Jody Galatola v PW Dancewear
[2024] FWC 2454
•12 SEPTEMBER 2024
| [2024] FWC 2454 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Jody Galatola
v
PW Dancewear
(C2023/6910)
| DEPUTY PRESIDENT LAKE | BRISBANE, 12 SEPTEMBER 2024 |
Application for costs – general protections application involving dismissal – whether application was made without reasonable cause – (s.611(2)(a)) – whether reasonably apparent application had no prospect of success (s.611(2)(b)) – whether application was unreasonably continued (s.375B) – application not unreasonably continued – application not made without reasonable cause – not apparent application had no reasonable prospect of success – costs application dismissed.
Mr Jody Galatola (the Applicant) lodged a general protections application involving dismissal with the Fair Work Commission (the Commission) on 7 November 2023. The Applicant claims that adverse action was taken against him by PW Dancewear (the Respondent) under the Fair Work Act 2009 (Cth) (the Act). The Applicant did not identify the specific adverse action taken against him.
The Respondent raised a jurisdictional objection that the Applicant was not dismissed under s.386 of the Act as the Applicant resigned from his employment on 25 September 2023. The Applicant contested the objection on the basis that he was constructively dismissed and forced to resign under s.386(1)(b) of the Act.
The matter was listed for hearing on 15 February 2024 to determine the jurisdictional objection. The Applicant discontinued his application during hearing.
On 20 February 2024, the Respondent (the Costs Applicant) lodged an application for costs against Mr Galatola (the Costs Respondent) under ss.375B and 611 of the Act. The Costs Applicant seeks an order for costs in the amount of $10,120.
Background
The Costs Respondent was employed by the Costs Applicant as a Warehouse Manager. On 20 September 2023, the Costs Applicant identified an overpayment of $132 per week that Mr Galatola had been receiving since 2021. The Costs Applicant requested the Costs Respondent to pay this amount back. The Costs Respondent believed he was entitled to the payment. He resigned from his employment and alleged he was forced to do so because of the Costs Applicant’s conduct.
On 21 November 2023, Mr Cameron Niven as the Costs Applicant’s representative wrote a letter to Mr Galatola identifying that there are two jurisdictional objections and that he would not have reasonable prospects of success. The Costs Respondent was asked to discontinue the matter on this basis.
On 15 February 2024, the Costs Applicant tendered in Mr Galatola’ s resignation letter into evidence. Upon obtaining the resignation letter, the Costs Respondent was informed that a general protections application involving dismissal must require ‘dismissal’ and that the objection could only be overcome if it was demonstrated that the resignation was forced. It was argued that the Costs Applicant did not intend for dismissal but a recovery of the overpayment and therefore there was no forced resignation.
The Costs Applicant contends that it should have been reasonably apparent to Mr Galatola that his application had no reasonable prospects of success and relies on s.375B of the Act. They argue that the Costs Respondent unreasonably failed to discontinue the proceeding until the jurisdictional hearing which caused unnecessary costs in preparing for the hearing. The Costs Applicant also argue that Mr Galatola made his application without reasonable cause, as it should have been apparent to the Costs Respondent that the application had no reasonable prospects of success under s.611(2)(a) of the Act.
The Costs Respondent submits that he is a layperson with limited knowledge of the law and was unrepresented prior to and during the hearing on 15 February 2024. Therefore, he was not advised on the appropriate course of action in relation to the application. Mr Galatola also argues that he initially engaged with the Fair Work Ombudsman (the FWO) in relation to his claims about the Costs Applicant withholding his entitlements and FWO advised him to contact the Commission about the dispute, which led him to file the general protections application.
Should Mr Galatola bear the Costs Applicant’s costs?
Section 611(1) of the Act establishes a general rule that parties in proceedings before the Commission must bear their own costs. There are provisions in the Act which operate as exceptions to this general rule and allow costs to be awarded in specific circumstances. Sections 375B and 611(2) of the Act are two such exceptions.
Section 375B of the Act provides as follows:
“375B Costs orders against parties
(1) The FWC may make an order for costs against a party (the first party) to a dispute for costs incurred by the other party to the dispute if:
(a) an application for the FWC to deal with the dispute has been made under s.365; and
(b) 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 dispute.
(2) The FWC may make an order under subsection (1) only if the other party to the dispute has applied for it in accordance with section 377.
(3) This section does not limit the FWC’s power to order costs under section 611.”
Section 375B of the Act is expressed in nearly identical terms to s.400A, which applies to unfair dismissal applications. In Matthew Gugiatti v SolarisCare Foundation Ltd [2016] FWCFB 2478, the Full Bench stated 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.”[1] A warning provided to a party about the prospects of their case may be relevant to the assessment of whether the continuation of a matter was reasonable.[2]
The Supplementary Explanatory Memorandum to the Fair Work Amendment Bill 2013 (Cth) states, at [56] to [61], as follows in relation to s.375B:
“New section 375B allows the FWC to order costs against a party to a general protections dismissal dispute (the first party) if it is satisfied that the first party caused the other party to the dispute to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the dispute. New section 375B is similar to the costs orders that are available against parties in relation to unfair dismissal matters (see section 400A).
This power to award costs is in relation to the dispute before the FWC and does not include costs associated with a general protections court application.
The power to award costs under new section 375B is not intended to prevent a party from robustly pursuing or defending a general protections dispute before the FWC. Rather, the power is intended to address the small proportion of litigants who pursue or defend disputes in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.
The FWC’s power to award costs under subsection 375B(1) 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.
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.
New subsection 375B(2) provides that the power to award costs against one party in these circumstances is only exercisable if the other party to the dispute makes an application in accordance with section 377. New subsection 375B(3) makes it clear that the new power to award costs under subsection 375B(1) operates in addition to subsection 611(2), which enables the FWC to make costs orders against a person in certain circumstances, such as where an application is made vexatiously or without reasonable cause.”
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.”
In Church v Eastern Health t/as Eastern Health Great Health and Wellbeing (‘Church’),[3] the Full Bench stated that ‘without reasonable cause’ within the meaning of s.611(2)(a) does not apply solely on the basis that an application is unsuccessful.[4] It takes into account the facts known to the party at the time of instituting the proceeding that there was no substantial prospect of success.[5] The application must have been ‘so obviously untenable that it cannot possibly succeed’.[6]
In Baker v Salva Resources Pty Ltd[2011] FWAFB 4014 at [10], the Full Bench noted the following:
“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.[7]
In considering the above matter, I am not satisfied that Mr Galatola should incur the Costs Applicant’s costs. There is no clear evidence before me that there is clear evidence of unreasonable conduct by the Mr Galatola.
The Costs Applicant raised a jurisdictional objection that the Applicant was not dismissed.[8] Therefore, the Commission could not undertake its function to facilitate a conciliation until the objection was determined.[9] Mr Galatola received a letter from Mr Niven on 21 November 2023, the issue of dismissal or no dismissal could have simply been addressed through a different application.
Mr Galatola notes in his Form F8 application that he felt he “had no option but hand in my resignation” but did not understand the authorities of forced resignation under s.386(1)(b) of the Act.
It was not unreasonable pending on the evidence adduced at hearing regarding forced resignation. The Applicant did not knowingly drag the matter on knowing he was not forced to resign or ought to have known that his prospects of success were limited. Although constructive dismissal is a high barrier to overcome, it did not preclude Mr Galatola to potentially adduce evidence surrounding the conversations he had surrounding his resignation. Therefore, the argument was not manifestly untenable or groundless, or so lacking in merit or substance in accordance with s.611 of the Act.
When Mr Galatola’ s materials were received and was made aware that there was not sufficient evidence to meet the high threshold of forced resignation, he discontinued the matter indicating that he was not engaging in unreasonable conduct when informed about the prospects of success about his jurisdictional objection. Therefore, I am not satisfied that the Costs Respondent engaged in unreasonable act or omission under s.375B of the Act.
Conclusion
Therefore, I exercise my discretion not to award costs in favour of the Costs Applicant in this matter. Accordingly, PW Dancewear’s costs application pursuant to ss.375B, s.611(2) is dismissed.
DEPUTY PRESIDENT
[1] Matthew Gugiatti v SolarisCare Foundation Ltd[2016] FWCFB 2478 at [61].
[2] Roy Morgan Research Ltd v Baker [2014] FWCFB 1175, [21] – [23].
[3] Church at [23]-[33].
[4] Ibid at [30].
[5] see Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, cited with approval in Church at [30]
[6] Keep v Performance Automobiles Pty Ltd [2015] FWCFB 1956 at [17].
[7] Baker v Salva Resources Pty Ltd[2011] FWAFB 4014 at [10].
[8] Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152.
[9] Ibid.
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