Mohamed Hassan v New Concept Homes Pty Ltd T/A Construction

[2020] FWC 3572

[2020] FWC 3572

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Mohamed Hassan
v
New Concept Homes Pty Ltd T/A Construction
(U2020/2448)

COMMISSIONER BISSETT MELBOURNE, 10 JULY 2020

Application for an unfair dismissal remedy.

[1] On 18 June 2020 I issued a Decision 1 in which I dismissed an application seeking relief from unfair dismissal by Mr Mohammad Hassan on the grounds that he had not served the minimum employment period necessary to qualify him as protected from unfair dismissal. In that Decision I found that New Concept Homes Pty Ltd was a small business within the meaning of the Fair Work Act 2009 (FW Act) and that Mr Hassan had not completed 12 months service.

[2] Following the issue of the Decision, New Concept Homes Pty Ltd (the Costs Applicant) applied for costs in relation to the matter.

[3] That application was made on 26 June 2020 and hence in compliance with s.402 of the FW Act which requires an application for costs be made within 14 days of the determination of the matter.

[4] The parties agreed that I could determine this costs application without further hearing from the parties. The parties were asked to make any written submissions they considered appropriate in relation to the application. These submissions have been considered in making this decision.

Background

[5] The Costs Applicant seeks the payment of costs by Mr Hassan of $3,575 (although I note this has not been particularised) pursuant to “sections 400A, 402 and 611” of the FW Act.

[6] The Costs Applicant has not detailed its claim under any of the particular sections of the FW Act relied on but rather claims, generally, that it should have been reasonably apparent to Mr Hassan that his application had no real prospect of success and that the claim of Mr Hassan was vexatious.

[7] Mr Hassan made his application for relief from unfair dismissal on 3 March 2020. He commenced employment with the Costs Applicant on 2 June 2019. This was not dispute in the hearing in relation to the minimum employment period. Mr Hassan says that his employment was terminated on 13 February 2020 with an effective date of dismissal of 29 February 2020. The Costs Applicant says that the effective date of dismissal was 31 January 2020. On Mr Hassan’s evidence (and in the best case) he was employed by the Costs Applicant for 8 months and 3 weeks.

[8] The Costs Applicant provided its response to the unfair dismissal application on 23 March 2020. In that response the Costs Applicant indicated that it objected to the application on three grounds. Relevant to this decision, the first of the grounds was set out the employer response 2 as follows:

Threshold Issue – Period of Employment

1. The Respondent is a small business, i.e., employs less than 15 employees.

2. The Applicant’s employment has commenced on 3 June 2019, and, terminated on 31 January 2020.

3. Therefore, the Applicant has not been employed for the threshold period of 12 months.

[9] The second objection of the Costs Applicant to the unfair dismissal application was that the application was filed outside the 21-day time period prescribed in the FW Act.

[10] Following an unsuccessful conciliation, directions were issued to the parties which required them to file and serve submissions and evidence in relation to the jurisdictional objections. The Costs Applicant filed with the Commission and served on Mr Hassan its submissions in relation to the minimum employment period on 20 April 2020.

[11] In its filed materials the Costs Applicant indicated that evidence would be given by Mr Mekkya, the Director of the Costs Applicant, that the business was a small business and that it only had one employee (Mr Hassan). The submissions stated the same and that Mr Hassan had not completed the minimum employment period.

[12] On 8 May 2020 the Costs Applicant made a Calderbank 3 offer to Mr Hassan in settlement of his application. In that offer the Costs Applicant advised Mr Hassan that, as the business was a small business, he would need to have completed 12 months service in order to make a valid application for unfair dismissal and that, on the best case, this was not so. That offer indicated that the Costs Applicant had paid all entitlements due to Mr Hassan but offered to settle the matter for payment of a further $1,600, being one weeks’ gross pay. The Costs Applicant advised that Mr Hassan did not respond to this letter. Mr Hassan did not claim to have responded.

[13] Mr Hassan’s application for unfair dismissal was heard by the Commission on 5 June 2020. In his submissions leading up to the hearing Mr Hassan provided no evidence that the Costs Applicant employed more than 15 employees, only stating that he had seen a number of the people in the Costs Applicant’s office and knowledge of a person who may have worked for the Costs Applicant. Mr Hassan was given extra time following the hearing to provide further information to the Commission to support his claim that the Costs Applicant employed 15 or more employees. Mr Hassan again could not do so beyond producing a statement from a previous employee of the Costs Applicant as to the employment of one other person. My Decision on the unfair dismissal application was issued on 18 June 2020.

Submissions

[14] The Costs Applicant submits that, given the above matters, the application by Mr Hassan was misconceived and, given the information provided to Mr Hassan, he should have known his application would fail. It says that Mr Hassan was on notice as to the difficulties with his application yet failed to adduce any evidence to show that the Costs Applicant had enough employees such that it was not a small business. Further, when given a further opportunity to do so he could not produce any information to support his claim in relation to the size of the Costs Applicant’s business.

[15] The Costs Applicant submits that:

•  Mr Hassan should have taken steps prior to making his application to determine if he was eligible to apply for unfair dismissal;

•  Having made the application and having been put on notice that the Costs Applicant was a small business Mr Hassan should have understood his application could not be maintained;

•  On 2 May 2020 Mr Hassan indicated in a further response that he understood the number of employees of the Costs Applicant was a live issue when he submitted that “I have witnessed some people who used to work for the business and they were not casual neither subcontractors nor so it is clear the employer was trying to minimize his number of employees on the book to act like a small business.” Despite this Mr Hassan provided no grounds or evidence to support his position yet proceeded to a final hearing. In this respect his approach to the matter was “careless, unreasonable and vexatious”; and

•  Mr Hassan should have known that his application had no reasonable prospect of success.

[16] Mr Hassan was invited to make any submissions he wished to make with respect to the application for costs. In response to this invitation Mr Hassan sent copies of some payslips from his employment with the Costs Applicant and text messages he had sent to the Costs Applicant in relation to outstanding payments. He also sent a screen shot from a leave calculator. It was not apparent what Mr Hassan would have me take from this information.

[17] On 27 June 2020 Mr Hassan sent an email to my chambers in which he said that he had no income and a family to support and hence could not afford to pay any costs. He again raised issues of underpayment to him by the Costs Applicant.

Consideration

[18] Section 611 of the FW Act states as follows:

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.

[19] The terms “frivolous” and “vexatious” are referred to in Day v Victorian Railway Commissioners 4 where Dixon J stated that “a case must be very clear indeed” to justify summary dismissal and that “once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process”.

[20] In Nilsen v Loyal Orange Trust⁵ North J said:

The next question is whether the proceeding was instituted vexatiously. This looks to the motive of the applicant in instituting the proceeding. It is an alternative ground to the ground based on a lack of reasonable cause. It therefore may apply where there is a reasonable basis for instituting the proceeding. This context requires the concept to be narrowly construed. A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage.

[21] The Costs Applicant in this case has failed to identify the “collateral purpose” of the unfair dismissal application of Mr Hassan or how it was intended to harass and embarrass the Costs Applicant.

[22] A mere assertion of a purpose does not allow me to find, objectively, that this purpose existed. Without evidence there is little to support a claim that the application was vexatious. For this reason, I reject the submissions that the application of Mr Hassan was vexatious. The requirements of s.611(2)(a) of the FW Act are not met.

[23] Whether it should have been reasonably apparent to Mr Hassan that his application had no reasonable prospect of success (s.611(2)(b)) is be determined objectively – that is, on the view of any reasonable person.

[24] A finding that an application (or response) has no reasonable prospects of success should be reached with extreme caution and should only be reached when an application (or response) is ‘manifestly untenable or groundless’.

[25] In Deane v Paper Australia Pty Ltd⁶ the Full Bench of the Australian Industrial Relations Commission considered the meaning to be given to the expression "no reasonable prospect of success" and said:

[7] …The construction of the expression in that context was considered by a Full Bench of the Commission in Wright v Australian Customs Service.⁷ In that case the Full Bench, drawing upon relevant authority relating to summary dismissal of proceedings in various jurisdictions, held that a conclusion that an application had no reasonable prospect of success should only be reached with extreme caution and where the application is manifestly untenable or groundless.

[8] Making due allowance for the caution which must attend the exercise of a discretion to summarily dismiss an application, it appears to us that the approach in Wright is one we should follow. In other words, unless, upon the facts apparent to the applicant at the time of instituting the appeal, 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.

[26] In this case I am satisfied that Mr Hassan’s application had no reasonable prospect of success. Mr Hassan has not been able, at any stage of proceedings, to put forward any basis (beyond mere assertion) on which the Commissioner could conclude that the Costs Applicant was anything but a small business. The most minimum of research and use of tools on the Commission website would have alerted Mr Hassan to the fact that, could he not show the Costs Applicant was not a small business, he would not be eligible to make an unfair dismissal application.

[27] The submissions and evidence filed by Mr Hassan in response to the directions of the Commission failed to engage in this matter and seemed more directed at proceedings in the Supreme Court in 2019 in which Mr Mekkya seemed to have some involvement.

[28] Further, Mr Hassan’s primary complaint appears to go to whether he was correctly paid. These are not matters the Commission can resolve and an unfair dismissal application is not the means by which such matters will be resolved.

[29] Mr Hassan was further put on notice by the Costs Applicant’s response to the unfair dismissal application, by its Calderbank offer and by its submissions that the Costs Applicant claimed to be a small business and that this was a critical matter to be resolved in any hearing. Despite this Mr Hassan produced nothing on which the Commission could conclude he had served the minimum employment period necessary under the FW Act to make an application for unfair dismissal.

[30] I am therefore satisfied that it should have been reasonably apparent to Mr Hassan that his application had no reasonable prospect of success (s.611(2)(b)) such that the condition necessary to consider an award of costs is met.

Should I award costs

[31] The decision to award costs is a discretionary decision of the Commission. This much is clear from the wording of s.611(2) (“…the FWC may order a person…to bear some or all of the costs…”).

[32] The discretion to award costs should be considered against the general presumption that each party must bear its own costs in a matter before the Commission (s.611(1)) and that the award of costs is a departure from that general standard. In this respect a decision to award costs should not be made lightly.

[33] The Costs Applicant in this matter seeks an award of $3,575 with no break down as to when and how those costs were incurred. This of course can be remediated by the request of further information form the Costs Applicant. It seeks such costs in circumstances where Mr Hassan has an ongoing complaint as to payment of wages.

[34] I have decided in this case to exercise my discretion and not order costs be paid by Mr Hassan.

[35] I have reached this conclusion firstly because I do not consider that the Costs Applicant has been put to much expense in preparing its submissions and evidence in the unfair dismissal application. Its submissions were not detailed and, to the extent they dealt with the question I had to decide, were brief. While the Costs Applicant was required to file two sets of submissions these did not vary substantially. To the extent the Costs Applicant incurred any costs as a result of the Commission seeking more information as to Mr Mekkya’s related companies, this was not a cost caused by Mr Hassan. Whilst Mr Hassan’s materials were minimal and, at times, incoherent, he believed his employment had been terminated unfairly and sought to have that remedied. Whilst he should not have pursued his application particularly once alerted to the Costs Applicant’s objection I cannot find that he did so with any inappropriate intent.

[36] This was not a particularly complex matter, the submissions filed not extensive and the time taken not great. I am not convinced that Mr Hassan should, in the circumstances, meet the costs of the Costs Applicant.

[37] The application is therefore dismissed.

COMMISSIONER

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 1   [2020] FWC 3189.

 2   Form F3 - Employer response to unfair dismissal application.

 3   Calderbank v Calderbank [1975] 3 All ER 333.

 4 [1949] HCA 1.

5 (1997) 76 IR 180 citing Attorney General v Wentworth (1988) 14 NSWLR 481 at 491.

6 PR932454 (AIRCFB, Giudice J, Williams SDP, Simmonds C, 6 June 2003).

7 PR926115 (AIRCFB, Giudice J, Williams SDP, Foggo C, 23 December 2002) at paras [23] - [27] and [32].