Federal Court awards legal costs order against unsuccessful employee
The Federal Court has awarded legal costs against a former employee after determining that he unreasonably refused several reasonable offers made on behalf of his employer to settle his unfair dismissal case.
As noted by Federal Court Judge Gregory Egan, under section 570(b) of the Fair Work Act 2009 (“the Act”), courts have the discretion to award legal costs against any party “If it is satisfied that a party engaged in an unreasonable act or omission and that act or omission caused the other party to incur costs”.
The applicant, ‘WD’ commenced proceedings on 3 March 2020 against his former employer Condor Energy Services Limited (No 2) (“Condor”), seeking reinstatement, compensation, and an apology.
The initial unfair dismissal case was heard from 30 May 2022 until 1 June 2022 and on 28 September 2022. The Judgment of the Court dismissing the Application was handed down on 23 December 2022.
During the proceedings, the employer made without prejudice offers to WD on 7 July 2020 (The First Rejection Letter) and later, on 17 May 2021 (The Second Rejection Letter).
The letters highlighted a claim from WD that the substantial reason for Condor dismissing him was due to him suffering from a disability or mental health issue. However, as they stated, he had failed to either particularise the basis of these claims or provide any evidence to substantiate his allegations.
The second letter also included an offer of $5,000.
Judge Egan raised particular concerns with the short amount of time WD took to review the Letters, being 20 minutes after receiving the first letter and 10 minutes after receiving the second letter.
As the Judge noted,
“Each rejection was made in an offended tone and in robust terms. The applicant expressed his rejection of such offers in terms of his intending to proceed with his claims irrespective of the claimed prospect of adverse findings being made against him. Such correspondence on the applicant’s part indicated that he had not closely and attentively considered what the consequences might be if he were not to accept the offers and subsequently have his claims rejected by the Court”.
He also noted,
“The applicant must have known that the success or otherwise of his case was in large part dependent upon his proving his claims to that effect. The Court finds that for the applicant to have continued to press on with his claims in the face of such denials was at the time unreasonable and that it remained so until the handing down of judgment”.
The Judge directed the parties to agree on the quantum of the costs to be paid.
For queries about the Fair Work Commission, unfair dismissals, settlement negotiations, or any other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 925 529, 0417 622 178 or via email to email@example.com
Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.