Mrs Roze Mellor v Akcar Pty Ltd T/A Stepping Stones Children's Services

[2015] FWC 6007

[2015] FWC 6007

FAIR WORK COMMISSION

DECISION

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

Mrs Roze Mellor
v
AKCAR Pty Ltd T/A Stepping Stones Children's Services
(U2015/9215)

COMMISSIONER WILSON MELBOURNE, 31 AUGUST 2015

Application for relief from unfair dismissal - application for security for payment of costs - application refused.

[1] The application concerns a security for payment of costs application made against an unfair dismissal applicant, Ms Roze Mellor, by her former employer, AKCAR Pty Ltd trading as Stepping Stones Children’s Services (AKCAR). I note that the application for unfair dismissal remedy identifies the legal name of the Respondent’s business to be ‘AKCAR PTY LTD’, however the Respondent’s material identifies the legal name to be Ackar Pty Ltd. The correct legal name of the Respondent is a matter beyond the scope of this decision, and I do not determine that issue in this decision.

[2] According to the unfair dismissal application, Ms Mellor’s employment commenced in November 2014, with dismissal taking effect on 19 June 2015. The Respondent’s material suggests otherwise, specifically a commencement of employment on 1 December 2014, with the dismissal taking effect on 23 June 2015. In any event, it is not necessary for the purposes of this decision to resolve those differences.

[3] The security for payment of costs application arises because, initially at least, the Respondent put forward three jurisdictional objections against the continuation of Ms Mellor’s unfair dismissal application and maintains that, because of these objections, her application would have no reasonable prospect of success. The jurisdictional objections advanced by the Respondent originally went to;

• Ms Mellor not having completed the minimum employment period;



• the Respondent being a small business and thereby able to demonstrate acting consistently with the Small Business Fair Dismissal Code; and



• Ms Mellor’s dismissal being a genuine redundancy for the purposes of the Fair Work Act 2009 (the Act), meaning that her dismissal was not an unfair dismissal.

[4] Subsequent to the initial security for payment of costs application and the filing of its submissions in respect of the matter, the Respondent advised the Commission that it was no longer pursuing two of the jurisdictional objections against Ms Mellor’s application, namely that she had not completed the minimum employment period and that her dismissal was consistent with the Small Business Fair Dismissal Code.

[5] As a result, the only jurisdictional objection presently before the Commission is that Ms Mellor’s dismissal was, in all the circumstances, a genuine redundancy, with the meaning of that term being set out within s.389 of the Act.

[6] It is noted that the Commission’s practice in dealing with objections of genuine redundancy are ordinarily dealt with at the same time as the Commission considers the overall merits of the application. This is for the reason that the Commission’s experience is that the evidence required to ascertain whether or not a person’s dismissal was a genuine redundancy within the meaning of the Act often substantially overlaps the evidence required to determine whether, in the event that the dismissal was not a genuine redundancy, it was otherwise an unfair dismissal.

[7] There is nothing within the material filed by the parties in this matter to date that would give rise to a view that the determination of whether Ms Mellor’s dismissal was a genuine redundancy should be dealt with separately to the question of whether or not her dismissal was otherwise unfair. That is, there is no apparent reason for the two subjects to be dealt with at different times.

[8] A security for payment of costs application may be made by parties pursuant to s.404 of the Act which provides that the Commission’s Rules may provide for the furnishing of security for the payment of costs in relation to an unfair dismissal matter. The Fair Work Commission Rules 2013 in turn deal with the matter in rule 55 as follows;

55 Order for security for payment of unfair dismissal matter costs

(1) A respondent or applicant in a matter before the Commission arising under Part 3-2 of the Act (unfair dismissal) may apply to the Commission for an order that a person provide security for the payment of costs in respect of the matter or part of the matter.

Note 1: The application must be in the approved form—see subrule 8(2).
Note 2: The Commission will not ordinarily make such an order before the conclusion of conciliation.

(2) The person to whom an order made under subrule (1) applies must pay the amount of security at the time, and in the manner and form, required by the order.

(3) If the Commission orders that security for the payment of costs be given in respect of a matter or part of a matter arising under Part 3-2 of the Act, a respondent or applicant in the matter may apply to the Commission to:

(a) reduce or increase the amount of security to be provided; or

(b) vary the time at which, or manner or form in which, the security is to be provided.

(4) Without limiting any other power which the Commission may exercise, if the Commission directs a person to provide security for costs in relation to a matter or part of a matter arising under Part 3-2 of the Act, the Commission may order that the matter be:

(a) adjourned until security is provided; or

(b) adjourned indefinitely.

[9] The security for payment of costs application made by the Respondent asserts that Ms Mellor’s claim does not have a reasonable prospect of success for the reason that she was terminated after 6 ½ months employment for reason of genuine redundancy and is seeking compensation of a nominated, but small, amount. Further, the security for payment of costs application refers to certain discussions, apparently between the parties in the course of the original telephone conciliation conference. The ordinary practice of the Commission is that those conferences are held in private, as required by s.398(2) of the Act, without prejudice to the rights of either party if the matter is not settled and it proceeds to a hearing. As a result the Commission as presently constituted disregards the entirety of the material that the Respondent seeks to introduce in respect of the telephone conciliation conference.

[10] The security for costs application also refers to it being made under s.611 of the Act.

[11] The approach of the Commission in respect to applications for security for payment of costs has originally been dealt with in the matter of Chen v Monash University in which Vice President Hatcher set out the following;

“[6] The principles relevant to the determination of an application for security for costs were summarised by Asbury DP in Harris v Home Theatre Group t/a Home Theatre Group, which summary was quoted with approval by the Full Bench in Zornada v St John Ambulance Australia (Western Australia) Inc In short, there is no absolute rule that controls the exercise of the discretion to order security for costs, and the outcome will depend on the circumstances of the case with the governing consideration being what is required by the justice of the matter. Matters relevant to the consideration will include the financial position of the party against whom the order is sought, the prospects of success and strength of the case of the party resisting the order, the prospects of a costs order being made even if the party seeking the order for security for costs is successful, whether a costs order will be satisfied if made, whether a party will be or will be likely to be absent from the jurisdiction when a decision is made and has no or few assets in the jurisdiction, whether the proceedings raise matters of general importance and whether the hearing of the proceedings is close at hand.” 1 (references omitted)

[12] As evident from the above, the foregoing principles were distilled from several sources including the matter of Zornada, in which the Full Bench found as follows in relation to the principles determined by Asbury DP in Harris v Home Theatre Group; 2

“[35] We agree with the summary provided by her Honour. We further note that costs orders in this jurisdiction are extraordinary, and security for costs orders even more so. This is because the Act reflects the longstanding principle that costs will not be awarded against parties in industrial proceedings, other than in exceptional circumstances. Costs are limited to circumstances where the proceedings have been commenced vexatiously, without reasonable cause, or in circumstances where it should have been reasonably apparent that the application had no reasonable prospect of success. It should be noted that a proceeding is not to be classed as being instituted without reasonable cause simply because it fails, but rather in circumstances where the applicant’s own version of the facts, it is clear that the proceeding must fail.

[36] Accordingly, the Commission should award security for costs only in the rarest of circumstances, once the Commission has balanced the merits of the application, the financial position of the parties, and what is just in the circumstances.” 3 (references omitted)

[13] Having given consideration to the matters filed by the parties in relation to the security for payment of costs application, there is nothing within them that would cause me to form the view that on the Applicant’s own version of the facts it is clear that the proceedings must fail.

[14] She contends that she was not dismissed for reason of genuine redundancy and advances some reasoning that might be consistent with such argument.

[15] In particular, her application to the Commission discloses the kernel of an argument which could well be made in the course of a full hearing, to the effect that “Stepping Stones have several child care centres in the Hobart area. Mrs Mellor would have been happy to consider a move to another centre if it had been offered to her”. 4 It is reasonably foreseeable therefore that a full hearing of the matter is likely to include evidence and submissions about whether or not the exclusion from the definition of genuine redundancy as set out in s.389(2) of the Act has application to her case.

[16] It is also likely, upon the basis of the contention in Ms Mellor’s application that she witnessed another person being interviewed for a position at the place she once worked, together with the assertion that there are witnesses who would verify that the person interviewed is now working the same days that Ms Mellor once had. 5 As a result, there is likely to be an argument in a merits hearing as to whether or not such circumstances mean that her termination is not a genuine redundancy.

[17] Whilst the Applicant puts forward limited material that would suggest that the Respondent “is a significant enterprise” and there is material from the Respondent about the costs and effects of having to meet the claim in a hearing, there is not directly evidence before the Commission that would address the circumstances of the Applicant’s own financial position. Accordingly I am unable to balance the financial position of the parties in making an assessment of the merits of the security for costs application. As a result, I make no findings in that regard.

[18] In relation to the justice of the matter, the only material to which I can have regard is the limited information from the parties about the merits of their respective cases. That in turn brings me back to the comments referred to above regarding Ms Mellor’s contentions regarding whether or not her dismissal may be a genuine redundancy. I consider it would likely be an injustice to Ms Mellor if she were precluded from having those contentions tested for reason of being unable to meet any security for costs order that I might make. Having made that comment I note, of course, that Ms Mellor has not contended that she would be unable to proceed in the eventuality of an order from the Commission regarding security for costs.

[19] For the above reasons I am not persuaded that the Commission’s discretion to order security for payment of costs should be exercised. This matter is not one of the “rarest circumstances” to which the Full Bench has referred. In fact, on the material filed to date, the matter appears to be one of the more ordinary unfair dismissal matters that the Commission might see. There is certainly a spirited contest between the parties and no doubt many facts yet to be determined; however none of that rise to the proposition that on the Applicant’s own version of the facts, it is clear that the proceeding must fail.

[20] The Respondent’s application for security for costs is dismissed.

[21] Ms Mellor’s union, United Voice, in its submissions on the subject of security for payment of costs, refers to its own desire to have an order for costs made against the Respondent, in the amount of $93.55.

[22] This is advanced, so it is said, for reason of the consequence of the Respondent’s conduct in making its jurisdictional arguments and its security for payment of costs application. Such contentions on the part of United Voice are not within the power provided by s.404, for the reason they do not relate to the furnishing of security for the payment of costs for a forthcoming hearing. Neither are they yet within the costs that might be contemplated in either s.400A or s.401, since those sections are in each case constrained by s.402, which requires costs applications to be made within 14 days after the FWC determines the matter. Of course, the Commission is yet to determine this matter and so a consideration of s.402 does not arise. Further, I am not persuaded on the basis of the somewhat brief submissions by United Voice that an order in the manner they contemplate would be within the tests established by s.611.

[23] Accordingly, United Voice’s application in respect of its costs order is dismissed.

COMMISSIONER

 1   [2015] FWC 3888, at [6]

 2   [2011] FWA 2910

 3   Zornada v St John Ambulance Australia (Western Australia) Inc[2013] FWCFB 8255, at [35] – [36]

 4   Form F2 Application for Unfair Dismissal Remedy, para 3.2.7

 5   Ibid, para 3.2.8 and 3.2.9

Printed by authority of the Commonwealth Government Printer

<Price code C, PR571388>