Mandy Heritage v Vesta Counselling Service

[2023] FWC 1354

[2023] FWC 1354

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

Mandy Heritage
v

Vesta Counselling Service

(U2023/2493)

DEPUTY PRESIDENT O’NEILL MELBOURNE, 16 JUNE 2023

Application for an unfair dismissal remedy – costs application – application dismissed

Background

1. On 23 March 2023 Ms Heritage lodged an application for an unfair dismissal remedy against her former employer, Vesta Counselling Services (Vesta). The application stated that the applicant began working for Vesta on 21 March 2022 and that the termination of her employment took effect on 10 March 2023. In response to the question “To the best of your knowledge, how many employees were employed in your workplace before you were dismissed”, the applicant ticked the box for 1 to 14 employees. The applicant represented herself.

2. Based on the Commission’s file the following occurred.  On 2 April 2023, Vesta was served a copy of the application by Commission staff and instructed to complete and file a response to the application in the prescribed Form F3.  Vesta was also advised that a conciliation had been scheduled for 19 April 2023.

1. On the same day Vesta’s CEO, Ms Lynda Toohey, emailed the Commission advising that the applicant had been employed for less than one year and that Vesta had fewer than 15 employees. The applicant was not copied into this email.

1. On 3 April 2023, Vesta filed a response to the application by way of a Form F3.  Vesta represented itself, with the form completed by Ms Toohey. The form raised two objections: that the applicant did not meet the minimum employment period and that the employer is a small business employer and had complied with the Small Business Fair Dismissal Code.

2. On 4 April 2023, correspondence was sent to Vesta acknowledging receipt of the Form F3, noting that an objection had been raised and that a conciliation was scheduled for 19 April 2023. The letter advised that Vesta could advise the Commission if it did not wish to take part in the conciliation, otherwise it would go ahead as scheduled.

3. On 5 April 2023, Ms Toohey telephoned the Commission and said that based on information on the Commission’s website, the applicant was not eligible to make an unfair dismissal application as Vesta was a small business employer and the applicant had worked less than 12 months. Ms Toohey felt that the applicant should be told they were not eligible to make the application. Commission staff advised Ms Toohey that only a Member of the Commission was able to dismiss an application, and that Vesta had the option to either participate in the conciliation or have its objection dealt with by a Member of the Commission. Mr Toohey was advised that she may be eligible for the Workplace Advice Service. Ms Toohey confirmed that she would participate in the conciliation.

1. On 16 April 2023, Vesta filed an additional Form F3 which contained further details in response to the merits of the application.

1. On 19 April 2023, the conciliation took place. The applicant discontinued her application that day.

1. On 21 April 2023, Vesta made an application under section 400A of the Fair Work Act 2009 (Cth) (Act) for an order for costs against the applicant in the sum of $2,322. These costs comprised the time spent by Ms Toohey in responding to the application, such as researching and preparing the Form F3, the telephone calls with Commission staff, and time spent preparing the application for costs. The costs claimed were based on an hourly rate of $156 per hour for Ms Toohey’s time, together with two $120 fees to meet and ‘debrief’ with her clinical supervisor/business advisor.

1. On 2 May 2023, instructions for the filing of material in support of the costs application were issued. 

1. Vesta filed an amended costs application form dated 14 May 2023, which now sought an order for costs against the applicant in the sum of $2,190. Vesta also submitted details concerning the hourly rates for Ms Toohey’s time and receipts for the two payments to her clinical supervisor.

1. Ms Heritage filed no material in response to the costs application.

1. Both parties consented to have the matter determined on the papers.

Consideration

1. The costs claimed by Vesta are mainly the ‘costs’ of its CEO, Ms Toohey, spending time in responding to the application. However, other than the two $120 costs relating to two ‘debrief’ meetings with her clinical supervisor, they are not actually costs expended by Vesta. Rather, they are a claim for recompense for the value of the time spent by its CEO.

2. The Commission cannot make an order for the payment of this type of ‘cost’. The Commission’s discretion to order costs is limited to professional legal costs actually incurred by a party. There is a long line of authority that the power of courts or tribunals to award costs does not extend to recompense a self-represented party for the value of their time spent in preparing their own case.[1] There are many reasons for this approach, including that doing so would lead to the inequal treatment of litigants, as a party who was legally represented would not be recompensed for their own time and effort, but a self-represented party would be. Courts have also pointed to practical considerations such as the difficulty of quantifying the costs of a self-represented party. Judgments have also raised the issue that the work completed by self-represented parties in most instances cannot be regarded as the equivalent of work completed by qualified legal representatives, as it is usually less efficiently conducted and therefore tends to add to the opposing party’s legal representation costs and drains court resources.[2] Further, in the context of matters before the Commission, a party is not able to be legally represented (and therefore incur costs that may potentially be the subject of an order for costs) unless and until they have been granted permission.[3] Accordingly, legal costs incurred where no permission has been granted cannot be claimed.

1. Accordingly, I find that the application must be dismissed in relation to the costs concerning Ms Toohey’s time.

1. Self-represented parties can, in some circumstances, be recompensed for some out-of-pocket expenses incurred. Vesta has claimed the sum of $240 for two meetings with her clinical supervisor, one on 6 April 2023 and the other on 20 April 2023, the day after the application was discontinued.

1. As noted above, the application by Vesta was made under section 400A of the Act. Section 400A provides a discretionary power for the Commission to make an order for costs against a party. The Commission can only consider making such an order if it is satisfied that the first party (in this case Ms Heritage) caused the claimed costs to be incurred because of an unreasonable act or omission in connection with the conduct or continuation of the matter.[4]  

1. Vesta has not identified what it claims to be the unreasonable act or omission of the applicant in connection with the conduct or continuation of the matter.  I infer that Vesta’s contention is based on its view that the applicant should have either not made the application and/or should have discontinued it straight away upon receipt of the Form F3 filed on 3 April 2023 when Vesta asserted that it was a small business and raised the two jurisdictional objections. However, no evidence or explanation has been provided to support Vesta’s claim that the costs of the two ‘debrief’ sessions with Ms Toohey’s clinical supervisor/business partner were costs that the applicant caused to be incurred. Further, there is no basis to conclude that costs incurred the day after the applicant had discontinued her application, were costs the applicant caused Vesta to incur.

1. Applications for costs can also be made under section 611 of the Act. Unlike section 400A, which is directed at costs incurred in relation to the ‘conduct or continuation’ of the matter, section 611 empowers the Commission to make an order for costs in relation to the making of an application.  The Commission can make an order for costs under section 611 if it is satisfied that, relevantly, an application is made vexatiously or without reasonable cause or where it should have been reasonably apparent that the application has no reasonable prospects of success.  

1. However, my decision would not change if the application had been made under section 611 of the Act. Firstly, it is not necessarily the case that an application made by a person with between 6 and 12 months’ service, was made vexatiously or without reasonable cause. Where an employee has served between 6 and 12-month’s employment, the minimum employment period required depends on whether the employer was a small business employer. The definition of small business employer in section 23 of the Act includes certain casual employees and employees of associated entities. An applicant’s view, expressed in the Form F2, may not be correct and generally requires some evidence to determine whether the respondent is a small business employer as defined in section 23. Prior to the applicant withdrawing her application, no evidence had been produced by Vesta to establish that it was a small business.

1. Where an applicant has identified (and confirmed) they were employed for less than 6 months’, administrative processes are in place whereby Commission staff inform them they are ineligible to make an unfair dismissal application. However, an applicant may or may not be eligible to make an unfair dismissal application where the employment period served is between 6 and 12 months. Such applications are administratively processed including being served on the respondent, and the respondent can then elect to either participate in a conciliation or have the objection dealt with by a Member of the Commission.

1. Secondly, Vesta voluntarily chose to participate in the conciliation on 19 April 2023. Ms Toohey was made aware at least by 4 April 2023 that this was a voluntary process. Information to the same effect is available on the Commission’s website. Accordingly, I am not satisfied that the applicant caused Vesta to incur the claimed costs.

1. The application for an order for costs is dismissed.

DEPUTY PRESIDENT

Final written submissions:15 May 2023.

[1] Bell Lawyers Pty Ltd v Pentelow (2019) 372 ALR 555; Cachia v Hanes (1994) 120 ALR 385.

[2] GE Dal Pont, Law of Costs, Butterworths, 2003 at [7.24]-[7.29].

[3] Fair Work Act 2009 (Cth), s.596.

[4] Fair Work Act 2009 (Cth), s.400A(1).

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