Leoni Seychelles v Catering Industries NSW Pty Ltd
[2023] FWC 2331
•13 SEPTEMBER 2023
| [2023] FWC 2331 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.120—Redundancy pay
s.611—Application for costs
Leoni Seychelles
v
Catering Industries NSW Pty Ltd
(C2023/4455)
| DEPUTY PRESIDENT DEAN | CANBERRA, 13 SEPTEMBER 2023 |
Application for costs.
On 29 June 2023, I issued a decision with respect to an application made by Catering Industries NSW Pty Ltd to reduce the redundancy payment otherwise payable to Ms Leoni Seychelles (the s.120 decision)[1]. In the s.120 decision I found that the offer of alternative employment made to Ms Seychelles was not an ‘acceptable offer’ as required by the Act, and as a result I dismissed the application.
Ms Seychelles (the Costs Applicant) has now made an application pursuant to s.611 of the Act for costs against Catering Industries NSW Pty Ltd (the Costs Respondent).
The matter was listed for hearing on 12 September 2023. At the hearing Ms Freedman, lawyer, appeared with permission for the Costs Applicant, and Mr Gillani, HR Manager, appeared on behalf of the Costs Respondent.
For the reasons set out below, I am not satisfied that the requirements of s.611(2)(a) or (b) of the Act which are necessary for the Commission to make an order for costs have been met. Accordingly, the application for costs is dismissed.
Relevant legislation
Section 611 of the Act provides as follows:
611 Costs
(1) A person must bear the person’s own costs in relation to a matter before the FWC.
(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.
Note: The FWC can also order costs under sections 376, 400A, 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).
Background
As noted earlier, the Costs Respondent made the s.120 application to reduce the redundancy payment otherwise payable to the Costs Applicant on the basis that it had obtained ‘other acceptable employment’ for her. The Costs Applicant opposed the s.120 application on the basis that the offers made were not ‘acceptable”.
The circumstances relating to the s.120 application were set out in the s.120 decision and are not repeated here.
In deciding that the offers of alternative employment made to the Costs Applicant were not acceptable offers, I noted that there were factors weighing for and against a finding that the offer of full time employment (as opposed to the offer of part time employment) was an acceptable offer. However, on balance, and having weighed all the factors, I found that the offer was not acceptable and dismissed the s.120 application.
Submissions and evidence
The Costs Applicant submitted that the application was made vexatiously or without reasonable cause, and had no reasonable prospects of success. A witness statement was tendered by the Costs Applicant in support of the application for costs.
Vexatiously or without reasonable cause
The Costs Applicant submitted that the Costs Respondent made the s.120 application for “the improper collateral purpose of attempting to avoid liability for redundancy payments to all redundant employees”. Further, it was submitted that the Costs Respondent “engaged in deceptive, misleading and coercive conduct since the notice of redundancy on 23 March 2023 and the [s.120 application] was made as a continuation of a pattern of behaviour demonstrated by [the Costs Respondent] designed to thwart its redundant employees’ rights to redundancy payment”.
The Costs Applicant alleged this conduct was evidenced by the Costs Respondent’s refusal to use the word ‘redundancy’ when discussing the matter with its employees. Further, it was alleged that the Costs Respondent attempted to force her to resign in order to become eligible for a redundancy payment and in doing so it attempted to deprive its employees of their redundancy entitlements (the Allegation).
It was also contended that “the unacceptable offer of alternative employment was only made 24 hours after [the Costs Applicant] advised [the Costs Respondent] that she would not agree to resign. It was submitted that the offer was not genuine and only made as a last resort to avoid liability for her redundancy payment.
The Costs Applicant submitted that the Allegation was relevant to the question of costs and whether the costs application was made vexatiously. The Allegation, it submitted, was proven on the evidence and hence supported an award of costs.
The Costs Respondent submitted that the s.120 application was not made vexatiously or without reasonable cause. It relied in part on the fact that it was partially successful in other applications relating to the loss of contract to provide catering services at the same workplace as the Costs Applicant. It submitted that it was common in the catering contract industry to win and lose contracts and employees would be offered alternative employment at other sites where available. Further, employees were not employed at a particular site and were relocated on occasions to meet operational requirements.
No reasonable prospects of success
The Costs Applicant submitted that despite my finding in the s.120 decision that I was not satisfied Mr Gillani was aware of the extent to which the Costs Applicants’ personal circumstances would impact her ability to consider alternative employment, costs should be awarded because it should have been reasonably apparent that the s.120 application had no reasonable prospect of success.
In short, the Costs Applicant contended that the Costs Respondent’s ‘ignorance’ of the Costs Applicant’s personal circumstances and the impact those circumstances would have on her ability to consider alternative employment was not reasonable.
The Costs Respondent submitted that the s.120 application had reasonable prospects of success, relying on the same submissions it made earlier.
Consideration
Section 611(1) of the Act makes it clear that parties in proceedings before the Commission must bear their own costs. The Act provides exceptions where the Commission may order costs against a party if it is satisfied that circumstances specified in s.611(2) exist. Even if this section is enlivened, the Commission retains a discretion as to whether to award costs. The power to award costs should be exercised with caution and only in a clear case.[2]
The onus sits with the Costs Applicant to satisfy the Commission that the circumstances set out in s.611(2) exist.
In Keep v Performance Automobiles Pty Ltd[3] a Full Bench of the Commission considered the approach to be taken to an application for costs made pursuant to s.611 of the Act and held:
“[16] The FWC’s power to order that a person bear some or all of the costs of another person in relation to an application is only enlivened if the FWC is satisfied as to the matters set out in either s.611(2)(a) or s.611(2)(b).
[17] The proper construction of s.611(2)(a) was recently considered by a Full Bench in Church v Eastern Health t/as Easter Health Great Health and Wellbeing (Church). Church is authority for the following propositions:
(i) The power to order costs pursuant to s.611(2) should be exercised with caution and only in a clear case.
(ii) A party cannot be said to have made an application ‘without reasonable cause’ within the meaning of s.611(2)(a), simply because his or her argument proves unsuccessful.
(iii) One way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether upon the facts known to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. 7
(iv) The test imposed by the expression ‘without reasonable cause’ is similar to that adopted for summary judgment, that is, ‘so obviously untenable that it cannot possibly succeed’, ‘manifestly groundless’ or ‘discloses a case which the Court is satisfied cannot succeed’.
[18] As to s.611(2)(b), the FWC may make a costs order against a person if satisfied that ‘it should have been reasonably apparent’ to that person that their application had ‘no reasonable prospect of success’. The expression ‘should have been reasonably apparent’ in s.611(2)(b) imports an objective test, directed to a belief formed on an objective basis as opposed to the applicant’s subjective belief.
[19] There is Full Bench authority for the proposition that the Commission should exercise caution before arriving at the conclusion that an application had ‘no reasonable prospects of success’. In Deane v Paper Australia Pty Ltd a Full Bench made the following observation about this expression in the context of enlivening a power to award costs under s.170CJ(1) of the Workplace Relations Act 1996;
‘unless upon the facts apparent to the applicant at the time of instituting the [application], the proceeding in question was manifestly untenable or groundless, the relevant requirement in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available.’” (citations omitted)
Vexatiously or without reasonable cause - s.611(2)(a)
In Church[4] the Full Bench considered the meaning of the expression ‘vexatiously or without reasonable cause” contemplated in s.611(2)(a) and said:
“[29] The question of whether an application was made ‘vexatiously’ looks to the motive of the applicant in making the application. It is an alternative ground to the ground that the application was made ‘without reasonable cause’ and may apply where there is a reasonable basis for making the application. In Nilsen v Loyal Orange Trust (Nilsen) North J observed that this context requires the concept of vexatiousness to be narrowly construed. His Honour went on to state that an application will be made vexatiously ‘where the predominant purpose .... is to harass or embarrass the other party, or to gain a collateral advantage’. Deane and Gaudron JJ made a similar observation in Hamilton v Oades in which they said:
‘The terms ‘oppressive’ and ‘vexatious’ are often used to signify those considerations which justify the exercise of the power to control proceedings to prevent injustice, those terms respectively conveying, in appropriate context, the meaning that the proceedings are ‘seriously or unfairly burdensome, prejudicial or damaging’ and ‘productive of serious and unjustified trouble and harassment.’” (citations omitted)
In the present case, I am not satisfied that the Costs Respondent made the s.120 application vexatiously or without reasonable cause. As the case law indicates, the test imposed is a high bar, that being, ‘so obviously untenable that it cannot possibly succeed’, ‘manifestly groundless’ or ‘discloses a case which the Court is satisfied cannot succeed’
This is not a case where the s.120 application was manifestly groundless. The Costs Respondent made offers of alternative employment to the Costs Applicant, including a full time position on the same rate of pay and within a similar travel distance with continuity of service.
As noted earlier, the full time position offered to the Costs Applicant required a careful weighing of the similarities of the roles before I decided the offer was not ‘acceptable’. It was not a ‘clear-cut’ decision.
No reasonable prospect of success - s. 611(2)(b)
As to the question of whether it should have been reasonably apparent that the application had no reasonable prospects of success, the Full Bench in Baker v Salva Resources Pty Ltd[5] said:
“[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.”[6] (citations omitted)
On the material before me, I am not persuaded that, when viewed objectively, it should have been reasonably apparent to the Costs Respondent that the s.120 application had no reasonable prospect of success. Nor can I conclude that the application is manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable.
Conclusion
As was the case in the s.120 decision, it remains unnecessary for the Commission to make any findings about the Allegation. It is not a relevant factor in deciding whether to award costs under s.611(2).
The Commission retains a discretion as to whether to award costs. The power to award costs should be exercised with caution and only in a clear case. In all of the circumstances, I find that this is not a case where I should exercise my discretion to award costs. Accordingly, this application for costs is dismissed.
DEPUTY PRESIDENT
A Freedman of Baker Deane & Nutt Lawyers for Leoni Seychelles.
S Gillani for Catering Industries NSW Pty Ltd.
Hearing details:
2023.
By telephone:
September 12.
[1] [2023] FWC 1543.
[2] See [2014] FWCFB 810 at [27].
[3] [2015] FWCFB 1956
[4] [2014] FWCFB 810.
[5] [2011] FWAFB 4014.
[6] Ibid at [10].
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