Mr Gabriel Avila v City Central

[2015] FWC 2940

[2015] FWC 2940

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Gabriel Avila
v
City Central
(U2014/13629)

VICE PRESIDENT WATSON MELBOURNE, 7 MAY 2015

Application for costs - whether application made vexatiously or without reasonable cause - whether unreasonable act or omission - Fair Work Act 2009 - ss.394, 400A, 402 and 611.

[1] This decision concerns an application for an order for costs by City Central in respect of an unfair dismissal application brought by Mr Gabriel Avila pursuant to s.394 of the Fair Work Act 2009 (the Act).

[2] Mr Avila’s employment was terminated by City Central on 17 October 2014. He filed an application for unfair dismissal remedy with the Fair Work Commission (the Commission) on 7 November 2014. A telephone conciliation conference was held on 1 December 2014 and did not result in an agreed settlement.

[3] The arbitration of the matter was listed for hearing on 26 March 2015. Directions were made for the filing of written materials in relation to the application. Mr Avila was directed to file written submissions and witness statements in support of his application by 22 December 2014. City Central was directed to file written submissions and witness statements in opposition to the application by 27 January 2015. Both parties complied with the directions.

[4] The matter was heard on 26 March 2015. In the proceedings, Mr Avila was represented by Mr Kemppi of United Voice and City Central was represented by Mr Connolly of counsel. I indicated my decision on the day of the hearing and issued a decision, edited from the decision on transcript, on 7 April 2015. I concluded that there was a valid reason for the dismissal and that the decision was not harsh, unjust or unreasonable. I therefore dismissed the application.

[5] On 9 April 2015, City Central filed an application for costs pursuant to s.611 of the Act or in the alternative, s.400A of the Act.

[6] The parties agreed that the application for costs could be dealt with on the papers and were given an opportunity to file written submissions in relation to the costs application.

The Legislative Test

[7] The power to make an order for costs is dealt with in s.611 of the Act which provides:

“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 ofthe 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).”

[8] Section 400A provides:

“400A Costs orders against parties

(1) The FWC may make an order for costs against a party to a matter arising under this Part (the first party) for costs incurred by the other party to the matter if the FWC is satisfied that the first party caused those costs to be incurred because of an unreasonable act or omission of the first party in connection with the conduct or continuation of the matter.

(2) The FWC may make an order under subsection (1) only if the other party to the matter has applied for it in accordance with section 402.

(3) This section does not limit the FWC’s power to order costs under section 611.”

[9] Section 402 provides:

“402 Applications for costs orders

An application for an order for costs under section 611 in relation to a matter arising under this Part, or for costs under section 400A or 401, must be made within 14 days after:

(a) the FWC determines the matter; or

(b) the matter is discontinued.”

[10] It is well established that an order for costs is a discretionary matter when the basis for making a costs order is established. Section 611 contains a number of separate bases for granting an order for costs. An application has been held to be made without reasonable cause if it is so untenable that it cannot possibly succeed. 1

Should an order for costs be made?

[11] City Central contends that Mr Avila’s case was instituted without reasonable cause. It also submits that the rejection of a settlement offer by Mr Avila was an unreasonable act or omission that caused costs to be incurred.

[12] The threshold that must be met for an order for the payment of costs is a high one. In this case the unfair dismissal application was progressed through to final hearing at which Mr Avila was unsuccessful. As will be clear from the primary decision in the matter, the case was determined in accordance with the provisions of the Act, largely on the basis that demonstrated performance issues were found to exist and the procedure adopted by City Central did not render the dismissal unfair. The conduct in question was the standard of workmanship of Mr Avila. The main issues that arose in the case were whether this amounted to a valid reason for termination and whether Mr Avila had been adequately warned and given an opportunity to improve his performance. In particular I found as follows:

“[9] I have no doubt on the evidence that has been led in this matter that Mr Avila had knowledge of the job requirements of his role. He had assistance in adequately performing those duties, but despite a series of warnings he failed to improve his performance such as to meet the requirements of the employer and its clients.” 2

[13] While the application was dismissed for these reasons I am not of the view that the application was commenced without reasonable cause. Mr Avila appeared to hold the view that his performance was not inadequate. He was unsuccessful in making out this point but I am of the view that his view was genuinely held.

[14] It is contended that the failure of Mr Avila to discontinue the matter prior to hearing after receiving the City Central’s evidence and a letter from its solicitors demanding the withdrawal on the basis that each side would bear their own cost, was an unreasonable act or omission that should provide the basis for a costs order. I am not of the view that such a finding should be made. Apparently the offer of settlement was not generous. In Mr Avila’s mind the outcome of the case was uncertain. In my view it was not unreasonable for him to continue to prosecute his application.

Conclusion

[15] For the above reasons the application for costs is dismissed.

VICE PRESIDENT

Final written submissions:

City Central on 22 April 2015.

Mr Avila on 29 April 2015.

City Central in reply on 6 May 2015.

 1   General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125.

 2   [2015] FWC 2362.

Printed by authority of the Commonwealth Government Printer

<Price code A, PR566580>