Second suit brought applicant’s compensation to over $10,000
In an FWC decision last October, the applicant was awarded $7,476.31 following a successful unfair dismissal suit.
The applicant, a Field Sales Executive, was dismissed for her conduct and performance deficiencies, which included engaging in private social media activity whilst working.
The Commission found that the respondent’s failure to consider the impacts of COVID-19, the reduction in the applicant’s working hours and her 20% pay cut were mitigating factors in favour of a finding of unfair dismissal.
In November 2020, the applicant filed another application, seeking an order for an additional $7,978.10 in costs.
The applicant submitted that, through her lawyer, she made three settlement offers, each made reasonably and in good faith. The respondent rejected the first offer and did not respond to the second and third offers.
The applicant asserted that the respondent’s failure to consider or respond to these offers caused her to incur significant costs, to the extent that her compensation had been entirely absorbed by litigation fees.
The Fair Work Commission may order a person to bear the costs of another person if it is satisfied that the first person responded to the application “vexatiously or without reasonable cause”.
Given the evidence-heavy nature of the case, the Commission found that the respondent was within its rights to reject the offers, given settlement would have removed the potential for a finding that the dismissal was not unfair.
However, the Commission took issue with the respondent’s failure to communicate its response towards the second and third settlement offers, for reasons including that:
- it was a pattern of behaviour
- the respondent could have responded but chose not to
- the settlement offers were sent by a legal practitioner who held duties to both her client and the Commission
- failure to communicate placed substantial litigation pressure on the applicant
The Commission did not accept the respondent’s submission that its lack of a response should have been interpreted as a rejection of the offers.
Ultimately, it was satisfied that the respondent’s refusal to respond to the second and third settlement offers was unreasonable.
The Commission noted that cost orders should only be made where there is a clear case but found it appropriate to award $3,947.05 in costs to the applicant.
Key Takeaways for HR:
- Employers involved in an unfair dismissal suit must respond to all settlement offers
- Failure to cooperate may cause additional costs to be incurred under the Fair Work Act 2009 s 400A(1)
