In the recent matter of Steven Post v NTI
Limited  FWC 1059, the Fair Work Commission ordered an
employee to pay indemnity costs to his former employer as a result
of his imprudent and delinquent conduct during the
Section 400A of the Fair Work Act 2009 grants the
Commission discretion to award costs against a party where it is
satisfied that the costs were incurred because of an unreasonable
act or omission in connection with the party's conduct or
continuation of a matter.
Further, section 611 of the Fair Work Act 2009 provides
that the Commission may order a party to bear some or all of the
costs of another party where the Commission is satisfied that the
application was made vexatiously or without reasonable cause or
where it should have been reasonably apparent to the party that
their application had no reasonable prospects for success.
When the unfair dismissal matter was heard at first instance,
the Commission found that the employee's dismissal for serious
misconduct was justified. The employee appealed the decision to the
Full Bench of the Commission, where the decision at first instance
The employee then appealed the decision of the Full Bench to the
Federal Court seeking judicial review. However, before the appeal
could be heard, the employee discontinued the Federal Court
Due to the conduct of the employee and the unreasonable
continuation of the matter, the employer sought an order for the
employee to bear their costs on an indemnity basis under sections
400A and 611 of the Fair Work Act 2009.
In determining the application for costs, the Commission found
that the employee had imprudently refused four separate offers to
settle, wilfully disregarded the facts and caused undue
prolongation of the proceedings. The Commission highlighted that
the employee 'should have appreciated he had a hopeless
case' and that his claim 'was made without reasonable
In attempting to settle the matter, the employer had made offers
of five weeks' wages in December 2014, three months' wages
in January 2015 and two offers of six months' wages in February
2015. The last two offers made by the employer were the maximum
compensation available to the employee in the unfair dismissal
The Commission's unfavourable opinion of the employee was
driven by his 'unreasonable' and 'reckless' conduct
in refusing the numerous settlement offers from the employer. The
Commission found that the employer's offers to the employee
were 'extremely generous' given the employee's conduct
and that the failure to accept any of the offers was unreasonable
and invited the Commission's criticism.
Due to the employee's unreasonable conduct and continuation
of the matter where it was apparent that the application did not
have any reasonable prospects of success, the Full Bench upheld the
decision at first instance and ordered the employee pay the
employer's costs on an indemnity basis.
This decision demonstrates that the Commission will exercise its
discretion to award costs against a party under sections 400A or
611 of the Fair Work Act 2009 where the circumstances
Further, the decision highlights the strategic importance of
employers making reasonable formal offers to employees in an
attempt to settle an unfair dismissal claim prior to a hearing.
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The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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An employee that refused a reasonable offer of settlement was ordered by the FWC to pay his ex-employer's legal costs.
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