Money issues surround dismissal litigation


Money issues surround dismissal litigation

Unfair dismissal litigation can give rise to preliminary and associated issues that often involve money – be it indemnity costs, penalties or legal costs.


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Unfair dismissal litigation can give rise to preliminary and associated issues that often involve money – be it indemnity costs, penalties or legal costs.

Five cases noted here cover points unrelated to the substantive issues of dismissal. 

Big indemnity because refused settlement offer

The FWC (Williams C) considered a $3000 settlement offer reasonable and so, when it was refused, the FWC ordered the employee to pay almost $14,000 as an indemnity payment to cover the employer’s costs when the employee failed in the unfair dismissal action.

The Commission noted that an unreasonable act or omission, as referred to in s400A of the Fair Work Act 2009, that causes a party to incur costs would provide a basis for an order being made not for party and party costs but rather for costs on a “solicitor and client” basis or on an indemnity basis.

F v GHS Regional Pty Ltd [2016] FWC 3120 (24 May 2016) 

Vexatious claim causes $130,000 penalty

A university academic who failed to pay costs orders after unsuccessfully pursuing an unfair dismissal matter has been hit with further cost orders by the Federal Circuit Court (Street J) because she continued with proceedings “vexatiously and without reasonable cause within the meaning of s572(2)(a) of the Fair Work Act”.

University Of Sydney v M [2016] FCCA 1051 (4 May 2016); University Of Sydney v M [2016] FCCA 1050 (4 May 2016); M v University Of Sydney (No 2) [2016] FCCA 1054 (4 May 2016) 

Private car use takes income over limit

The FWC (Binet DP) found the company policy provided that Mr P could separately seek reimbursement for the use of his private car on a per-kilometre basis. Evidence was tendered that Mr P sought and received reimbursement in accordance with the policy for mileage and parking in the Perth area in January, February, March, April and May 2015. This reimbursement was sought and paid separately to Mr P’s vehicle allowance.

The FWC was satisfied that in Mr P’s case his car allowance was not a reimbursement.

The Commission concluded that Mr P’s “earnings” for the purposes of s382(b)(iii) of the Fair Work Act 2009 amounted to $138,536 and therefore exceeded the then high income threshold of $136,700. Consequently, he was not protected from unfair dismissal. The FWC noted that it was not strictly necessary to make this finding as Mr P’s dismissal was a case of genuine redundancy.

P v Expro Group Australia Pty Ltd [2016] FWC 2298 (19 May 2016) 

Really big business so no small business exemption

There were overseas connections established between companies, so the Australian company did not qualify as a small business (even though it had only one employee) and was not exempt from unfair dismissal actions.

The FWC (O’Callaghan SDP) commented that if the number of employees engaged by Gardens of Italy Close Corporation were required to be taken into account because this corporation must be regarded as an associated entity, then Gardens of Italy could not be defined as a small business for the purposes of s383 of the Corporations Act 1989 and, as Mr P had worked for more than six months, he would then have completed the six-month minimum employment period.

The Corporations Act required the Commission to take into account the employees of the related, but overseas operated, Gardens of Italy Close Corporation.

P v Gardens of Italy Pty Ltd [2016] FWC 2503 (22 April 2016) 

Neither side will pay legal costs as lawyers not justified

The FWC (Ryan C) found that in the circumstances of the present matter where neither of the applicants nor the respondent was a professional IR advocate, but where each of the applicants and
Mr M from the respondent were professionals, it was apparent that no unfairness would be visited upon either the applicants or the respondent if no one is represented by a lawyer.

H v WSH Group Pty Ltd/Hines v WSH Group Pty Ltd [2016] FWC 3489 (30 May 2016)

See also: Unfair dismissal overview 

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