DECISION

Fair Work Act 2009
s.789FC - Application for an order to stop bullying

Mr Justin Bailey
v
PCL Finance Pty Ltd; Illawarra Home Loans Pty Ltd T/A Illawarra Home Loans
(AB2020/119)

Application for costs.

[1] On 18 February 2020, Mr Justin Bailey (the Applicant) applied for a stop bullying order (the Bullying Application) under section 789FC of the Fair Work Act (the Act). The Applicant’s Form F72 named Illawarra Home Loans & PCL Finance (the Respondent) as his employer and claimed that he was being bullied by one of his co-workers (the Named Party).

[2] The Respondent and the Named Party were represented by Mr Chris Sheppard from RMB lawyers.

[3] During a Conference on 15 June 2020, the Applicant withdrew his Bullying Application. At this time, the Respondent made a verbal application (the Application) for a costs order pursuant to section 611 of the Act. I directed the Respondent to file with my Chambers and serve on the Applicant written submissions and documentary evidence in support of the Application by 29 June 2020. I directed the Applicant to file with my Chambers and serve on the Respondent written submissions and documentary evidence in opposition to the Application by 13 July 2020. The parties consented to the Application being determined on the materials submitted in response to these Directions.

Background

[4] On 18 March 2020, the matter was listed for Conference. At the Conference, the Applicant indicated that the behaviour that was the subject of his original complaint had recently ceased. However, the Applicant expressed the view that that there was a risk that the bullying would resume and requested that the matter be stood over for a period of time to ensure that there was no risk that he would be bullied moving forward. I stood the matter over for a month and asked the Applicant to report back to my Chambers indicating whether he believed that there was a risk of bulling continuing or recurring and whether he would like to press his Bullying Application.

[5] On 17 April 2020, the Applicant wrote to my Chambers in the following terms:

“In the last month we have started to work from home because of the Coronavirus understandably.

I have been restricted from making decisions that relate to my staff, parts of our computer system and removed from my normal work. I have had little to no contact with the management, I have called and emailed with no response. This has excluded and isolated me from my workplace. I realise we are working from home, but I have been simply removed from my role and feel abandoned. This has made me feel distressed. I received a nasty email stating I had taken stationary after being asked to work from home, I specifically asked in person before I took what I needed which I would use in my normal day to day operation. I replied to this email with no response. I also called to speak to Martin as it had surprised me but was not called back.

I have only been paid in the last few months when this issue has been brought to the attention of the FWC or mentioned in my email requesting payment.

I am doing the best I can working from home but feel anxious, stressed and nervous. Especially with the current environment with no communication from the management.

I realise this matter cannot go on forever, but may I ask for another 30-day extension?

I would feel less anxious and I feel things might escalate if this does not occur. May I also ask if in this time could we book a phone conference if needed?

I believe we are both trying to resolve the business dispute and hope we can work something out in the future.

Thanks”

[6] On 17 April 2020, the Respondent wrote to Chambers in the following terms:

“Dear Commissioner Riordan,

I have taken instructions from my clients with respect to Mr Bailey’s email below.

The Respondent’s do not consent to Mr Bailey’s application for the matter be stood over for a further 30 days. The Respondent’s wish to have the matter either disposed of, or listed for hearing.

Whilst this is not the arena in which to give or adduce evidence, the Respondent’s instruct me that Mr Bailey has been contacted on a number of occasions by their delegated employees and contemporaneous records exist that Mr Bailey has given assurances that he is fine working in the current circumstances – which are not ideal for anyone.

Further, I am instructed that Mr Bailey has been paid on time. His last payment was made on 15 April 2020 as required.

Whilst Mr Bailey is entitled to bring the current application which is before the Fair Work Commission, likewise the Respondent’s are entitled to have the matter heard without undue delay in order to bring an end to the litigation.

Accordingly, we respectfully request that the matter not be stood over any further.”

[7] After considering both emails I granted the Applicant’s request to stand the matter over for a further period of a month. I agree with the Respondent that the Applicant is entitled to pursue his application and that the Respondent is entitled to the application being resolved as quickly as possible and not subject to ‘undue delay.’ However, due to the unprecedent and ever changing context of the COVID-19 pandemic, which had disrupted the normal working conditions in the Respondent’s office, I did not believe that standing the matter over for a further period represented an ‘undue delay’.

[8] On 15 May 2020, I called the matter on for a further Conference. At the Conference, the Applicant indicated that he was still working from home but was due to return to working in the office next week. The Applicant requested that the matter be stood over for a further period. The Respondent objected to the matter being further stood over. I stood the matter over on the understanding that the Applicant would be returning to work, which would provide a clear indication of whether there was a risk that the bullying would continue.

[9] On 1 June 2020, the Applicant wrote to Chambers in the following terms:

“Dear Commissioner Riordan,

At our last conference you asked me for an email on the 1st of June.

I have now been back to work but at this point only for 4 days. (Named Party) (Sic) has only been to work for 2 of these days.

With this in mind I would like to please continue with the conference on the 17th of June 2020.

I do not feel this is unreasonable.”

[10] On 9 June 2020, I wrote to the Applicant inviting the him to withdraw the Bullying Application as he had been given appropriate time to return to the Respondent’s office and had substantially failed to do so.

[11] On 15 June 2020, I called the matter on for a Conference. During this Conference I advised the parties that I intended to issue directions and program the matter for Hearing. At the Conference, the Applicant indicated that the bullying was no longer occurring and withdrew the Bullying Application.

Brief Summary of the Respondents’ Submissions

[12] The Respondent submitted that the Applicant should be liable for a portion of the Respondent’s legal costs from the outset of the proceedings because:

● The Applicant acknowledged that bullying was not taking place at the time he filed the Bullying Application on 18 February 2020.

● The Applicant filed the Bullying Application in an attempt to harass or annoy the Respondent.

● Despite acknowledging in mid-March, mid-April, mid-May 2020 and on 1 June 2020 that bullying was not taking place (and had not taken place since 3 February 2020) and being informed that, in those circumstances the Bullying Application could not succeed, the Applicant refused to discontinue the Bullying Application and repeatedly sought adjournments and further conferences - each of which, put the Respondent to further cost.

[13] In the alternative the Respondent submitted that;

● it should have been apparent to a reasonable person in the Applicant’s position that the Bullying Application had no reasonable prospects of success. and,
● the Applicant was informed at each Conference that the Bullying Application would fail unless the bullying was continuing. and,
● in spite of this he continued to proceed in circumstances where the bullying was not occurring.

[14] Further, the Respondent submitted that throughout the proceedings the Applicant focused on ensuring that the matter was prolonged in order to ensure that he was paid in accordance with a commercial agreement between the parties.

[15] The Respondent submitted it made a ‘with prejudice save as to costs’ exchange with the Applicant on 9, 10, 11 June 2020. However, these negotiations failed because the Applicant insisting on a commercially unviable undertaking. These emails included a provision that the exchange could be used in a future application for Costs.

[16] The Respondent submitted that its costs as of 17 June 2020, were $5,086.75 and asserted that the Applicant should be ordered to pay 60% of these costs.

Brief Summary of the Applicants’ Submissions

[17] The Applicant submitted it didn’t matter if he was a contractor or an employee as he was entitled to lodge an application for a stop bullying order pursuant to 789FC of the Act because he was a worker.

[18] The Applicant contended that the Bullying Application was not vexatious as it was made in response to behaviour that could reasonably be characterised as bullying.

[19] The Applicant submitted a list of 18 instances of alleged bullying. The first of these examples was 16 December 2019 and the most recent example was 13 February 2020.

Relevant Statutory Provisions

[20] The relevant provisions in the Act are as follows:

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.

(1) 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).

789FC Application for an FWC order to stop bullying

(1) A worker who reasonably believes that he or she has been bullied at work may apply to the FWC for an order under section 789FF.

(2) For the purposes of this Part, worker has the same meaning as in the Work Health and Safety Act 2011, but does not include a member of the Defence Force.

Note Broadly, for the purposes of the Work Health and Safety Act 2011, a worker is an individual who performs work in any capacity, including as an employee, a contractor, a subcontractor, an outworker, an apprentice, a trainee, a student gaining work experience or a volunteer.

(3) The application must be accompanied by any fee prescribed by the regulations.

(4) The regulations may prescribe:

(a) a fee for making an application to the FWC under this section; and

(b) a method for indexing the fee; and

(c) the circumstances in which all or part of the fee may be waived or refunded.

789FF FWC may make orders to stop bullying

(1) If:

(a) a worker has made an application under section 789FC; and

(b) the FWC is satisfied that:

i. the worker has been bullied at work by an individual or a group of individuals; and

ii. there is a risk that the worker will continue to be bullied at work by the individual or group;

then the FWC may make any order it considers appropriate (other than an order requiring payment of a pecuniary amount) to prevent the worker from being bullied at work by the individual or group.

(2) In considering the terms of an order, the FWC must take into account:

(a) if the FWC is aware of any final or interim outcomes arising out of an investigation into the matter that is being, or has been, undertaken by another person or body—those outcomes; and

(b) if the FWC is aware of any procedure available to the worker to resolve grievances or disputes—that procedure; and

(c) if the FWC is aware of any final or interim outcomes arising out of any procedure available to the worker to resolve grievances or disputes—those outcomes; and

(d) any matters that the FWC considers relevant.

Consideration

[21] The parties agreed for the Application to be determined on the papers.

Section 611 (2)(a) - Did the Applicant make the application vexatiously or without reasonable cause?

[22] A Full Bench of the Commission in Lisa Holland v Nude Pty Ltd T/A Nude Delicafe [2012] FWAFB 6508 outlined what constitutes making an application vexatiously. The Full Bench states, at [7]:

“[7] We turn to the first issue raised by the appellants’ grounds of appeal. The approach generally taken by members of the Tribunal as to the meaning to be ascribed to the word “vexatiously” in s.611(2)(a) is to adopt the comments of Justice North in Nilsen v Loyal Orange Trust 1 (Nilsen). The Commissioner referenced this case in her reasons for decision. Nilsen was decided in 1997 when the then Workplace Relations Act 1996 applied however the relevant provision considered by His Honour was in terms similar to s.611(2)(a) being whether an applicant “instituted the proceeding vexatiously or without reasonable cause”. About this provision His Honour said:

“The next question is whether the proceeding was instituted vexatiously. This looks to the motive of the applicant in instituting the proceeding. It is an alternative ground to the ground based on a lack of reasonable cause. It therefore may apply where there is a reasonable basis for instituting the proceeding. This context requires the concept to be narrowly construed. A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage : see Attorney General v Wentworth (1988) 14 NSWLR 481 at 491. The approach of the High Court in an application for a permanent stay of criminal proceedings on the ground of abuse of process constituted by improper purpose is instructive. In Williams v Spautz [1992] HCA 34, (1992) 174 CLR 509, at 522, Mason CJ, Dawson, Toohey and McHugh JJ said:

“Bridge LJ identified one difficulty when he said ([1977] 1 WLR, at p 503; [1977] 2 All ER, at p 586):

‘What if a litigant with a genuine cause of action, which he would wish to pursue in any event, can be shown also to have an ulterior purpose in view as a desired byproduct of the litigation? Can he on that ground be debarred from proceeding? I very much doubt it.’ (Emphasis added.)

So would we. But his Lordship, by implication, evidently sees no difficulty with the case in which the plaintiff does not wish to pursue his or her cause of action to a conclusion because he or she intends to use the proceedings for a collateral and improper purpose.” 1

[23] Applying this obiter, I am satisfied that the Bullying Application was not made vexatiously. Throughout the proceedings, the Applicant outlined accusations of bullying. These accusations, if true, would justify the Applicant lodging an application under section 789FC of the Act. The veracity of these claims has never been tested, but the Respondent has provided no evidence that they did not occur but did undertake remedial action in February by separating the work areas of the parties. In such circumstances, I am satisfied that the Applicant reasonably believed he was being bullied.

[24] The Respondent provided no evidence in support of their claim that the Bullying Application was instigated for the ulterior purpose of enforcing an alleged commercial agreement between the Applicant and the Respondent. As such I am not satisfied that the Bullying Application was made vexatiously.

[25] In Re Joseph Michael Kanan v Australian Postal and Telecommunications Union [1992] FCA 366 (Kanan) Wilcox J of the Federal Count of Australia stated, at [29]:

“[29] It seems to me that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where it appears that, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause. 2 

[26] The obiter in Kanan has been applied by the Commission when determining whether an application was filed without reasonable cause. 3 

[27] Applying the decision in Kanan, it cannot be said that the Applicant, at the time of initiating the proceeding, would have been of the view that there was no substantial prospect of success. The Applicant has submitted a number of examples of alleged bullying. Whilst I agree with the Respondent that these allegations have never been established, the Respondent has provided no evidence that they did not occur. In such circumstances, it cannot be found that there was no substantial prospect of success when the proceedings were initiated. As such, I am not satisfied that the Bullying Application was made without reasonable cause.

Section 611 (2)(a) - the FWC is satisfied that it should have been reasonably apparent to the Applicant that his application had no reasonable prospect of success.

[28] Section 611 (2)(b) of the Act establishes an objective test of whether it should have been reasonably apparent that an application had no reasonable prospect of success. A Full Bench of Fair Work Australia in Baker v Salver Resources Pty Ltd [2012] FWAFB 4014 provided the following comments with respect to section 611 (2)(b) of the Act:

“The concepts within s.611(2)(b) “should have been reasonably apparent” and “had no reasonable prospect of success” have been well traversed:

“should have been reasonably apparent” must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test; 3 and

a conclusion that an application “had no reasonable prospect of success” should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable” 4

[29] The Respondent asserts that during the proceedings the Applicant was advised by the Commission that in the current circumstances the alleged bullying was no longer taking place and that the Bullying Application had no prospect of success. The only evidence of this assertion submitted by the Respondent, was an email chain instigated by my Chambers on 9 June 2020. This email advised the Applicant that it was apparent to the Commission that the actions that were the subject of the complaint had ceased and invited the Applicant to withdraw the Bullying Application. The Applicant did so 6 days later.

[30] Even if evidence had been provided that the Applicant had been put on notice that the Bullying Application would fail if he was unable to show that there was a risk of the bullying continuing, it was reasonable in the circumstances for the Applicant to seek that the Bullying Application be stood over. The Bullying Application was instigated shortly before the Commonwealth and NSW Governments advised that in response to the COVID-19 pandemic, nonessential workers should be working from home. It was reasonable for the Applicant to have sought for his Application to be stood over until he and his colleagues could have been reasonably expected to return to the workplace. It could not have been established that the conduct complained of had no risk of continuing because the Applicant and his co-workers had not been working in the same office. It cannot objectively be said that the Bullying Application was manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable. As such, I am not satisfied that it should have been reasonably apparent to the Applicant that the Bullying Application had no reasonable prospect of success.

Conclusion

[31] The COVID-19 pandemic has dramatically altered the way that Australians have undertaken their work in 2020. I am satisfied that the Applicant believed that he had an arguable case for a stop bullying order when he submitted the Bullying Application. The fact that his normal place of employment changed so drastically in the following months does not automatically lead to the Bullying Application being extinguished.

[32] The Respondent made the decision to engage a legal representative before the matter was programmed for Hearing. During the Conferences, I formed the view that the Director was a very competent individual and was more than capable of representing the Respondent during the Conference process without the assistance of a legal representative.

[33] I am satisfied and find that the Applicant has not acted in a manner which satisfies the requirements of section 611(2) of the Act. Therefore, section 611(1) of the Act applies and the Respondent must bear its own costs.

[34] The Application is dismissed.

[35] I so Order.

COMMISSIONER

 1   Nilsen v Loyal Orange Trust [1997] IRCA 267 (11 September 1997), [(1997) 76 IR 180 at p. 181]; citing Attorney-General v Wentworth (1988) 14 NSWLR 481, at p. 491; cited in Holland v Nude Pty Ltd T/A Nude Delicafe) [2012] FWAFB 6508 at [7]

 2   Re Joseph Michael Kanan v Australian Postal and Telecommunications Union [1992] FCA 366 (31 July 1992) at [29]

 3   Dryden v The Bethanie Group Inc [2013] FWC 224 at [20]

 4   Baker v Salver Resources Pty Ltd [2012] FWAFB 4014 at [10]

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