In a recent decision, the Fair Work Commission (the “FWC”), which is generally a “no costs” jurisdiction, considered whether costs should be ordered against a paid agent. The paid agent was representing an employee bringing a general protections claim involving pregnancy discrimination and dismissal.

The case provides useful guidance on when a costs application may be successful in the FWC.

Costs under the Fair Work Act

Under the Fair Work Act 2009 (Cth) (“FW Act”) the FWC may make an order for costs against a representative (that is, a lawyer or paid agent representing a party to the dispute) only where they are satisfied that the costs incurred are incurred:

• because the representative encouraged the person to start, continue or respond to the dispute and it should have been reasonably apparent that the person had no reasonable prospect of success in the dispute; or
• because of an unreasonable act or omission of the representative in connection with the conduct or continuation of the dispute.

The FWC’s costs model is designed to create an accessible forum and allow applicants to pursue claims without the risk of adverse costs orders. However, this is balanced against the ability of the FWC to award costs in rare circumstances and this ability to do so acts as a deterrent to the misuse of the Fair Work regime.

Background

This case is one of those rare circumstances. The employee made a general protections dismissal application, but the employer raised a successful jurisdictional objection challenging the employee’s ability to bring the claim. In a nutshell, the employer argued that the employee could not bring a general protections dismissal application as there was no evidence she had been dismissed. The FWC agreed with the employer and the employer subsequently applied for a costs order against the employee’s representative (a paid agent). The employer argued that the employee’s representative had acted unreasonably by encouraging the employee to pursue the claim when it had no reasonable prospects of success.

Key learnings

The FWC found that the employee’s representative had behaved “unreasonably” in “continuing to press the case when it became more and more clear that the case he had lodged could not possibly succeed.”

The FWC highlighted the importance of the evidence available to the employee (and the representative by extension) at the time the application was lodged, was central to whether it could be said that there was an “unreasonable act”. The FWC highlighted that a representative may run a case where the supporting evidence is weak but arguable, but, in this instance, there was “no evidence”.

The FWC noted that it was clear that the employee’s representative had “no evidence whatsoever that [the employee’s] employment had even been terminated.” In fact, the evidence available at the time (an email from the employer) made it clear that the employee was still an employee. In light of this, the FWC found that the employee’s representative “either was or should have been aware that [the employee] had deliberately chosen not to respond” to the correspondence and that the email “was seeking her availability for alternative work”.

The FWC highlighted that those who wish to appear at the FWC should not be “swayed by emotion or sentiment” but rather focus on “the evidence and the law”.

The FWC found that the actions of the representative by pursuing a case that had no prospects of success caused the employer to incur a large legal bill and it was appropriate to award costs against the representative in the circumstances.