RNTT Pty Ltd v Obuchowski
[2019] FCCA 1376
•19 March 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| RNTT PTY LTD v OBUCHOWSKI | [2019] FCCA 1376 |
| Catchwords: INDUSTRIAL LAW – Application for the enforcement of a costs order made by the Fair Work Commission – application for pecuniary penalty – where the amount owed by the Respondent is paid – the Court declines to order penalty – application dismissed. |
| Legislation: Fair Work Act 2009 (Cth), ss.400A, 546, 566, 570, 611 |
| Applicant: | RNTT PTY LTD |
| Respondent: | JOAN OBUCHOWSKI |
| File Number: | ADG 412 of 2018 |
| Judgment of: | Judge Street |
| Hearing date: | 19 March 2019 |
| Date of Last Submission: | 19 March 2019 |
| Delivered at: | Adelaide |
| Delivered on: | 19 March 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr B Duggan |
| Solicitors for the Applicant: | DW Fox Tucker Lawyers |
The Respondent appeared in person
ORDERS
The application is dismissed.
DATE OF ORDER: 19 March 2019
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADG 412 of 2018
| RNTT PTY LTD |
Applicant
And
| JOAN OBUCHOWSKI |
Respondent
REASONS FOR JUDGMENT
This is an application within the Court’s jurisdiction under s 566 of the Fair Work Act 2009 (Cth) (“the Act”) in which the applicant has brought proceedings seeking enforcement of an order made by the Senior Deputy President of the Fair Work Commission on 7 September 2018 for the payment of costs by the employee respondent to these proceedings to her employer in the sum of $21,854.78. The order included a term that the amount is to be paid within 30 days.
The proceedings that were brought seek an order from the Court for the enforcement of payment of the amount ordered in the Fair Work Commission as well as an order for interest and an order for a pecuniary penalty under s 546 of the Act based on the provisions of s 611(3) of the Act. The applicant also seeks an order for costs in respect of the steps taken for enforcement pursuant to s 570 of the Act. The affidavit read in support of the application by the applicant identifies reasons by which the Fair Work Commission found it was appropriate to make an order for the payment of costs, notwithstanding the particular statutory provisions that applied to the Fair Work Commission in s 400A and s 611 of the Act.
The application for costs that was made was tendered in Court and included an itemised schedule of costs calculated in accordance with Schedule 3.1 of the Fair Work Regulations 2009 (Cth). It is apparent on a fair reading of the Senior Deputy President’s reasons that the President accepted that the costs should be calculated in accordance with the Schedule in the sum identified in the application and it is apparent that the order was made on the same date as the reasons and reflects a quantification consistent with item 4 in the application for costs.
While it is the case that the Court has powers under which it can take steps to permit the further enforcement of costs orders, including awarding interest, these are discretionary matters and it is apparent from the evidence of the respondent that the amount the subject of the order of the Fair Work Commission has been paid.
The applicant submitted that the failure to pay in the circumstance of the present case is one which the Court should regard as engaging the Court’s powers under s 570 of the Act, notwithstanding the general rule that there should be no order for costs in proceedings under the Act.
The circumstances of the present case are ones where an employee brought a claim against a respondent unsuccessfully in the Fair Work Commission. The scheme of the Act is to facilitate the pursuit of rights by employees. The principle in respect of no order as to cost should not lightly be departed from. It is not necessary in the circumstance of the present case to determine whether or not the order made under s 400A and s 611 of the Act is an order that would have been made had such issues been raised before this Court. It is relevant to take into account that it was an employee seeking to pursue her employment rights under the Act that gave rise to an exercise of power in the Fair Work Commission making an adverse costs order against her. That is clearly out of the ordinary and is not something that should ordinarily occur as employees are entitled to bring proceedings under the Act without a costs consequence.
In order to enforce the costs order made it is necessary for an order to be made by this Court. In that sense all enforcement proceedings are ones that require steps to be taken to permit enforcement where the order has not been complied with. That is not of itself enough to justify the making of a costs order under s 570 of the Act. There should be particular conduct identified to satisfy the requirements of s 570 of the Act.
Mr Duggan of counsel on behalf of the applicant submitted that the respondent was able to pay the full amount shortly before the first return date in these proceedings and, whilst not permitted to explore the matter, sought to take issue with the assertion of financial hardship by the employee in paying the amount.
The fact that an employee is required to pay an employer an amount in costs in the sum of $21,854.78 is a matter which of itself speaks of potential burden on a person the subject of the order. Regardless of whether there was any financial hardship, it is not appropriate to make a costs order under s 570(2) of the Act merely because costs have been incurred in seeking to enforce an order made by the Fair Work Commission. The Court does not accept that the respondent failing to pay prior to the return date constitutes an unreasonable act or omission that caused the other party to incur costs, because a necessary step for the applicant to enforce the order was to bring the proceedings before this Court. The refusal to pay, even if there was not a degree of financial hardship, is not of itself something, in circumstances where the employer has obtained an order against the employee, the Court would be satisfied that it is the employee’s unreasonable act or omission that has caused the employer to incur costs where it is necessary in any event to obtain the benefit of an order from this Court to have an enforcement costs order. The applicant has failed to establish the requirements of s 570(2) of the Act and accordingly, there can be no departure from the principle in s 570(1) of the Act that each party should pay its own costs.
The application that was brought before the Court also sought a penalty against the employee under s 546 of the Act for the failure to pay the costs order ordered by the Fair Work Commission on the basis that it constituted a breach of a term under s 611(3) of the Act. The term in that regard was said to be the requirement for payment within 30 days. It is not appropriate for the Court to use penalty powers under s 546 of the Act to add to the burden of costs on an unsuccessful employee except in exceptional circumstances.
Further, it is not appropriate to bring enforcement proceedings seeking a penalty in respect of the obtaining of a costs order merely because an employee has not paid the same. The inclusion of the relief for penalty in the proceedings that were instituted by the applicant was not appropriate and should not have occurred.
Provisions of the Act, whilst providing significant teeth to ensure compliance with the orders of the Fair Work Commission, are not intended to impose unfair burdens on employees who might be the subject of an adverse costs order. It was not appropriate for the applicant to include in the pursuit of these proceedings a request for a penalty. Indeed, the request for penalty must have had some impact on the respondent in determining to make the payment prior to the return date before the Court today. That is not a permissible reason for these types of proceedings to include such an order for penalty where an employer is pursuing enforcement of a costs order against an employee.
The Court has taken into account the principles and factors that are relevant to whether a penalty is appropriate and in the finding of a penalty. The Court is not satisfied that this is an appropriate matter in which the Court would exercise any power to impose a penalty. For reasons the Court has just given no such relief should have been sought in this application. The seeking of relief that is not appropriate is a matter that can or in future may well be taken into account where a heavy-handed approach has been adopted by an employer against an employee. The Court regards this pursuit of relief in the present case as heavy-handed and inappropriate. Accordingly, the Court finds no penalty is appropriate.
Further, in the circumstance of the present case the Court is not satisfied that requirements of s 570 of the Act have been met. For the reasons given above, it is not the case, that in enforcement proceedings of an order made by the commission against an employee, that it should follow as of course that an order should be made for the payment of the moving party’s costs where that moving party is the employer.
In the circumstance of this case the Court finds there is no engagement of s 570(2) of the Act and even if there had been, the Court would as a matter of discretion decline to make any adverse order against the employee in the circumstance of the present case. Accordingly, the application dismissed.
I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Judge Street
Date: 31 May 2019
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