Costs Awarded to Worker in Underpayment Case

In Harper v Tingmak Pty Ltd & Ors [2020] FCCA 626, the worker was an employee at a small regional airport in central western NSW. During the course of her employment, she became concerned that she was not being paid her wages at the correct rate. She had also noticed that her employer had not been paying her superannuation entitlements. She raised these concerns with her employer on several occasions. On the last occasion that she raised the issue with her employer, the employer reacted by terminating her employment 24 hours later. The worker commenced proceedings against the employer in the Federal Circuit Court for adverse action and the underpayment of her wage entitlements, including the non-payment of her superannuation entitlements.

The Court found that the termination of employment amounted to adverse action and imposed civil penalties. The Court imposed a penalty of $25,000.00 on the company and $15,000.00 on one of the directors of the company. In doing so, the Court moderated the proposed penalties on the basis that:

While the Court has taken account of the submissions of the applicant, the Court is of the view that some moderation in the penalty ranges discussed above, is called for, given this was a small company, the respondents are presumably of limited means.

The Court also considered the non-payment of superannuation entitlements to be a significantly serious matter which should be treated separately from the other breaches.

Findings and orders were made in relation to the underpayment and adverse action claim. In doing so, the Court also dealt with the question of costs.

The Court noted at [29] that:

The applicant was part of a small team who provided ground services at a regional airport. The applicant was dependent upon the respondents for the payment of proper entitlements and did not have easy access to either the Award and or advice in relation to what she was entitled to.

One of the difficulties in underpayment cases has been the no costs regime under the Fair Work Act. That regime often serves to advantage parties with unmeritorious cases or who fail to act reasonably.

The Court made further orders as to costs and held at [52] and [53] that:

The applicant has been put through a considerable amount of legal expenses due to the failure of the respondents to comply with Court orders and actively participate in the proceedings.

Further, the failure to respond to the offers of settlement and compromise is a matter, which in my view, tips the balance in favour of the applicant in that the Court is satisfied that the actions of the respondents were unreasonable and caused the applicant to incur additional costs.

The case is a clear example of the danger in failing to engage in settlement processes and Court proceedings. It also shows the benefit of making reasonable offers to settle such cases.