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. This 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 that 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 .

If you believe you have a matter that warrants an unfair dismissal claim please contact JFMLAW. One of our friendly lawyers can advise you on the merits and prospects of your case succeeding.