s.394 - Application for unfair dismissal remedy

Application for costs by respondent employer in connection with an application for relief from unfair dismissal - s.400A - substantive unfair dismissal application s.394 - no prospects of success - unreasonable act or omission - failure to follow directions - applicant discontinued - application dismissed

• [1] This is an edited version of my decision delivered ex tempore and recorded in transcript on 29 October 2025. I dismissed the application made by the Costs Applicant for costs pursuant to s.400A of the Fair Work Act 2009 (the FW Act).

• [2] This is an application by EPSA Pacific Pty Ltd seeking an order for costs against Mr Luke Daly pursuant to s.400A of the FW Act. The application is made in the context of an earlier application, by Mr Daly, claiming a remedy for an alleged unfair dismissal pursuant to s.394 of the FW Act.

• [3] I do not intend to repeat the submissions and evidence in detail. I note that the Costs Applicant's application is set out in its materials, submissions and evidence heard by the Commission today and the Costs Respondent's response is set out in its materials, submissions and evidence also heard by the Commission today.

• [4] The substantive application for unfair dismissal was brought on the basis of an alleged unfair dismissal resulting from a serious safety incident at the Isaac Plains Mine on 23 November 2024. That matter was ultimately discontinued following the failure of the Applicant to comply, inter alia, with the Commission's directions to file his case.

• [5] A Costs Application was brought by EPSA seeking costs pursuant to s.400A.

• [6] Section 400A allows for cost orders where the Commission is satisfied that costs were incurred due to an unreasonable act or omission of a party in the conduct of the case. The unreasonable act or omission may be deliberate or reckless, including failing to consider settlement or unreasonably failing to discontinue an application, but these are not necessarily unreasonable in every case. A warning about a party's prospects may be relevant to whether the continuation of a matter was reasonable.

• [7] The general rule is that each party must bear their own costs, except where statutory criteria under s.400A and s.611 are enlivened. When these criteria are met, the Commission's power to award costs is discretionary and must be exercised in a manner that is "fair and just", taking into account a broad range of relevant factors.

• [8] There must be a causal link between the unreasonable act or omission and the costs incurred. The award of costs on the ground of unreasonable act or omission is also reflected in s.401, dealing with costs orders against lawyers and paid agents. Preconditions for a valid application under s.401 are specified in s 401(1)(a)-(c).

• [9] The Explanatory Memorandum to the Fair Work Bill 2012 says of s.400A:

[169] ...the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.

• [10] The provisions of s.400A need to be read in the general context of costs matters provided for in the Act. Section 611 of the Act states that a "person must bear the person's own costs in relation to a matter before the FWC." Whilst s.400A allows for costs orders to be made, the starting point for any consideration of an award of costs must be that "each party bears its own costs."

• [11] When awarding costs under either s.400A or s.401, the Commission has discretion to award costs on either a party-party or indemnity basis.

• [12] The power to award costs is discretionary and subject to specified statutory prerequisites. Costs do not follow the event as the presumption of the Act is that each party bears their own costs. However, costs may be awarded where the Commission is satisfied that the unreasonable act or omission of a party, in connection with the continuation or conduct of the matter, has caused the other party to incur costs.

• [13] The Costs Applicant, EPSA, contends two primary bases for its application.

• [14] The first is that the Costs Respondent, Mr Daly (the Applicant in the substantive proceedings), brought an application that had no reasonable prospects of success, primarily because, in his response to the show cause notice, Mr Daly admitted to wrongdoing on his part in relation to the safety incident.

• [15] Whilst I accept that Mr Daly did indeed make that admission in his response to the show cause notice, I accept the evidence of Mr Daly at the costs hearing today (29 October 2025) that there was some conjecture around representations made to him by the Drill and Blast Supervisor that if he accepted some responsibility, everything would return to normal. I also note the uncontested evidence that the ICAM report identified two people as the root cause of the safety incident and yet that only one of those two people had their employment terminated as a consequence. Mr Daly sets out his case in his submissions in this matter admitted as Exhibit CR2. Ultimately, that evidence was not tested in the substantive matter, but what it demonstrates is that there was a case to be argued by Mr Daly. It is well known that the Fair Work Commission is a low-cost jurisdiction. The bar to award costs on the basis of no reasonable prospects of success is rightly a high one. In circumstances where I am satisfied that Mr Daly had a case to be argued, it cannot be found that he had no reasonable prospects of success and I dismiss this first limb of the application.

• [16] The second basis for the application by the Costs Applicant is that the Commission should be satisfied there is an act or omission that resulted in costs and there is a causal link between the two which triggers the Commission's discretion.

• [17] I accept that there was an omission on the part of Mr Daly to file his material in compliance with the Commission's directions. I do not accept the contention put by the Costs Respondent's representative that it is a common occurrence that parties fail to follow the directions of the Commission and that, on that basis, the failure is not exceptional. That is not the test and, in any event, parties, especially those who are legally represented, ought to know that they are required to comply with directions or, as required, to seek an extension in accordance with the practice note and their professional obligations. Indeed, in this matter, the reason why leave was initially granted to Mr Daly to be legally represented by Paladin Lawyers and later withdrawn for the final non-compliance hearing that was listed following the failure to file that material, was that Paladin did not demonstrate in its actions that it was assisting the Commission to deal with the matter efficiently. This was apparent in Paladin's repeated failures to follow directions, failures to act promptly to seek production of material they said they required in order to make their case and failure to seek extensions where required.

• [18] I accept there was an omission by the Costs Respondent to comply with the directions to file the materials. Such failures are not reasonable in circumstances where other options are open to a party, such as to seek an extension, to appeal a decision, or to start working on the direction promptly and actually comply.

• [19] I accept there was a causal link to some costs incurred between the deadline of 4pm on 14 July 2025 and the initial discontinuance of the substantive matter on 15 July 2025. However, I do not accept the quantum claimed by the Costs Applicant given the relatively short period between the deadline for filing the Costs Respondent's material and its discontinuance. Additionally, whilst I acknowledge the discontinuance needed to be confirmed by the Applicant in the substantive proceedings, there is no doubt the Costs Applicant was on notice it was coming and they ought to have resisted undertaking any further legal work until that was clarified by my chambers.

• [20] In terms of my discretion to award costs, I consider that the Costs Respondent has already had to deal with a number of distressing events in his life. The incident itself was no doubt distressing, as was losing his employment and then dealing with subsequent health issues. I accept his evidence of the financial impact an order would have on him and I decline to exercise my discretion to make a costs order. Had the Costs Applicant maintained its application against the Costs Respondent's representatives, there may have been a different outcome.

• [21] As a final comment, the evidence of Mr Daly in Exhibit CR2 was clearly capable of being made without the RHSQ report that the Costs Respondent blames for its failure to comply with the Commission's directions. I reject the Costs Respondent's submission. Particularly in circumstances where it was open to the Costs Respondent's representative to seek production of that material as far back as 30 June 2025 when the directions were first issued. They were tardy in doing so and then tardy in prosecuting their request for them.

• [22] Parties cannot simply take their time in putting together their case and then accuse the Commission of denying them procedural fairness because they have not put their case together on time. Legal representatives and paid agents must be respectful of the Commission's time, as well as that of their colleagues, and they also need be mindful of the stress that delays in matters of the nature dealt with before the Fair Work Commission have on the parties before it. These matters are always stressful and that is why the Tribunal was established to deal with these matters quickly and efficiently. The prosecution of the Costs Respondent's case was entirely within the control of the Costs Respondent's representative. If they had done all things necessary to promptly act in doing so, I suspect we would have had a very different outcome in the substantive matter; however, we will never know that.

• [23] Costs are usually sought by parties to right the wrong of the costs incurred unreasonably. I find the Costs Applicant's submission that if they are successful in being awarded costs, that they will donate them to charity, to be disturbing. The costs of these costs proceedings themselves are likely to be far greater than the costs in the substantive proceedings, albeit those proceedings were discontinued before the matter proceeded to hearing. All proceedings in courts and tribunals are serious matters that bring high levels of stress to parties involved and tie up the Commission's resources. In such circumstances, the Costs Applicant's intentions are disappointing.

• [24] The costs application is dismissed and I order accordingly.

Mr Stephen Mackie of Counsel for the Costs Applicant

Ms Tammy Wong of Counsel for the Costs Respondent

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