Wellington v Offermans Partners (No 2)

Jarrett J of the Federal Court of Australia considered an application by Wellington (the applicant) against Offermans Partners (the respondent) concerning alleged contraventions of the Fair Work Act 2009 (Cth). The dispute centred on the respondent's unlawful deduction of $3,200 from the applicant's final pay, purportedly to offset training costs, despite the applicant's employment being terminated by redundancy.

The court was required to determine the appropriate penalty for the contravention and to consider an application for costs. Specifically, the court had to assess whether the respondent's actions constituted an "unreasonable act or omission" for the purposes of section 570(2)(b) of the Fair Work Act, which governs the court's discretion to award costs. The respondent argued that the applicant should bear the respondent's costs on an indemnity basis from a certain date, or alternatively on the Federal Circuit Court scale, due to the applicant's rejection of a settlement offer.

In relation to the penalty, Jarrett J found that deterrence, both specific and general, was the primary objective. The court noted that making an unlawful deduction from an employee's pay is a serious matter. Despite the respondent's directors, who were legally and financially qualified, claiming a genuine belief in their entitlement to withhold the funds, the court found this difficult to accept given the clear terms of the employment contract. The contract stipulated that training costs could only be recouped if employment was terminated voluntarily or for serious misconduct within 12 months of the training costs being paid, not in cases of redundancy. Consequently, a penalty of $8,500 was imposed, payable to the applicant.

Regarding costs, the court examined the respondent's submission that the applicant's rejection of a $15,000 Calderbank offer was an unreasonable act. However, the applicant argued that the respondent's own conduct, including its untenable legal arguments and denial of liability, constituted unreasonable acts that caused the applicant to incur costs. The court found that the respondent's positions, which were based on legally flawed interpretations of the contract and legislation, were not reasonable and significantly increased the costs of the proceedings. The court also noted deficiencies in the respondent's factual assertions. Ultimately, the court found that the respondent's unreasonable acts and omissions had caused the applicant to incur costs, and it exercised its discretion to award costs in favour of the applicant.