Not every unfair dismissal case is a winner. Let’s look at a case where the Fair Work Commission found that the employee’s failure to accept settlement offers was imprudent and delinquent and consequently ordered costs against the employee.

In the case of Steven Post v NTI Limited T/A NTI [2016], the Fair Work Commission has ordered indemnity costs against an employee who recklessly rejected offers up to six months wages to settle his hopeless unfair dismissal claim.

The employee was offered twice the statutory limitation on the compensation amount that the Commission can order. The employee’s actions in rejecting each offer proved to be unreasonable. Meanwhile, the employer continued to incur further costs.

The employee claimed that his dismissal was grossly unfair. This claim was rejected by the Commission.

The employee then lodged proceedings in the Federal Circuit Court for a judicial review.

The employer argued that as a result of the employee’s unreasonable acts and omissions in pursing his claim, the employer had incurred considerable costs in defending the claim. This included participating in conciliation, preparing witness statements, briefing counsel, attending hearings and making interstate travel arrangements for flying witnesses to give evidence.

Generally, the Fair Work Commission is very reluctant to order costs against a party. That is, in most cases each parties bear their own costs. However, in situations where one party has commenced proceedings without reasonable cause or vexatiously, the Commission will be inclined to order costs against the party.

The Commission found that it should have been reasonably apparent to the employee that his application was lacking merit and had no reasonable prospects of success. The Commission was satisfied that the employee’s failure to accept offers of settlement was imprudent refusal. As such the Commission exercised its discretion to award indemnity costs under the Fair Work Act 2009.

Indemnity costs can also be referred to as ‘solicitor-client’ costs. That is the employee in the above case was liable to pay for all legal professional costs and disbursements incurred by the employer.

This decision serves as a useful reminder of the dangers of making unreasonable claims and refusing reasonable offers of settlement.

Before you decide to bring a claim at the Commission please contact one of our friendly lawyers on 02 9331 0266 to discuss the prospects of success in your claim.