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Recovering costs from unfair dismissal claims

AREEA principal employee relations consultant Bill FitzGerald discusses a Fair Work Commission case in which an employer successfully recovered costs from a dishonest former employee claiming unfair dismissal.

Bill FitzGerald
Bill FitzGerald

WITH unfair dismissal claims in Australia now at around 14,500 a year – more than double the annual average prior to the introduction of the Fair Work Act 2009 – it’s little wonder that AREEA is often called on to consult with members having to defend a claim which they believe lacks merit.

This has frequently led to employers choosing to pay ‘go away money’ to avoid the excessive costs and disruptions of court proceedings.

AREEA is the leading advocate for change to Australia’s grossly expanded unfair dismissal and ‘general protections’ laws, making it one of five key workplace relations reforms we are campaigning for the next Australian Government to adopt.

Until reform occurs, however, members should be aware that the Act does provide facility for employers to recover costs where employees lodge ‘dash for cash’ claims. This was most recently seen in Green v Toll Holdings [2016] FWC 1675 when FWC Deputy President Gostencnik awarded a truck driver pay his former employer Toll Holdings in excess of $18,000.00 in legal costs.

The applicant had launched an unfair dismissal claim after his oral fluid test recorded positive for amphetamine and methamphetamine, prompting Toll to terminate his employment.

During the hearing, the applicant presented negative results from a urine test he claimed was administered by his personal doctor after the initial positive test result.

However, in DP Gostencnik’s words, the applicant’s bid for a favourable unfair dismissal claim ‘crumbled’ when it was established that he had intentionally presented a drug test result which he knew to be false, and knowingly gave false evidence under oath.

Under cross examination, the applicant doctor testified that the negative drug test result was not the one he had provided the applicant, and the true result had in fact been positive.

Once this evidence was revealed, the applicant, as DP Gostencnik described, ‘did a runner’ and failed to return to proceedings.

In considering the application for costs, DP Gostencnik determined that in accordance with s611 of the Act, the applicant made the application vexatiously or without reasonable cause and it had no reasonable prospect of success.

Effectively the applicant’s ‘whole case was founded upon a lie designed by him even before his employment was terminated’.

He further determined that the costs were unreasonably incurred by the company as direct consequence of the false documents and evidence.

Implications for employers

While not all unfair dismissal cases play out like this one, where it is believed that applications have no merit, members are advised to contact an AREEA consultant to formulate an appropriate response including making a cost application if the matter is ultimately dismissed.

For advice on unfair dismissal claims and the recovery of costs, contact an AREEA Consultant near you.


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