Mr Paul Carter v Qantas Airways Limited
[2012] FWA 10750
•20 DECEMBER 2012
[2012] FWA 10750 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Paul Carter
v
Qantas Airways Limited
(U2009/11888)
COMMISSIONER SPENCER | BRISBANE, 20 DECEMBER 2012 |
Unfair dismissal application - costs application
Introduction
[1] This decision relates to an application by Mr Carter (the Applicant) seeking an Order that Qantas Airways Limited (the Respondent) bear some or all of the costs of the Applicant in relation to his unfair dismissal application at first instance 1 and the costs of the costs application. In dealing with this matter it is necessary to briefly set out the circumstances of the termination of the Applicant’s employment, the conduct of the matter before the Tribunal and relevant decisions.
[2] Given the protracted nature of these proceedings since their commencement this decision does not refer to all of the facts to date or the proceedings in their entirety, but all have been considered in reaching this decision. Similarly while not all of the submissions in relation to costs are referred to, all have been considered. The Tribunal notes that the Applicant has made a number of allegations relating to the conduct of the parties in these proceedings both at first instance and on appeal. Not all of these allegations have been referred to but all of such have been considered.
Unfair Dismissal Application
[3] The Applicant was terminated from his employment with Qantas on 28 August 2009. He made an application for unfair dismissal remedy in Fair Work Australia (FWA) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act). The matter was unable to be resolved in conciliation and was referred to the Tribunal as presently constituted for arbitration.
[4] At the outset the Tribunal notes that a significant amount of material was filed by both Parties in relation to the application, with the matter, in the end, coming down to a largely factual case put by both parties. The factual scenario regarding the termination is set out in the first instance decision 2; it is not necessary in this decision to repeat all such material.
[5] In the preliminary stages of the matter, several conferences were held to deal with issues regarding discovery of documents. Directions were set for the filing of evidence and submissions, with the matter being heard over 6 hearing days. At the end of the hearing further Directions were set to allow for the filing of final submissions. It was noted in the first instance decision that 2 volumes of material were filed by the Applicant with only some of these documents being tendered as exhibits. 3
[6] It should at this stage be noted that delays were occasioned in this matter to allow for separate proceedings to be dealt with in another jurisdiction. 4 A matter brought that was in some way, connected with the present proceedings was brought in the Magistrates Court for committal but was dismissed.
[7] The Applicant and Respondent filed a range witness statements.
[8] The Applicant’s case, very generally stated, at first instance was that employees in Mr Carter’s position had a general discretion to alter ticketing to generally assist customers and in addition or in the alternative the culture of the workplace was that such changes were condoned. 5 The Respondent argued primarily that this was not the case and that such changes were subject to strict fare rules. It was argued that the actions taken by Mr Carter has resulted in actual and potential revenue loss to Qantas.
[9] This apparent conflict between the Applicant’ understanding of his discretion and the expectations of the Respondent lead to a finding that the Applicant had “certainly not received a consistent message about his conduct” 6. It was also found that the Applicant had been advised to discontinue some particular ticketing practices in a record of discussion but that the Applicant’s conduct had to be considered in the context of the disciplinary action taken against other employees.7 The Tribunal found that the Applicant had not been afforded an alternative to dismissal nor had an opportunity to internally appeal such.8
[10] The Applicant provided various explanations for his practices including that he was unaware of the different fare types utilised by Qantas. It was found however that this position was difficult to reconcile on the evidence. 9 Some shortcomings of the Respondent’s evidentiary case in relation to any training provided to Mr Carter in the various Qantas systems, policies or even the specifics of the fare rules were identified in the decision.10
[11] The application was dismissed, on appeal, it was found that there was a valid reason for the dismissal, but that the first instance decision, that the dismissal was harsh, unjust or unreasonable was confirmed. The reasons provided in the decision, set out that the reasons for termination could not amount to serious misconduct in the context of the law and the evidence before the Tribunal. Procedural flaws, including the failure to notify the Applicant of his right to appeal the decision terminating his employment, which, given the size and resources of the Respondent’s enterprise were particularly noteworthy and the availability of other disciplinary steps that should have been considered prior to dismissal. Regard was also had to the Applicant’s significant length of service, and the right of the Respondent to rely on their employees in this regard and imposing in them a significant amount of trust and confidence.
[12] The evidence revealed that while the Respondent acted prematurely 11 the actions of the Applicant were contributory and it was open to the Respondent to commence the disciplinary process.
[13] As stated the dismissal was found to be harsh, unjust and unreasonable on the evidence. The Applicant was reinstated with continuity of service but, taking into account the Applicant’s contribution to the circumstances, no continuity of payment of wages was ordered.
Appeal decision
[14] Whilst a separate costs decision has been initiated in relation to the Appeal proceedings given the elements to be considered against the findings of the decision at first instance it is relevant to provide the assessment of that decision on appeal as it impacts the decision at first instance. Clearly costs matters related to the Appeal are not at issue in the current determination. Both Qantas and Mr Carter appealed the decision at first instance. The notices to appeal were dealt with together and the Full Bench published its decision on 17 July 2012. 12
[15] The Qantas appeal included a number of interrelated grounds of appeal - that the decision was in error in a number of findings and made a number of errors involving significant questions of fact. The Full Bench considered each of the stated grounds of appeal.
[16] Regarding the ground that the decision at first instance was in error, in finding that Qantas did not have a valid reason to dismiss Mr Carter, the Full Bench considered the evidence and the findings. It held that insufficient weight was given to the finding that it was ‘questionable’ whether Mr Carter had any operational reason to make a number of the changes he did. It found that the evidence supported Qantas’s submission that there was a valid reason. 13
[17] The Full Bench also considered the other grounds: regarding whether error occurred in failing to find that the Applicant’s conduct amounted to serious conduct; in finding that Qantas had not monitored the dealings of customer service officers; that s.387(d) had been unreasonably applied when considering whether it was unreasonable that Mr Carter was unable to have his chosen support person (his Barrister) with him at the dismissal meeting. The Full Bench found no appealable error in these respects. It also found that the Commissioner’s findings and comments; regarding Qantas’s compliance with its own misconduct policy; whether Mr Carter had previously received any counselling or warnings; and considerations regarding the association made between Mr Carter and another previous employee who had been charged with fraud related to unauthorised bookings and changes, were open to her.
[18] The Full Bench then considered Qantas’s submissions on what it saw as significant errors of fact. Qantas submitted there were errors in the finding that generally Mr Carter had made the changes openly; that he made the changes motivated by naive enthusiasm; and that he had been commended for using his imitative (by rebooking customers without higher authorisation) in the past. The Full Bench considered that all these findings were open on the evidence.
[19] Further submissions on ‘significant errors’ were also not upheld by the Full Bench. It considered that finding that Mr Carter’s actions were in accordance with ‘established workplace culture’ was open on the evidence, as was the determination that Qantas could again have the necessary trust and confidence required for reinstatement.
[20] Ultimately, the Full Bench held that despite the error identified, having regard to all the issues, permission to appeal should not be granted. It did not consider that any issues of general importance or jurisdictional or legal points had been raised. The appeal was dismissed and the stay order previously granted was discharged. 14
[21] Mr Carter’s appeal related to the Commissioner’s decision that the period between termination and reinstatement would not form part of his period of service for the purpose of accrual of entitlements or payment of wages. The Full Bench noted that the appeal was lodged significantly out of time (with no explanation as to the delay) and neither the Tribunal nor the Respondent was given advance notice that the appeal would be filed. 15 Accordingly, the Full Bench declined to extend the time for filing.
Relevant Legislation and Grounds for Costs
381 Object of this Part
(1) The object of this Part is:
(a) to establish a framework for dealing with unfair dismissal that balances:
(i) the needs of business (including small business); and
(ii) the needs of employees; and
(b) to establish procedures for dealing with unfair dismissal that:
(i) are quick, flexible and informal; and
(ii) address the needs of employers and employees; and
(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.
Note: The expression “fair go all round” was used by Sheldon J in in re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95.
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 401, must be made within 14 days after:
(a) FWA determines the matter; or
(b) the matter is discontinued.
611 Costs
(1) A person must bear the person’s own costs in relation to a matter before FWA.
(2) However, FWA may order a person (the first person) to bear some or all ofthe costs of another person in relation to an application to FWA if:
(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) FWA 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: FWA can also order costs under sections 376, 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).
[22] The grounds for costs have recently been dealt with in the decision of McKerrow v Sarina Leagues Club Incorporated. 16 In that decision Commissioner Asbury stated:
“The power for the Tribunal to award costs in an application for an unfair dismissal remedy is found in s. 611 of the Act...
The power to award costs under s.611 of the Act is discretionary, and involves determining whether the situation is one in which there is a power to award costs, and if so, whether an award of costs is appropriate in all of the circumstances. 17 The general statement in s.611(1) that a person must bear the person’s own costs in relation to a matter before FWA, reflects the longstanding principle that costs will not be awarded against parties in industrial proceedings, other than in exceptional circumstances.
For the purposes of s.611(2)(a), litigation may be regarded as vexatious on objective or subjective grounds. 18 The question of whether an application is made vexatiously looks to motive of the party against whom the costs application is brought. An application will be made vexatiously where the predominant purpose is to harass or embarrass the other party or to gain a collateral advantage.19 Irrespective of motive, proceedings are also vexatious if they are “so obviously untenable or manifestly groundless as to be utterly hopeless.”20
Conduct during the pre-hearing and the hearing stages of an application can shed light on the motive and intent of a party 21. There is no indication that the terms “responded to the application” or “response to the application” used in s. 611(2)(a) and (b) are limited to a formal response made pursuant to Rule 14A or 15 of the Fair Work Australia Rules 2010 and Form F3A. There may be numerous points throughout the course of an application at which various responses are made,22 including a response made pursuant to Rule 14A or 15 of the Fair Work Australia Rules 2009. A response at any point throughout the course of an application can also be the basis of a costs application on the grounds set out in s. 611(2)(a) or (b).
The term “without reasonable cause” with respect to a proceeding is an additional ground upon which an order for costs can be made. A proceeding is not to be classed as being instituted without reasonable cause simply because it fails. 23 In Kanan v Australian Postal and Telecommunications Union24 Justice Wilcox was considering s.347 of the Industrial Relations Act which set out a general rule that a party to a proceeding in a matter arising under that Act “shall not be ordered to pay costs incurred by any other party...unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause”. His Honour observed:
“It seems to me that one way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends on the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being ‘without reasonable cause’. But where, on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks reasonable cause.” 25
The approach to be taken in relation to the concepts of “should have been reasonably apparent” and “had no reasonable prospects of success” in s.611(2)(b) of the Act was summarised by a Full Bench in Baker v Salva Resources Pty Ltd 26 in the following terms:
- “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 prospects 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 to be not reasonably arguable.” 27
The case law in relation to applications made vexatiously or without reasonable cause or applications where it should have been reasonably apparent that the applicant had no reasonable prospects of success, is also apposite to responses. Circumstances in which costs can be awarded against a respondent in an unfair dismissal application are:
- where a person responded to the application vexatiously;
- where a person responded to the application without reasonable cause; or
- where it should have been reasonably apparent to a person that the person’s response to the application had no reasonable prospects of success.” 28
Summary of Applicant submissions
[23] The Applicant filed some 200 pages of submissions and affidavit material in support of the application. It is not necessary to refer to all of the material filed but all of such has been considered. The Applicant submitted that an Order should be made on one or all of three grounds being that the Respondents response was vexatious (s.611(2)(a)), was without reasonable cause (s.611(2)(a)) and/or it should have been reasonably apparent that the response had no reasonable prospects of success (s.611(2)(b)).
Vexatious
[24] It was submitted that in considering whether a response was vexatious the Tribunal should turn its mind to the motive of the party in instituting the response. It was said that a response can be vexatious even where there is a reasonable basis for instituting a response. 29
[25] The Applicant relied upon the decision of Commissioner Asbury in Harris v Home Theatre Group 30 in particular [20]-[21], as follows:
[20] The question of whether an application was instituted vexatiously is answered by reference to the motives of the applicant in instituting the proceedings. A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass, annoy or embarrass the other party, or to gain a collateral advantage. 31 A proceeding will also be instituted vexatiously where irrespective of the motive of the litigant, it is: “so obviously untenable or manifestly groundless as to be utterly hopeless.”32
[21] Other grounds upon which an application could be said to have been instituted vexatiously have been identified as: the legitimacy or otherwise of the motives of the applicant; existence or lack of reasonable grounds for the claims sought to be made; repetition of compliance with or disregard of the Court’s practices, procedures and rulings; persistent attempts to use the Court’s processes to circumvent its decisions or other abuse of process; wastage of public resources and funds; and the harassment of those who are subject of the litigation which lacks reasonable basis. 33
Without reasonable cause/no reasonable prospects of success
[26] The Applicants submissions considered the concepts of “without reasonable cause” and “no reasonable prospects of success” simultaneously. In this regard reliance was placed upon the decision of Commissioner Thatcher in Walker v Mittagong Sands Pty Ltd 34 which was endorsed by the Full Bench in ACI Operations Pty Ltd v Cook35.
[27] It was submitted that the test of “no reasonable prospects of success” is a lower and wider test than “without reasonable cause”. Following from this, it was submitted, that circumstances satisfying the test of “without reasonable cause” would likely also satisfy the “no reasonable prospects of success” test but the reverse was not necessarily true. The Tribunal on this reasoning should assess whether a certain and concluded determination could be made that the proceedings would necessarily fail but this does not equate to a requirement that there be no “real” prospects of success and further, it was submitted, does not necessarily require that the proceedings be hopeless or bound to fail. The Applicant submitted that it was in any case a matter of judgment in all of the circumstances.
Summary of Facts relied upon by the Applicant
[28] The Applicant stressed that the Tribunal should consider the conduct of the case and the allegations against Mr Carter in the circumstances and background of the workplace including what was called the “not uncomplicated” 36 corporate and institutional practices etc of Qantas at the Brisbane Domestic Airport. Further it was said that this included a consideration of the location of those Qantas personnel involved in the investigation being away from the “coalface”37 of the Domestic Airport.
[29] The Applicant submitted that the deficiencies in the management of Qantas at the Domestic Airport, the flawed investigation process and the geographical location of those involved in the investigation away from the Domestic Airport was said to have contributed to the motivation in the response of Qantas to the unfair dismissal application. Contributing to this, it was submitted, the fact that Qantas personnel involved in the initial investigation were then involved in responding to the application before Fair Work Australia provided a motivation to respond to the application in circumstances, where an independent person may otherwise have considered a different course.
[30] The Applicant took issue with a number of points regarding the conduct of the Respondent. The predominant purpose of the Respondent, it was submitted, was to “harass, annoy and embarrass Mr Carter, and to gain a collateral advantage”. 38 Such collateral advantage was said to be for Qantas to hide its flawed investigation and disciplinary process from scrutiny and thereby protect its management and advisers. Similarly it was submitted that the motive of Qantas was not to properly respond to the application but to “finish off” Mr Carter, financially and emotionally. The referral of the matter to the Australian Federal Police was evidence of this motive in the Applicant’s submission. Other so called “red herrings” were said by the Applicant to evidence the Respondent’s lack of bona fides in responding to the application.
[31] The Applicant also contended that the ‘tone’ of submissions on behalf of the Respondent were ‘excessively discourteous’ to Mr Carter and in some allegations to his Counsel, Ms Beck. The use of this stance was said by the Applicant to have embarrassed, annoyed, harassed and hurt Mr Carter.
[32] The Applicant submits that the totality of the material submitted by Qantas should be considered in determining it’s motive in filing the Form F3 Employer Response and it’s conduct up to and during the hearing of the application.
Summary of the Respondent Submissions
[33] The Respondent submitted that the application should be dismissed or, in the alternative, that if costs are awarded, there is no basis for such costs to be assessed on an indemnity basis.
[34] The Respondent repeated that the primary position is that each party must bear their own costs and that a costs order cannot be given simply because a party is unsuccessful in its case. 39 All parties, even an employer that is a “substantial commercial corporation”,40 are entitled to defend an application made against them and to have their day in court even where the other party is claimed to have limited means.
[35] The Respondent contends, that the Tribunal is required to assess the conduct of the Respondent at the time, the Respondent responded to the application, being the time when it decided to defend the proceedings. Further, it is submitted, conduct which occurs after the response is made cannot of itself enliven jurisdiction under s.611 for the award of costs. 41 It is relevant, in the Respondents submission, that the wording of the legislation was altered upon the introduction of the current Act as compared to it’s predecessor. On this line of argument the fact that the previous act directed the enquiry to unreasonable acts or omissions “in connection with the conduct of the proceedings”42 and the current Act makes no such reference is an indication that the time the conduct is assessed is as above.
[36] The Respondent takes issue with portions of the Applicant’s submissions in this matter and with the statement of Mr Carter filed in the costs proceedings. On the Respondent’s submission the personal effects that the matter has had on the Applicant are not relevant to the Tribunal’s task under s.611 and accordingly the Respondent has objected to the Statement of Mr Carter being admitted into evidence in the costs proceedings.
[37] In regards to defending the application the Respondent submitted it was, in their view, not necessary or was unhelpful to submit affidavit evidence as the assessment undertaken by the Tribunal is to be an objective assessment. In this regard the Respondent relied upon Walker v Mittagong Sands. 43
[38] The Respondent’s submissions in this application can simply be summarised, that no basis could be found on the facts to satisfy the Tribunal, on an objective assessment, that a costs order should be issued. The Respondent took issue with the majority of the Applicant’s submissions asserting that they were irrelevant to the task at hand and even if they were accepted they still did not provide a sufficient basis upon which the Tribunal could be satisfied that a costs order should issue.
[39] Specifically the Respondent submitted that the facts did not disclose a collateral purpose to responding to the application as alleged by the Applicant. Further it was submitted that the findings, or the absence of adverse findings, of the Tribunal at first instance and on appeal evidence that the second and third limbs of the application, being “without reasonable cause” and “no reasonable prospects of success”, could not be substantiated.
Consideration
[40] The Applicant’s unfair dismissal case was brought on a genuine basis seeking an examination of the full range of circumstances leading to the dismissal. Both Parties had significantly different views of the operations, computer transactions, the workplace culture and the impact of the events on each Party.
[41] Both Parties, cases were arguable, genuinely held and each brought evidence in support. The decision was made after examining the volume of competing evidence of the range of matters related to the dismissal.
[42] The Applicant’s clear aim with the initial application was to have the matters examined and findings made and his termination overturned. The motivations of the Respondent were also clearly to defence what they submitted was a valid reason for the termination (as confirmed on appeal). Neither case was ‘obviously untenable or manifestly groundless to be utterly hopeless’ or brought or pursued in a manner to gain a collateral advantage. The initial decision provided the reasoning. In considering the grounds for the costs application the decision on appeal has also been taken into account. The appeal decision however does not alter the consideration of the grounds of the costs decision:
“[A] consideration of awarding costs [on a] conclusion that an application had no real prospects of success ‘should only be reached with extreme caution and where the application is manifestly untenable or groundless.’ 16 As noted by Finkelstein J in Zhang v The Royal Australian Chemical Institute Inc (No. 2), parties ‘should not be deterred from bringing proceedings by the risk of an adverse costs order.” 44
[43] Taking into account the facts and circumstances of the case and the reasoning and findings of the first instance decision and those in the appeal decision I am not satisfied that the Applicant has made out any of the grounds in s.611 of the Act that warrants the exercise of the discretion to award costs. Accordingly the application is dismissed. I Order accordingly.
COMMISSIONER
Hearing details:
On the papers.
1 Carter v Qantas Airways Limited [2011] FWA 8025.
2 Ibid at [6]-[15].
3 Ibid at [4].
4 Ibid at [5].
5 Ibid at [67].
6 Ibid at [68].
7 Ibid at [69].
8 Ibid at [69].
9 ibid [70].
10 Ibid at [71] and [74].
11 Ibid at [105].
12 [2012] FWAFB 5776.
13 Ibid at [39]-[40].
14 Ibid at [58].
15 Ibid at [60].
16 [2012] FWA 7574.
17 McKenzie v Meran Rise Pty Ltd t/as Nu Force Security Services Dec 375/00 M Print S4962 Per Giudice J, Watson SDP and Whelan C at [7].
18 (1988) 14 NSWLR 481.
19 Nilsen v Loyal Orange Trust IRCA Decision No: 267/97; Attorney-General v Wentworth (1988) 14 NSWLR 481.
20 Attorney-General v Wentworth ibid at 491.
21 Fox v Wilderness Escape Outdoor Adventures Pty Ltd [2011] FWA 8803.
22 Mokomoko v Zennforce Protection Group Pty Ltd [2011] FWA 1217 at [4].
23 R v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470 at 473 per Gibbs J.
24 (1992) 43 IR 257.
25 Ibid at 264-5.
26 [2011] FWAFB 4014.
27 Ibid at [10].
28 [2012] FWA 7574 at [3] to [9].
29 Nilsen v Loyal orange Trust [1997] IRCA 32.
30 [2011] FWA 2910.
31 Nilsen v Loyal Orange Trust IRCA Decision No: 267/97.
32 Attorney-General v Wentworth (1988) 14 NSWLR 481 at 491.
33 Re Cameron (1988) 14 NSWLR 481.
34 [2010] FWA 9440.
35 [2012] FWAFB 3292.
36 Applicant submissions, 27/08/2012, at 9.
37 Applicant submissions, 27/08/2012, at 10.
38 Applicant submissions, 27/08/2012, at 23.
39 Walker v Mittagong Sands Pty Ltd [2011] FWA 2225 at [47].
40 Applicant submissions, 27/08/2012 at 85.
41 Lisa Holland v Nude Pty Ltd [2011] FWA 8012 at [10].
42 Workplace Relations Act 1996 (Cth) ss.658(3) and (4).
43 [2011] FWA 2225 at [42] to [43].
44 White v Kabi Organic Golf Course [2012] FWA 2376.
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