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Costs, caution and consequences: “Rare” costs ruling against a paid agent

In the recent decision of Flexy Services Pty Ltd v Mr Brian Newman [2024] FWC 2840, the Fair Work Commission (FWC) made a costs order against a paid agent who represented an employee in making a general protections claim against her employer. Gadens writes.

Background

Ms Georgina McBride, a casual employee of labour hire company Flexy Services Pty Ltd (Flexy), alleged that she was dismissed due to her pregnancy. She engaged Mr Newman of 1800Advocates to pursue her general protections claim against Flexy following a decision by Rio Tinto to terminate her on-hire assignment with them.

Flexy argued Rio Tinto was not Ms McBride’s employer, had no power to dismiss Ms McBride, and that it had ended her assignment without Flexy’s knowledge. Flexy made a jurisdictional objection arguing Ms McBride had not been dismissed. Deputy President Peter O’Keeffe upheld Flexy’s argument, ruling that Flexy had not dismissed Ms McBride.

Costs order against the paid agent

Following the successful jurisdictional objection, Flexy applied for cost orders against Mr Newman. Under section 376(2)(b) of the Fair Work Act 2009 (Cth), Deputy President O’Keeffe determined that Mr Newman’s actions were unreasonable in connection with the continuation of the dispute and warranted costs – an outcome rarely achieved in this ‘no costs’ jurisdiction.

The Deputy President considered the following:

  • There was no evidence indicating Ms McBride had been dismissed and Flexy provided substantial evidence disproving her claim. Mr Newman, aware of correspondence confirming McBride was still regarded as an employee, had no reasonable basis to believe he could succeed before the FWC.

  • Mr Newman did not properly consider the prospects of success. The Deputy President did not accept he was merely following Ms McBride’s instructions.

What does this mean?

The FWC seldom awards costs; therefore, this ‘clear case’ offers useful guidance for future cost applications.

However, the Deputy President invited further submissions on the amount of costs to be awarded, characterising Flexy’s $80,000 legal fees for the jurisdictional objection ‘excessive’.

This case also highlights the rationale for upcoming reforms to address paid agent conduct in the FWC.

Following consultation, the FWC issued a report and recommendations on 9 September 2024 to regulate paid agent practices more stringently, aiming to protect clients and ensure professional integrity in this jurisdiction.

Read our full article to explore the case, its potential impacts, and upcoming reforms in greater detail.

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