’s application for costs against the Respondent
[30] I do not accept Ms Wheatland’s contention that the Respondent’s costs application was made vexatiously or that it is merely a tactic to intimidate Ms Wheatland into resigning from her employment. The limited evidence before me does not support any such finding. Further, during the conciliation the Respondent informed Ms Wheatland that her job has not been made redundant and it wants her to return to work as soon as such work is available, which it expects and hopes to be in the near future. I am satisfied that the Respondent’s predominant motive or purpose in bringing its costs application is because it believes that such costs should be awarded in circumstances where Ms Wheatland sought relief in her Application which is beyond the power of the Commission.
[31] I reject the contention that the Respondent’s costs application was brought without reasonable cause or that it should have been apparent to the Respondent, whose managing director is a solicitor, that its application for costs had no reasonable prospects of success. Although the Respondent has not succeeded in its costs application, I do not consider that the costs application was obviously untenable so that it could not possibly succeed, or that it was manifestly groundless or disclosed a case which could not succeed. In circumstances where all the relief sought by Ms Wheatland in her Application was beyond the power of the Commission to grant, the Respondent’s costs application was, in my view, reasonably arguable.
Conclusion
[32] For the reasons given, I dismiss both the Respondent’s costs application against Ms Wheatland and Ms Wheatland’s costs application against the Respondent.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
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1 Section 526(1) of the Act
2 Section 526(2) of the Act
3 [2014] FWCFB 810 at [23]-[33]
4 [2011] FWAFB 4014; (2011) IR 174
5 Richards v Automotive Brands Group Pty Ltd[2020] FWC 4168 at [8]
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