Costs in unfair dismissal applications

Previous articles by Dundas Lawyers have looked at the difficulties confronted in obtaining a costs order against an unsuccessful party in an unfair dismissal application (Application). To recap, section 611(1) of the Fair Work Act 2009 (Cth) (FWA) holds that a party to an Application, be it the complainant employee or the respondent employer, must bear its own costs in relation to a matter before the Fair Work Commission (FWC). However, there are circumstances when the other side’s costs can be imposed on a party to an Application. This article outlines these circumstances.

Legislative provisions

Section 611(2) of the FWA provides that costs can be ordered under against a party to an Application if the FWC is satisfied that:

the applicant or the respondent was acting vexatiously or without reasonable cause; or
it should have been reasonably apparent to the relevant party that they had no reasonable prospect of success.

Case law

In the recent case of Ewan Chapman v Ignis Labs Pty Ltd t/a Ignis Labs [2021] FWCFB 932, Chapman (Employee) lodged an Application under section 394 of the FWA. At the telephone conciliation stage of the original Application, an agreement was reached to settle the matter.^[1] The Employee then refused to sign the written terms of settlement.^[2]

The FWC at a subsequent mention dismissed the matter on the basis that as a settlement agreement had been reached, the Application had no reasonable prospects of success.^[3] The Employee then sought leave to appeal the FWC’s decision, lodging the appeal application with the Full Bench of the FWC (Full Bench) 335 days outside of the twenty one (21) day time limit.^[4] Thus the Employee needed permission to extend the time for lodging an appeal against the original FWC decision before he could even then seek leave to appeal the original decision. Unsurprisingly, the Full Bench refused an extension of time on the basis that:

the Employee had not provided any comprehensible explanation for the delay in lodging his appeal;
the delay was lengthy and significant;
the grounds of appeal did not disclose an arguable case of appealable error;
there was no discernible public interest in granting the appeal; and
the grant of an extension of time would cause prejudice to the employer.^[5]

Ignis Labs (the Employer) sought its costs in having to respond to the appeal application, pointing out that:

the Employee had in fact resigned;
the attempt to renege on the settlement agreement was unreasonable;
it had proposed the appeal be determined on the papers but the Employee insisted on a there being a hearing;
the Employee sent thirty-three (33) documents to the Employer, some being as long as 174 pages in length and which were largely irrelevant to the proceedings; and
the appeal never had prospects of success given the Employee had entered into a binding settlement agreement.^[6]

Taking into account these matters, the Full Bench awarded costs to the Employer and, in doing so, noted that, objectively, it should have been reasonably apparent to the Employee the appeal had no real prospects of success, thus engaging the jurisdictional prerequisite for an award of costs, bearing in mind however that the power granted under section 611 is still subject to an exercise of discretion.^[7]

The Employee was ordered to pay only some of the Employer’s incurred costs as the Full Bench did not accept that all of the claimed lawyer’s costs were necessary given the limit scope of the application, being whether an extension of time should be granted.

Takeaways

While rare, an employee will in the appropriate circumstances be ordered to pay at least some of the costs of an employer in unfair dismissal matters.

Links and further references

Further information on unfair dismissal application

If you are facing an unfair dismissal application or require advice regarding costs in such matters, contact Dundas Lawyers Gold Coast for a confidential and obligation-free discussion:

Mitch Brown
Dip.T.,BA.,LL.B.,MQLS.
Legal Practice Director – Dundas Lawyers Gold Coast Pty Ltd
Telephone: 07 5646 9174
Mobile: 0420 205 105
e: mbrown@dundaslawyers.com.au
1300 386 539 | 1300 DUN LAW

Disclaimer

This article contains general commentary only. You should not rely on the commentary as legal advice. Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

[1] Ewan Chapman v Ignis Labs Pty Ltd t/a Ignis Labs [2021] FWCFB 932, [2].

[2] Ewan Chapman v Ignis Labs Pty Ltd t/a Ignis Labs [2021] FWCFB 932, [2].

[3] Ewan Chapman v Ignis Labs Pty Ltd t/a Ignis Labs [2021] FWCFB 932, [2].

[4] Ewan Chapman v Ignis Labs Pty Ltd t/a Ignis Labs [2021] FWCFB 932, [3]; see also Fair Work Commission Rules 2013 (Cth) r 56(2).

[5] Ewan Chapman v Ignis Labs Pty Ltd t/a Ignis Labs [2021] FWCFB 932, [4]-[6].

[6] Ewan Chapman v Ignis Labs Pty Ltd t/a Ignis Labs [2021] FWCFB 932, [8].

[7] Ewan Chapman v Ignis Labs Pty Ltd t/a Ignis Labs [2021] FWCFB 932, [10], [18].