In the recent Fair Work Commission (Commission) decision of Mr James Green v Toll Holdings Ltd [2016] FWC 2790, an employee was ordered to pay his employer’s costs after running away from his own unfair dismissal hearing when it was revealed he had falsified a doctor’s report to hide his drug use. The decision demonstrates the approach the Commission will adopt when considering whether to exercise its power to order costs under s 611 of the Fair Work Act 2009 (the Act).

Fight or flight – the background to the costs proceedings

Toll Holdings dismissed Mr Green from his employment as a Yard Truck Driver after he tested positive for amphetamine and methamphetamine during routine drug screening at work. After failing the drug screening, Mr Green went to his doctor and underwent a second test, which allegedly came back negative.

Mr Green brought an application for an unfair dismissal remedy, claiming that his dismissal was unfair because Toll Holdings did not take into account the results of the second drug test which purportedly showed him to be drug-free. Mr Green annexed the ostensibly negative test results to his witness statement, and repeatedly relied on the negative result during cross-examination.

Unfortunately for Mr Green, Dr Chaudhry, who administered the second test, gave evidence during the proceedings that the second test had in fact come back positive. Dr Chaudhry produced the original test result document, which showed a positive result, and suggested that Mr Green had manipulated the version of the document he had relied upon to bring the unfair dismissal application.

Shortly after the lie was uncovered, Mr Green gave instructions to discontinue the proceedings, left the courtroom, and did not return.

Costs or no costs? That is the question.

Ordinarily, a person must bear their own costs in relation to a matter before the Commission.[1] However, section 611(2) of the Act allows the Commission to make costs orders against parties who:

  • bring claims vexatiously;
  • bring claims without reasonable cause; or
  • bring claims with no reasonable prospects of success.[2]

Deputy President Gostencnik emphasised that, in order to be vexatious, a party must be motivated to harass or embarrass the other side. Here, given the application was based so fundamentally on the falsified test result, and the lie that the test was negative, it was unfairly burdensome on Toll Holdings, leading the Deputy President to conclude that the claim was indeed vexatious. [3]

In order to determine whether an application was made without reasonable cause, the Commission will consider the circumstances of the application, including such things as whether the claim was frivolous, untenable, “manifestly groundless”, or “bad beyond argument”. Importantly, where, on the applicants own version of the facts, the application must fail, it is likely that the proceeding lacks reasonable cause.[4] That Mr Green’s case was founded on what he knew to be a lie was sufficient to find that it was without reasonable cause.

In deciding an application has no reasonable prospects of success, the Deputy President considered that such a finding should be approached with extreme caution and should only be made when the application is frivolous, untenable, groundless, or faulty.[5] That the lie was the fundamental basis for Mr Green’s claim, that it pervaded all his submissions to the Commission and informed the basis for his assertion of entitlement to remedy was sufficient for a finding that there were no reasonable prospects of success.

Deputy President Gostencnik found that Mr Green’s application was not only vexatious, but also without reasonable cause, and without reasonable prospects of success. In the absence of any compelling considerations that might weigh against the exercise of his discretion under s 611 of the Act, the Deputy President ordered Mr Green pay Toll Holdings costs on an indemnity basis. The bill totalled $18,618.31.

Implications

This case highlights that approach the Commission will adopt when considering whether it should depart from primary position that each party bears their own in a matter before the Commission. In the event that a party brings a claim based on false information, the Commission may exercise its powers to award costs orders.

If you are bringing or responding to an application, you should ensure your argument is not:

  • fabricated or untrue;
  • without reasonable cause;
  • brought with the intention of causing embarrassment or harassment to another party; or
  • so weak that you should know it has no reasonable prospects of success.