Joelle Humbert v Each Employment
[2014] FWC 1391
•21 MARCH 2014
[2014] FWC 1391 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Joelle Humbert
v
EACH Employment
(U2013/11601)
DEPUTY PRESIDENT HAMILTON | MELBOURNE, 21 MARCH 2014 |
Application for relief from unfair dismissal - Costs application - Efficient Case Management.
[1] On 17 July 2013 Ms Joelle Humbert filed an application for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (the Act) against EACH Employment.
[2] The matter was conciliated and no settlement was reached.
[3] The matter was listed for Jurisdiction and Arbitration Conference/Hearing before me for two days, 5 and 6 December 2013.
[4] Written submissions and witness statements were filed by both parties.
[5] A Notice of Discontinuance was filed at 4.44pm on 4 December 2013 by Taylor & Preston lawyers on behalf of their client, Ms Humbert.
[6] EACH Employment filed a costs application on 17 December 2013 against both the applicant, Ms Humbert and her lawyers, Taylor & Preston.
[7] Directions were issued on 20 December 2014. The parties were advised the Commission intended to determine the matter on the basis of written submissions and witness evidence filed. No objection to this course of action was received.
[8] Ms.Humbert filed extra material outside the time period specified in the directions. There appears to be no reason why it could not be filed earlier. She did not seek a variation of the directions. No explanation for its lateness was provided. The employer did not have the opportunity to respond to it. I have not had regard to that material. Even if I did have regard to it, it is not of assistance, or of marginal assistance, in dealing with the issues before me.
The Act and Authorities
[9] Section 381 provides the object of the unfair dismissal part of the Act:
“Section 381 Object of this Part
(1) The object of this Part is:
(a) to establish a framework for dealing with unfair dismissal that balances:
(i) the needs of business (including small business); and
(ii) the needs of employees; and
(b) to establish procedures for dealing with unfair dismissal that:
(i) are quick, flexible and informal; and
(ii) address the needs of employers and employees; and
(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.
Note: The expression “fair go all round” was used by Sheldon J in In re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95.”
[10] Section 400A 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.”
[11] The Explanatory Memorandum refers to this section and to s.401 in the following terms:
“Parts 3 and 4 of Schedule 6 to the Bill enhance the FWC’s ability to order costs against a party and/or their representative in unfair dismissal matters. The new ‘party costs’ provision applies where a party to an unfair dismissal matter (either an employee or employer) has caused the other party to incur costs by an unreasonable act or omission.”
“.... Under section 401 of the FW Act, lawyers and paid agents may currently be exposed to costs orders if FWA has granted permission for a person to be represented in an unfair dismissal matter. The Bill will provide for the FWC to order costs against a lawyer or paid agent whether or not the FWC has given permission for a person to be represented.
The amendments strike a balance between the need to protect workers from unfair dismissal, and to provide a deterrent against unreasonable conduct during proceedings. The amendments will enable costs orders to be more easily made in the case of unreasonable conduct but will not prevent genuine claims from being pursued. They will discourage frivolous and speculative claims and assist in the efficient resolution of claims by encouraging all parties to approach proceedings in a reasonable manner. These measures are reasonable and proportionate to address the time and expense that an unreasonable conduct by a participant and/or their representative may cause another party to incur.”
[12] The phrase “unreasonable act or omission” was used in s.170CJ(3) of the Workplace Relations Act 1996 (the WR Act). Sections 170CJ(1), (2) and (3) as they applied in March 2006 provided:
“Section 170CJ. Commission may order payment of costs
(1) If the Commission is satisfied:
(a) that a person (first party):
(i) made an application under section 170CE; or
(ii) began proceedings relating to an application; and
(b) the first party did so in circumstances where it should have been reasonably apparent to the first party that he or she had no reasonable prospect of success in relation to the application or proceeding;
the Commission may, on application under this section by the other party to the application or proceeding, make an order for costs against the first party.
(2) If the Commission is satisfied that a party (first party) to a proceeding relating to an application under section 170CE has acted unreasonably in failing:
(a) to discontinue the proceeding; or
(b) to agree to terms of settlement that could lead to the discontinuance of the application;
the Commission may, on an application under this section by the other party to the proceeding, make an order for costs against the first party.
(3) If the Commission is satisfied:
(a) that a party (first party) to a proceeding relating to an application made under section 170CE caused costs to be incurred by the other party to the proceeding; and
(b) that the first party caused the costs to be incurred because of the first party’s unreasonable act or omission in connection with the conduct of the proceeding;
the Commission may, on an application by the other party under this section, make an order for costs against the first party.”
[13] The unreasonable act or omission phrase in s.170CJ(3) was considered in Goffet v Recruitment National Pty Ltd 1, which concerned a failure to attend conciliation proceedings. In that matter the Full Bench stated:
“[35] In the absence of medical evidence of Ms Goncalves and an opportunity for the Appellant to be heard on the point no weight should attach to the affidavit of Ms Goncalves claim that she was ill on the day of the conciliation on 5 November 2008. The notice of listing for the 5 November 2008 conciliation was sent to the Respondent by fax on 20 October 2008. The matter was listed for 11.30am. The Respondent only notified the Commission that it would not be attending the conciliation when the Commissioner’s associate telephoned the Respondent to inquire of its whereabouts at the time of the conciliation. Assuming Ms Goncalves was ill, as it is submitted that she was, no explanation appears to be given for the failure of the Respondent to inform the Appellant or the Commission of the fact prior to the scheduled commencement time of the conciliation or at all at the initiative of the Respondent. That represents conduct in our view, which caused the Appellant and her representative an unnecessary attendance at the Commission for which we think she should have her costs. The failure to initiate contact with the Commission and/or the Appellant prior to the scheduled start time for the conciliation to inform it or them of the non-attendance of the Respondent was unreasonable. If the act was intentional it would be an unreasonable act. If unintentional it would be an unreasonable omission. There is no evidence that the Respondent’s conduct in this regard was an intentional act. We are satisfied that the Respondent’s conduct in respect of the conciliation on 5 November 2009 was an unreasonable omission which caused the Appellant to incur costs.”
[14] The Bench continued:
“[47] The Respondent’s failure to take steps to inform the Appellant of its intentions immediately after the issue of the notice of listing was either a deliberate or reckless act that could not be regarded as anything other than unreasonable. Alternatively, to the extent that the failure might be regarded as an omission, it was equally unreasonable. That those unreasonable acts or omissions caused the Appellant to incur the costs in connection with the conduct of the proceeding is unquestionable. We are satisfied that the Respondent must be ordered to pay the Appellant’s costs of and incidental to the submissions and preparation for arbitration. We allow also the costs on an indemnity basis in respect of the costs application.”
[15] A Full Bench considered the former s.170CJ(2) and (3) in Brazilian Butterfly Pty Ltd and Charalambous 2. The Bench discussed authorities and said:
“[39] Very strong prospects of success will not always justify a failure to participate in settlement negotiations initiated by a serious settlement offer from the other party. For example, where reinstatement is not sought and the amount offered by a respondent is equivalent to the statutory cap on compensation that can be ordered pursuant to s.170CH, it will likely be unreasonable for an applicant to fail to agree to a settlement on those terms, irrespective of how strong the applicant’s case is. Of course, even then, it is possible to conceive of circumstances where a failure to agree terms of settlement on the basis of such an offer would not be unreasonable. For example, depending upon the circumstances, it may be entirely reasonable for an applicant to insist upon a withdrawal of the dismissal and acceptance of a resignation in its stead if this were necessary to repair substantial damage done to an applicant’s professional reputation and future professional job prospects as a result of the dismissal.
[40] On the other hand, modest or even poor prospects of success on liability or remedy will not necessarily always make it unreasonable for a party to fail to agree terms of settlement that may lead to the discontinuance of the application. For example, an applicant who was a long term employee close to retirement may have very substantial contingent superannuation entitlements that will be lost unless he or she obtains reinstatement. The difference between the value of those contingent entitlements and the amount offered by the respondent as a monetary settlement may be so great as to make it reasonable for the applicant to refuse the respondent’s offer, notwithstanding that the applicants’ prospects of success are only modest or even poor. Again, each case will turn on its own facts.”
(references removed)
[16] The Full Bench continued:
- the terms of the settlement offered in relation to the relief sought;
- the relative strengths of the parties’ cases (and thus their relative prospects of success) in relation to both ‘liability’ and the relief sought;
- any assessment of the merits in the certificate issued by the Commission pursuant to s.170CF(2);
- the likely length and cost of proceeding to a hearing if the matter does not settle; and
- any adverse consequences that will accrue to a party if they accept a settlement on particular terms rather than successfully prosecute or defend the primary application, as the case may be.
“[43] A reasonable person, who is a party to proceedings pursuant to s.170CE, when confronted with an offer of settlement from the other party, will determine whether, and if so, how to respond to such an offer after considering all the circumstances of the case, including:
[44] This list is not intended to be exhaustive. All of the circumstances are relevant and, as is made clear in the joint judgment in Blagojevch, there is no basis in the Act for giving primacy to any particular factor in every case.
[45] In many, if not most, cases there will be contested facts or contested interpretations of particular facts. What knowledge in this regard is to be attributed to the reasonable person considering whether, and if so, how to respond to an offer of settlement? The passage in Abbey, upon which the Commissioner relied was, clearly enough, an attempt to grapple with that problem. However, there is a tension between the way in which that passage is expressed and the apparent acceptance by the majority in Blagojevch that a party can act reasonably in responding to an offer of settlement by reference to that party’s “genuine perception or recollection of events”. The Full Court’s formulation is to be preferred although, even then, it is not to be seen as a substitute for the words of the Act. Of course, there is an issue as to what constitutes a “genuine” perception. The Full Bench in Kangan Batman TAFE observed, we think correctly, that:
“A party cannot simply disregard matters that should have been reasonably apparent and then claim that such matters were not apparent to them”. ”
(references removed)
[17] A Full Bench said in Stagno v Frews Wholesale Meats 3:
“This last extract introduces a point of distinction between s.170CJ(1) and s.170CJ(2). The former refers to ‘without reasonable cause’, the latter to ‘acted unreasonably’. This anomaly, as it was described, is noted by a full bench in K.M. Lloyd v. International Health and Beauty Aids Pty Ltd t/as Elly Lukas Beauty College [Print Q5446] and, by inference, the bench is of the view that the tests are different in s.170CJ(1) and (2). That there is a different formula is clear but we are of the view that the formulations are based on the stage of proceedings at which they occur. Section 170CJ(1) relates to the initiation of proceedings. Section 170CJ(2) relates to the failure to discontinue or the discontinuance of the matter. In each case what attracts the discretion to award costs is unreasonable action or the absence of sufficient reason for the action taken. What is considered to be without reason is determined by reference to the stage that the proceeding has reached. We note that this leaves open the possibility that proceedings may commence which are with reasonable cause but may, in particular circumstances at a later stage, be further prosecuted unreasonably.
“We are of the view that a party to a proceeding commenced under s.170CE of the Act in which the Commission has begun arbitrating has acted unreasonably in failing to discontinue the matter if when, at the relevant time, upon the facts apparent to the applicant there was not substantial prospect of success.” ”
[18] These authorities were quoted with approval by a Full Bench of the Commission in Roy Morgan Research Ltd v. Mrs.Karen Baker 4, and in other Full Bench decisions.
Submissions
[19] EACH Employment submit that costs should be awarded against Ms.Humbert and her lawyers pursuant to ss.400A, 401 and 611. On 8 November Ms.Humbert and Taylor & Preston knew that the rescheduled hearing would be on 5-6 December, that her solicitor representative was unable to attend that day, and that extra costs would be required to be incurred to brief another legal representative. Despite this they waited for a month before withdrawing with the consequences that EACH Employment had incurred the majority of its legal costs for the preparation for the hearing. Ms.Humbert could in any event have continued her case without legal representation. It put a range of other submissions.
[20] Ms.Humbert and Taylor & Preston submit that the hearing date was changed from
11-13 November to 5-6 December which overlapped with a hearing commitment of the only Employment Lawyer at the firm, that it sought a change of date to avoid problems and this was opposed by EACH and refused by the Commission, that one week before the hearing additional funds were sought from Ms.Humbert, a conference was held on 3 December, and on 4 December it was advised by Ms.Humbert that she had decided to discontinue 5. Further, they had made offers of settlement which had been refused by EACH which ‘would not enter into negotiations with a view to resolution outside of a hearing’, and other matters.
Decision
[21] In my view there are three crucial aspects of this case. Firstly, there are the procedural steps taken after conciliation failed on 21 August 2013 and before 7 November 2013 when a new hearing date of 5-6 December 2013 was set by the Commission. Secondly, there are the actions taken by Ms.Humbert and Taylor & Preston after 7 November 2013 to obtain new representation and then discontinue the proceedings. Thirdly, there is the issue of offers of settlement.
[22] I turn to deal firstly with the procedural steps taken after conciliation and before 7 November 2013. Ms.Humbert did not comply with original directions requiring her to provide submissions in support of her case by 7 October 2013, for a hearing date of
11-13 November 2013. She provided a medical certificate and sought an extension of time before that date 6. She was provided with an extension of time until 14 October 2013. She did not comply with these further directions. A non-compliance hearing took place on 18 October 2013. She obtained new directions to put submissions and witness statements by 28 October 2013. These directions were complied with. According to EACH she expanded the grounds of her claim, with ‘entirely new allegations and material’, which EACH had to meet by a further witness statement and materials, thus incurring additional costs7.
[23] EACH submits that it incurred costs dealing with each of these procedural steps, including checking the status of the matter, responding to Ms.Humbert’s various proposals, attending a hearing, and then drafting further material. Taylor & Preston did not file a notice of representative commencing to act until 16 October 2013, and cannot be blamed for the non-compliance hearing 8. However, Ms.Humbert bears full responsibility for these earlier procedural steps.
[24] Secondly, there are the steps taken on and after 7 November 2013. On 7 November 2013 Taylor & Preston asked the Commission for a different hearing date because their one employment lawyer was committed to other hearings 9. This was denied by the Commission on 8 November 2013. The hearing dates of 5-6 December 2013 were confirmed.
[25] Taylor & Preston appointed new counsel ‘one week’ before the hearing, ie. on or around 28 November 2013. This is one day short of three weeks after the application for a different hearing date was refused by the Commission. New counsel were briefed and funds were sought from Ms.Humbert to pay for this 10. Ms.Humbert transferred funds as requested. A conference was held between counsel and Ms.Humbert on 3 December. Ms.Humbert was asked for further funds and did not have those additional funds. Taylor & Preston were unaware of Ms.Humbert’s personal financial difficulties and only subsequently became aware of them. Ms.Humbert then decided to discontinue on 4 December, but Taylor & Preston did not receive the required specific instructions until 4.15 pm on 4 December despite numerous phone calls to Ms.Humbert11. Ms.Humbert did not decide to represent herself and put submissions in the scheduled hearing.
[26] Thirdly, both sides made offers but none were satisfactory to the other side. In my view no weight should be given to this aspect of the case.
[27] I am unable to find that any of the grounds against Taylor & Preston are made out. They acted in accordance with their understanding of the instructions and financial position of their client, and put in place alternative representation arrangements for her. They acted in a generally appropriate manner.
[28] However, Ms.Humbert is in a different position. She is personally responsible for the conduct of the case for most of the period before 7 November, including the breach of two sets of directions and the non-compliance hearing. Her explanation is that it is difficult for her as an unrepresented litigant to represent herself, the employer had obtained legal representation, and other matters 12.
[29] In relation to the second period, after 7 November, Taylor & Preston acted on her instructions and put in place different representation, which she was to pay for. She made some payments and then claimed to be unable to make further payments on 3 December 2013. She did not return phone calls from Taylor & Preston until 4.15 on 4 December, when she finally gave them instructions to discontinue. Her explanation is that she was unable to pay, and that this was not her fault, and that she has been diagnosed with ‘post-traumatic stress’ and is on ‘debt management’ 13.
[30] There could be entirely innocent and acceptable explanations for any one of these occurrences, but they continued to take place over a substantial period, from October through to December 2013. Overall in the submissions put there is little or no acceptance by Ms.Humbert of any personal responsibility for the conduct of her proceedings, which proceeded under her instructions, or any recognition of the legitimate interests of EACH in timely and cost effective proceedings.
[31] Ms.Humbert did not comply with two sets of directions, and was successful at a non-compliance hearing in obtaining a third set of directions. EACH then had to answer what appear to be new allegations. She was given sufficient notice of a new hearing date of
5-6 December 2013. She apparently did not keep Taylor & Preston well informed about her financial position during the discussions she had with them about putting in place alternative arrangements for the conduct of her case after 8 November 14. She gave instructions to engage counsel. These proved to be ill-considered or misconceived instructions, because she could not afford to engage and continue with counsel, she now claims. Taylor & Preston acted on her instructions.
[32] She discontinued her application on late afternoon on 4 December, before the hearing on 5 December. Given the notice, her knowledge of her financial position, and her ability to discuss that with her solicitors if she had chosen to do so, she should have acted earlier to discontinue the matter. If she had done so she would have saved EACH considerable unnecessary costs. I was given no reasonable explanation for the delay in discontinuance. These costs were incurred by EACH because of her instructions as to the conduct of the case, for which she must take some personal responsibility.
[33] Ms.Humbert then failed to return numerous phone calls from Taylor & Preston on 4 December after the firm heard that she intended to discontinue the application. Allowance can be made for a limited number of such occurrences, but something of a pattern of unreasonable conduct occurred over a substantial period.
[34] Ms.Humbert could have represented herself at the hearing, as many unrepresented applicants do. She had the benefit of a set of witness statements and submissions prepared by legal representatives. She was in a better position than many unrepresented applicants. Her claim of ‘post-traumatic stress’ is not supported by any documentation 15. It is difficult to give weight to such a claim in the light of all the circumstances.
[35] Ms.Humbert sought to make a further submission on 17 March 2014 16, outside the period in which she was supposed to provide submissions. I have not had regard to this material. In any event it appears to be yet another failure to comply with directions, and is consistent with Ms.Humbert’s pattern of conduct of these proceedings. The material, given its date, could have been provided consistent with directions (eg. Dr.Chris Tewavas statement of 26 October 2013). The employer has not been able to respond to it in its submissions. In any event the material is limited in its content and effect, and would not change my decision.
[36] Turning to deal with the conduct of EACH, EACH is entitled to seek legal representation, just as Ms.Humbert did. EACH continued to incur additional costs because of the conduct of the case by Ms.Humbert, through no fault of their own. None of the allegations made against EACH with respect to the termination of Ms.Humbert have been established. EACH has interests which are legitimate and which were not recognised by the applicant in its submissions.
[37] The overall object of the unfair dismissal part of the Act refers to the needs of business and of employees, quick, flexible and informal procedures which address those needs, and a fair go all round (see ss.381 and 577). Applying these and other provisions, the public interest and the interests of employers and employees participating in proceedings require efficient case management by the Commission. The Commission issues directions and conducts its procedures in an endeavour to ensure the ‘prompt and efficient disposal of litigation’, and attempts to ‘avoid unnecessary delay, expense or prejudice’: see the High Court in Queensland v. J.L.Holdings Pty Limited 17, quoted and followed in Ghalloub v. Aon Risk18. The requirements of natural justice limit the circumstances in which the Commission may deny a party a hearing because of breach of directions or other procedural delays, although s.399A now provides some limited statutory support for compliance with directions. However, if a party exercises its rights in an unreasonable manner and causes unnecessary costs to the other side there may be consequences later, in costs proceedings. In Ghalloub a Full Bench of the Commission said:
‘[32] Nothing in our conclusion should give comfort to parties who fail to comply with directions. The appellant, through her representatives, behaved in a manner less than conducive to the efficient resolution of the application. Her failure twice to fully comply with directions is to be deplored. There could conceivably be consequences for the appellant, in relation to costs or otherwise. But in the circumstances the dismissal of the application was neither justified nor warranted. The case could have been heard despite the fact that the directions were not fully complied with. No prejudice was claimed by the respondent who, it is to be assumed, was ready to proceed. In the circumstances the appellant should not have been deprived of the opportunity to have her case heard and the Commission was not relieved of the obligation to hear that case.’
[38] Costs were later awarded against Ms.Ghalloub for unreasonable conduct of the proceedings, including an unnecessary adjournment and the making of false allegations which the employer had to answer 19.
[39] In this case Ms.Humbert has been accorded a fair go all round. She was repeatedly given the opportunity to put her case. However, EACH experienced unnecessary delay and expense because of the manner in which Ms.Humbert conducted her case.
Conclusion
[40] In my view Ms.Humbert engaged in cumulative unreasonable acts which incurred costs to EACH. The requirements of s.400A(1) are met. In the circumstances I have decided to make an order requiring Ms.Humbert to pay the costs incurred by EACH in respect of all proceedings after 7 October 2013, including the costs proceedings. 7 October 2013 was the first date for filing of submissions, and Ms.Humbert produced a medical certificate as an explanation for her inability to comply with those directions. Some allowance for the difficulty that parties do quite naturally have is in my view appropriately made, notwithstanding the later continuing delays.
[41] I direct the parties to:
1. confer as to the quantum of costs to be included in the order; and
2. if the quantum of costs is agreed, to advise me, and I will issue an order;
3. if the quantum of costs is not agreed, to advise me and I will settle the order;
4. given what is claimed to be financial hardship, I will consider an order that periodic weekly or monthly payments be made rather than payment in one lump sum, if this would assist Ms.Humbert.
DEPUTY PRESIDENT
Final written submissions:
2014
30 January
13 February
14 February
1 [2009] AIRCFB 626
2 PR968915, 25 August 2006
3 1998 84 IR 270
4 [2014] FWCFB 1175, Watson SDP, Hamilton DP, Lee C
5 Second Respondent’s Response, paragraphs 4-23
6 Email of 4 October 2013
7 Application for Costs, paragraph 3
8 Second Respondent’s Response, paragraph 6
9 7 November 2013 email from Ms.Penny LaGreca, Taylor & Preston
10 Second Respondent’s Response, paragraphs 11-15
11 Second Respondent’s Additional Response, paragraph 1-2
12 Statement by Joelle Humbert, 27 January 2014
13 Statement by Joelle Humbert, 27 January 2014
14 Second Respondent’s Additional Response, paragraph 1-2
15 Further Submissions for Costs Order, paragraph 13
16 Ms.Humbert email of 17 March 2014
17 (1996-97) 189 CLR 146 at 154
18 Australian Industrial Relations Commission, Full Bench, PR56665, 21 March 2005
19 PR970375
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