Megan Knight v The Trustee for the Mattray Trust t/a Murrayway Pty Ltd
[2022] FWC 959
•27 APRIL 2022
| [2022] FWC 959 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Megan Knight
v
The Trustee for the Mattray Trust t/a Murrayway Pty Ltd
(C2021/6273)
| COMMISSIONER HUNT | BRISBANE, 27 APRIL 2022 |
Application to deal with contraventions involving dismissal – application for costs following discontinuance of application – application for costs by respondent made pursuant to s.375B of the Fair Work Act 2009 – costs not ordered
Introduction
This decision concerns an application by The Trustee for the Mattray Trust t/a Murrayway Pty Ltd (Murrayway) made on 1 December 2021 seeking an order for costs against Ms Megan Knight pursuant to s.375B of the Fair Work Act 2009 (the Act).
Background to the substantive application
On 9 September 2021, Ms Knight made an application to the Fair Work Commission (the Commission) under s.365 of the Act, by way of a Form F8 – General protections application involving dismissal (F8), alleging that she had been dismissed from her employment with Murrayway in contravention of a general protection provided by the Act.
Ms Knight was self-represented throughout the proceedings.
Mr Matthew Murray is the director of Murrayway, and he participated in the proceedings, represented by Ms Jacinta Roberts of BR Solicitors.
Ms Knight alleged that she was dismissed by Murrayway in contravention of Part 3-1—General protections, specifically, s.352 of the Act which provides:
“352 Temporary absence—illness or injury
An employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the regulations.
Note: This section is a civil remedy provision (see Part 4‑1).”
Section 365 of the Act, which is in Part 3-1 of the Act, provides:
“365 Application for the FWC to deal with a dismissal dispute
If:
(a) a person has been dismissed; and
(b) the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part;
the person, or the industrial association, may apply to the FWC for the FWC to deal with the dispute.”
Ms Knight worked for Murrayway from 28 April 2021 to 26 August 2021. In the F8, Ms Knight stated that her dismissal took effect on 25 August 2021, but that she was notified of the dismissal a day later on 26 August 2021. A detailed account of the text messages sent between Ms Knight and Mr Murray is found at [12]. In addition, Ms Knight said the following occurred:
· She was employed on a full-time basis as a Café Manager at Park & Co, a café owned and operated by Murrayway.
· Her employment was reviewed after three months and she was given a pay rise; she had not been made aware of any performance issues.
· She had a fall at home in the afternoon on Sunday, 22 August 2021, and despite having a swollen foot, she attended work the following morning on Monday, 23 August 2021.
· She worked from 6:15am for around two and a half hours, left to attend a medical appointment, made arrangements for her shift to be covered, and advised Mr Murray accordingly.
· She notified Mr Murray that she had fractured her fifth metatarsal, that she would be off work for a few days, and that she would keep him updated.
· Ms Knight did not work the following day on Tuesday, 24 August 2021, and the following Wednesday and Thursday 25 and 26 August 2021 were rostered days off.
· On Tuesday, 24 August 2021, Ms Knight advised Mr Murray that she had been fitted to a ‘moonboot’ which she would need to wear to work for the next 4-6 weeks and she would need to keep off her foot for least 3-4 days. She indicated that she should be able to work on Friday, 27 August 2021.
· Ms Knight and Mr Murray exchanged a number of text messages at [12].
· Ms Knight formed the view that Mr Murray had terminated her employment because she had injured her foot.
· Ms Knight requested notice of termination “as this was all just text messages.”
· On Thursday, 26 August 2021, at 1.51pm Mr Murray sent the following email to Ms Knight:
“To Whom It may concern
Megan Knights position as full time cafe manager at Park and Co Bli was terminated by mutual agreement on Wednesday 25th of August.”
· Ms Knight contends that no reason was given for her termination, and denied ever agreeing to the termination of her employment.
As to what outcome was sought in making her application, Ms Knight said: “I was given no notice of dissmissal [sic], I was not paid notice. I was off work with a fractured foot”.
On 22 September 2021, Murrayway filed a Form F8A – Response to general protections application (F8A). Murrayway made a jurisdictional objection to the application on the grounds that Ms Knight resigned from her employment and was therefore not dismissed, as required by the Act. The following submission was included in the F8A:
“JURISDICTIONAL OBJECTIONS
1. The applicant was employed for less than 6 months.
2. The applicant repudiated the employment contract.
3. On 25 August 2021, the applicant strongly indicated she wished to be terminated and by her actions showed her intention to no longer be bound by her employment agreement.
4. The applicant via text message indicated to the respondent that she did not wish to continue her employment saying-
"As much as im (sic) not ok with that i think that it is the best option. Im {sic) a little outa {sic) the loop atm with all that's {sic) going on im (sic) sorry. And your communication has been vague for a few weeks so hope to catch up and resolve this one way or another.”
And
... "anyway i don't do this crap via message ... " ....
And
... "if you are simply done with me id {sic} appreciate you just letting me know. You talked to me about being honest, i want to be honest with you!!!" . ...
5. The respondent accepted the applicant's repudiation/resignation by:
A. Text message - noting "I will pay you out Monday, I am sorry we didn't get along .... "; and
B. By providing the applicant an email confirming termination by mutual agreement on 26 August 2021.
6 . In addtion (sic) the applicant failed to provide the employer a medical certificate for the Alleged illness or injury.
7. In accordance with regulation 3.01, for section 352 to apply, the illness or injury exists if the employee provides a medical certificate. The applicant did not provide a medical certificate to the respondent.
8. Accordingly, section 352 will not apply.”
Murrayway said the following as to the outcome sought by Ms Knight:
“1. The applicant was paid in full for work completed up to her termination date - including sick and annual leave.
2. The applicant was paid one weeks notice in lieu.
3. The applicant did not seek any outcome and the application is arguably frivilous (sic) and vexatious and was purely brought to cause upset and distress.
4. The application has been brought without merit and has no reasonable prospects of success.”
As to the alleged contraventions of the Act, Murrayway stated:
· Ms Knight was employed full time as a café manager at Park & Co.
· Ms Knight received a review of her performance by email on 28 July 2021 in which the following performance issues were noted as areas for improvement:
“1. Opening processes;
2. Pack down procedures;
3. Weekly sales analysis;
4. Weekly stock ordering; and
5. Long term management expectations.”
· There was an occasion where Ms Knight had allegedly admitted to being dishonest in respect of an incident where she misled management regarding the circumstances of the absence of a staff member.
· Ms Knight did not at any time provide a medical certificate to Murrayway.
· Ms Knight did not attend the remainder of her rostered shifts.
· Mr Murray denied that he “took offence” to being called “vague” by Ms Knight.
· Murrayway denied unfairly terminating Ms Knight’s employment.
· Murrayway contended that Ms Knight had shown a “strong desire to be terminated”, and by her actions showed her intention to resign her employment.
· Murrayway denied breaching a general protection.
The following text messages, in chronological order, were exchanged between Ms Knight and Mr Murray between 23-26 August 2021, screenshots of which were included in the material before the Commission:
From: | Date and time (if known): | Message: |
Ms Knight | 9:21am Monday, 23 August 2021 | Ive had to leave work. Hurt foot yesterday arvo at home and thought ice would fix. Woke up swollen couldn’t get shoe on hurts like hell. Going in for docs app at 10.15. Hopefully can give me something to help walk on and ill be ok for tomorrow will let you know. Georgia staying to close. |
Mr Murray | Ok, thanks for texting me and letting me know , how ironic , I have done something to my foot and have doctors appointment at 11.30 …. | |
Mr Murray | 11:31am Monday, 23 August 2021 | How did you go at doctors ? |
Ms Knight | Unfortunately as they squeezed me into a fully booked surgery…im still sitting her waiting over an hour later. Will let you know | |
Mr Murray | Ok , good luck | |
Ms Knight | You too | |
Ms Knight | 1:33pm Monday, 23 August 2021 | Ok so bad news is i have a break in my 5th metatarsal and need to be completely off foot at least next 2 days. Good news is ill be back at doctors tomorrow morning and he will most likely be putting me in boot for few weeks so i will be able to get around walk work etc So at this stage just need to cover me tomorrow. Will update you tomorrow |
Mr Murray | Ok, Brenna is going to do tomorrow so all g, good luck [thumbs-up emoji] let me know how you go | |
Ms Knight | Ok will let you know tomorrow and at this stage if doctors lets me i can come back Thursday | |
Ms Knight | 2:32pm Tuesday, 24 August 2021 | Just an update Ive been back to doctors today and they have fitted me to moonboot which I will be able to wear to work for 4-6 weeks as soon as swelling goes down. Doctor says will be at least 3-4 more days of completely off foot. I think I should be ok for Friday so I will go with that. |
Mr Murray | Ok, but maybe we should touch base Thursday arvo… you don’t want to overdo it and then end up in the boot longer … I know you are tough and I respect your work ethic but be kind to yourself and if you feel like you need an extra few days please just do it ! | |
Ms Knight | Ok but i know i definitely wont be feeling like any more days off sitting on my arse ill go mad. Think i will be fine just a little slower in boot but that will be ok. | |
Mr Murray | 5:46pm Wednesday, 25 August 2021 | Hi, hope your foot is feeling ok! Do you think you will be back Friday ? Matt |
Ms Knight | Funny was just about to message you. As much as id like to say yes things are not as good as I hoped (obviously dont heal as quick as I thought). My foot just hasn’t gone down in swelling at all. Id rather say no now so you have time to re organise roster than make it a problem for you!!! Im actually not happy at all with my progress. | |
Mr Murray | That’s no good … sorry to hear that. I will find replacements for you friday, Saturday and Sunday. I will put you on roster for Monday , but we can touch base Sunday if you are no good , are you ok with that ? | |
Ms Knight | As much as im not ok with that i think that it is the best option. Im a little outa the loop atm with all that’s going on im sorry. An your communication has been vague for few weeks so hope to catch up and resolve this one way or another. Sorry i stuffed my foot its pissing me off more than you I guarantee you!!!! Anyway ill keep you updated. Dont want to stress you any more!! | |
Mr Murray | Vague? Something I have not been called before ? I would love an example . I have a list of issues a mile long that have happened at park and co over the last 4 days to address tomorrow but I think we are unfortunately on different pages ATM and I think we are both struggling to find common ground. Probably best to catch up face to face when you ready to return to work before we go any further to clear the air | |
Ms Knight | By VAGUE I mean you don’t even contact me anymore unless necessary and when you do its via text. If you have an issue with me and dont like the way I am then please don’t think you will offend me if you dont want me there!!! Just be honest! I care alot about what i do always have and about Park and im sorry that my ideas are not on the same page as yours we both have very different experience in very different areas. Anyway I dont do this crap via message so if you would like to catch up when im FIT FOR WORK!! which i will be soon (and if your in doubt of my injury in anyway i have doctors report) then we shall catch up however if you are simply done with me id appreciate you just letting me know. You talked to me about being honest i want ot be honest with you!!! | |
Mr Murray | Ok, Fair to say we think completely differently , and that’s ok , it doesn’t need to end the world! .Lets not waste each other’s time. You can find something else to do. I will pay you out Monday , I am sorry we didn’t get along , neither of us need this , good luck with your foot | |
Ms Knight | No problem!!! Good luck with everything. Wish you all the very best. I will get credit card and key returned to cafe asap. | |
Mr Murray | No worries , good luck with your foot and if easier you can cut the credit card up and mail the key or drop it into Craig at Vincenza next door Kegans work | |
Ms Knight | In other words you dont want to see me no worries my husband Keenan! Will drive me to drop key off at park tomorrow. Also if you could please send me email detailing confirmation of termination of position. | |
Mr Murray | Sorry, I was just trying to make it easier for you , happy to see you , I will go to park and co tomorrow at 10 am and see you both then , will send email as a priority tomorrow for you . | |
Ms Knight | Thank you. Will see you tomorrow No hard feelings here at all. | |
Mr Murray | 12:07pm Thursday, 26 August 2021 | Hi Megan, are you still dropping in today ? |
Ms Knight | Keenan got called to do a few things and as you know Im unable to drive sorry. Just waiting on my termination notice too when you get a chance. | |
Mr Murray | I was going to type it out when you got here … Will do in next 30 minutes |
At 1:51pm on 26 August 2021, Mr Murray sent the following email to Ms Knight:
“Subject: Employment cessation
To whom it may concern,
Megan Knights position as full time café manager at Park and Co Bli was terminated by mutual agreement on Wednesday the 25th of August.
Regards,
Matthew Murray
Director
Murrayway Pty Ltd”
At 2:01pm on 26 August 2021, Ms Knight responded to the above email as follows:
“Subject: Re: Employment cessation
Hi Matt
Just so we are clear. There was no mutual agreement I have text messages showing this and you also you have terminated me without notice.
Regards
Megan Knight”
At 3:02pm on 26 August 2021, Mr Murray responded:
“Subject: RE: Employment cessation
Just so we are clear, yes I did terminate you after you should a strong desire to be terminated. We clearly think and interpret things very differently. Please don't look to start a fight, I am not interested. The sunshine coast is a small place and I would like to remain cordial.
I genuinely wish you well,
We agreed you would not be back till at least Monday given your foot - read same text messages . . So I will use your eligible sick leave for the time you took off (you worked till 8.42 on Monday, so 1.12 hours in total for the week. You currently have 17.2 hours of sick leave I can use for some of that week. I will take the balance of the 38 hours from your 42 hours of accrued annual leave. I will contact the fair work ombudsman on
Monday to ensure I calculate your pay out portion correctly.Please ensure the key and card are dropped back to me at either Montanas. Park and Co, or to Vincenza ( give to Craig or Jason ) by tomorrow to avoid a delay in finalising your pay.
Alternatively , give me an address I can send someone to collect it from a letter box.
Once again, please reconsider your stance on looking end this in a fight, I am not interested.
I wish you well,”
Proceedings before the Commission
The matter was listed for a conciliation before a staff member of the Commission but was vacated at Murrayway’s insistence. On 1 October 2021, I issued directions for the filing of the parties’ material, listed the matter for Hearing in respect of the jurisdictional objection, and listed the matter for a Conference before me by telephone on 6 October 2021.
At the Conference it was pressed by Murrayway that because Ms Knight had not produced a medical certificate, Murrayway could not have taken adverse action against Ms Knight on account of s.352 of the Act requires employees to produce a medical certificate. I informed Murrayway that such matter was a not a consideration before the Commission, and the Commission was required to determine only if there had been a dismissal.
Material was filed by Murrayway as per my directions. Within Murrayway’s submissions, there was an application for the Commission to dismiss Ms Knight’s application, effectively pursuant to s.587 of the Act, contending that the application had “been brought without merit and has no reasonable prospects of success”.
On 18 October 2021, my Chambers sent correspondence to the parties providing copies to Ms Knight of the authorities referred to by Murrayway, and relevantly advising:
“The Commissioner notes the Respondent’s submissions from paragraph 56. The reference to s.352 of the Act should read s.587. The Commissioner notes the Respondent’s awareness of s.587(2) which precludes the Commission from dismissing a s.365 application on the ground that the application is frivolous or vexatious or has no reasonable prospects of success. Accordingly, the only power to dismiss a s.365 application is if the application is not made in accordance with the Act. The Commissioner invites the Respondent to withdraw the application for the Commission to dismiss the application under s.587 of the Act.”
On 20 October 2021, Murrayway responded relevantly advising:
“We confirm that in our Submissions, paragraph 57 should reference s.587 not s.352 and confirm that this was merely a typographical error.
We note the Commissioners statements at the telephone conference on 6 October 2021 whereby the Commissioner did not wish for our Submissions to reference s.352 of the Act or Regulation 3.01. Accordingly, we have made no reference to same in our file submissions and merely sought that the matter be dismissed on the basis that it is arguable the Application was not made in accordance with the Act.
However, as requested by the Commissioner in her email of 18 October 2021, we hereby withdraw the application for the Commission to dismiss the application under s.587 of the Act.”
Mr Murray’s evidence before the Commission and submissions submitted by Murrayway failed to include the email exchanges between the parties on 26 August 2021 where Mr Murray stated to Ms Knight, “Just so we are clear, yes I did terminate you after you [showed] a strong desire to be terminated.” This evidence did not come before the Commission until Ms Knight filed her material on 31 October 2021.
On 8 November 2021, Murrayway filed further submissions and supplementary witness statements. Mr Murray relevantly stated in his supplementary witness statement regarding his email to Ms Knight of 26 August 2021, “…Further to this, I mention “the sunshine coast is a small place” by way of explanation as to my thought process behind this email, I note that the hospitality industry is very transient, and over time you meet and come into contact with most owners/staff/suppliers in your industry. I feel that life is much nicer without conflict, and we had a perfect opportunity to simply put the bad experience behind us, and I urged Ms Knight to do so, as I wanted to keep the peace.”
In the reply submission filed above, Murrayway continued to submit that the Commission must not only find that an employee has been dismissed, but the Commission must reasonably believe the employee was dismissed for a prohibited reason:
“We acknowledge that the Commission has advised that the only decision that they can make in this matter is whether the Applicant was dismissed by the Employer. However, the decision of the The Full Court of the Federal Court in Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152 has confirmed that the Fair Work Commission has the jurisdiction to deal with certain objections that may be made by employers to general protections applications involving a dismissal – with each matter determined on a case by case basis.
It is submitted that for a General Protections Matter to proceed, not only must the Commission find that the Applicant was dismissed, they must reasonably believe that the Applicant was dismissed for a prohibited reason (emphasis).”
On 12 November 2021, the materials filed by the parties were consolidated into a Digital Court Book and a copy was provided to the parties.
At 7:03am on 17 November 2021, being the morning of the Hearing, Ms Knight sent an email to my Chambers which she did not copy to Murrayway. Within the email it appeared that she did not wish to proceed with the Hearing, but did not make it certain that she wished to withdraw her application.
The abovementioned email from Ms Knight was not ultimately provided to Murrayway due to the events that immediately followed. I have not placed any reliance upon the above email in making my decision in the costs application, other than to refer to it to provide context for Ms Knight’s subsequent correspondence.
Upon being made aware of the above email from Ms Knight, I directed my associate to contact Ms Knight by telephone around 9:15am that morning to advise her that it was not appropriate to communicate ex parte with Chambers, and to advise her that she was expected to appear by video at the Hearing later that morning. My associate reported to me that Ms Knight had advised that she no longer wished to continue with the application and had advised that she did not want to “face these stupid allegations”. My associate confirmed with Ms Knight that her intention was to withdraw her application and provided her with instructions as to discontinuing the application. My associate discussed with Ms Knight the Form F50 - Notice of discontinuance (F50) and Ms Knight advised that she did not have access to a document printer in order to print, sign, scan and return a completed F50. My associate then advised Ms Knight that if she wished to discontinue her application, she could send an email to Chambers, copying-in Murrayway, advising that she wished to discontinue her application.
At 9:27am, following her conversation with my associate, Ms Knight sent the following email to my Chambers, copying in Murrayway’s representative, discontinuing her application in accordance with Rule 10 of the Fair Work Commission Rules 2013:
“Good Morning Commissioner
I wish to discontinue the matter C2021/6273.
Regards
Megan Knight”
At 9:32am on 17 November 2021, Murrayway sent the following email to Chambers and Ms Knight:
“We confirm that we accept Ms Knights discontinuance of proceedings and will await the Commissioner’s directions in relation to the withdrawal of the Complaint and the Hearing today.
We note that we are currently ready, and also have the Witnesses at this office in preparation for the Hearing.”
At 9:32am on 17 November 2021, my Chambers sent an email to the parties to confirm receipt of Ms Knight’s discontinuance, and to advise the parties that the hearing listed at 10:00am later that morning was vacated and the file would be closed.
The costs application
On 1 December 2021, Murrayway lodged a Form F6 – Application for costs (F6).
Under item 2.1 of the F6, Murrayway indicated only that it sought costs pursuant to s.375B of the Act. It did not make an application seeking costs pursuant to any other section of the Act, for example, s.611 of the Act.
Legislation
Section 375B of the Act provides:
“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 section 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 377 of the Act provides:
“377 Applications for costs orders
An application for an order for costs in relation to an application under section 365 or 372 must be made within 14 days after the FWC finishes dealing with the dispute.”
Ms Knight discontinued her application on 17 November 2021, which is when the Commission finished dealing with the dispute. Murrayway lodged its F6 on 1 December 2021, being exactly 14 days after Ms Knight discontinued her application, which was when the Commission finished dealing with the dispute.
As noted at [32] above, Murrayway did not indicate in the F6 that it sought costs pursuant to s.611 of the Act. Therefore, the F6 as lodged on 1 December 2021 did not contain an application for costs pursuant to s.611. As discussed later in this decision, Murrayway was made aware that my preliminary view was that the costs application was not made pursuant to s.611 of the Act.
These circumstances are remarkably similar to the costs application in Cadd v Millenium Cleaning (Vic) Pty Ltd[2017] FWC 2473 (Cadd), in which the party seeking costs did not mark the box next to “s.611---general provision in relation to costs” in item 2.1 of the Form F6. In Cadd, Commissioner Ryan held that:
“[4] The language of Item 2.1 of the Form F6 clearly contemplates that an application for cost orders can be made under more than one section of the Act. An applicant could make an application for costs orders under both ss.375 and 611 at the one time and using the one form. This reflects the purpose behind s.375B(3) of the Act.
[5] At the hearing of the costs application Ms Brooks submitted to the Commission that she intended to mark the box next to s.611.1What Ms Brooks intended to do and what she did are two very different things. The Commission has no capacity, given the language of s.377, to accept an application for a costs order in relation to a s.365 matter that is made outside of the first 14 days after the Commission finishes dealing with the s.365 matter. Therefore, even though Ms Brooks intended to make an application under s.611 in relation to the s.365 matter, the fact that she did not do so within 14 days after the Commission finished dealing with the s.365 means that no application under s.611 could be considered by the Commission.”
I agree with the reasoning in Cadd that s.377 of the Act operates to prevent the making of any application for costs, including pursuant to s.611, in relation to an application under s.365 outside of 14 days after the Commission has finished dealing with the dispute.
I am satisfied that only a costs application pursuant to s.375B has been made within the time required by the Act.
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).”
Costs application material
In the F6, Murrayway outlined the following grounds on which costs are sought:
“1. The Respondent in this Application, brought a General protections claim against the Applicant without providing any documentation or evidence to support a General Protections Application.
2. In fact, the Respondent in her Application dated 9 September 2021 alleged she was dismissed as a result of an injury, however, does not depose to this, nor provide any evidence, in relation to this in her submissions dated 31 October 2021.
3. The Respondent in essence argued an Unfair Dismissal Claim, to which she was jurisdictionally barred due to her Employment being less than 6 months.
4. The Respondent brought a General Protections Claim against the Applicant without reasonable cause or prospects of success.
5. In addition, the Respondent was not legally eligible to bring a General Protections Application as the Application was not made in accordance with the Act.
6. Furthermore, the Respondent was aware that the Applicant was legally represented and had arranged for the witnesses for the Applicant to be in attendance at the hearing at 10.00am on 17 November 2021, however waited until 9.27am on 17 November 2021 to discontinue the matter (Annexed Emails).
7. It is the Applicants position that the costs incurred by the Applicant in relation to the Hearing were incurred as a result of the unreasonable conduct of the Respondent.
8. Although the Fair Work Regulations 2009 - Schedule 3.1 note amounts for Costs, it is the Applicants position that in the FWC should award an amount of Costs that they consider reasonable, particularly in relation to the vexatious nature of this matter.”
Murrayway provided the following itemised schedule of costs:
| Item No. | Date | COSTS Description of work done | Amount (EXCL GST) |
| 1 | 20.09.2021 | Receiving Instructions to review and respond to Application – Reviewing Material from Applicant – Preparing Response. | $1,390.00 |
| 2 | 22.09.2021 | Finalising Response, Filing and Serving same. | $440.00 |
| 3 | 05.10.2021 | Instructions to Draft Submissions and Affidavit Material in accordance with FWC Directions and preparation in drafting of same. Drafting Witness Statements – Respondent and two (2) witnesses. | $2,360.00 |
| 4 | 15.10.2021 | Finalising and Filing Submissions and Affidavit/Witness Statements | $1,480.00 |
| 5 | 02.11.2021 | Perusal of Applicant Submissions – obtaining client instructions to respond | $245.00 |
| 5* | 05.11.2021 | Instructions to Draft Further Submissions and Affidavit Material in accordance with FWC Directions – attending to execute | $880.00 |
| 6 | 08.11.2021 | Finalising Submissions and Further Response materials – filing and serving | $440.00 |
| 7 | 15.11.2021 | Preparation for Hearing. | $1,760.00 |
| 8 | 17.11.2021 | Attending Hearing – Discussions with Witnesses. Protocol and Requirements | $880.00 |
| Total: | $9,875.00 | ||
(* error in original)
On 2 December 2021, I listed the matter for a Directions Hearing by telephone before me on 13 December 2021. I also directed that Ms Knight provide a preliminary written response to the F6.
On 9 December 2021, Ms Knight provided the following response to the F6:
“My response in relation to the costs claim is
I made a General Protection claim against the Applicant due to the fact that I was terminated abruptly whilst being off work with a broken foot. I believe I was well within my rights to have made this claim and I believe I had reasonable cause and prospects of success with the claim.
I at no point objected to the Applicants decision to appoint legal representation. It is noted that even in the initial phone conference the Commissioner made a point of saying to the Applicant that legal representatives were not usually allowed during the call and therefore asked if I had any objections. I said no and allowed the Applicant to have his lawyer present.
It was the Applicant's choice to appoint a lawyer as obviously he was unable to respond himself.
Having been under a professional for trauma and stress counselling for some time I made the decision to discontinue the claim on the 17th November due to the fact that I did not need this stress in my life any longer.
I needed to let it go so I could get on with my life. I have only fully recovered from my injury in the last 3 weeks finally able to work without a boot. I made the decision based on my mental health that I needed discontinue and move on from this toxic employer that was never capable of admitting wrong doing and would always be looking to lay blame elsewhere.
Once again I will say I do believe I made the General Protection claim with reasonable cause and prospects of success.
Therefore I was legally eligible to bring a General Protections Application.”
On 13 December 2021, I convened a Directions Hearing by telephone with the parties. At the Directions hearing, Ms Knight appeared for herself. I granted leave for Murrayway to be represented by Ms Roberts. Mr Murray was in attendance.
At the Directions Hearing I raised with Murrayway that it had not indicated in the F6 that it sought costs pursuant to s.611 of the Act. While Murrayway said at the Directions Hearing that it had intended to seek costs pursuant to s.611 of the Act, it conceded that it had not ticked the relevant box. I indicated to Murrayway that its application for costs would not be taken to be taken to have been made in respect of any of the grounds outlined in s.611 of the Act, and would be dealt with in respect of s.375B of the Act only. Accordingly, where Murrayway’s grounds include references to the original application having been made frivolously or vexatiously, or that it should have been apparent to Ms Knight that she had no reasonable prospect of success, I shall have no regard to such submissions. These matters are not a matter for consideration.
The consideration of the Commission to this application is whether the Commission is satisfied that Ms Knight caused costs to be incurred because of an unreasonable act or omission in connection with the conduct or continuation of the dispute.
At the Directions Hearing, the parties consented to the determination of the costs application on the papers, with no further material to be filed.
Applicable case law
Costs generally
Cost orders in proceedings under the Act are rare. In Australian Workers Union v Leighton Contractors Pty Ltd (No 2),[1] the Full Court of the Federal Court observed in relation to s.570 of the Act, but with such observation being equally apposite to the costs provisions the subject of consideration in these proceedings, as follows:
“In our view the authorities establish the following principles:
(1) The purpose or policy of the section is to free parties from the risk of having to pay their opponents’ costs in matters arising under the Act, while at the same time protecting those parties who are forced to defend proceedings that have been instituted vexatiously or without reasonable cause.
(2) It follows from the protection offered by s 570(2) that a person will rarely be ordered to pay the costs of a proceeding. But it is not necessary to prove that there are exceptional circumstances warranting the making of an order: Spotless Services Australia Ltd v Senior Deputy President Jeanette Marsh [2004] FCAFC 155 (Spotless) at [12]–[13] (to the extent that the Full Court in Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275 (Kangan) held otherwise, we would respectfully disagree).”
Section 375B and ‘unreasonable act or omission in connection with the conduct or continuation of the dispute’
In Neil Keep v Performance Automobiles Pty Ltd (Keep),[2] the Full Bench of the Commission observed that:
“[11] Section 375B was inserted into the FW Act by the Fair Work Amendment Act 2013 (Cth). The new provision came into effect on 1 January 2014 and applies to dismissals which took effect from that date.”
The Full Bench in Keep then referred to the following passages from the Supplementary Explanatory Memorandum to the Fair Work Amendment Bill 2013:[3]
“[12] The Supplementary Explanatory Memorandum to the Fair Work Amendment Bill 2013 (Cth) states as follows:
“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).
57. 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.
58. 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.
59. 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.
60. 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.
61. 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.”
[13] It is apparent from the Supplementary Explanatory Memorandum that the legislature intended that the power to order costs provided by s.375B only be exercised where there is clear evidence of unreasonable conduct. Such an approach is entirely consistent with the jurisprudence relating to the other costs provisions in the FW Act (such as s.611).”
In Cadd,[4] Commissioner Ryan said:
“[10] […] In 2013 ss.375B and 779A were introduced into the Act […]. The 2013 amending legislation had the effect of copying s.400A which only applied in relation to unfair dismissal matters and repeating the provision so that it applied to general protection matters and to termination of employment matters. Any consideration of the operation and scope of s.375B will be assisted by having regard to the purpose and scope of operation of s.400A
[…]
[16] The trigger action to enliven s.375B is “an unreasonable act or omission of the first party in connection with the conduct or continuation of the dispute” and this is the same as the second trigger action identified in s.376. Given that s.375B and s.400A use exactly the same wording to identify the trigger action to enliven the section, namely, “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/matter, then it is appropriate to also look at the Explanatory Memorandum to the 2012 amending legislation which introduced s.400A. That Explanatory Memorandum included the following:
“170. The FWC’s power to award costs under this provision 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. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.”
In Zosel v The Trustee for the Grace Freeman Nelson Trust T/A Landsculpture Design & Construction Pty Ltd[2016] FWC 6513 (Zosel), Deputy President Kovacic made the following remarks which are relevant to the distinction between s.375B and s.611:
“[11] Section 400A(1) of the Act provides that the Commission may make an order for costs against a party (the first party) to a matter arising under Part 3-2 – Unfair Dismissal of the Act if it 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.” The Costs Applicant in its application did not point to any such unreasonable act or omission by Mr Zosel in pursuing his unfair dismissal application. Rather, the Costs Applicant appeared to contend in its costs application that Mr Zosel’s application had been made vexatiously or without reasonable cause and had no reasonable prospect of success. While those considerations may have been relevant had the costs application been made under s.611 of the Act, as previously noted the costs application was made under s.400A. Against that background and in the absence of any submissions pointing to “an unreasonable act or omission of the first party in connection with the conduct or continuation of the matter”, the Commission cannot be satisfied that the grounds in s.400A(1) have been made out.”
Consideration
Was there an unreasonable act or omission in connection with Ms Knight’s conduct or continuation of the dispute?
As is made clear in the words of s.375B, and in the previous decisions of the Commission discussed above, there must be a clear reference to an unreasonable act or omission on the part of Ms Knight, and that unreasonable act or omission must be done in connection with the conduct or continuation of the dispute.
It is unclear to me what unreasonable act or omission is relied upon by Murrayway in making the costs application. Much of Murrayway’s application for costs relies upon whether the act of making the application by Ms Knight pursuant to s.365 was frivolous, vexatious, not made in accordance with the Act, or had no prospects of success. These matters, much like those in Zosel discussed above, are relevant considerations in an application pursuant to s.611. However, as I have earlier mentioned, there is no application before the Commission for costs pursuant to s.611, on account of Murrayway not having competently made such an application within 14 days of the Commission finishing dealing with the s.365 dispute.
The only grounds within the costs application to have any proper pleadings are as follows:
“6. Furthermore, the Respondent was aware that the Applicant was legally represented and had arranged for the witnesses for the Applicant to be in attendance at the hearing at 10.00am on 17 November 2021, however waited until 9.27am on 17 November 2021 to discontinue the matter (Annexed Emails).
7. It is the Applicants position that the costs incurred by the Applicant in relation to the Hearing were incurred as a result of the unreasonable conduct of the Respondent.”
The question of whether Ms Knight’s acts and omissions in respect of the conduct and continuation of the dispute were unreasonable must be viewed in the context of the originating application before the Commission.
Ms Knight certainly had an arguable case that she had been dismissed. Murrayway objected to Ms Knight’s contention that she had been dismissed. I consider that, on the basis of the material before the Commission, Ms Knight had extremely good prospects of being found to have been dismissed from her employment by Murrayway.
From the very outset, there was clear evidence in the text messages and emails between Ms Knight and Mr Murrayway that points towards her having been dismissed at the employer’s initiative. I refer particularly to the following two messages which were exchanged between Ms Knight and Mr Murray on 25 August 2022 which I have outlined earlier:
| Ms Knight | By VAGUE I mean you don’t even contact me anymore unless necessary and when you do its via text. If you have an issue with me and dont like the way I am then please don’t think you will offend me if you dont want me there!!! Just be honest! I care alot about what i do always have and about Park and im sorry that my ideas are not on the same page as yours we both have very different experience in very different areas. Anyway I dont do this crap via message so if you would like to catch up when im FIT FOR WORK!! which i will be soon (and if your in doubt of my injury in anyway i have doctors report) then we shall catch up however if you are simply done with me id appreciate you just letting me know. You talked to me about being honest i want ot be honest with you!!! |
| Mr Murray | Ok, Fair to say we think completely differently , and that’s ok , it doesn’t need to end the world! .Lets not waste each other’s time. You can find something else to do. I will pay you out Monday , I am sorry we didn’t get along , neither of us need this , good luck with your foot |
In the above messages, Ms Knight clearly refers to returning to work. She was not required to attend for work on 25 and 26 August 2021 on account of those days being her rostered days off work. She was hoping she might be fit for work by Friday, 27 August 2021, but this was looking doubtful. She stated that she doesn’t do this “crap” via message, and if there is a requirement for a catch up, it should be when she is fit for work, which she was not on 25 August 2021. She inquires, if Mr Murray is “done with her”, then she would appreciate him letting her know.
There was no reason for Mr Murray to respond with, “Let’s not waste each other’s time. You can find something else to do. I will pay you Monday.” He could have easily responded that he acknowledged that she was on her rostered days off, was recuperating, was unfit for work, and he welcomed a catch up when she was fit for work. If it had been necessary to determine the issue, I would have likely found that he terminated her employment by sending the above text message.
In addition to the above message, which I consider would have weighed heavily towards a finding of dismissal by Murrayway, Mr Murray wrote to Ms Knight the next day exclaiming:
“Just so we are clear, yes I did terminate you after you [showed] a strong desire to be terminated. We clearly think and interpret things very differently. Please don't look to start a fight, I am not interested. The sunshine coast is a small place and I would like to remain cordial…” (emphasis added)
Mr Murray cannot, in the face of an application before the Commission being asked to determine if a termination occurred at the initiative of the employer, resile from the words he chose to send to Ms Knight. The contemporaneous evidence demonstrates that in black and white he said, “yes I did terminate you.” Curiously, Murrayway chose not to provide such evidence before the Commission despite being required to file material prior to Ms Knight. No explanation has been provided as to why all relevant material known to Murrayway was not put before the Commission in dealing with Murrayway’s jurisdictional objection. This is deeply troubling given Murrayway was legally represented at all relevant times.
It was Ms Knight’s filed evidence which revealed the unequivocal realisation that Mr Murray was certain he had terminated Ms Knight’s employment on 25 August 2021. His words, “after you [showed] a strong desire to be terminated” do not, under any circumstance, pierce the reality of what Mr Murray had done to Ms Knight.
The gist of Murrayway’s factual contentions in opposing the Commission’s jurisdiction was that Ms Knight goaded Mr Murray into dismissing her, and that she had behaved in a way that repudiated the employment contract. The submission of Murrayway that Ms Knight antagonised Mr Murray is, in my view, abhorrent. She simply included in the text message an inquiry that if Mr Murray was done with her, he should let her know.
It is clear that in Murrayway’s reply submissions filed on 8 November 2021 at [23], in close proximity to the Hearing on 17 November 2021, Murrayway continued to obfuscate the Commission’s role in determining the jurisdictional objection before it. Murrayway continued to press that the Commission would need to be satisfied that Ms Knight was dismissed for a prohibited reason.
In Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152 (Coles v Milford), the Full Court of the Federal Court of Australia observed at [64] that: “The text and structure of s 365 is such that there has been a dismissal in fact and that there is an allegation that the dismissal was for a prohibited reason.” (emphasis added) The Full Court further observed at [65] that:
“[65] It is not difficult to conceive of cases where the parties may be in “dispute” as to whether or not a person has been dismissed. Most often that will occur in cases where the applicant alleges (and the respondent contests) that he or she has been constructively dismissed. But that dispute is not to be confused with the dispute forming the subject matter of the FWC’s conciliation powers as just described. A dispute about whether a person has been dismissed raises an antecedent issue going to the existence of the FWC’s authority to compel an employer to participate in its conciliation processes.
Subject to the Commission’s satisfaction as to the fact of dismissal, the Commission’s jurisdiction to deal with an application to deal with dispute under s.368 is then enlivened by the mere allegation that a person was dismissed in contravention of part 3-1 of the Act.
Murrayway spent some time labouring in the weeks prior to the 17 November 2021 Hearing over whether there was, in essence, a prima facie case that Ms Knight had been dismissed in contravention of a general protection. There is simply no such requirement in s.365.
Murrayway made numerous procedural and jurisdictional errors in its submissions in the originating proceedings that I consider it somewhat embarrassing considering it was legally represented. Despite repeated communications that the only consideration before the Commission was whether Ms Knight was dismissed pursuant to s.386 of the Act, Murrayway continued to press matters which could never succeed, nor required determination by the Commission.
Ms Knight was self-represented and continuing to receive written submissions of Murrayway asserting that the Commission could not hear her application because it had not been properly made because she had not produced a medical certificate confirming her absence from work. The submission made by Murrayway, not long before the hearing of the originating application is plainly incorrect. It seems to me that there was nothing that could be said to convince Murrayway that is submissions relevant to the jurisdiction of the Commission were incorrect.
Frankly, if Murrayway spent considerable sums of money on the submissions in November 2021 relevant to the jurisdiction of the Commission, it should be seeking a discount on the legal fees paid by it, not for Ms Knight to have to pay for such absurdity. At several stages throughout the originating proceedings, the Commission was required to address Murrayway on its objections which were not matters available for the Commission to consider.
I am not satisfied that at any stage Murrayway put forward a suitable objection to the Commission’s jurisdiction to the application that was so compelling or likely to succeed that Ms Knight’s continuance of her application until the morning of 17 November 2021 was unreasonable. I consider that at all times during the course of the substantive proceedings, Ms Knight was entitled to the belief that she had an arguable case that she had been dismissed.
I have considered the question of whether there was any act or omission on the part of Ms Knight in connection with the conduct of the proceedings that could be said to constitute an unreasonable act or omission. I am satisfied that there are no identifiable instances of unreasonable act or omission on the part of Ms Knight as would enliven the discretion to award costs against Ms Knight.
I have considered specifically whether Ms Knight’s conduct in discontinuing her application on the morning of the Hearing was an unreasonable act, or whether there is any unreasonable omission in her not having discontinued her application sooner. Discontinuance of an application shortly prior to a listed determinative event has been raised in other applications for costs before the Commission.[5] Whether the discontinuance of an application shortly prior to a listed determinative event is unreasonable will depend on the unique circumstances of each case.
It is clear to me, having regard only to Ms Knight’s submission at [44], Ms Knight experienced what can be described as ‘cold feet’ and was overwhelmed on the morning of the Hearing. She was, in my view, as a result of Murrayway’s erroneous submission on 8 November 2021, led to believe that she was required to demonstrate issues greater than a dismissal at the initiative of Murrayway. Murrayway was submitting to the Commission that she would have to do far more than that; the Commission would have to take on the role of the Court. As I have said earlier, Murrayway was incorrect on that point and I consider that it added to Ms Knight’s stress, culminating in her withdrawing her claim which I consider held very good prospects.
I do not consider Ms Knight’s discontinuance of her application on the morning of the Hearing to be unreasonable because I consider that she was extremely likely to have been found to have been dismissed from her employment by Murrayway if the Hearing had eventuated.
For the reasons above, I am satisfied there are no grounds on which to make any order for costs pursuant to s.375B of the Act against Ms Knight.
Conclusion
I decline to make any orders for costs as sought by Murrayway.
Accordingly, the application by Murrayway for costs is dismissed. An order [PR741009] to this effect will be issued with this decision.
COMMISSIONER
[1] (2013) 232 FCR 428 at 430-431.
[2] [2015] FWCFB 1956.
[3] [2015] FWCFB 1956 at [12].
[4] Cadd v Millenium Cleaning (Vic) Pty Ltd[2017] FWC 2473.
[5] See, for example, Noronha-Barrett v Australian National University [2015] FWCFB 7958.
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