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Each party to a proceeding at Fair Work Australia will usually bear its own costs. Occasionally, one party may be required to pay the costs of the other party. This may be where, for example, a representative causes costs to be incurred to the other party because of an unreasonable act or omission. G. Dircks v JimRoy Pty Limited [2009] AIRCFB 679 is one such case.
In that case, the employee (Vukadinovic) was dismissed because she had lied to her employer on numerous occasions. Most seriously, she said her parents had died and requested compassionate leave when they in fact had not (although her father later did die).
The employee claimed unfair dismissal, and the subsequent conciliation failed. The applicant elected to proceed to arbitration. Her adviser (Mr Dircks) wrote to the respondent (JimRoy) and requested evidence indicating that his client had lied.
JimRoy served its material in opposition to the application on 18 November 2008. Two days later, Mr Dircks said in a telephone conversation to JimRoy’s lawyer that he could not dispute that his client had lied, but that honesty was not “a requirement of her employment”. He pressed for a settlement of 5 weeks’ pay. This request was not agreed to and Mr Dircks ceased to act for Ms Vukadinovic on 1 December 2008. The matter was then discontinued.
JimRoy applied for costs and succeeded. The employee and her representative were ordered to pay the employer’s costs, and Mr Dircks appealed. The Full Bench reduced his liability to the period in which he knew of the applicant’s dishonesty. It said that once Mr Dircks knew that his client was lying, he “should have taken immediate steps to ensure the application went no further”. Extracting what leverage he could in the face of the weakness of his client’s case was an unreasonable act or omission justifying an award of costs under section 658(4)(b) of the Workplace Relations Act (now section 401(1)(b) of the Fair Work Act).
HR Tips
• Costs will only be awarded in very limited cases - more than just failure is required.
• That said, applicants with weak cases should be put on notice that costs may be sought against them if they elect to proceed beyond conciliation in a case with no reasonable prospects of success. This could have the desired ‘chilling effect’ of deterring an unmeritorious claim.
Michael Whitbread
Lawyer
Australian Business Lawyers
michael.whitbread@ablawyers.com.au
NOTE: This is for information purposes only.
It does not purport to be comprehensive or to render legal advice.
