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[2018] FWC 3753
General information, not legal advice.
Fair Work Commission
2018-06-26
Original judgment source is linked above.
Section 394 - Application for unfair dismissal remedy
Application for an unfair dismissal remedy - application by employer for confidentiality orders - principles concerning open justice - scope of orders - orders made only in terms necessary
Application for an unfair dismissal remedy - application by employer for security of costs - principles to be applied - application dismissed
[1] On 7 March 2018 Mr Mark Andrawos (Applicant) applied to the Fair Work Commission (Commission) under section 394 of the Fair Work Act 2009 (FW Act) for an unfair dismissal remedy. He claims that dismissal by his former employer MyBudget Pty Ltd (MyBudget or the Respondent employer) on 14 February 2018 was harsh, unjust or unreasonable.
[2] I issued directions for the filing of written materials on 26 April 2018, 15 June 2018 and 22 June 2018.
[3] The Commission has before it two interlocutory applications, both made by the Respondent employer: firstly, an application filed on 7 June 2018 for confidentiality orders concerning documents filed, the conduct of the hearing and the contents of any published decision (the confidentiality application); and secondly, an application filed on 21 June 2018 seeking an order for security of costs against the Applicant (the security for costs application).
This decision determines these interlocutory applications.
[4] For the purposes of dealing with these interlocutory applications the following background facts have been established and are relevant:
4. At the time of lodging his application Mr Andrawos was legally represented. At the time of lodging its response to the application, the employer was legally represented. Both sought permission to be represented at the hearing of the mater. On 15 June 2018 I published a decision, by consent, in which I granted both Mr Andrawos and MyBudget permission pursuant to section 596 of the FW Act to be represented by a legal practitioner[1];
[5] I conducted a hearing, by telephone, of the confidentiality application on 15 and 21 June 2018. I conducted a hearing, by telephone, of the confidentiality application and the security for costs application on 21 June 2018.
[6] The Respondent employer's confidentiality application, accompanied by a Draft Order, seeks multiple orders concerning the conduct of the hearing and the contents of any published decision.
[7] Mr Andrawos does not contest the application in principle but submits that similar orders should apply to the identification and evidence of any witnesses he calls.
[8] The Commission is empowered under sections 593(3) and 594 of the FW Act (and its general powers in section 590) to make orders concerning the conduct of proceedings, including confidentiality.
[9] Section 593(3) provides:
"(3) The FWC may make the following orders in relation to a hearing that the FWC holds if the FWC is satisfied that it is desirable to do so because of the confidential nature of any evidence, or for any other reason:
(a) orders that all or part of the hearing is to be held in private;
(b) orders about who may be present at the hearing;
(c) orders prohibiting or restricting the publication of the names and addresses of persons appearing at the hearing;
(d) orders prohibiting or restricting the publication of, or the disclosure to some or all of the persons present at the hearing of, the following:
(i) evidence given in the hearing;
(ii) matters contained in documents before the FWC in relation to the hearing."
[10] Section 594 provides:
(1) The FWC may make an order prohibiting or restricting the publication of the following in relation to a matter before the FWC (whether or not the FWC holds a hearing in relation to the matter) if the FWC is satisfied that it is desirable to do so because of the confidential nature of any evidence, or for any other reason:
(a) evidence given to the FWC in relation to the matter;
(b) the names and addresses of persons making submissions to the FWC in relation to the matter;
(c) matters contained in documents lodged with the FWC or received in evidence by the FWC in relation to the matter;
(d) the whole or any part of its decisions or reasons in relation to the matter.
(2) Subsection (1) does not apply to the publication of a submission made to the FWC for consideration in an annual wage review (see subsection 289(2))."
[11] The orders sought by the Respondent employer fall into three categories:
An order that clients of the employer (other than those giving evidence) be referred to in proceedings via an abbreviation or pseudonym;
An order that the transcript of proceedings not be published;
An order that neither the Commission in its decision nor any other person publish names or identifying material of clients and persons giving evidence (other than the Applicant);
An order that materials before the Commission be used only for the purpose of proceedings;
An order that materials before the Commission only be made available to the Applicant and his representatives and the Respondent and its representatives;
An order that materials before the Commission be destroyed at the conclusion of proceedings and verification of that be provided to the Respondent.
[12] The grounds on which the confidentiality orders are sought are set out in the application. They can be summarised as follows. Evidence before the Commission will include material which identifies persons who were or are clients of the employer, some of whom are aware of these proceedings but others who are not. That evidence is financial in nature including income, assets and liabilities. Financial information provided by clients of the employer was not provided for external purposes such as these proceedings. It is unnecessary and unfair to have those persons identified, and their financial affairs.
[13] In considering the application, the Commission must give effect to the principles of open justice[2] whilst having regard to the interests of persons whose material public or private interests could be adversely affected or unintentionally damaged by the litigation. The Commission must also act consistently with its natural justice obligations to the parties.
[14] I am satisfied on the material before me that it is appropriate to make orders that constrain somewhat the access of the public, the media or other third parties to confidential financial material before the Commission relating to clients of the employer not involved in these proceedings, and to the identification of their names and personal details. I consider that private financial information provided by clients and former clients that concern their income, assets and liabilities is a material private interest and of no general utility to non-parties to these proceedings. Where it relates to clients or former clients not involved in these proceedings, those persons would have no opportunity to make submissions on the effect of disclosure of such matters.
[15] I note that the Respondent employer is seeking no orders that would constrain access by the Applicant or his representative to such material during the course of proceedings. Making a confidentiality order of the kind contemplated does not compromise natural justice principles.
[16] I consider however, the orders sought by the Respondent employer to be unnecessarily wide in a number of respects. I particularly consider that an obligation to return and not retain hard copies of the nominated material at the conclusion of proceedings should be an alternative to its destruction. Electronic copies can be more readily deleted. In some instances it may also be possible that parts of a document (or the transcript) be redacted in preference to restricting the publication of the document as a whole.
[17] None of the orders I will make apply to material the Commission is duty-bound to hold. The Commission is bound by laws and protocols concerning the administration and retention of its files and records. The orders I make will indicate that material I have directed to be confidential will be retained by the Commission but so marked on its hard copy and electronic records. Any decision I may ultimately publish will be unfettered by these orders; however, my current intention is to not act inconsistently if I publish a decision.
[18] I grant the Respondent employer's application and issue a draft order in an amended form. I will re-list this matter prior to the commencement of proceedings on 5 July 2018 to settle the terms of the order which I will make, after hearing the parties in light of this decision.
[19] If needed, I will deal with any complementary or supplementary orders sought by the Applicant in respect of material he has or places on file should an application be made and be similarly grounded.
[20] I will keep the terms of my order under review. I will grant both parties an opportunity to make application for further or amended orders on 24 hour notice or during the course of proceedings.
[21] The security for costs application seeks an order that Mr Andrawos pay to the Respondent employer the whole or a portion of the $44,630 which the employer asserts will be its legal costs if the matter proceeds to hearing. It asserts that, as at the date of its application, it had expended $38,360 in representative costs.
[22] The grounds on which the Respondent employer makes the application are that it says that Mr Andrawos's application is both vexatious and also untenable and manifestly groundless on its face. It says that even if the application was not made vexatiously, having now received the employer's materials, it is unreasonable for Mr Andrawos to continue to pursue the claim. The Respondent employer says it is needlessly incurring costs of preparing for the hearing and defending the matter. It says that it intends to make an application for costs at the conclusion of the matter. It says that it requires security for costs to be deposited to protect its interests should a costs order be made in its favour.
[23] Mr Andrawos opposes the employer's security for costs application. He says that his unfair dismissal application is seriously made and being seriously prosecuted. He believes his dismissal to have been unfair having regard to the reason given as well as the employer's decision making process and the impact of dismissal on him. He says he has suffered severe adverse financial circumstances since his dismissal and has not secured alternative employment since. He says he is in no position to deposit monies with the employer and that he should not be required to do so.
[24] A security for costs application is able to be made under section 404 of the FW Act and Rule 55 of the Fair Work Commission Rules 2013. The Respondent employer has made the application in the correct manner and complied with the formalities associated with doing so.
[25] Whether to make a security for costs order (and the quantum and conditions attached thereto) is a discretionary matter. The principles governing the exercise of the discretion were outlined by a single member in Harris v Home Theatre Group Pty Ltd[3]. Those principles have been subsequently adopted by full benches of the Commission including in Zornada v St John Ambulance Australia Western Australia) Inc[4] and Velasquez v Cabrini Health Limited[5]. I need not set out those principles in full. It suffices to observe that I consider them to be appropriate, and adopt them for the purposes of this decision.
[26] It is apparent from these principles that security for costs orders, given the statutory scheme applicable to the unfair dismissal jurisdiction, are extremely rare. A party seeking such an order carries a considerable burden of persuasion:
"We further note that costs orders in this jurisdiction are extraordinary, and security for costs orders even more so. This is because the Act reflects the longstanding principle that costs will not be awarded against parties in industrial proceedings, other than in exceptional circumstances."[6]
"The Full Bench is mindful that costs applications in the Commission are extraordinary and security of costs applications, even more so."[7]
[27] The approach to be adopted was recently summarised by the Commission in the following terms:
"In short, there is no absolute rule that controls the exercise of the discretion to order security for costs, and the outcome will depend on the circumstances of the case with the governing consideration being what is required by the justice of the matter. Matters relevant to the consideration will include the financial position of the party against whom the order is sought, the prospects of success and strength of the case of the party resisting the order, the prospects of a costs order being made even if the party seeking the order for security for costs is successful, whether a costs order will be satisfied if made, whether a party will be or will be likely to be absent from the jurisdiction when a decision is made and has no or few assets in the jurisdiction, whether the proceedings raise matters of general importance and whether the hearing of the proceedings is close at hand."[8]
[28] In the context of this matter, and for the following reasons, I decline to order that the Respondent employer be granted a security for costs order against Mr Andrawos.
[29] The application made by Mr Andrawos does not appear, on current indications, to have been made vexatiously or for ulterior purpose. Mr Andrawos appears to have a genuinely held view that he was unfairly dismissed. Following his dismissal he engaged lawyers, assumedly at cost, to advise him and file his application. The application contained substantial material and contentions. He has prepared a detailed witness statement and is preparing a reply to the Respondent employer's materials.
[30] This matter would appear to concern a dismissal for alleged serious misconduct. Some factual differences appear to exist, whilst others appear common. While an employee contesting a dismissal for serious misconduct faces a considerable onus of persuasion if the conduct as alleged is established before the Commission, Mr Andrawos's application is framed in an orthodox manner. In addition to issues of valid reason being in contention, overall harshness and procedural fairness are in issue. It is trite to note that even in a serious misconduct case where conduct is established or even conceded, the Commission is required to consider not just whether a valid reason for dismissal existed but also other matters enumerated in sections 387(b) to (h) of the FW Act. This includes whether dismissal was a proportionate response in all of the circumstances. Mr Andrawos's application raises these issues and cannot be said to be inherently untenable notwithstanding that the employer believes that even the conduct said to be acknowledged by the Applicant in his materials was a sufficient basis for dismissal.
[31] It is also relevant to observe that these are first instance proceedings. Mr Andrawos has not yet had his day in court. An application for security for costs has a different context on appeal, where a party has had their position considered at first instance.
[32] I acknowledge that MyBudget appears to be taking its litigation responsibilities seriously by filing substantive witness statements and documents in accordance with my directions in order to meet the onus an employer carries in a serious misconduct case. This necessarily involves cost, and it would appear in this case, considerable pre-hearing costs. However, it is also relevant that the unfair dismissal jurisdiction is not one where costs automatically follow the event. The Respondent employer here is seeking an order to protect its interests should it secure a costs order, which is not assured and which is governed by legislative criteria.
[33] I also take into account Mr Andrawos's claim that he is not in a strong financial position as a consequence of having been dismissed and not having yet secured alternative employment.
[34] Giving appropriate consideration to these factors as well as established authority on the operation of section 404 of the FW Act, I dismiss the Respondent employer's application for a security for costs order.
M. Andrawos, on his own behalf and P. Greathead, for the Applicant
M. Hii_, with permission_, and K. Dodson for MyBudget Pty Ltd
[2] United Firefighters Union of Australia v Metropolitan Fire and Emergency Services Board [2017] FWCFB 2500
[3] [2011] FWA 2910 per Asbury DP
[6] Zornada v St John Ambulance Australia Western Australia) Inc [2013] FWCFB 8255 at [35]
[7] Velasquez v Cabrini Health Limited [2018] FWCFB 888 at [18]
[8] Chen v Monash University [2015] FWC 3888 at [6]
Printed by authority of the Commonwealth Government Printer
Mr Mark Andrawos
MyBudget Pty Ltd [2018] FWC 3753