‘Hard Bargaining’ Employee Pays Costs

The Fair Work Commission has ordered an unrepresented employee, Mr Colin Ferry, to pay almost $14,000 in costs following his refusal to accept a settlement offer of $3,000 from his former employer, GHS Regional WA Pty Ltd (“GHS Regional”) to settle his unfair dismissal claim.

Mr Ferry was dismissed form his position of Yard Manager at GHS Regional on 13 October 2014 for entering GHS Regional’s yard out of hours without permission and for removing items from the yard for his personal use. Mr Ferry filed an unfair dismissal claim under section 394 of the Fair Work Act 2009 (Cth) (“FW Act”).

Following Commissioner Williams’ decision to dismiss Mr Ferry’s unfair dismissal claim, GHS Regional applied for a costs order pursuant to section 400A of the FW Act on the basis that Mr Ferry’s refusal to accept GHS Regional’s offer of settlement was an “unreasonable act or omission”.

Commissioner Williams, in forming his decision, noted “…the Commission should only exercise its discretion to award costs where there is clear evidence of an unreasonable act or omission has occurred, and that a mere failure to agree to a settlement offer, even when a person’s case may be weak and ultimately unsuccessful, does not necessarily warrant the exercising of the discretion to award costs. Section 400A of the Act does not preclude parties from hard bargaining and compel them to accept the best, or near best offer, of the other party”.

Commissioner Williams took into account that Mr Ferry, being unrepresented, was not a “seasoned negotiator” and could not be expected to bring those skills and understanding to settlement negotiations. GHS Regional also had not put to Mr Ferry when making its offer of settlement that Mr Ferry’s case was very weak. However, Commissioner Williams was satisfied that Mr Ferry had, in “wilful disregard to known facts” failed to “reasonably assess the prospects of his case and his refusal to accept the respondent settlement offer went beyond “hard bargaining”  and did amount to an 

unreasonable act in connection with the continuation of his application which caused costs to be incurred by the Respondent”.

In forming his decision to order costs, Commissioner Williams also emphasised that any offers made during the course of a conciliation should not be taken into account in a costs application unless that offer is later made on an open basis.

For advice and/or guidance in relation to unfair dismissal claims, or issues as to exposure to costs orders, please contact Nick Stevens, Megan Cant or Jane Murray.

Published May 2016

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