Does the Fair Work Commission have the power to make a costs order?

What is a costs order?

The Fair Work Commission has the power, in certain circumstances, to order a party to pay the legal costs for the other party. The power to do this comes from the Fair Work Commission issuing a ‘costs order’.

When does the Fair Work Commission consider a costs order?

The Fair Work Commission is generally perceived as a no costs jurisdiction, other than in exceptional circumstances. This means that it is very rare for the Fair Commission to make a costs order. In most circumstances, each party is responsible for paying their own legal costs. However, the Fair Work Commission still has the authority to make a costs order, although this power is discretionary and rarely used. Such a situation will only transpire in exceptional circumstances where:

1. A matter was commenced by a party in a vexatious manner without a reasonable cause. Vexatious proceedings are proceedings that have been conducted to achieve a wrongful purpose and are an abuse of the process of the Commission. In determining whether this situation is applicable the Commission will determine whether the matter was ‘so manifestly faulty that it does not admit of argument’ amongst other things.
2. A matter was commenced where there were no reasonable prospects of success. This factor is considered objectively by the Commission where it would have been apparent to a reasonable person that the matter had no reasonable prospects of succeeding.

The Commission’s discretionary power was exercised in Walker v Mittagong Sands Pty Ltd T/A Cowra Quartz [2011] FWA 2225 where an employer had relied on false evidence to dismiss an employee. Once the employer became knowledgeable of the falsity of the evidence, it should have become apparent that the matter had no reasonable prospects of succeeding. Thus, by continuing with the application the employer was wasting precious commission resources and time. The application should have been discontinued as soon as the unreliable evidence came to the employer’s mind .

Hill v L E Stewart Investments Pty Ltd T/A Southern Highlands Taxis and Coaches and Others [2014] FWC 5588

In this case, the respondents (the employer and persons named) foreshadowed an intention to apply for costs on the grounds of inconvenience and disruption, evidenced by the time they spent preparing for and participating in the listed telephone conferences and attending the hearing in Wollongong. The respondents supported the claim for costs on the ground that Mr Hill’s anti-bullying application was ‘vindictive and frivolous’. Mr Hill did not file any submission on the question of costs nor did he attend the hearing of the anti-bullying application.

The Commission was satisfied that it should have been reasonably apparent to Mr Hill that his application had no reasonable prospect of success, and that due to his working relationship already coming to a natural end – there was no further risk of bullying, rendering his claim outside the scope of the legislation. The legislative scheme is directed to preventing potential future conduct, not punishing or compensating for past conduct.

Costs were also ordered on the basis of Mr Hills unreasonable behaviour, in that he

• Failed to attend the hearing of his application,
• Failing to advise that he would not attend,
• Not responding to the Commission’s prior inquiries as to whether he would attend, and
• His failure to provide any reasonable explanation for this conduct.