The Industrial Magistrate has granted an application seeking the claimant pay the respondent’s costs of proceedings in relation to an underpayment of wages claim.

Background

The claimant union filed an Industrial Magistrates Court claim alleging employee wages and superannuation underpayments, failure to comply with the award and the Fair Work Act 2009 (Cth).

The respondent denied the claim indicating they would seek costs. The employee was paid a supplementary payment after a payment shortfall was identified by an audit.

When ordered to, the claimant lodged an amended claim updating the figures for unpaid wages and superannuation and seeking additional payment for 15 minutes each shift the employee had worked.

The respondent lodged a counterclaim alleging the employee failed to work the entirety of their shifts and seeking payment for the overpaid wages. After discussion, the claimant discontinued proceedings.

The respondent lodged an application seeking costs be paid by the claimant pursuant to reg 11 of the Industrial Magistrates Courts (General Jurisdiction) Regulations 2005 (WA) (Regulations).

Contentions

The respondent sought costs, relying on both claims, their responses and two affidavits. The claimant opposed this, relying on submissions and their representative’s affidavit about dismissing the claim.

Findings

The Industrial Magistrate found reg 11 of the Regulations sets out a discretionary power to award costs, and that the Court must be objectively satisfised the case was frivolously or vexatiously instituted or defended. The Industrial Magistrate noted costs are awarded in extreme cases, such as instituting proceedings without reasonable cause or where an employee was not subject to an award.

The Industrial Magistrate found an affidavit from each party were consistent with each other. The Industrial Magistrate found the respondent was required to prove its application and this was not reversed by the claimant not relying upon any substantial evidence in response. The Industrial Magistrate noted the claimant was not required to explain why the claim was discontinued.

The Industrial Magistrate found it was unnecessary to consider why the claim did not proceed to trial when determining if it was instituted frivolously or vexatiously and relied on The Commissioner of Police of Western Australia v AM [2010] WASCA 163, as the Regulations did not define either word.

The Industrial Magistrate found the claim was patently faulty as shown by plain reading of the claims, review of the award and one of the claimant’s filed affidavits. The Industrial Magistrate noted the amended claim order came about as the first claim attached a spreadsheet with errors and failed to address how amounts claimed arose in relation to the compensatory payment made by the respondent.

The Industrial Magistrate noted the claim should have been discontinued after the audit calculations demonstrated it had no merit. The Industrial Magistrate considered the additional 15 minutes claimed for each shift and found the amended claim was to bolster an otherwise unsustainable claim.

The Industrial Magistrate found there were major defects in both claims, each was untenable, or in the alternative, the claim was so frivolous that to allow it to continue would involve ongoing expense to both parties and the Court, considering the likely necessary interlocutory applications.

The Industrial Magistrate noted the lack of foresight and preparation by the claimant’s previous industrial officer led to the respondent incurring the expense of defending a claim destined to fail.

The Industrial Magistrate found this was an extreme case and that ordinarily the industrial regime should be a ‘no costs’ jurisdiction to allow all members of the community access to justice without fear of excessive costs. The Industrial Magistrate noted the claimant’s experienced representative failed to ensure necessary checks and balances were in place to bring a competent claim. The Industrial Magistrate found this wasted the Court’s time and resources, requiring the respondent to incur ongoing, prolonged, and unnecessary legal costs. The Industrial Magistrate found that as the claim was frivolously instituted, it was not required to consider if the claim was vexatiously instituted.

The Industrial Magistrate found the case was frivolously instituted and ordered the claimant to pay the respondent’s party-party costs from 12 January 2021, to be assessed, if not agreed.

The decision can be read here.