G. Dircks v JimRoy Pty Ltd [2009] AIRCFB 679

JimRoy Pty Ltd (JimRoy) was successful on Wednesday when the full bench of the AIRC confirmed that an applicant, and her representative, Gary Dircks (Dircks), were jointly and severably liable to pay the former employer’s party-party costs as a result of their unreasonable conduct in an unfair dismissal claim against JimRoy.

The decision is a significant win for employers who may be the subject of unfair dismissal claims where the former employee decides to pursue a claim that has little prospects of success.

In this case, the applicant, Natasha Vukadinovic (Vukadinovic), made an unfair dismissal claim under the Workplace Relations Act after her employment was terminated for lying about the death of her mother and father and seeking compassionate leave as a result of those asserted deaths.

Her representative, Dircks, with whom Vukadinovic had entered into a contingency fee agreement, continued to seek a financial settlement of her claim even after Dircks acknowledged to Deacons Partner Stuart Kollmorgen that he could not dispute that Vukadinovic had lied about her parents’ death in order to obtain the compassionate leave, and that, in any event, his argument would be that honesty was not “a requirement of her employment.”

As a result of Dircks’ continuing to pursue the claim JimRoy was forced to prepare for hearing, incurring uncessary costs, when first Dircks and then shortly afterwards Vukadanovic eventually withdrew from the proceedings.

The full bench confirmed the findings made by Commissioner Tolley, at first instance, that:

“The application had no chance of success and Mr. Dircks’ dragging out of the matter and his continual attempts to extract monies from the employer were wrong actions in the face of the knowledge he had of the applicant’s actions.”

The Commission did however state that these findings should have been confined to a shorter period than what was decided at first instance. In doing so, it upheld Dircks' appeal and varied Commissioner Tolley's order to limit Dircks’ liability for costs to this shorter period.

The Full bench made it clear that Mr Dircks had an obligation to take immediate steps to ensure the application went no further once he became aware that it was bound to fail, however, “during that period he sought to exercise what leverage he could to extract a payment from the respondent”. On this basis Dircks’ conduct was within the concept of an “unreasonable act or omission” contained in section 658(4)(b) of the Workplace Relations Act.

In making its decision the full bench upheld Dircks' appeal and varied Commissioner Tolley's order to limit his liability for costs to a shorter period than what was decided at first instance.

This is a significant decision, putting Applicants and their representatives on notice that unreasonable claims of unfair dismissal, made for the purposes of extracting settlement monies from former employers can come at a very high personal cost.