DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Elizabeth Mitchell
v
Kellogg Brown & Root Pty Ltd T/A KBR
(U2016/8691)

Application for costs pursuant to section 611 of the Fair Work Act– costs awarded.

Introduction

[1] This is an application by Kellogg Brown and Root Pty Ltd T/A KBR (KBR) seeking an order for costs against Ms Elizabeth Mitchell pursuant s.611 of the Fair Work Act 2009 (the Act). The application is made in the context of an earlier application by Ms Mitchell, claiming a remedy for an alleged unfair dismissal pursuant to s.394 of the Act. That application was dismissed on 25 October 2016. 1

[2] Ms Mitchell was dismissed by KBR on 15 July 2016. KBR contended that the dismissal was due to Ms Mitchell’s role becoming redundant. Ms Mitchell submitted that the redundancy was not genuine within the meaning of s.394 of the Act as:

● the work that she performed is now being performed by others;
● she was not properly consulted; and
● she should have been offered an alternative role as an Administrative Specialist/Contracts Administrator.

[3] In my decision on the substantive matter I found that:

“[10]…the dismissal was a genuine redundancy pursuant to s.389 of the Act, and accordingly Ms Mitchell has not been unfairly dismissed within the meaning of s.385 of the Act.”

Submissions on Costs

[4] In relation to their costs application, KBR submitted that:

● the Employer Response form submitted prior to the conciliation indicated that the dismissal was a case of genuine redundancy;
● at the conciliation held on 7 September 2016, Ms Mitchell was informed that that role of Administrative Specialist/Contracts Administrator referred to in her application did not go ahead and was not filled;
● on 4 October 2016, Ms Bronwyn Benson sent Ms Mitchell a letter explaining that as her termination was a case of genuine redundancy, it was unlikely her application would be successful and that KBR would rely on that letter in recovering costs against her should she continue with the claim;
● the fact that KBR did not go ahead with the role of Administrative Specialist/Contracts Administrator was reiterated in KBR’s submissions dated 6 October 2016;
● on 17 October 2016, Ms Mitchell emailed Ms Benson to confirm that KBR would not pursue costs against her should she discontinue her application. Ms Benson advised that KBR would not pursue costs should she decide to discontinue prior to 19 October 2016, as costs would then be accrued for travel to Adelaide for the hearing. This email indicated that Ms Mitchell was aware that her application had no reasonable prospect of success, and she understood the correspondence sent to her on 4 and 6 October 2016;
● at the determinative conference held on 20 October 2016, Ms Mitchell said she believed the Administrative Specialist/Contracts Administrator role had been filled by a person returning from maternity leave. KBR disputed that Ms Mitchell was not aware that KBR did not go ahead with this role as it was made clear during the conciliation and again in the submissions filed by KBR on 6 October 2016; and
● had Ms Mitchell read through the evidence provided to her on 6 October 2016 she should have been aware her application had no reasonable prospect of success.

[5] Ms Mitchell’s submissions relevant to the costs application are:

● on October 2016, Ms Mitchell received a letter from Ms Benson which stated that the KBR would pursue costs should she proceed with her application. Ms Mitchell perceived this to be intimidating and threatening;
● Ms Mitchell felt financially threatened by the letter and contacted my associate to enquire about the process of discontinuance;
● Ms Benson responded to Ms Mitchell’s email on 17 October 2016, advising her that should she discontinued the matter before the hearing, KBR would not pursue costs; and
● Ms Mitchell considered the matter further and decided to proceed with her application, as she believed that KBR has breached its own internal protocols, that the redundancy was not justified and wanted an independent assessment of the proceedings.

The power to award costs

[6] The power to award costs is discretionary and subject to specified statutory prerequisites. The presumption of the Act is that each party bears their own costs. However, costs may be awarded where the Commission is satisfied that the unreasonable act or omission of a party, in connection with the continuation or conduct of the matter, has caused the other party to incur costs.

[7] Section 611 of the FW Act provides as follows:

“FAIR WORK ACT 2009 - SECT 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 of the 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).”

[8] The meanings of the terms ‘vexatiously’ and ‘without reasonable cause’ were discussed in Church v Eastern Health. 2 The Full Bench in that decision said the question of whether an application was made vexatiously looks to the motive of the applicant in making the application. An application is made vexatiously where the predominant purpose is to harass or embarrass the other party or to gain a collateral advantage.3

[9] The term ‘without reasonable cause’ is not enlivened simply because a party’s argument proves unsuccessful. The test is whether the application (or in this case position adopted) by the party should not have been made (or in this case taken). In Kanan v Australia Postal and Telecommunications Union 4 Justice Wilcox described the test as:

“whether upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success…..where on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may be properly said that the proceeding lacks a reasonable cause.”

[10] On the evidence before me, I do not believe that Ms Mitchell had an ulterior motive in pursuing her unfair dismissal application. Ms Mitchell was aggrieved by the decision to terminate her employment and clearly wanted to prosecute her unfair dismissal application. On that basis I do not find that the position adopted by Ms Mitchell was vexatious.

[11] In considering whether Ms Mitchell pursued her application ‘without proper cause’ an assessment needs to be made as to whether the application had no reasonable prospects of success, and if objectively, that fact should have been reasonably apparent to Ms Mitchell.  5

[12] In the s.394 decision, I concluded as follows:

“[7] KBR submitted that the dismissal was the result of the need to reduce costs as a result of declining contract awards, particularly in the resources sector. Ms Mitchell contended that aspects of her role continued to be performed. This is not disputed by KBR, Ms Mitchell’s work was undertaken by two existing employees after her departure. The redistribution of work to existing employees is not inconsistent with the job no longer being required to be performed by anyone because of changes in the operational requirements.6 I find that the requirements of s.389(1)(a) of the Act have been met.

[8] KBR is required to meet the consultation obligations in any applicable modern award or enterprise agreement. It was not suggested that Ms Mitchell’s work is covered by an Agreement. There was debate as to whether Ms Mitchell’s role was covered by the Clerks – Private Sector Award 2010 (the Award). KBR contended that it was covered, and Ms Mitchell argued that she was not covered. Having reviewed Schedule B – Classifications of the Award, I am not convinced Ms Mitchell’s role was covered by the Award however, the employer’s consultation processes appears to meet the requirements of clause 8.1 of the Award. I find that the consultation requirements in s.389(1)(b) of the Act have been met.

[9] From the evidence before me, the employer attempted to redeploy Ms Mitchell to another role. Whilst there is a debate between the parties on Ms Mitchell’s suitability for the ‘Team Assistant’ role, ultimately that role was withdrawn and not filled, as it was not required. On that basis, it would not have been reasonable in the circumstances for Ms Mitchell to be redeployed in that role. There was no suggestion that any other roles were available. I find that the redeployment obligations in s.389(2) of the Act have been met.”

[13] Few facts in this matter were contested. The only aspect of the Respondent’s case that was not known to Ms Mitchell at the time she lodged her application, was that the position of Administrative Specialist/Contracts Administrator was withdrawn two weeks’ after it was advertised, after the Respondent’s failed to secure a tender upon which that role relied.

[14] KBR submitted that during the Conciliation Conference held on 7 September 2016, Ms Mitchell was made aware that the Administrative Specialist/Contracts Administrator role:

“…did not go ahead and was not filled. Mrs Mitchell believed the role had been filled by someone returning from maternity leave, who was part-time. Mrs Mitchell argued as she was part-time she could have done this job. Kylie Demianova responded to this comment by explaining that the role had not gone ahead and the person returning from maternity leave had returned to the role she held before she went on maternity leave.”

[15] This point was also contained in KBR’s outline of submissions filed on 6 October 2016.

[16] On 4 October 2016, KBR advised Ms Mitchell in writing that it believed her case would not succeed and that it would seek to recover costs should her claim fail.

[17] The only issue contested at the determinative conference was the decision by KBR not to award Ms Mitchell the alternative role of Administrative Specialist/Contracts Administrator. As it turned out this role was withdrawn. Whilst this information was not available to Ms Mitchell at the time of her dismissal, she was informed of this development at the conciliation on 7 September 2016 and in the submissions dated 6 October 2016.

[18] In my view, on 6 October 2016, Ms Mitchell, having been informed of the case against her should have reached the conclusion that her application did not have any reasonable prospects of success.

[19] This finding enlivens my discretion to award costs incurred by KBR after 6 October 2016, which I exercise based on the failure of Ms Mitchell to discontinue her application after having full knowledge of the case against her, and having been warned that a failure to discontinue her application would result in KBR’s pursuit of costs.

[20] In my view it is appropriate to award the expenses incurred by KBR in having its representative travel to the hearing, this was an additional cost that would not have otherwise been incurred. The same cannot be said of the wages of Ms Benson and Ms Demianova.

[21] Accordingly I exercise my discretion to award costs in the amount of $1583.00 which will be payable within 28 days of this decision.

COMMISSIONER

 1   [2016] FWC 7740.

 2   [2014] FWCFB 810.

 3   Ibid at [29].

 4   [1992] FCA 539

 5   [2011] FWAFB 4014 at [10].

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