Costs in the Fair Work Commission

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The general rule in the Commission’s jurisdiction is that each party bear their own costs. 

However, the Commission may order a party to pay the costs of the other party if, for example:

There are also circumstances where the Commission may order a party’s representative to pay the costs of the other party if the representative encouraged the party to start or continue or respond to the application and it should have been reasonably apparent that the application or response had no reasonable prospect of success.

In Attorney-General v Wentworth (1998) 14 NSWLR 481, it was observed by Justice Roden that litigation may be regarded as vexatious, on objective or subjective grounds, by applying the following test:

  1. Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought; 

  2. They are vexatious if they are brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues to which they give rise; 

  3. They are also properly to be regarded as vexatious if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless…

The question of what constitutes “without reasonable cause” was considered by Justice Wilcox in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 at 264-2; [1992] FCA 366 at [29]:

[i]t 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.

According to the Explanatory Memorandum to the Fair Work Amendment Bill 2012, an unreasonable act or omission may include a failure to discontinue an application or agree to terms of settlement.

Although it is extremely rare the Commission will order a party to pay the costs of the other party, you should always err on the side of caution before bringing or responding to an application, and obtain legal advice at the earliest opportunity.

Vasilaras + Co obtained a cost order against Mr Paerau and his representative Garry Dircks T/as Just Relations on behalf of our client Rainshield Roofing. The Commission found:

In addition to above decision, we obtained a cost order against Epworth Hospital on behalf of our client Mr Selcuk. Mr Selcuk achieved the statutory maximum for compensation of 6 months’ pay and Epworth appealed the decision. The appeal was unsuccessful and Epworth were ordered to pay the costs of the appeal proceeding. 

If you have any questions in relation to an employment dispute, contact one of our experienced employment lawyers on 1800 VAS LAW. 

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