Union delegate ordered to pay costs following adverse action claim

Union delegate ordered to pay costs following adverse action claim

In an unusual ruling, the Federal Court has ordered an employee to pay part of his employer’s legal costs determining that his consistent refusal to accept monetary offers to settle his adverse action claim following the termination of his employment was unreasonable in the circumstances. The court also determined that the employee’s counterclaim for $500,000 in damages was a completely unreasonable act that resulted in his former employer incurring significant legal fees.

Following the lodging of his initial claim in August 2017 through to proceedings in March 2020, his employer, Sydney Trains, made eight offers of settlement to resolve the matter, with several of the offers being substantially more than the employee’s gross annual earnings of $79,990. He refused to participate in mediation on two occasions, and he consistently refused to respond to his employer’s offers of settlement or propose a counteroffer.

In the initial proceedings, Sydney Trains made a settlement offer of $10,000 but would not consider reinstatement as an option. In the Federal Court proceedings before Justice Stephen Burley, three of the employees’ line managers testified that they would immediately seek a transfer or consider resigning from the organisation if the employee was reinstated. One manager commented,

“that Mr S was the most difficult employee he had ever had to manage. He found him to be extraordinarily stubborn and unrelenting in his unfair and disrespectful behaviour. It was his belief that Mr S caused significant risk to the safety and wellbeing of those he worked with”.

Justice Burley acknowledged there was clear evidence that the employee could not achieve reinstatement to his former position.

Justice Burley was critical of the employee’s failure to respond to an increased offer from Sydney Trains of $100,000 to settle the matter. As he noted,

“A person in the position of Mr S could not reasonably have considered that he would achieve an outcome in the litigation that would improve upon these offers. Indeed, subsequent events indicate that he harboured a completely unrealistic expectation that the outcome of the proceedings would involve the repayment of the legal fees that he had incurred…”.

Justice Burley accepted the submission of Sydney Trains that the employee’s rejection of each offer was so unreasonable to justify the court making an order that the employee bears the indemnity costs incurred in the proceedings.

He determined that the employee must pay Sydney Trains’ legal costs on a party/party basis from 14 September 2019.

S v Sydney Trains (No 2) [2021] FCA 1200

For questions about adverse action claims, legal costs, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 0417 622 178, 1300 WAL LAW or via email to dean.cameron@workforceadvisory.com.au

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.

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