Claiming your costs in the fair work commission

Posted on October 13th, 2017

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Section 611(1) of the Fair Work Act 2009 (FWA) sets out that the general rule for proceedings in the Fair Work Commission (FWC) is that parties must bear their own costs. Section 611(2) provides an exception to this rule which applies if the FWC is satisfied that a party to the proceedings acted vexatiously or without reasonable cause or that it should have been reasonably apparent the application or response had no reasonable prospects of success, costs can be awarded.

Acting Vexatiously

The FWC has said that an application is vexatious when the predominant motive or purpose of the application is to harass or embarrass the other party to gain collateral advantage.

Without Reasonable Cause

An application is made without reasonable cause if it can be characterised as so obviously untenable that it cannot possibly succeed or is manifestly groundless. Whether an application is made without reasonable cause may be tested by asking whether, on the facts apparent to the applicant at the time the application was made, there was no substantial prospects of success. An application is not made without reasonable cause simply because the application did not succeed. If success depends upon the resolution or one or more arguable points of law, the proceedings will not be characterised as being without reasonable cause. 

No Reasonable Prospects of Success

The FWC has held that a finding that an application has no reasonable prospects of success should only be made with extreme caution and in circumstances where the application is manifestly untenable or groundless or so lacking in merit or substances as to be not reasonably arguable.

Additional Costs Power of Unfair Dismissal Proceedings

Section 400A of the FWA provides an additional power to the FWC to award costs in unfair dismissal applications. Under 400A, the FWC may make an order for costs if it is satisfied that the first party caused costs to be incurred because of an unreasonable act or omission in connection with the conduct or continuation of the matter. In contrast to section 611(2), section 400A applies to unreasonable acts or omissions in connection with the conduct or continuation of a matter already instituted and is not concerned with whether it was reasonable to have instituted; a matter in the first place. Section 400A was designed to provide the FWC with a discretionary power to award costs against a small portion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner.

Katie ThompsonKatie Thompson is a Solicitor at Mullane & Lindsay Solicitors and practises in the Commercial dispute resolution and litigation team. If you require any assistance in this area please contact Katie Thompson to arrange a consultation or contact our Newcastle or Sydney office. 

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