Ms Sharon Collins v STL Holdings Pty Ltd T/A Sargent Rental and Maintenance
[2014] FWC 5177
•8 AUGUST 2014
| [2014] FWC 5177 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Sharon Collins
v
STL Holdings Pty Ltd T/A Sargent Rental and Maintenance
(U2014/3513)
SENIOR DEPUTY PRESIDENT RICHARDS | BRISBANE, 8 AUGUST 2014 |
Summary: application for costs - minimum employment period - facts reasonably known by the Costs Respondent - s.400A - unreasonable act in not discontinuing by accepting settlement offer - s.611(2) - without reasonable cause - costs awarded.
[1] On 22 May 2014 I issued a decision in [2014] FWC 3295 (“the prior decision”) in which I dismissed an application by Ms Sharon Collins (“the Costs Respondent”) made under s.394 of the Fair Work Act 2009 (“the Act”).
[2] Ms Collins had been seeking an unfair dismissal remedy in relation to the termination of her employment by STL Holdings Pty Ltd T/A Sargent Rental and Maintenance (“the Costs Applicant”).
[3] The Costs Applicant had pressed three objections to the application proceeding. These three objections were as follows:
- The Costs Respondent did not serve the minimum period of employment (s.382(a) and s.383 of the Act);
- The Costs Respondent (for purposes of s.382(b) of the Act) was not covered by a modern award or enterprise agreement, and the sum of the Costs Respondent’s annual rate of earnings was more than the high income threshold; and
- The application was filed out of time (for purposes of s.394(2) of the Act).
[4] In my prior decision I only determined the first of the three objections above. Having determined that the Costs Respondent had not served the minimum employment period, and thus was not a person protected from unfair dismissal under the Act, there was no requirement to determine the remaining matters. Consequently, the extent to which the Costs Respondent was exposed to the further two objections was not examined.
[5] Following the publication of the prior decision, the Costs Applicant has made an application for costs under s.611 of the Act and s.400A of the Act, which I must now determine.
[6] Section 611 of the Act provides as follows:
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).
[7] Section 400A of the Act provides as follows:
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.
[8] The background to this matter is best set out be replicating the substantive section of the prior decision itself:
“The Applicant claimed that:
My duration of employment exceeds the minimum period; having served six months and 10 days accounting for the cessation of my paid employment on 17 December 2013; I never received written notification from the Respondent notifying me otherwise [...].
The evidence of Ms Zeona Rudd, who was the Multi Site Manager - Dysart and Moranbah for the Respondent at the time, was that she attended a “termination meeting” with the Applicant on 10 December 2013. Those present at the meeting also included Mr Robert Brooker, Chief Branch Operations, and Ms Megan Rush, Human Resources Manager.
I add at this point that the Applicant did not seek to cross examine the evidence of Mr Brooker and Ms Rudd and their evidence was admitted uncontested as a consequence.
Ms Rudd claimed that in the course of the meeting it was explained to the Applicant that her employment was being terminated within her probationary period in accordance with her employment contract. It was further communicated that the termination was to take place on 10 December 2013 with immediate effect and that she would be paid in lieu for her notice period.
It was further claimed by Ms Rudd that the Applicant was provided with a letter of termination dated 10 December 2013. That correspondence read relevantly as follows:
We confirm that we have decided not to continue your employment beyond your probationary period. As a result, your employment will end today, Tuesday, 10 December 2013.
It was said by Ms Rudd that the Applicant refused to sign the letter of termination.
Mr Brooker’s evidence was to the same effect as that of Ms Rudd. Mr Brooker added that there was some effort to explain to the Applicant that she was being paid in lieu of any requirement to work out her notice period.
Ms Rush’s evidence corroborated the unchallenged evidence of Ms Rudd and Mr Brooker.
I have no reason to question the evidence of Ms Rush, Ms Rudd or Mr Brooker. Ms Rush for her part gave evidence that was candid and professional in presentation and grasp of detail and had no hallmarks of fabrication whatsoever.
My view in this regard is bolstered by the correspondence between the Applicant and Ms Rush subsequent to 10 December 2013. On 11 December 2013 at 9:11 AM, the Applicant e-mailed Ms Rush and referred to the arrangements for her overtime and other reimbursements to be paid alongside her final payments. The e-mail was headed, “Termination – payment of overtime and reimbursements”.
The Applicant complained therein of what she considered to be the abuse of the probationary provision within her contract, what she believed to be the absence of an opportunity to rebut the claims made against her the previous day, and her general dissatisfaction with “the way the process took place” which included not having been invited to have a support person present.
The evidence in this matter points inexorably to the conclusion that the Applicant’s employment with the employer came to an end on 10 December 2013.The actions of the employer in paying notice in lieu at that time is decisive in that respect. The subsequent email correspondence also strongly suggests that the Applicant too considered that the “process” of 10 December 2013 had brought the employment relationship to an end.
Having established the date from which the employment relationship ceased, it is next necessary to determine the date on which the employment relationship commenced.
The Applicant argues that her employment relationship commenced on 7 June 2013 - the day after she was offered the position as Branch Manager. On that day (7 June 2013), the Applicant was escorted through the site.
The Applicant also argues that the employment relationship commenced or demonstrated its continuity on 18/19 June 2013, when she performed some initial training at the request of the Respondent. The Applicant claims to have been paid for this training. The evidence of Ms Rush showed that the Applicant was indeed paid for the two days of training conducted in Brisbane.
The contract of employment was signed between the employer and the Applicant on 12 June 2013.
The contract of employment includes a heading entitled “Commencement date”. The words that follow this heading are:
Your employment will commence on a date to be advised.
In handwriting after those words is the following date:
8/7/2014
The Applicant’s Position Description states that the Applicant was to start in her position on:
08/07/13
The Applicant had also signed a Personnel Form on 22 June 2013. This Personnel Form indicated that the Applicant had completed two days of employment on 18 and 19 June 2013. The completed details on the form also establish that the “Date Employment Commenced” was 8 July 2013. The form also shows that the Applicant was entered onto the payroll on that same day (though the Applicant reasonably may not have been privy to that latter information at the time she signed the document as it was inserted in the “Office Use Only” window on the form.
Ms Rush also tended further (supplementary) evidence that concerned email correspondence between the employer and the Applicant.
By e-mail correspondence on 12 June 2013 it is evident that at that time the Applicant herself had not reached a conclusion as to “an exact start date” as she still needed at that time to discuss her circumstances with the outgoing employer. Further e-mail correspondence of 17 June 2013 shows that the employer itself was still to determine a start date for the Applicant.
Ms Rush contends that the Applicant therefore commenced her employment on 8 July 2013.
The Applicant for her part queried, though without a great deal of confidence, the genuineness of the signed Personnel Form.
Conclusion
I initially reject the Applicant’s argument, not strongly made, that her employment commenced the day following the offer of employment, which was 7 June 2013. In one email to the Commission she claimed to have been paid for that day. There is no evidence for this claim as to payment. Nor for any other days on which the Applicant visited the site for seemingly brief periods on 11 and 13 June 2013.
Circumstances such as these do not constitute the entering into by the parties of legal relations involving the performance of work and consideration. In any event, the Applicant was in no position to commence employment at such a time. The email correspondence from the Applicant to the employer of 12 June 2013 referred to above shows this to be the case.
If I accept, in the alternative, the Applicant’s date of commencement of her employment relationship with her employer as being 18 June 2013), the Applicant’s period of continuous employment with the employer was between 18 June 2013 and 10 December 2013.
This is a period of service of five-month and 23 days.
Therefore, even on the Applicant’s own evidence, the Applicant cannot be said to have completed the minimum employment period.
Notwithstanding this, my own view of the evidence set out above is that the Applicant commenced employment with the employer on 8 July 2013. There was no offer of continuing employment and acceptance of terms other than in respect of the commencement date of 8 July 2013. While payments were made for two training days in June 2013, these two days cannot affect the determination of the continuous period of employment for the purpose of establishing the minimum employment period.
The application under s.394 of the Act, therefore, must be dismissed (on either chronological scenario) as the Applicant is not a person protected from unfair dismissal under s.382 of the Act because the Applicant had not completed the minimum employment period.” 1
[9] The Costs Respondent’s argument, at its highest, was that her period of employment commenced upon her acceptance of the offer of employment on or about 7 June 2013, and when she had had an escorted tour of the work site. I found that this could not be the case as there had been no conduct at that time that could establish that an employment relationship had commenced such that the Costs Respondent’s period of service had commenced.
Costs application: consideration
[10] For the Costs Applicant’s case to succeed it must be demonstrated on an objective basis that the application for unfair dismissal remedy was vexatious or without reasonable cause for the purposes of s.611(2)(a) of the Act, or had no prospects of success for purposes of s.611(2)(b) of the Act.
[11] The Full Bench in Baker v Salva Resources Pty Ltd[2011] FWAFB 4014 (“Re: Baker”) made the following observations about s.611(2) of the Act:
- “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 prospect 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. [sic]
The concepts within s 611(2)(b) “should have been reasonably apparent” and “had no reasonable prospect of success” have been well traversed:
[12] The Costs Respondent’s arguments, which are set out above, were far from strong on the jurisdictional point as determined. If the Costs Respondent had genuinely believed she had commenced employment with the Costs Applicant on or about 7 June 2013, this sits in stark contrast to the factual position conveyed to the Costs Applicant by way of the e-mail on 12 June 2013. In that email (of which she is undeniably the author) the Costs Respondent referred to her ongoing work commitments with her then current employer (and their impact on her “start date”).
[13] I have set out above in the prior decision the case against the Costs Respondent’s claim as to having commenced employment on 7 June 2013. The email of 12 June 2013 to which I have referred read as follows:
Hi Kate
Thanks for the call, very excited at the opportunity and can't wait to get started!
This maybe something you have to run part Zac?
I was hoping to replicate my current position at $135 + Super, also the potential for a work commute vehicle?
I am also assuming that all relevant electronic equipment (PC or laptop\phone etc) will be provided? I have only briefly skimmed the document and didn't see mentioned but am sure it's a given with the commitment\24-hour accessibility of the role?
I'm quite sure it was the 18th and 19th of this month Zac had requested I join a meeting in Dysart? This will still be fine, however I will discuss with Hornery’s tonight/tomorrow morning (the directors are in Mackay most of the day) as to an exact start date, they may require me the remainder of that week for some close out’s - the rest I should be able to work with them out of hours but will confirm that you tomorrow.
[...].
[14] On 12 June 2013, the Costs Respondent had still to determine an “exact start date” given her ongoing commitments with the still current employer. By 17 June 2013 the Costs Applicant was still not aware of a start date for the Costs Respondent. I have also found that that the Applicant was dismissed from her employment on 10 December 2013, and the Costs Respondent’s own conduct at the time (evidenced by her email of 11 December 2013, as referred to in the prior decision in which the Applicant took issue with the dismissal of 10 December 2013) supports that finding.
[15] Notwithstanding these circumstances, the Costs Respondent pressed her case in the Commission.
[16] The circumstances of this case therefore enliven the jurisdiction to award costs.
Section 400A
[17] The Costs Applicant also argued that the Costs Respondent caused it to incur costs under s.400A of the Act, because of an unreasonable act in connection with the conduct and continuation of the matter. The Costs Applicant’s arguments in this regard are as follows:
1. Over the period 1 April 2014 to 12 May 2014 the Costs Applicant put the Costs Respondent on notice that her unfair dismissal application had been made without merit, she would not succeed at the jurisdictional hearing and that the Costs Applicant would be seeking costs against her should she pursue her claim.
2. From 1 April 2014 to 12 May 2014, the Costs Respondent rejected various offers of settlement.
3. The Costs Respondent was put on notice by the Costs Applicant’s solicitors from the period of 1 April 2014 to 12 May 2014 that costs would be sought in this matter as the proceedings had no reasonable cause and thus no prospects of success.
4. Despite the communications, the Costs Respondent chose to proceed with her application to a jurisdictional hearing. The Costs Respondent’s conduct was unreasonable as it was clear that her employment did not satisfy the minimum qualifying period, she earned well in excess of the high income threshold and her application had been filed out of time.
5. Further, the Fair Work Commission even brought to the Costs Respondent’s attention on 24 April 2014 through written correspondence, that the Costs Applicant had made reference to the prospect of making an application for costs in its material filed with the Fair Work Commission.
6. Based on the unreasonable acts in connection with the conduct and continuation of the matter, the Costs Applicant was forced to incur further, unnecessary legal costs.
[18] The material filed by the Costs Applicant showed that it proposed a settlement of the matter. The Costs Respondent was offered (given the various objections the Costs Applicant had raised to the application) to settle the matter on the basis that the Costs Respondent withdrew her application and each side bear their own costs to that point (as at 1 April 2014).
[19] It is enough to conclude that the Costs Respondent was abundantly aware that the continuation of the matter after 1 April 2014 would result in a costs application being sought by the Costs Applicant. The Costs Applicant’s various communications to the Costs Respondent relentlessly pointed this out over time. Regardless of the Costs Respondent’s awareness of the consequences of her actions, and notwithstanding that the Costs Respondent should reasonably have appreciated (for the reasons given earlier) that she had not met the minimum period of employment before such time as an application can be made, the Costs Respondent pressed her application.
[20] In so doing, the Costs Respondent caused unnecessary costs to the Costs Applicant for the purposes of s.400A of the Act.
Conclusion
[21] The Costs Applicant is seeking costs against the Costs Respondent pursuant to s.402, s.400A and s.611 of the Act.
[22] The Costs Applicant is seeking costs against the Costs Respondent on an indemnity basis, or in the alternative, on a party-party basis.
[23] The award of costs is a discretionary decision by the Commission. In exercising its discretion the Commission will have regard to a wide range of circumstances including the circumstances relevant to the enlivening of the jurisdiction itself.
[24] The discretion to award costs is evident in the language of s.611(2) of the Act, which in part provides as follows:
[...] 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 [...].
[25] The determination of the jurisdictional matter (whether the Costs Respondent had served the minimum period of employment) was one element within a wider set of claims and jurisdictional-type objections, the remainder of which were not determined. But in respect of the claim that the Costs Respondent had not served the minimum employment period, for the purposes of s.611(2)(a) and s.611(2)(b) of the Act, the Costs Respondent must be found, on the facts at all times known to her, to have acted without reasonable cause, and her argument for the same reason had no reasonable prospect of success (however that phrase might be re-stated).
[26] Because I have made this finding, I have not made a finding that the Costs Respondent acted vexatiously for the purposes of s.611(2)(a) of the Act. This is because such a finding is unwarranted, or at least would be a redundancy, where there is a finding that the Costs Respondent has made the application ‘without reasonable cause’. I come to this view for reason that the Full Bench of the Commission in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing [2014] FWCFB 810 (at [29]) found that the:
question of whether an application was made ‘vexatiously’ looks to the motive of the applicant in making the application [and] is an alternative ground to the ground that the application was made “without reasonable cause’ and may apply where there is a reasonable basis for making the application. [my emphasis]
[27] Arguably, an application that was made ‘without reasonable cause’ would always be exposed to the inference that the application had been motivated to “trouble and harass” the other party. But in any event, the discretion to award costs is enlivened by the findings that the Applicant acted without reasonable cause and that her argument had no reasonable prospect of success.
[28] It is also the case that the Costs Respondent, on the facts known to her about the start date for her employment and the date of her dismissal, reasonably should have accepted the offer of settlement put to her by the Costs Applicant on 1 April 2014. That offer was to allow the Costs Respondent to withdraw her application and for both sides to bear their own costs. The Costs Respondent did not accept this settlement. In so doing, disregarding the facts reasonably known to the Costs Respondent, the Costs Respondent, for the purposes of s.400A(1) caused costs to be incurred because of an unreasonable act in connection with the continuation of the matter.
[29] I reach this finding on the basis that the Fair Work Amendment Bill 2012 Explanatory Memorandum provides as follows in relation to the then new s.400A:
[...] is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under s.394 and a failure to agree to terms of settlement that could have led to the application being discontinued.
[30] I note that in respect of all the evidentiary matters - the emails of 12 June 2013, 11 December 2013 and 1 April 2014 - there is no factual dispute between the parties. In my view, these circumstances warrant that the Costs Respondent be ordered to pay the Costs Applicant’s party-party costs as they were incurred from 11 April 2014, and not earlier. I nominate this date as it is the date on which the Costs Respondent had been put on notice (in substantive terms) that she had not served the minimum period of employment.
[31] That is, from 11 April 2014, the time at which the Costs Applicant filed its substantive submissions, the Costs Respondent was apprised fully of the Costs Applicant’s argument, and must from that point reasonably have appreciated, now with abundant clarity, the difficulty of maintaining her position going forward. Reasonable minds may differ on such matters as this, so I indicate that I have exercised my discretion in this regard knowing that the Costs Applicant had put the Costs Respondent on notice at an earlier time, and the facts relevant to the serving of the minimum employment period reasonably were known to the Costs Respondent at all times. An arguable case, I concede, could be made for the date from which costs should be awarded to be earlier than that which I have stipulated.
[32] In the event that the parties cannot themselves resolve the amount to be paid within 10 working days of the date of this decision, the amount ordered to be paid will be assessed on application by the Costs Applicant to the chambers of Senior Deputy President Drake ([email protected]).
[33] An order requiring the Costs Respondent to pay an amount in costs to the Costs Applicant equal to the party-party costs from 11 April 2014 will issue along with this decision.
SENIOR DEPUTY PRESIDENT
Hearing details:
Determined on the basis of written materials
Final written submissions:
Costs Applicant - 25 July 2014
Costs Respondent - 22 July 2014
1 [2014] FWC 3295 at [9]-[39].
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