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- Unreported Judgment
QUEENSLAND INDUSTRIAL RELATIONS COMMISSION
Maher v Isaac Regional Council  QIRC 191
Maher, Trevor Desmond
Isaac Regional Council
Termination Dispute – Application for costs
15 October 2020
5 May 2020 (Mention)
1 June 2020 (Mention)
The issue of costs was heard on the papers.
TERMINATION DISPUTE – APPLICATION FOR COSTS – where the dismissed employee had been subject to disciplinary allegations – whether the council had complied with procedural requirements in terminating the local government employee – consideration of ‘without reasonable cause’ – consideration of ‘no reasonable prospect of success’.
Acts Interpretation Act 1954 (Qld) sch 1, s 32CA
Industrial Relations (Tribunals) Rules 2011 (Qld) r 70
Industrial Relations Act 1999 (Qld) s 355(1)
Industrial Relations Act 2016 (Qld) s 321, s 322, s 545
Local Government Act 2009 (Qld) s 197
Local Government Regulation 2012 (Qld) reg 283
Uniform Civil Procedure Rules 1999 (Qld) sch 2
Workers’ Compensation and Rehabilitation Act 2013 (Qld) s 563
Baker v Salver Resources Pty Ltd  FWAFB 4014
Blackbird Energy Pty Ltd v Turner (2007) 185 QGIG 81
Blows v Townsville City Council  QIRC 066
Bow Park Pty Ltd v Williams (No. 2) (2004) 175 QGIG 18
Du Preez v Chelden (No. 2)  ICQ 015
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Greenwood v State of Queensland (Sunshine Coast Wide Bay Health Service District)  QIRC 125
Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257
MIM Holdings Limited v Automotive, Metals, Engineering, Printing and Kindred Industries
Industrial Union of Employees Queensland (2000) 164 QGIG 370
Promnitz v Gympie Regional Council  ICQ 011
Re Christina Hatchett v Bowater Tutt Industries Pty Ltd (No 3) (1991) 39 IR 31
Walker v Mittagong Sands Pty Limited T/A Cowra Quartz (2011) 210 IR 370
Wang v Crestell Industries Pty Ltd (1997) 73 IR 454
White v State of Queensland (Central Queensland Hospital and Health Service)  QIRC 041
Yousif v Workers’ Compensation Regulator  ICQ 10
Mr C. Joy of Craig Joy Workplace Consulting for Mr T. Maher
Ms N. A-Khavari of Counsel instructed by Ms R. Pezzutti of Wotton & Kearney for Isaac Regional Council
Reasons for Decision
- Mr Trevor Desmond Maher (the Applicant) filed an Application for Reinstatement regarding his former employer, the Isaac Regional Council (the Respondent, the Council), on 30 May 2019. Mr Maher was employed by the Council for approximately three years. His last position held with Council was Programme Leader – Regulatory Services.
- In May 2018, the Council began investigating allegations of misconduct said to have been perpetrated by Mr Maher. He was subsequently suspended on pay. An investigation and show cause process ensued. In a letter dated 10 May 2019, Council dismissed Mr Maher based on findings of inappropriate conduct.
- On 31 July 2019, the application was conciliated before Commissioner Thompson. The matter was unable to be resolved by agreement, and so was allocated to me in December 2019 to proceed to hearing.
- I issued the parties with Directions on 27 February 2020 to file and exchange: Statements of Facts and Contentions, witness lists, and affidavits of evidence for each of the witnesses.
- The matter was first mentioned on 5 May 2020. During that mention, there was some discussion about the discovery of documents. That was resolved by my indication to Mr Maher’s representative that, if further information was sought from a non-party, he can compel that disclosure by way of Form 29 Notice of non-party disclosure. At that stage, there were still some Directions outstanding, including the filing of witness lists and affidavits.
- A second mention was held on 1 June 2020. By that date, all of the Directions for filing had recently been complied with. At the beginning of that mention, Mr Maher’s representative indicated that Mr Maher would be discontinuing the Application for Reinstatement. On that basis, the hearing dates were vacated, and I issued the parties with Directions to negotiate about the issue of costs and, failing agreement, file written submissions on that question. The parties were evidently unable to resolve the issue, because each party subsequently filed submissions on the issue of costs.
- There are two issues to be addressed. First, whether an order for costs should be made. Second, if costs are to be ordered, the amount of those costs.
- For the reasons that follow, I find that:
- An order for costs is warranted, as Mr Maher continued to prosecute the Reinstatement Application when there were no reasonable prospects of success.
- The amount of costs to be paid by Mr Maher to the Council is $12,000, to be paid within 28 days of this decision being issued.
The power to award costs
- The Council submits, and I agree, that the power to award costs in a proceeding such as this is contained in s 545 of the Industrial Relations Act 2016 (Qld), which provides:
545 General power to award costs
- (1)A person must bear the person’s own costs in relation to a proceeding before the court or commission.
- (2)However, the court or commission may, on application by a party to the proceeding, order—
- (a)a party to the proceeding to pay costs incurred by another party if the court or commission is satisfied—
- (i)the party made the application or responded to the application vexatiously or without reasonable cause; or
- (ii)it would have been reasonably apparent to the party that the application or response to the application had no reasonable prospect of success; or
- (b)a representative of a party (the represented party) to pay costs incurred by another party to the proceeding if the court or commission is satisfied the representative caused the costs to be incurred—
- (i)because the representative encouraged the represented party to start, continue or respond to the proceeding and it should have been reasonably apparent to the representative that the person had no reasonable prospect of success in the proceeding; or
- (ii)because of an unreasonable act or omission of the representative in connection with the conduct or continuation of the proceeding.
- (3)The court or commission may order a party to pay another party an amount reasonably payable to a person who is not a lawyer, for representing the other party.
- Further, the Industrial Relations (Tribunals) Rules 2011 provide:
- (1)This rule applies if the court or commission makes an order for costs under section 545 of the Act.
- (2)The court or commission, in making the order, may have regard to—
- (a)for a proceeding before the commission—the costs payable on the scale of costs for Magistrates Courts under the Uniform Civil Procedure Rules 1999, schedule 2; or
- (b)for a proceeding before the court or the full bench—the costs payable on the scale of costs for the Supreme Court and District Court under the Uniform Civil Procedure Rules 1999, schedule 1; or
- (c)any other relevant factor.
- (3)The court may order that costs be assessed by the registrar and, in assessing costs, the registrar may have regard to the Uniform Civil Procedure Rules 1999, chapter 17A.
Should an order for costs be made?
- The default position in proceedings in the Commission is that parties are to bear their own costs. That default position exists to not discourage parties from pursing their industrial entitlements, and so is not easily disturbed.
- In their correspondence to Mr Maher and Mr Joy, the Council indicated that they intended to pursue costs against Mr Joy personally as Mr Maher’s representative. Yet, in their submissions before me, they have expressly provided that the application for costs is pursuant to s 545(2)(a), rather than s 545(2) more broadly or with s 545(2)(b) in addition. That is also borne out in the nature of their submissions, which do not relate in any detail to the advice Mr Joy may have provided.
- Further, the Council does not submit that Mr Maher made his Reinstatement Application vexatiously, but rather under the other heads of s 545(2)(a).
- As such, I am empowered by the IR Act to award costs to the Council against Mr Maher in this matter if I am satisfied that either:
- Mr Maher brought his Reinstatement Application without reasonable cause; or
- It would have been reasonably apparent to Mr Maher that the Reinstatement Application had no reasonable prospect of success.
Was the Reinstatement Application brought without reasonable cause?
- The meaning of the term ‘without reasonable cause’ has been considered in several decisions.
- In Kanan v Australian Postal Telecommunications Union, his Honour Justice Wilcox provided (emphasis added, citations removed):
It seems to me that one way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being ‘without reasonable cause’. But where it appears that, on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.
- In Yousif v Workers’ Compensation Regulator, his Honour Justice Martin considered s 563 of the Workers’ Compensation and Rehabilitation Act 2013 (Qld). That section presents precisely the same question as s 545(2)(a) of the IR Act. In that matter, while considering the term ‘without reasonable cause’, his Honour said (emphasis added, citations removed):
The test to be applied is not simply whether or not the application was unsuccessful. It is whether the application could not succeed at the time when it was made.
- It has been held that the test imposed by the expression ‘without reasonable cause’ is comparable to the one applied by a court on an application for the exercise of summary power to stay or strike out proceedings. In that regard, Chief Justice Barwick provided (emphasis added, citations removed):
The test to be applied has been variously expressed; ‘so obviously untenable that it cannot possibly succeed’; ‘manifestly groundless’; ‘so manifestly faulty that it does not admit of argument’; ‘discloses a case which the Court is satisfied cannot succeed’; ‘under no possibility can there be a good cause of action’; ‘be manifest that to allow them’ (the pleadings) ‘to stand would involve useless expense’.
At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or ‘so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument’; ‘so to speak apparent at a glance’.
As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same. Dixon J. (as he then was) sums up a number of authorities in Dey v. Victorian Railways Commissioners  HCA 1; (1949) 78 CLR 62 VOL CXII-9 where he says (1949) 78 CLR, at p 91; ‘A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.’
- Mr Maher’s affidavit, filed on 30 May 2019 in support of his Reinstatement Application, deposes to several factors which he submits made the termination harsh, unjust or unreasonable, including:
- The suspension was in part unpaid and thereby unlawful, as the Local Government Regulation 2012 (Qld) provides that a disciplinary suspension is to be paid.
- The show cause notice and investigation did not provide Mr Maher a fair opportunity to respond, as the allegations were insufficiently particularised.
- The termination was harsh, as Mr Maher’s disciplinary record with the Council was clear.
- The allegations of sexual harassment and improper workplace conduct are subject to various factual disputes, which are said to add sufficient context to negate those allegations.
- The allegations of sexual harassment and improper workplace conduct were not subject to any contemporaneous complaint.
- The imposition of a disciplinary penalty to Mr Maher, in circumstances where he allowed a person under his management to possess a “bite stick” at work, is unjust in circumstances where: it was legal and appropriate for Mr Maher’s worker to do so, it had been the practice of the Council for some period to issue those “bite sticks” to some workers, and there was no explicit and blanket direction to the contrary from Council management.
- Mr Maher filed several versions of submissions as to costs. They largely reiterate Mr Maher’s affidavit material on that issue. Mr Maher’s material traverses a wide range of issues of varying relevance to the issue of costs in these proceedings. In a broad sense, Mr Maher’s position is that at the time of filing the Reinstatement Application, the Council had not furnished him with sufficient evidence. Upon receiving evidence from the Council, he discontinued the matter promptly.
- A large proportion of Mr Maher’s submissions deal with other proceedings he says he has commenced against the Council. These have very limited relevance to determining his prospects of success in this proceeding or the quantum of any costs to be ordered. His affidavit and submissions also contain objectionable material including without prejudice communications. The Council has objected to my considering that material. I have not placed any weight on such materials in arriving at my decision, apart from my acknowledgement that the commerciality of an offer to settle may encompass issues beyond the scope of these proceedings.
- The Council submits that there were no procedural or substantive grounds upon which the dismissal could have been described as harsh, unjust or unreasonable, particularly given Mr Maher’s admitted conduct. The Council’s submissions in that regard can be summarised as follows:
- Mr Maher was advised on 24 May 2018 that the Council was going to conduct an investigation into his workplace conduct.
- That investigation was conducted by an independent third party, namely Mr Edwards of Livingstones. That involved interviewing eight employees in addition to Mr Maher.
- On 18 July 2018, Mr Maher was provided a copy of the fifteen allegations against him and invited to participate in an interview.
- Mr Maher took up that opportunity and attended an interview in early August 2018. He also provided a written response to the allegations which were being investigated.
- An investigation report was subsequently prepared by Mr Edwards, dated 28 August 2018. That investigation found that one or more sub-allegations in 11 out of the 15 allegations were substantiated. That investigation report was provided to Mr Maher, though only after the Application for reinstatement was on foot.
- On 23 August 2018 Mr Maher was provided with a show cause letter. That letter, amongst other things, informed Mr Maher that 11 allegations had been substantiated and the details of the evidence relied on. It also set out the alleged breaches of the Code of Conduct and the Workplace Bullying and Harassment Policy. That letter invited Mr Maher to show cause as to why disciplinary action, including the termination of his employment, should not be taken.
- On 31 August 2018, Mr Maher provided a written response to that show cause notice.
- Mr Maher was issued with medical certificates from his Doctor that he was unfit for work from 29 August 2018 to 1 October 2019. Mr Maher’s submissions in this matter provide that Mr Maher has been collecting New Start Allowance for some time because of a psychological condition. The Council has not been advised at any point in these proceedings that Mr Maher is medically fit to work, and on the present material it appears to Mr Maher remains unemployed.
- Mr Maher was subsequently terminated on or around 10 May 2019, by way of a letter from the Chief Executive Officer. That letter set out the reasons for Mr Maher’s termination, including that Mr Maher had:
- Failed to demonstrate an understanding of the potential power imbalance between himself as a manager and young female employees, particularly Ms Harker;
- Demonstrated an inability to perform his duties in accordance with Council policies and procedures and the Local Government Act 2009 (Qld), which are inherent requirements of his position;
- Demonstrated an inability to promote appropriate workplace behaviour in his role;
- Shown a pattern of inappropriate behaviour;
- Demonstrated behaviour that was inconsistent with his role;
- Engaged in conduct which fell short of the behaviours expected of a manger;
- Responded to the allegations in such a manner that demonstrated a lack of insight into the inappropriateness of his conduct, sought to shift the blame onto others, and showed a lack of remorse.
- As a result of his conduct, made the employment relationship untenable by diminishing any remaining trust and confidence the Council held in Mr Maher.
- The substantiation of the allegations was based, at least in part, on Mr Maher’s admissions to certain allegations and his non-denials as to several other allegations or parts thereof.
- It would have been clear to Mr Maher that the Reinstatement Application would fail, or that it was objectively recognisable that it could not succeed at the time of filing, because:
- On the available facts and evidence, the termination of Mr Maher’s employment was not harsh, unjust or unreasonable;
- From the time of the termination letter, it was apparent that reinstatement was untenable to Mr Maher, and in any event, he had no capacity to be reinstated because he was (and remains) unfit for work by reason of his medical condition; and
- In the circumstances, Mr Maher made the Reinstatement Application to recoup alleged underpayment of wages while still employed, as opposed to reinstatement, where the Respondent was not medically fit to return to work.
- It is not merely a question of whether Mr Maher would have succeeded at hearing or not. To disturb the default position of parties bearing their own costs, s 545(2)(a)(i) of the IR Act requires that I be satisfied that Mr Maher’s application was, on its face, unable to succeed at the time of filing. In that regard, I make several preliminary points.
- A finding that a proceeding was commenced without reasonable cause should be made with due caution and only in circumstances where, upon the facts apparent to an applicant at the time of instituting a proceeding, there was no substantial prospect of success or arguable points of law. As such, I have carefully considered Mr Maher’s initiating material, including his affidavit filed 30 May 2019.
- First, Mr Maher’s termination was the result of a large number of substantiated allegations, which Mr Maher disputes on factual and legal bases. If some of the allegations were found at a hearing to be unsubstantiated, it raises the question of whether the termination was harsh, unjust or unreasonable. That is always the fine balance to be struck in cases where a variety of allegations have been said to substantiate the termination, but some of those allegations are later found not to be substantiated at a hearing. It is not usually a straightforward matter and would no doubt have been the subject of submissions and consideration.
- Second, in circumstances where a dismissal arises because of serious misconduct or alleged criminal conduct, the onus of proof as to those events occurring shifts from the employee to the employer. That shift in onus may improve a former employee’s prospects of success.
Were the allegations sufficiently particularised?
- Discipline of local government employees such as Mr Maher is provided for by s 197 of the Local Government Act 2009 (Qld), and by the Local Government Regulation 2012 (Qld) at Ch 8 Pt 3 Div 1. In particular:
283 Employee to be given notice of grounds for disciplinary action
- (1)Before the chief executive officer takes disciplinary action against a local government employee, the chief executive officer must give the employee—
(a) notice of the following—
(i) the disciplinary action to be taken;
(ii) the grounds on which the disciplinary action is taken;
(iii) the particulars of conduct claimed to support the grounds; and
(b) a reasonable opportunity to respond to the information contained in the notice.
- (2)The grounds and particulars are taken to be the only grounds and particulars for the disciplinary action taken, and no other ground or particular of conduct can be advanced in any proceeding about the disciplinary action taken against the local government employee.
- That legislation was considered in Promnitz v Gympie Regional Council, by his Honour Justice Martin. His Honour found that:
- Before disciplinary action is taken against a local government employee, the chief executive officer must give the employee a notice which states the disciplinary action to be taken, the grounds on which the disciplinary action is taken, and the particulars of the conduct claimed to support the grounds.
- The particularisation of the grounds for the disciplinary action and the conduct must be within the notice itself:
It may be that the underlying hardship perceived by the Council is that, as it had already conducted an inquiry through an agent, the appellant had already been provided with an opportunity to say what she wished to say. Nevertheless, s 238 of the Regulation inserts a mandatory step before the taking of disciplinary action and it does so without reference to any earlier investigation that might have taken place.
- Compliance with the processes set out in the regulations is mandatory, and non-compliance can form the basis of a finding that the termination was harsh, unjust or unreasonable.
- The Notice to Show Cause, issued on 23 August 2018, commences by saying:
On 24 May 2018 Isaac Regional Council (Council) suspended your duties in order to investigate a number of serious allegations relating to bullying and harassment and inappropriate conduct against you as a Council employee. The external investigator, Livingstones, have now conducted their independent investigation regarding the allegations. The investigation process included the collection and analysis of relevant information and evidence, conducting interviews with relevant employees to provide insight into the matters and documenting all information and evidence. A summary of the allegations were presented to you in a letter dated 18 July 2018, where you were required to respond to the allegations in a meeting held on 1 August 2018. You provided written responses only and made the decision to not participate in an oral interview.
I have set out below the findings of the investigation relating to the allegations of bullying and harassment and inappropriate conduct, together with details of the policies and procedures which Council alleges that you have breached.
- I will turn then to consider just some of the allegations contained in the Show Cause Notice dated 23 August 2018 which were substantiated.
Allegation 6a and 6b
In conducting himself in the workplace, Mr Maher has acted inappropriately towards customers and/or staff, examples include:
- On at least one occasion Mr Maher verbally abused a customer over the telephone in front of Isaac Regional Council staff.
- On at least one occasion Mr Maher has been rude and arrogant towards a member(s) of the public in dealing with matter(s) before referring them onto a Ranger.
- Those allegations are lacking in particularity. They do not establish any dates, even approximately, or any specific language complained of, or any further relevant or identifying context.
In conducting himself in the workplace, Mr Maher has acted inappropriately towards customers and/or staff, examples include:
- On different occasions, said words to the effect of the following in front of an Isaac Regional Council staff member:
- Said words to the effect of “Fine as many people as possible” and/or “go hard and fine them”.
- Given the nature of Mr Maher’s role as a manager, it is not abundantly clear in the Show Cause Notice as to how using those words may warrant a disciplinary penalty. It is noteworthy that the allegation acknowledges that it is not a direct quote but only “words to the effect of”, which to some extent invites the possibility of a contextual explanation. That context was not forthcoming, as the allegation is accompanied by rather scant detail.
- That is not to suggest the allegation is incapable of substantiation or warranting a penalty, but the alleged facts must be sufficiently particularised and any connection between the alleged facts and the alleged breach of policy or code of conduct must be particularised in order to allow a person a fair opportunity to respond.
Mr Maher expressly, or impliedly by conduct, permitted and/or gave authorisation for Mr Josh Dowsett (Mr Dowsett), former Ranger, to possess a restricted weapon, commonly referred to as a ‘bite/night stick’ and/or ‘police baton’, in the workplace.
- There is no particularisation in the Show Cause Notice about how Mr Maher “expressly, or impliedly by conduct” allowed Mr Dowsett to possess the “bite stick”, or identification of precisely how that is a restricted weapon. Again, that does not mean the allegation was incapable of substantiation, but rather that Mr Maher was entitled to further detail in order to allow him to respond.
Allegation 12a and 12b
On one or more occasions Mr Maher has covertly or without awareness of other parties, recorded or made it appear as though Mr Maher had used a personal recording device to record, conversations with:
- Other members of Isaac Regional Council Staff;
- On at least on occasion with Councillor Peter Freeleagus on a Councillor Pound visit.
- There is no explanation or particularisation of how that conduct is in breach of a council code of conduct or policy, or indeed a law. Again, that allegation may constitute such a breach, but it is incumbent upon the Council to explain that connection to Mr Maher and allow him a fair opportunity to respond.
- The Council has listed a variety of factual allegations, followed by code of conduct and policy extracts, and expected Mr Maher to connect the dots. Those connections may be self-evident for the allegations of sexual harassment connecting to the sexual harassment policy, and for some of the other allegations. However, it is a far less clear connection between these factual allegations and the breach of a code of conduct or policy. It is incumbent upon the Council to make that connection and allow Mr Maher to respond. The fact that Mr Maher responded to the allegations in some manner does not mean that his complaints of a lack of particularity in some allegations are inherently unfounded.
- Mr Maher may have been furnished with more fulsome details at some other time, such as during the investigation or after the termination, but his Honour Justice Martin in Promnitz was clear: the particularisation must be within the notice itself and not merely within the preceding investigation process.
- Mr Maher’s submission that some of the allegations were difficult to respond to as they lack particularity is arguable. If he had been successful on that point, and aside from the issues as to remedy discussed elsewhere in this decison, it would be necessary to consider whether deficiencies in particularity for some of the allegations render the decision to terminate harsh, unjust or unreasonable. That would require the delicate balancing act of determining whether the allegations which were substantiated were sufficient, in and of themselves, to justify termination. That is a situation that warrants further consideration at hearing and is not on its face a foregone conclusion.
- I cannot conclude that Mr Maher brought these proceedings without reasonable cause on that basis. For the avoidance of doubt, that is not to say Mr Maher would have been successful at hearing, but merely that there was an arguable point of law at the time he filed the Reinstatement Application.
Was reinstatement untenable or impossible, and did that result in the reinstatement application being brought without reasonable cause?
- The IR Act provides for the following regarding remedies resulting from a reinstatement application:
321 Remedies—reinstatement or re-employment
- (1)This section applies if the commission is satisfied an employee was unfairly dismissed.
- (2)The commission may order the employer to reinstate the employee to the employee’s former position on conditions at least as favourable as the conditions on which the employee was employed immediately before dismissal.
- (3)If the commission considers reinstatement would be impracticable, the commission may order the employer to re-employ the employee in another position that the employer has available and that the commission considers suitable.
- (4)The commission may also—
- (a)make an order it considers necessary to maintain the continuity of the employee’s employment or service; and
- (b)order the employee to repay any amount paid to the employee by, or for, the employer on the dismissal; and
- (c)order the employer to pay the employee the remuneration lost, or likely to have been lost, by the employee because of the dismissal, after taking into account any employment benefits or wages received by the employee since the dismissal.
- (5)This section does not limit the commission’s power to make an interim or interlocutory order.
- (1)If, and only if, the commission considers reinstatement or re-employment would be impracticable, the commission may order the employer to pay the employee an amount of compensation decided by the commission.
- (2)The commission must not award an amount of compensation that is more than—
- (a)if the employee was employed under an industrial instrument—the wages the employer would have been liable to pay the employee for the 6 months immediately after the dismissal, paid at the rate the employee received immediately before the dismissal; or
- (b)if the employee was not employed under an industrial instrument—the lesser of the wages under paragraph (a) and an amount equal to half the amount of the high income threshold under the Fair Work Act 2009 (Cwlth), section 333.
- (3)The commission must take into account any amount paid to the employee by the employer on the dismissal.
- (4)This section does not limit the commission’s power to make an interim or interlocutory order.
- The remedy to be provided in the event of a successful reinstatement application is a matter of discretion, though the default position in reading those two sections together is reinstatement or re-employment, rather than payment in lieu.
- The Council submitted that:
It was untenable for (Mr Maher) to be reinstated in circumstances where the CEO of (the Council) had:
- Formed the view that the employment relationship was untenable; and
- Lost trust and confidence in the Applicant,
Where this was communicated to (Mr Maher) as early as the Termination letter, prior to the filing of the Reinstatement Application.
- Council’s opposition to reinstatement or re-employment is not a conclusive barrier to either of those outcomes. There are numerous authorities dealing with the phrase “impracticable” in the context of s 322, which echo the sentiment that the default position of reinstatement is not easily displaced. His Honour Vice President O’Connor provided a useful summary of those in White v State of Queensland (Central Queensland Hospital and Health Service)  QIRC 041 (citations removed):
The respondent drew the Commission's attention to the decision of Wilcox J in Nicolson v Heaven and Earth Gallery where his Honour wrote:
"The word "impracticable" requires and permits the Court to take into account all of the circumstance of the case, relating to both the employer and the employee, and to evaluate the practicability of a reinstatement order in a common sense way. If a reinstatement order is likely to impose unacceptable problems or embarrassment or seriously affect productivity, or harmony within the employer's business, it may be 'impracticable' to order reinstatement; notwithstanding that the job remains available."
There is no evidence before the Commission to support a conclusion that it would be "impracticable" to reinstate the applicant in the sense that such an order would impose "unacceptable problems or embarrassment or seriously affect productivity, or harmony".
The applicant referred the Commission to Perkins v Grace Worldwide (Aust) Pty Ltd where the Full Bench of the Fair Work Commission wrote:
"Trust and confidence are concepts of degree. It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether that standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party.
It may be difficult or embarrassing for an employer to be required to re-employ a person the employer believed to have been guilty of wrongdoing. The requirement may cause inconvenience to the employer. But if there is such a requirement, it will be because the employee’s employment was earlier terminated without a valid reason or without extending procedural fairness to the employee. The problems will be of the employer’s own making. If the employer is of even average fair-mindedness, they are likely to prove short-lived. Problems such as this do not necessarily indicate such a loss of confidence as to make the restoration of the employment relationship impracticable."
Whilst I accept that it may be inconvenient or difficult for the respondent to reinstate the applicant, it is nevertheless, in my view, not impracticable for them to do so. In Auto Logistics Pty Ltd v Kovacs de Jersey P considered the meaning of word "impracticable". His Honour concluded:
"That word does in my view bear its ordinary meaning, and it is not enough, to establish practicability, to show that restoration of employment would be merely inconvenient or difficult. As the dictionaries confirm, the word means practicably impossible."
- In his affidavit filed in these proceedings on 1 June 2020, Mr Stevenson deposes to several reasons why he believes reinstatement would be impracticable:
- His loss of trust and confidence in Mr Maher;
- Mr Maher’s medical condition and fitness for work; and
- Structural changes to the Council since Mr Maher’s termination.
- In a letter to Council later that same day, Mr Maher wrote:
It is evident from the CEO’s Affidavit that the reinstatement for which (Mr Maher) contended would appear not to be feasible. With that development, the Applicant’s prospects of an order for back-pay also disappear.
- In their submissions, the Council submits that the CEO’s position regarding reinstatement was known since the provision of the termination letter, and it would be disingenuous for Mr Maher to submit that he only now understands that position. In that regard, Council refers to correspondence between the parties and the Affidavit of Mr Stevenson, the CEO of the Council.
- Regarding trust and confidence, Council submitting that they have lost trust and confidence in Mr Maher is just one element in determining whether reinstatement or re-employment would be impracticable. Had the matter proceeded to hearing, and if Mr Maher had been successful, the practicability of reinstatement would have been a question to be determined on the basis of evidence and submissions from both the Council and Mr Maher. It was not a foregone conclusion at the time of filing, and on the material available to Mr Maher, that reinstatement would not be an available remedy. The fact that Mr Maher changed his mind as to his prospects of reinstatement over a year after being dismissed does not mean he should have been of that mindset in the first place.
- Regarding Mr Maher’s fitness for work, Mr Maher says he has medical certificates regarding his unfitness for work from 29 August 2018 until 1 October 2019. Further, his Statement of Facts and Contentions filed 23 March 2020 provides:
(Mr Maher) has been unable to work due to his psychological condition. He was granted New Start Allowance from 3rd March 2019, and remains on that to this point, with the exception of 10th May 2019 to 24th August 2019 where he lived on the payout of his long service leave.
- Mr Maher was unfit for work at the time of filing due to a psychological condition. Indeed, he remains unfit for work, according to his material filed in this matter. That circumstance would certainly weigh in favour of a finding that reinstatement or re-employment was impracticable at this stage. However, it is important to avoid the clarity of vision which flows from the advantage of hindsight. What is relevant is the information available to Mr Maher at the time of filing.
- Psychological conditions are complex and at times unpredictable in their onset, duration, and effect. There is no evidence before me that, at the time of filing, Mr Maher knew or ought to have known that his illness would continue for such an extended duration and indeed to this day. Mr Maher knew he was unwell at that point, and had been unwell for some months prior. It was not unreasonable for Mr Maher to believe that, in the period between filing the Reinstatement Application and it being heard potentially over 12 months later, he would recover sufficiently to be able to return to work in some capacity.
- Regarding restructuring, in Mr Stevenson’s affidavit he stated that:
Significant structural changes have been made to the organisation since (Mr Maher’s) employment was terminated.
Reinstatement to (Mr Maher’s) position is not possible, because that position has been changed to incorporate broader responsibilities and has been filled by another person appointed in good faith.
- Those reasons may have been sufficient for this Commission to find that reinstatement or re-employment of Mr Maher was impracticable. Certainly, that appears to have been Mr Maher’s opinion, as it resulted in him discontinuing these proceedings. However, the CEO’s statement acknowledges that the changes have occurred after Mr Maher was terminated. There is insufficient evidence before me that such restructuring was either completed or known to Mr Maher at the time of filing this Reinstatement Application.
- The Council also submits that Mr Maher brought these proceedings in an attempt to recoup allegedly unpaid wages, rather than reinstatement, particularly given his medical unfitness to return to work at the time of filing.
- As set out in paragraphs - above, there is insufficient evidence before me that Mr Maher knew, or ought to have known, at the time of filing these proceedings that his condition would afflict him for such a duration.
- Mr Maher specifically provided from the outset of these proceedings that he sought reinstatement, re-employment, or payment if reinstatement or re-employment is found by the Commission to be impracticable. Certainly, throughout his material Mr Maher has conflated the allegation of unpaid wages arising from a suspension, with the question of compensation arising from a finding of unfair dismissal. It appears to me that Mr Maher considered the alleged unpaid wages arising from the suspension were relevant to an award of unpaid wages resulting from reinstatement or re-employment pursuant to s 321(4)(c). Given the wording of that section, that connection is nebulous. However, it does not follow that the entire Reinstatement Application was thereby brought without reasonable cause. The lack of an award of money due to lost wages under s 321(4)(c) would have had no bearing on the award of reinstatement or re-employment under s 321(2) and (3).
- It is noteworthy that, in a regional location with limited employment opportunities, a job may be far more valuable than a financial settlement. That is particularly true when Mr Maher’s psychological health is considered.
- Further, Mr Maher initiating a separate claim on a different issue, though seeking to conflate the two into one settlement, does not mean that this proceeding was brought without reasonable cause or that Mr Maher was not actually seeking reinstatement.
- As such, I cannot conclude with the requisite level of certainty, namely the balance of probabilities, that the matter was commenced without reasonable cause.
Would it have been reasonably apparent to Mr Maher that his Reinstatement Application had no reasonable prospect of success?
- The Council submits that, in addition or in the alternative, it would have been reasonably apparent to Mr Maher that the Reinstatement Application had no reasonable prospects of success. That avenue for recovering costs is contained in s 545(2)(a)(ii). The term ‘reasonable prospect of success’ involves an objective assessment.
- Mr Maher’s Reinstatement Application was filed on 30 May 2019, though not discontinued until 1 June 2020. I have accepted that these proceedings were not brought without reasonable cause because, at the time of filing, Mr Maher could reasonably have expected to have sufficiently recovered from his illness such that he could return to work. That, in combination with the other aforementioned factors, meant that Mr Maher seeking reinstatement was not entirely void of reasonable prospects.
- However, as the matter progressed, it should have become apparent to Mr Maher that he was not recovering from his illness to a sufficient extent to return to work. At that stage, his prospects for reinstatement or re-employment were effectively extinguished, because it would have been entirely impracticable to reinstate him. His only avenue to achieve a remedy would then have been an order for compensation under s 322.
- That section provides that the amount of compensation paid is an exercise of discretion, but mandates that said award cannot exceed “the wages the employer would have been liable to pay the employee for the 6 months immediately after the dismissal, paid at the rate the employee received immediately before the dismissal”.
- Mr Maher was dismissed by way of letter dated 10 May 2019, with notice paid in lieu, with 6 months post that date being 10 November 2019. Throughout that period, Mr Maher was unfit for work. Given that he had exhausted his sick leave accrual prior to termination, his wages for those 6 months had he not been terminated would have been zero. As such, he could not have received any compensation.
- The question then becomes: when would Mr Maher have been expected to realise that he was not recovering from his illness to the extent necessary to return to work, and hence he had no prospects of success?
- Prior to filing his Reinstatement Application on 30 May 2019, Mr Maher had been unfit for work since 29 August 2018. That was some 9 months prior to his filing of the Reinstatement Application. Even though I accept that at the time of filing Mr Maher might reasonably have expected to recover sufficiently to be able to return to work, the reasonableness of that expectation diminished over time.
- In my view, that point arrived when Mr Maher received correspondence from the Council dated 11 February 2020, which offered him $10,000 to discontinue the proceedings. That letter also clearly set out why Mr Maher’s illness would prevent him from being reinstated, and why he could not recover any lost wages under s 322 because he had been unfit for work for the 6 months post-termination. By that stage, Mr Maher had been unfit for work for some 18 months by virtue of his psychological condition, and it was no longer reasonable for him to expect that he would recover sufficiently to return to work at any time in the near future.
- Mr Maher’s correspondence in reply dated 18 February 2020 suggests that he could recover compensation because of s 321(4)(c). However, that submission does not recognise the fact that, in order for s 321(4)(c) to become relevant, reinstatement or re-employment must first be ordered, and by that stage there was no reasonable prospect of that occurring.
- It should have become apparent to Mr Maher on 11 February 2020, upon receiving the Council’s correspondence, that he had no reasonable prospects of success. Given that he continued to put the Council to the cost of defending his Reinstatement Application, in combination with the other circumstances including the Council’s offers of settlement to Mr Maher, I have determined to make an award of costs against him. That is not a conclusion lightly reached. The question then becomes a matter of quantum.
The Amount of Costs
- The Council sought that I make orders for costs on an indemnity basis, or in the alternative costs to be assessed by the Industrial Registrar pursuant to r 70(3) of the Rules.
- The Commission is empowered, under s 545 and r 70, to award an amount of costs. The precise quantum of the costs awarded is discretionary, though discretion must be exercised judicially. The amount of costs may be informed by the Magistrates Court scale and other relevant matters. It is open to the Commission to make an order which best fits the circumstances of the case.
- The Council refers to Fraser Coast Regional Council v Alderton  QIRC 001, wherein Commissioner Thompson determined to award costs against an applicant. In respect of their submissions as to the relevance of that matter, I agree that Mr Maher was warned that costs would be sought against him, that an offer to settle the matter was made quite early in the proceedings by Council, and that Council’s offer was reasonable. I have carefully considered Council’s attempts to resolve the matter before incurring further cost, and they certainly weigh in favour of an order for costs.
- Mr Maher’s counter-offer sought an amount greater than 6 months wages to settle the matter. The Council submits that such an offer was unreasonable, as he could not have been awarded that much had he been successful at hearing. However, it is noteworthy that settlement offers are made on a commercial basis, and so do not need to precisely reflect the expected outcome of a hearing. That resolution would have encapsulated other disputes Mr Maher had with the council regarding allegedly unpaid wages and would have avoided any possibility of Mr Maher being reinstated or re-employed by Council. No doubt those elements may have had some value to the Council.
- This matter was conferenced before Commissioner Thompson and was mentioned twice before me. As is the usual course in a termination dispute, the Respondent was required to file a Response to the Reinstatement Application, a Statement of Facts and Contentions, witness lists and several other documents.
- The hearing was to be conducted in part by video due to COVID-19. In order to reduce the complexities and duration of the hearing, I required witnesses to provide their evidence-in-chief by affidavit. That is somewhat unusual for a termination dispute, and I accept that has resulted in the Council incurring more cost than they normally would have in circumstances where a matter was discontinued prior to hearing. That is particularly true in light of the fact that the Respondent intended to call a large number of witnesses. However, I am also mindful that such a circumstance is not the fault of Mr Maher.
- The Council has submitted that their costs in these proceedings, calculated at the Magistrates Court Scale, were as follows:
Professional costs: $34,563.53 (with an additional $6,912.70 as a 20% “care and conduct allowance”)
Disbursements: $14,325.00 (including Counsel)
Total (exclusive of 20% allowance): $48,888.53
Total (inclusive of 20% allowance): $55,801.23
- On the face of it, for a matter that did not proceed to hearing, that amount of costs is significant. It includes, in professional costs alone, almost $9,000 for correspondence and over $9,000 for telephone calls. It is also calculated on the scale for matters over $50,000. It is unclear why that was the case, given that six months of Mr Maher’s annual wage at termination was $46,556.45.
- In Alderton, the award of costs was for $8,973.40 and encompassed: two days of hearing on being granted leave for legal representation, disclosure, preparation for trial, three days of hearing on the application for reinstatement, and the application for costs. I note that council in that matter did not instruct counsel. That is not to suggest that the award of costs in one matter should be applied to another. Quite clearly, the issue of the amount of costs incurred is based upon the particular circumstances of the proceeding. However, it illustrates the point that the amount of costs sought by the Council in this matter is substantial.
- In Blackbird Energy, Deputy President Bloomfield considered a costs application following an unsuccessful application for reinstatement. That case involved consideration of s 355(1) of the Industrial Relations Act 1999 (Qld), which provided costs powers to the Commission in similar terms to s 545 of the current IR Act. His Honour provided:
Leaving aside the costs incurred by Blackbird in mounting the current application pursuant to s. 335 of the Act, the materials filed with the Affidavit of Ms Foreman disclose that Blackbird incurred professional fees for its solicitor and counsel in the amount of $73,634.46. However, $11,908.22 of this amount is shown to be in respect of "Misappropriation of Funds". Whether that relates to the present application or other matters is unclear. The remainder, in the amount of $61,726.24, is said to be in relation to "Donna Turner- dismissal". However, apart from a detailed invoice from counsel to Blackbird's solicitors the make up of the professional fees claimed is not disclosed.
Without in any way suggesting doubt about the bona fides of the professional fees charged, I have decided that whilst Blackbird is certainly entitled to recover a proportion of its cost, I should pay greater regard to the published Scale of Costs (without necessarily adopting it) rather the costs actually incurred, and to take into account all of the circumstances of the case. This includes Ms Turner's modest financial circumstances and the fact that the case was likely to involve a one day trial even if Ms Turner had admitted all of the issues canvassed above.
In the end result I have decided to award costs on a global basis in the quantum of $16,000 with such payment to be made within 22 days of the date of release of this decision. Such amount is generally calculated on the premise that costs for 2 days of trial and 4 days of preparation (for solicitor and counsel) were unnecessarily incurred by Blackbird.
- His Honour also followed a similar approach in Greenwood, and in several other matters.
- I am minded to adopt a similar approach in making an order which best fits the circumstances of the case.
- I have carefully considered the costs materials provided by the Council, and both parties’ submissions. In addition, I have noted Mr Maher’s lengthy and ongoing unemployment, the outcome of these proceedings, and the fact that the matter was discontinued before hearing but after affidavit and other materials had been filed by the Respondent. I have sought to address the unfairness of the Council incurring unnecessary costs in these proceedings, while avoiding the costs order having a punitive impact on Mr Maher.
- In my view, the point at which it should have been apparent to Mr Maher that he could not succeed in these proceedings was 11 February 2020. He persisted with this matter until 2 June 2020, filing a discontinuance shortly before the hearing of this matter was to commence on 8 June 2020. In that period, in compliance with Directions, the Council:
- Attended two mentions, with solicitor and counsel;
- Complied with disclosure requirements;
- Filed attendance notices and affidavits in respect of 12 witnesses; and
- Filed Statements of Facts and Contentions.
- In addition, following the discontinuance, Council has been required to file submissions and gather evidence in this application seeking costs.
- I have compared the costs incurred by the Council since 11 February 2020 in these proceedings against the Magistrates Court Scale. I have determined that the order which best reflects the nature and outcome of these proceedings, and the circumstances of the parties, is that Mr Maher is to pay the Council’s costs in these proceedings in the amount of $12,000. That amount encompasses the Reinstatement Application and this costs application.
- The default position in proceedings such as these is that the parties are to bear their own costs. I may disturb that presumption and award costs, if I am satisfied that the proceedings were made without reasonable cause or if it would have been reasonably apparent to the party that the application had no reasonable prospect of success.
But, the presence of a finding that an application was made without reasonable cause or that an applicant had no reasonable prospect of success, does not mandate an order for costs in favour of the opponent. Section 545(2) provides a discretion to make such an order.
- In considering the material before me, I have determined that Mr Maher had no reasonable prospect of success in his Reinstatement Application. It should have become apparent to him during these proceedings that his self-reported ill-health would have precluded him from reinstatement, or compensation in the alternative, due to that illness preventing him from working during the relevant period. His persistence with these proceedings has placed the Council in the position of incurring costs in defending his application. As such, I am of the opinion that a departure from the default position of parties bearing their own costs is warranted.
- In considering the quantum of costs, I have calculated a global figure to encapsulate all of the relevant circumstances, including the assessment provided by the Council. I have concluded that Mr Maher is to pay the Council $12,000 as costs in these proceedings, which includes the substantive Reinstatement Application and the costs application. He will have 28 days to do so.
- I order accordingly.
- That, within 28 days, Mr Trevor Desmond Maher is to pay the Isaac Regional Council $12,000 as costs incurred in these proceedings.
 ‘the Reinstatement Application’.
 A Form 27 Notice of Discontinuance has subsequently been filed.
 Although Isaac Regional Council’s submissions are in substance an Application in an Existing Proceeding, for convenience and the avoidance of confusion I have referred to the parties in this Decision as they appear in the substantive Application for reinstatement: Mr Maher as the Applicant, and Isaac Regional Council as the Respondent.
 ‘IR Act’.
 ‘the Rules’.
 Affidavit of Ms R. Pezzutti filed 22 June 2020, exhibit RMP-3.
 Submissions of the Council filed 22 June 2020, , .
 Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, 29.
 Yousif v Workers’ Compensation Regulator  ICQ 10, , citing MIM Holdings Limited v Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees Queensland (2000) 164 QGIG 370, 371.
 Re Christina Hatchett v Bowater Tutt Industries Pty Ltd (No 3) (1991) 39 IR 31,  followed in Walker v Mittagong Sands Pty Limited T/A Cowra Quartz (2011) 210 IR 370.
 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, 129-130.
 A type of stick, similar to a police baton.
 Affidavit of Ms R Molineaux (nee Haldane) filed 29 May 2020, Exhibit RH-10.
 Affidavit of Mr T Maher filed 30 May 2019, Exhibit G.
 Wang v Crestell Industries Pty Ltd (1997) 73 IR 454, 463, followed in Blows v Townsville City Council  QIRC 066, .
 Promnitz v Gympie Regional Council  ICQ 011, (‘Promnitz’).
 Local Government Regulation 2012 (Qld) reg 283.
 Promnitz v Gympie Regional Council  ICQ 011, .
 Ibid -.
 White v State of Queensland (Central Queensland Hospital and Health Service)  QIRC 041, -.
 Affidavit of Ms R Pezzutti filed 22 June 2020, Exhibit RMP-7.
 Affidavit of Mr T Maher filed 15 May 2020, -.
 Bow Park Pty Ltd v Williams (No. 2) (2004) 175 QGIG 18, cited in Du Preez v Chelden (No. 2)  ICQ 015, .
 Submissions of Mr Maher filed 3 July 2020, ; Affidavit of Ms R Pezzutti filed 22 June 2020, Exhibit RMP-7.
 Application for Reinstatement filed by Mr Maher on 30 May 2019, page 3.
 Baker v Salver Resources Pty Ltd  FWAFB 4014, .
 Acts Interpretation Act 1954 (Qld) sch 1, definition of ‘month’ and definition of ‘calendar month’.
 Applicant’s Statement of Facts and Contentions, filed 23 March 2020,  – .
 Industrial Relations (Tribunals) Rules 2011 (Qld) r 70.
 Affidavit of Mr Maher filed 30 May 2019, exhibit A.
 Blackbird Energy Pty Ltd v Turner (2007) 185 QGIG 81.
 Greenwood v State of Queensland (Sunshine Coast Wide Bay Health Service District)  QIRC 125.
 Acts Interpretation Act 1954 (Qld) s 32CA(1).
 Du Preez v Chelden (No. 2)  ICQ 015, .
- Published Case Name:
Maher v Isaac Regional Council
- Shortened Case Name:
Maher v Isaac Regional Council
 QIRC 191
15 Oct 2020