Mrs Sandra McKenna v Home Theatre Group Pty Ltd T/A Home Theatre Group

[2012] FWA 10344

[2012] FWA 10344

FAIR WORK AUSTRALIA

DECISION

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

Mrs Sandra McKenna
v
Home Theatre Group Pty Ltd T/A Home Theatre Group
(U2012/5586)

COMMISSIONER ROE MELBOURNE, 7 DECEMBER 2012

Application for costs.

[1] This is an application for costs made on behalf of Home Theatre Group Pty Ltd (the Respondent in the unfair dismissal proceedings). The Respondent seeks $23,182.50 incurred in defending the unfair dismissal application.

[2] On 30 October 2012 I dismissed the Application for unfair dismissal remedy brought by Ms Sandra McKenna (the Applicant). 1 That matter arose from an application filed on 28 February 2012 and updated and amended on 7 March 2012 under s 394 of the Fair Work Act 2009 (the Act) for relief in respect to the termination of her employment from Home Theatre Group Pty Ltd T/A Home Theatre Group.

[3] The following parts of that decision are of particular relevance to this costs application:

“[8] It is not in contention that the Applicant is protected from unfair dismissal in that HTG is a national system employer, the Applicant had been a full time employee for more than 12 months, there is no suggestion that the termination was a genuine redundancy and the Applicant was dismissed at the initiative of the employer.

[9] This matter was originally listed for hearing in June 2012. The Applicant provided submissions and evidence upon which she relied on 22 May 2012. However, on 2 May 2012 the Applicant advised that she wished to withdraw from any hearing. In response the hearings of the matter were cancelled. The Applicant did not file the notice of discontinuance as requested by FWA. On 20 July 2012 the Applicant requested that the case be reopened. Directions were issued for a new hearing date and the parties complied with directions to provide materials.

[10] The Applicant did not attend the hearing in Brisbane on 19 October 2012. Immediately following the hearing my Associate advised the Applicant as follows:

“As you are aware the matter U2012/5586 was listed for hearing today at 9am in Brisbane. When you failed to attend I spoke to your husband on the phone who advised that you would not be attending the hearing.

You are required by close of business on Tuesday 23 October 2012 to either advise us in writing (by email or by lodging a notice of discontinuance form (F50, which can be found on the website)) that you are discontinuing your application OR provide us with written reasons as to why it would be a denial of natural justice for the Commissioner to now dismiss the matter. If you wish to argue that the matter should continue then medical evidence in respect to 19 October 2012 will need to be provided.

At the hearing today (19 October 2012) the Commissioner admitted the evidence and the submissions of the Respondent employer as had been provided to you earlier – the submission and the statement of Mr Curley with attachments. The Commissioner did not admit at this stage the additional materials provided by the Respondent.”

[11] On Tuesday 23 October 2012 the Applicant replied as follows:

“I was unable to attend on Friday due to a panic attack, I can provide a medical certificate.

My doctor has requested that due to my panic attacks am I able to have my husband Wayne McKenna represent me? If permission is granted my doctor can provide or complete the necessary paperwork to confirm that due to panic attacks I could not represent myself. I am not in a financial situation to pay for legal representation like Home Theatre Group.

As Wayne is also aware of what has transpired I would be comfortable with his representation.

If this option is not available to myself I have no other option than to withdrawal from the hearing.”

[12] On Tuesday 23 October 2012 my Associate replied as follows:

“I refer to your email of Tuesday 23 October 2012.

The Commissioner notes that you were unable to attend the hearing on Friday due to a panic attack and that you can provide a medical certificate but have not yet done so.

If permission was granted for your case to proceed then your case has no capacity to be successful unless your evidence is able to be tested. Your evidence is the main material you have put forward in support of your case. Therefore you would need to be present in person and be cross examined by the representative for Home Theatre Group.

It appears from you email that you wish to withdraw or discontinue your application unless you can proceed with the case without having to be present and be available for cross examination.

Therefore, could you please confirm by return email whether you wish to withdraw or discontinue your application.”

[13] On Thursday 25 October 2012 my Associate wrote further as follows:

“I refer to my correspondence of 23 October 2012 to which I have not yet received a response.

Unless you provide contrary advice or advice that you wish to withdraw or discontinue your application by close of business on Friday 26 October 2012, the Commissioner will act on your advice on 23 October 2012 that you are not willing or able to appear in person so that your evidence can be cross examined and will issue a decision in the matter on that basis.”

No response was received. Given the history of this matter and the fact that the Applicant has on a previous occasion withdrawn the matter and then sought to have it reinstated I do not consider that it would be fair to all parties or appropriate to delay the matter further. I therefore will proceed to determine the matter on the basis that the Applicant is not available for cross examination and that the Applicant was the sole witness put forward by the Applicant in support of her case.” 2

...

“[25] The Applicant alleges that the workplace culture was one in which communications of a personal nature which would normally be regarded as inappropriate between work colleagues were commonplace and tolerated. The evidence of the Respondent in some respects supports the allegations of the Applicant. The evidence also does not clearly demonstrate that the Applicant was guilty of fraud or financial mismanagement. The evidence does not clearly demonstrate that the Applicant failed to appropriately record annual leave. There is nothing to adequately respond to the defence offered by the Applicant in writing to the Respondent in respect to these matters. The evidence suggests that the boundaries between work and personal life in the workplace were unclear. The evidence does not suggest that the Applicant was solely responsible for this failing.

....

[27] I do have some concerns about the fairness of the process of the termination. The evidence of the Respondent demonstrates that the Applicant repeatedly advised the Respondent that she was not able, for medical reasons, to respond to the allegations made against her. The Respondent did not provide the Applicant with adequate time to respond before making the decision to terminate her employment in these circumstances. However, despite the very long period of time which has now elapsed and the opportunities provided, the Applicant as part of the process around this Application has not provided an adequate response to a number of the allegations. In particular the Applicant has not provided an adequate response to the allegations concerning the inappropriate emails. For the reasons explained earlier I do not regard the other allegations as being adequately established by the Respondent.” 3

...

“[31] The evidence shows that the Respondent did not have a reasonable basis on which to conclude that the Applicant’s conduct in respect to recording of annual leave and financial matters justified dismissal. There was no evidence of any proper investigation of these matters prior to the termination and there was no proper opportunity for the Applicant to respond to the allegations.

[32] The evidence suggests that the Respondent did have reasonable basis to conclude that the disparaging emails sent by the Applicant caused serious and imminent risk to the reputation of the employer’s business. In the absence of the evidence of the Applicant I must accept the evidence of the Respondent. That evidence is sufficient to satisfy me that the Respondent did have a reasonable basis to conclude that the disparaging emails sent by the Applicant caused serious and imminent risk to the reputation of the employer’s business. Pursuant to Regulation 1.07(2)(b)(ii) this is serious misconduct. Regulation 1.07(4) does not apply in this circumstance.” 4

[4] The parties agreed to the following process to resolve the costs application.

“1. The matter will be dealt with “on the papers” without the need the parties to incur the costs of a further hearing. The parties are at liberty to apply for a hearing should that be deemed necessary following receipt of materials provided application is made prior to 4 December 2012.

2. The Applicant to provide any information about the reasons for her absence from the proceedings on 19 October 2012 including any medical evidence she wishes to provide by 16 November 2012; noting that the Applicant is able to provide additional material in response to the Respondent’s submissions if necessary.

3. The Respondent to provide its submissions in support of the application for costs by 23 November 2012.

4. The Applicant to provide any response to the submissions by 30 November 2012.

5. If the Applicant raises new matters the Respondent may further reply by 4 December 2012.

6. The Commissioner will then issue a decision.”

[5] The relevant section of the Act is as follows:

“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.”

[6] The Application is made pursuant to Section 611(2)(a).

[7] The relevant parts of my original decision quoted earlier demonstrate that there is no basis to assert that the Application was made without reasonable cause. In fact I found that in respect of some of the matters relied upon by the employer to justify the termination the Respondent did not have a reasonable basis to conclude that these matters justified termination.

[8] The Respondent argues that the Applicant initiated the proceedings vexatiously to gain a collateral advantage or alternatively to harass or embarrass the Respondent.

[9] The Respondent argues that the collateral advantage sought by the Applicant was not in relation to a remedy available under the Act. In support of this the Respondent argues that on a number of occasions the Applicant advised Mr Cooper on behalf of the Respondent that she only wanted what she believed was owed to her. Effectively the Respondent alleges that on a number of occasions the Applicant offered to settle her unfair dismissal claim if matters such as payment of medical expenses, telephone account, bonus payment and annual leave payments were made by the Respondent. The Respondent also alleges that the Applicant suggested that the witness statements in the unfair dismissal matter could be embarrassing to the Respondent and to herself and that it would be better if the matter was resolved by the payment of her claims in respect to medical expenses, telephone account, and bonus payment.

[10] The Respondent also alleges that the Applicant provided copies of her submission in the unfair dismissal proceedings to a number of other employees of the Respondent and to Mr Curley’s former wife. The Respondent alleges that this was designed to embarrass Mr Curley.

[11] When the Applicant initially withdrew her unfair dismissal claim she cited a reason for doing so was that she had found a media source that was interested in her employment with the Respondent.

[12] The Respondent alleges that the reinstitution of the unfair dismissal claim coincided with a decision by the ANZ Bank to reverse certain bpayments made by the Applicant from accounts owned by the Respondent to credit cards owned by the Applicant or her husband. The Applicant cited these actions as a reason for her desire to reopen proceedings. The Respondent alleges that the Applicant has told Mr Curley that she was not going to stop until she had the $15,000 refunded.

[13] The Respondent says that these matters demonstrate that the predominant purpose in instituting the proceedings is for the collateral advantage of leveraging a negotiating position in relation to the annual leave claim, the bonus claim, the medical expenses, the mobile phone and the bpayment reversals claim.

[14] The Respondent alleges in the alternative that the predominant purpose was to harass or embarrass the Respondent. The Respondent cites the Applicant’s intention to pursue media interest and the provision of her submission to a number of other employees and Mr Curley’s former wife.

[15] The Respondent also cites the lack of genuine desire to pursue the unfair dismissal claim. In particular the Respondent refers to the Applicant’s stated desire to move on, the Applicant’s tardiness in providing materials and failure to attend the proceedings on 19 November 2012 without prior notice. The Respondent argues that no weight should be given to the medial certificate dated 14 November 2012. The Respondent suggests that the medical certificate is in response to the application for costs and did not allow the medical practitioner to make a contemporaneous consideration of the Applicant’s health position.

[16] The Applicant provided a medical certificate for 19 October 2012, the day of the hearing, and also provided a letter from her medical practitioner. The medical practitioner is of the view based upon the Applicant’s medical history that it was feasible to expect that the Applicant would have a panic attack if required to attend court proceedings. The practitioner stated that it would not be in the Applicant’s best health interests to attend court proceedings. The medical certificate stated that the Applicant attended on 14 November 2012 and that the Applicant reported acute panic attack on 19 October 2012 and that this was consistent with her medical history.

[17] The Applicant provided a submission in the form of a statement from her husband Wayne McKenna. Much of the material is not relevant to the costs application in that it is concerned with the merits of the matters which led to the Applicant’s termination. However, the statement does confirm that the Applicant is suffering from ongoing illness which prevents her from responding and prevented her from participating in the hearing on 19 October 2012. Mr McKenna confirms that he had direct knowledge of these matters. Mr McKenna states that the Applicant attends her medical practitioner regularly. The Applicant is prepared to provide further medical evidence if required provided this is not at her cost. Mr McKenna confirms that the Applicant had done a lot of preparation work for the case prior to 19 October 2012.

[18] It is commonplace for parties in unfair dismissal matters to make proposals to each other about settlement. It is also commonplace in unfair dismissal matters for there to be other claims and counter claims arising from the employment relationship and particularly in respect to alleged outstanding entitlements or overpayments or expenses. Failure to pay entitlements may be a relevant consideration in determining whether or not a termination was unfair notwithstanding the fact that restitution for such matters is not a part of the available remedy. Often unfair dismissal disputes do not get resolved unless other outstanding claims and counter claims arising from the employment relationship are also resolved. On some occasions an employee will be prepared to resolve an unfair dismissal claim without any monetary compensation. They may only be seeking to rectify a perceived hurt or damage to their reputation arising from the termination process. The remedies sought in these circumstances might be described as collateral but they are not improper and do not make the pursuit of the Application vexatious.

[19] Given that I have found that the Application was not without merit I cannot find that persistent offers by the Applicant to settle the matter on the basis that other alleged outstanding entitlement claims were resolved is using the Application and the proceedings for a collateral and improper purpose. Proceeding for a collateral purpose does not in itself make the proceeding vexatious. There has to be some abuse of process or improper purpose involved. In the circumstances of a case which I have found is not without merit I have no reason to believe that the Applicant was not genuinely pursuing an unfair dismissal remedy. I accept that the matter may have been resolved to her satisfaction if other collateral matters related to the employment relationship had been resolved. In the circumstances of this case I cannot conclude that the predominant purpose in instituting the proceedings was to gain a collateral or improper advantage. In these circumstances her pursuit of these collateral matters cannot make pursuit of an otherwise meritorious claim vexatious.

[20] I do not accept that the use of media exposure or the threat of the use of media exposure makes a claim for unfair dismissal vexatious. This would not be the first or the last unfair dismissal claim where feelings run high on both sides. Employers on occasion will use the media to draw attention to their claims of unmeritorious actions by an employee; and employees and unions will on occasion use the media to draw attention to their claims of unfair treatment. Such actions do not make a claim vexatious.

[21] I do not accept that there is evidence which establishes that the claim was initiated primarily to harass or embarrass the Respondent. Again it is not unusual for parties to seek to embarrass each other in the course of industrial proceedings. However, given that I have found the claim is not without merit I do not accept that actions which may have been designed to embarrass the Respondent or put some pressure onto the Respondent mean that the making of the unfair dismissal claim was vexatious.

[22] It is the making of the claim not its prosecution which must be vexatious. The actions alleged by the Respondent occurred after the making of the claim and in most cases significantly after the making of the claim. This makes it more difficult to establish that those alleged actions render the making of the claim vexatious in circumstances where it cannot be established that the claim is without merit.

[23] It is not uncommon for parties to fail to make submissions on time especially when the party is not represented. I do not regard this as evidence that the Applicant is not genuine about pursuing the claim.

[24] The Applicant consistently referred to illness, which she alleges is linked to the behaviour of the Respondent, as the reason why she was unable to respond to the allegations made by the Respondent and were given as the reasons for the termination. The Applicant did make extensive submissions in support of her Application for unfair dismissal remedy. This is strong evidence that she had a genuine desire to pursue her claim.

[25] The Applicant explained on the morning of the hearing on 19 October 2012 that she was unable to attend due to panic attack. This was reinforced in correspondence in the subsequent days which I quoted in my earlier decision. In all of the circumstances I find this to be a reasonable explanation.

[26] I have no reason to doubt the medical certificate. The Applicant’s medical practitioner confirms that the Applicant was suffering from anxiety related to her court case process earlier in the year. The medical practitioner considered that an acute panic attack related to a further court case was consistent with the applicant’s medical history. The medical practitioner advised that the Applicant should not continue with such court appearances. Given that I advised the Applicant that she would have to appear as a witness if she wished to continue with her case and that I subsequently dismissed the Application because she did not indicate she was able to appear, there was no reason why the Applicant would have visited her medical practitioner to get a medical certificate for 19 October 2012. It is understandable that she only proceeded to get the medical certificate when the Respondent lodged the application for costs.

[27] I am satisfied after considering all of the submissions and the circumstances that the Applicant has not “made the application vexatiously or without reasonable cause”.

[28] In coming to my decision I have had regard to the submissions made by the Applicant employee and the Respondent only to the extent that they are relevant to the costs application.

[29] I dismiss the application for costs.

COMMISSIONER

 1   [2012] FWA 9309.

 2   [2012] FWA 9309, at paragraphs 8 - 14.

 3   [2012] FWA 9309, at paragraphs 25 and 27.

 4   [2012] FWA 9309, at paragraphs 31 and 32.

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