Hari Lengkong v Bupa Care Services Pty Ltd T/A Bupa Morphettville

[2012] FWA 6720

[2012] FWA 6720

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Hari Lengkong
v
Bupa Care Services Pty Ltd T/A Bupa Morphettville
(U2011/14885)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 9 AUGUST 2012

Termination of employment - costs.

[1] This decision addresses an application which Mr Lengkong has made for costs. It follows a decision 1 issued on 1 May 2012. In that decision I found that the termination of Mr Lengkong’s employment by Bupa Care Services Pty Ltd trading as Bupa Morphettville (Bupa) was harsh, unjust and unreasonable. I determined that reinstatement was not appropriate and ordered the payment of 16 weeks pay as compensation pursuant to s.390(3) of the Fair Work Act 2009 (the FW Act).

[2] Mr Lengkong was a registered nurse. The termination of his employment followed an incident where an elderly resident under his general supervision suffered an injury. Mr Lengkong’s employment was terminated following an investigation into Mr Lengkong’s performance of his work and adherence to Bupa’s reporting requirements.

[3] Mr Lengkong’s costs application is made pursuant to s.611(2)(b) of the FW Act, on the basis that it should have been reasonably apparent to Bupa that its response to his claim had no reasonable prospect of success. Mr Lengkong asserts that, by 17 November 2011, Bupa knew that the injury to the resident was different to the injury description provided to him on 1 December 2011. Further, that the Bupa General Manager acted on information she knew not to be accurate when she then summarily dismissed Mr Lengkong.

[4] Mr Lengkong’s costs application was made within the time limit specified in s.402 of the FW Act.

[5] Both parties have provided extensive written submissions. I have taken these submissions into account in reaching a conclusion in this matter.

Findings

[6] The general provisions under the FW Act are to the effect that each party bears its own costs. However, s.611(2) prescribes circumstances which, if made, provide Fair Work Australia (FWA) with the discretion to award costs.

[7] Section 611 states:

“611 Costs

(1) A person must bear the person’s own costs in relation to a matter before FWA.

(2) However, FWA may order a person (the first person) to bear some or all of the costs of another person in relation to an application to FWA if:

(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or

(b) FWA is satisfied that it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.

Note: FWA can also order costs under sections 376, 401 and 780.

(3) A person to whom an order for costs applies must not contravene a term of the order.

Note: This subsection is a civil remedy provision (see Part 4-1).”

[8] A Full Bench in Baker v Salva Resources Pty Ltd 2 addressed this statutory provision in the following terms:

“[10] The concepts within s.611(2)(b) “should have been reasonably apparent” and “had no reasonable prospect of success” have been well traversed:

• “should have been reasonably apparent” must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test; and



• a conclusion that an application “had no reasonable prospect of success” should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable.”




[end notes removed]

[9] In Walter v Mittagong Saenz Pty Ltd 3 Thatcher C stated:

“[44] In relation to the criteria ‘without reasonable cause’ and ‘no reasonable prospect of success’, I have concluded that:

(a) the criteria ‘no reasonable prospect of success’ in paragraph 611(2)(b) is lower and wider than the term ‘without reasonable cause’ referred to in paragraph 611(2)(a), which is similar to the test traditionally applied by a court to summarily dismiss actions. 31 Circumstances which satisfy the ‘without reasonable cause’ test would be likely to satisfy the ‘no reasonable prospect of success’ criterion, but the reverse would not necessarily apply.

(b) when FWA is required to form an opinion as to whether the application had a reasonable prospect of success, it is not to undertake an assessment of whether a certain and concluded determination could be made that the proceedings would necessarily fail. The test in paragraph 611(2)(b) is not about whether there is no ‘real’ prospect of success and does not of necessity require that the proceedings were hopeless or bound to fail (by applying a test such as whether an application is manifestly untenable or groundless).

(c) a similar approach should be taken by FWA to the construction of the expression ‘no reasonable prospect of success’ as was adopted by the majority of members of the High Court in Spencer in respect of the term ‘no reasonable prospect’, namely:

“No paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content. Nor can the expression usefully be understood by the creation of some antinomy intended to capture most or all of the cases in which it cannot be said that there is ‘no reasonable prospect’. The judicial creation of a lexicon of words or phrases intended to capture the operation of a particular statutory phrase like ‘no reasonable prospect’ is to be avoided. ... Rather, full weight must be given to the expression as a whole.”

(d) it is a matter of judgement, sometimes of fine judgement, in all of the circumstances of a particular case whether an application or response had no reasonable prospect of success.

(e) an assessment of whether an application or response was made without reasonable cause or had no reasonable prospect of success should be undertaken with caution, particularly when the matter had not been determined by FWA and questions of fact and issues of law are important and in dispute.”

[end notes removed]

[10] Commissioner Thatcher’s observations were cited with approval by a Full Bench in ACI Operations Pty Ltd v D Cook. 4

[11] I have applied this approach.

[12] I have considered the entirety the evidence before me in the hearing of Mr Lengkong’s application. Whilst that evidence gave rise to the conclusions I set out in my initial decision on the merits of Mr Lengkong’s application, the issue in this costs application goes specifically to the reasonableness of Bupa’s response to that application.

[13] There are a number of key issues in this respect. Firstly, whether Bupa should reasonably have been aware that Mr Lengkong’s response to the injury sustained by the resident did not warrant dismissal. Secondly, whether there were any other known significant deficiencies in the Bupa approach to the termination of Mr Lengkong’s employment such that the Bupa position was unreasonable. Finally, whether, in that context, the Bupa position in response to Mr Lengkong’s application was an unreasonable response.

[14] The evidence of the Bupa General Manager, Ms Wood and other Bupa personnel indicates that Bupa management did, or should have known by 1 December 2011, the proper characterisation of the resident’s injury. Ms Wood’s description of the injury on about 1 December 2011 as a "degloving" type of injury 5 was not sustainable.

[15] I consider this to represent a deficiency in the Bupa management process. It was a significant contribution to my conclusion that the termination of Mr Lengkong’s employment was harsh, unjust or unreasonable. However, I am not satisfied that it meant that Bupa knew, before the hearing of Mr Lengkong’s application that the termination of his employment was unfounded. The evidence indicates that Bupa management had concerns about Mr Lengkong’s compliance with its injury notification procedures and his duty of care obligations. Bupa also had concerns about Mr Lengkong’s previous actions. The adverse findings made against Bupa in my decision of 1 May 2012 do not enable a finding of unreasonable behaviour in the context of s.611(2).

[16] I am satisfied that Bupa had at least an arguable case. Its position was reinforced when Bupa became aware, after the application was made, that Mr Lengkong had retained patient records in a manner which it could quite reasonably have considered inappropriate.

[17] The submissions of the parties relative to the costs application indicate that Bupa proposed settlement amounts until just prior to the hearing on the merits. I have noted the evidence is that Mr Lengkong’s clearly preferred remedy was reinstatement. I am unable to conclude that Bupa’s approach to the conciliation process was unreasonable in the context of s.611(2). Bupa participated in that process and both parties had the capacity to settle the matter before the hearing.

[18] On this basis I am not satisfied that it should have been reasonably apparent to Bupa that its response had no reasonable prospect of success. The requirements of s.611(2)(b) are not met and the costs application is refused.

SENIOR DEPUTY PRESIDENT

Final written submissions:

Mr Lengkong, 18 June 2012

Bupa Care Services Pty Ltd trading as Bupa Morphettville, 29 June 2012

Mr Lengkong, in Reply, 5 July 2012

 1   [2012] FWA 3737

 2   [2011] FWAFB 4014

 3   [2011] FWA 2225

 4   [2012] FWAFB 3292

 5   Transcript PN873 and PN1254 and [2012] FWA 3737, para 24

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