Employment law and the Federal Circuit Court of Australia

This a decision of the Federal Circuit Court which explains the nature of its small claims jurisdiction arising out of the Fair Work Act, and the circumstances in which (a) legal representation will be permitted (not generally welcome) and (b) the nature of its interlocutory powers to strike out claims or not. Please forgive the odd formatting, which arises from the court’s publications.

This a decision of the Federal Circuit Court which explains the nature of its small claims jurisdiction arising out of the Fair Work Act, and the circumstances in which (a) legal representation will be permitted (not generally welcome) and (b) the nature of its interlocutory powers to strike out claims or not.

“Introduction

  1. On 2 October 2019, the applicant filed an application in this court’s small claims jurisdiction seeking $19,296.31 in unpaid ‘allowances’.[1]  On 20 November 2019, the respondent filed a response in which it opposed the orders sought by the applicant and sought orders that the applicant’s application be dismissed and costs as agreed or assessed.[2]

[1] Applicant’s application filed on 2 October 2019; applicant’s Form 5 filed on 2 October 2019.

[2] Respondent’s response filed on 20 November 2019.

  1. On 15 June 2020, the applicant filed an affidavit in support of his application.[3]

[3] Affidavit of Steve Kotaidis sworn and filed on 15 June 2020.

  1. On 17 June 2020, the respondent filed an application in a case seeking the summary dismissal of the applicant’s application pursuant to section 17A(2) of the Federal Circuit Court of Australia Act 2001 (Cth) (“FCCA Act”),[4] together with an affidavit.[5]

[4] Respondent’s application in a case filed on 17 June 2020.

[5] Affidavit of Robert Stephenson affirmed on 15 June 2020 and filed on 17 June 2020.

  1. This decision relates to the respondent’s application in a case.[6]

[6] Respondent’s application in a case filed on 17 June 2020.

  1. For the reasons which follow, the respondent’s application in a case ought to be dismissed.

Leave for legal representation

  1. At the hearing, which occurred by videoconference, the applicant represented himself and the respondent sought leave to be legally represented.  The court was also assisted by a representative from the Fair Work Ombudsman who appeared as amicus curiae.
  1. The applicant opposed the respondent’s request for leave to be legally represented at the hearing.  I granted leave and indicated that I would provide more detailed reasons for doing so in these written reasons for judgment.
  1. The substantive application was brought by the applicant in the court’s small claims jurisdiction. As such, section 548(5) of the Fair Work Act 2009 (Cth) (“the FW Act”) provides that a party may only be legally represented in such proceedings with leave of the court.
  1. However, section 548(7) of the FW Act further provides that ‘a person is taken not to be represented by a lawyer if the lawyer is an employee or officer of the person.’  As such, it would have been open to the respondent to have a legally trained employee represent it in these proceedings.
  1. His Honour Judge Kendall recently considered the circumstances in which leave ought to be granted in the context of proceedings in the court’s small claims jurisdiction in Al Jorany v AHG Services (WA) Pty Ltd [2019] FCCA 2598. In that case, his Honour set out the principles arising from the authorities on when leave ought to be granted. In particular, he identified the following relevant, albeit not definitive, considerations:

(a)          the objects and purposes of the Small Claims Division and also of this Court to provide quick, informal and just resolutions of disputes without undue technicality;

(b)          the complexity of the matters that arise on the face of the application, be it factual or legal, and whether a lawyer by reason of their training and expertise, might be of assistance to the Court;

(c)          whether the other party … is represented by a lawyer and any prejudice or unfairness the other party may suffer if leave is granted;

(d)          the familiarity, and competence, of the proposed legal representatives to provide assistance to the Court on the complexities or technicalities that arise; and

(e)          whether the party seeking leave to be represented has an in-house lawyer or employee capable of conducting the matter satisfactorily. (case references excluded)[7]

[7] Al Jorany v AHG Services (WA) Pty Ltd [2019] FCCA 2598 at [9].

  1. It was submitted for the respondent that leave ought to be granted in this case for the following reasons:
  1. a)           in the context of an application to dismiss the applicant’s claim for want of jurisdiction, a number of technical legal issues arise, including whether leave is required at all in the context of claim that the court lacks jurisdiction;[8]
  2. b)           counsel was familiar with the matter having prepared the written submissions filed in the proceeding and this would assist with the quick and efficient hearing of this matter;[9]
  3. c)           to the extent that there was any imbalance as between the parties, that could be addressed by:
  4. i)           assistance from the representative of the Fair Work Ombudsman who was appearing as amicus curiae;
  5. ii)          the obligations on counsel as a member of the independent bar to provide assistance to the court; and

iii)         the manner in which the hearing is conducted by the court well versed in assisting self-represented parties who appear before it;[10] and

  1. d)           to the extent that the respondent has in-house counsel, they are not familiar with or experienced in conducting contested hearings in courts and tribunals and rely exclusively on external counsel for the conduct of dispute work.[11]

[8] Transcript page 5 at lines 20 to 27.

[9] Transcript page 5 at lines 30 to 33.

[10] Transcript page 5 at lines 35 to 41.

[11] Transcript page 5 at lines 43 to 46.

  1. I gave limited weight to the last of these factors in circumstances where, clearly, even in house counsel would have more experience of legal proceedings than a lay person.  However, as indicated in the course of the hearing, I was satisfied on balance that leave ought to be granted.  In particular, I had regard to:
  1. a)           the nature of the objection being taken to the court’s jurisdiction;
  2. b)           the fact that the respondent had the right to be represented by an employee with legal qualifications and it would be of greater assistance to the court to have submissions put by counsel familiar with the case and familiar with the court’s jurisdiction; and
  3. c)           any prejudice to the applicant that may arise from leave being granted could be ameliorated by the court managing the proceeding in a way to minimise any such prejudice and providing assistance to the applicant as required.
  1. For each of these reasons, I granted leave for legal representation.

Application in a case

  1. As stated, by an application in a case, the respondent sought the dismissal of the applicant’s application.  It did so on two grounds:
  1. a)           firstly, on the basis that the claim by the applicant lacked jurisdiction and therefore ought be dismissed under section 17A of the FCCA Act;[12]and
  2. b)           secondly, it was submitted that the applicant’s claim was not a claim which can be brought in this court’s small claims jurisdiction.[13]

[12] Respondent’s outline of case filed on 17 June 2020 pages 4 to 7.

[13] Respondent’s outline of case filed on 17 June 2020 page 7

  1. For the following reasons, I do not accept either of these submissions.  I am satisfied that properly viewed, the applicant’s claims do raise a claim which arguably falls within the court’s small claims jurisdiction and therefore falls within this court’s jurisdiction.
  1. Section 17A of the FCCA Act relevantly provides:

(1)          The Federal Circuit Court of Australia may give judgement for one party against another in relation to the whole or any part of a proceeding if:

(a)          the first party is prosecuting the proceeding or that part of the proceeding; and

(b)          the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.

  1. It was properly conceded by the respondent that the court’s power to summarily dismiss all or part of a proceeding is one which ought not to be exercised lightly.  In Spencer v Commonwealth of Australia (2010) 241 CLR 118 (“Spencer”), which considered the Federal Court’s power for summary dismissal under section 31A of the Federal Court of Australia Act 1975 (Cth) (“FCA Act”), French CJ and Gummow J noted:

A proceeding need not be ‘hopeless’ or ‘bound to fail’ for it to have no reasonable prospect of success.[14]  …

The exercise of powers to summarily terminate proceedings must always be attended with caution.  That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process.[15]  …

[14] Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [17].

[15] Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [24].

Section 31A(2) requires a practical judgement by the Federal Court as to whether the applicant has more than a ‘fanciful’ prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law.   …

  1. In addition, their Honours Hayne, Crennan, Keifel and Bell JJ noted that the wording used in section 31A of the FCA Act, which is in identical terms to that in section 17A of the FCCA Act, makes it clear that the provision:

departs radically from the basis upon which earlier forms of provision permitting the entry of summary judgment have been understood and administered.  Those earlier provisions were understood as requiring formation of a certain and concluded determination that a proceeding would necessarily fail.[17]

[17] Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [53].

  1. The plurality went on to say:

How then should the expression ‘no reasonable prospect’ be understood? No paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content.[18] …

[18] Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [58].

Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is ‘no reasonable prospect’ of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. … At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.[19]

[19] Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [60].

  1. It is clear from the court’s reasoning in Spencer that the respondent need not show that the applicant’s case is ‘hopeless’ or ‘bound to fail’, but rather, that it has no reasonable prospect of success.
  1. Therefore, the question before this court is whether, having regard to the applicant’s claim and, importantly, the context in which that claim has been brought, the applicant has ‘no reasonable prospect’ of success.
  1. I accept the respondent’s submission that this court’s jurisdiction in relation to matters arising under the FW Act is not ‘at large’.  Rather it is conferred with original jurisdiction:

as is vested in it by laws made by the Parliament:

(a)          by express provision; or

(b)          by the application of section 15 C of the Acts Interpretation Act 1901 to a provision that, whether expressly or by implication, authorises a civil proceeding to be instituted in the Federal Circuit Court of Australia in relation to a matter.[20]

[20] Federal Circuit Court of Australia Act 1999 (Cth) s 10.

  1. Section 566 of the FW Act relevantly confers jurisdiction on this court in respect of ‘any civil matter arising under this Act.’
  1. Section 539 of the FW Act sets out various civil remedy provisions. Section 545 then provides that this court may make any order which it considers appropriate if satisfied that a person has contravened, or proposes to contravene, a civil remedy provision. Section 546 empowers this court to make an order for a pecuniary penalty if satisfied that there has been a contravention of a civil penalty provision.
  1. Section 548 then deals with the court’s small claims jurisdiction.  Relevantly, the court’s small claims jurisdiction is limited to orders relating to amounts specified in section 548(1A).
  1. Section 542 of the FW Act further deals with safety net contractual entitlements and section 543 allows applications to be made to this court for the enforcement of such entitlements.
  1. There are also other provisions in the FW Act which confer jurisdiction on this court, however, they are not relevant for present purposes.[21]

[21] For example, see Fair Work Act 2009 (Cth) s 558C(3).

What is the applicant’s claim?

  1. As stated, the respondent’s primary submission is that the applicant’s claim, as particularised, does not fall within the court’s jurisdiction.  It is therefore necessary to identify what the applicant’s claim actually is.
  1. In doing so, it is important to acknowledge that this claim has been brought in the court’s small claims jurisdiction where not only are pleadings not required, but where it is assumed that applicants and respondents will represent themselves unless leave is granted for legal representation.
  1. Moreover, it is clear from section 548(3) that in dealing with small claims, the court is not bound by rules of evidence and procedure, and may act in an informal manner and without regard to legal forms and technicalities.  Importantly, section 548(4) provides that:

At any stage of the small claims proceedings, the court may amend the papers commencing the proceedings if sufficient notice is given to any party adversely affected by the amendment.

  1. The purpose of the court’s jurisdiction in relation to small claims is to deal with claims of up to $20,000 in a quick, efficient and just manner.
  1. Consistent with this purpose, the application forms which applicants are required to file to initiate a claim in the small claims jurisdiction reflect the fact that most, if not all, parties in the jurisdiction will be representing themselves without legal training.  This factor needs to be considered in understanding what claim is actually being pressed.
  1. It therefore goes without saying that proceedings in the small claims jurisdiction do not require formal pleadings, and one ought not to expect the level of precision that one might so expect in other civil jurisdictions.  That said, it is necessary to engage the court’s jurisdiction that the applicant articulate a claim with some clarity so that a determination can be made as to whether or not the court’s jurisdiction is enlivened.
  1. In this case, as stated above, the applicant filed an application together with a Form 5 and an affidavit.  It was submitted for the respondent that:
  1. a)           when consideration is given to these documents and to the oral submissions made by the applicant at the hearing, no cause of action arises which enlivens the court’s jurisdiction; and
  2. b)           in the alternative, if the court concludes that there is a cause of action under the FW Act, then the applicant does not seek an order in relation to a matter set out in section 548(1A), and therefore, it cannot proceed in the court’s small claims jurisdiction.
  1. So, what then does the applicant claim?
  1. Properly understood, the applicant’s claim, at its highest, was that whilst he was employed by the respondent, and whilst his employment was based in Melbourne, he was required to work in Canberra.  During the period from September 2016 to July 2017,[22] he incurred various expenses related to his work in Canberra for which he sought reimbursement.  The applicant’s claims for reimbursement were rejected by his employer.

[22] I note that at times the applicant referred to the relevant period as September 2016 to July 2017 and at other times he referred to September 2017 to July 2018.  However, he referred to the former dates in his affidavit sworn 15 June 2020, and I have taken these to be the relevant dates for the purposes of this judgment.

  1. At Part G of the Form 5, the applicant did not allege a contravention of any of the nominated industrial instruments, but rather, selected the ‘other’ category of contravention and stated in support of that alleged contravention:

No Letter of Offer provided stating that office location was based in Canberra.  Claiming expenses incurred between Sep (sic) 2017 through to July 2018.[23]

[23] Applicant’s Form 5 filed on 2 October 2019 at item 25.

  1. In his application, the applicant stated that he was employed by the respondent as an IT Manager.[24]  At Part I, he provided the following details of his claim:

I was offered a position of an ITSM SME Business Consultant however I was not provided an internal letter of offer stating that my office location had moved interstate based in Canberra.  I raised this concern on numerous occasions but to no avail.  It is company policy & protocol that a letter of offer is produced that details locality and terms of the position.  I did not receive a letter of offer for the said position and as such I am claiming for expenses incurred by me for Sept 2017 – July 2018.[25]

[24] Applicant’s Form 5 filed on 2 October 2019 at item 16.

[25] Applicant’s Form 5 filed on 2 October 2019 at Part I.

  1. In his affidavit, the applicant further stated:

I was offered a position as a ITSM SME Business Consultant with Fujitsu Australia working on the Department of Defence account from August 19th 2016 through to the end of July 2017.

I am claiming reimbursement expenses incurred by me during that timeline for travel incidentals, which included, accommodation, per diem, and motor vehicle kilometre reimbursement as I was commuting from Melbourne to Canberra.[26]

[26] Affidavit of Steve Kotaidis sworn and filed on 15 June 2020 at paragraph 1.

  1. He went on to say that ‘No Letter of Offer was provided by my employer … indicating that the role was based in Canberra.’[27]

[27] Affidavit of Steve Kotaidis sworn and filed on 15 June 2020 at paragraph 2.

  1. Annexed to the applicant’s affidavit was a breakdown of the expenses which he claimed.[28]

[28] Affidavit of Steve Kotaidis sworn and filed on 15 June 2020 at Exhibit B.

  1. In the course of the hearing, the applicant, who was representing himself, reiterated the fact that he had not been provided with or signed a contract which stated that the position he was employed in was based in Canberra.  When asked what flowed from that assertion, he said:

So that means that … if I reside in Melbourne and they require me to go to Canberra then they pay for my expenses…[29]

[29] Transcript page 21 at lines 10 and 11.

  1. It was submitted for the respondent that:
  1. a)           the applicant did not state the source of his alleged entitlement to be reimbursed for his expenses in his application;[30]
  2. b)           in particular, he did not point to any term in his contract which gives rise to such an entitlement;[31]
  3. c)           indeed, he repeatedly stated that no letter of offer was provided to him;[32]and
  4. d)           moreover, as is clear from Part G of the applicant’s Form 5, he did not assert any contravention of either the National Employment Standards, a term of a modern award, an enterprise agreement, a workplace determination, a national minimum wage order, an equal remuneration order, or a safety net contractual entitlement.[33]

[30] Transcript page 11 at lines 35 to 37.

[31] Transcript page 12 at lines 38 to 42.

[32] Transcript page 12 at lines 42 to 45.

[33] Transcript page 13 at lines 1 to 6.

  1. The respondent stated in its written submissions:

… whilst unstated, Mr Kotaidis appears to allege that he incurred expenses under the mistaken impression that Fujitsu would reimburse him. However, even taking Mr Kotaidis’ allegations at their highest, such a case – whilst conceivably capable of establishing an equitable cause of action, for example – could not establish a relevant FW Act contravention actionable in this Court. Nor could such a claim otherwise engage this Court’s jurisdiction. It could only do so if there were some other aspect of the justiciable controversy which attracted federal jurisdiction. On the face of Mr Kotiadis’ claim, there is none. It follows that insofar as Mr Kotaidis has any claim against Fujitsu – a proposition which Fujitsu of course denies – that claim lies elsewhere.[34]

[34] Respondent’s outline of case filed on 17 June 2020 at paragraph 15.

  1. As submitted for the respondent, the applicant did not assert that the failure to reimburse him expenses incurred amounted to a contravention of the FW Act or a fair work instrument made under the FW Act.
  1. However, the question is whether, having regard to the nature of the applicant’s Form 5, it could properly be said that:
  1. a)           the applicant has claimed the respondent’s failure to reimburse his expenses constitutes a breach of his employment contract; and
  2. b)           if so, whether this is a matter which can be dealt with by this court in its small claims jurisdiction.
  1. The respondent’s submissions largely rely upon the fact the applicant has not expressly referred to a contractual term, whether oral or in writing, which obliges the respondent to reimburse his expenses.  That is true.  However, it is open to the court to conclude that, when fairly read, the substance of the applicant’s claim is that there was either an express or, at least, an implied term of his employment contract, that he would be reimbursed for reasonably incurred work related expenses if he were to perform duties in Canberra at the direction of his employer, whilst being based in Melbourne.
  1. So much is clear from the applicant’s continued reference to the absence of a letter of offer stating that the position was one which was based in Canberra.  I understand this to mean that the applicant asserts that had there been such a letter of offer, he would understand why the respondent would maintain that it was not required to reimburse him his expenses.
  1. Whether such a term was in fact properly expressed or implied to form part of his employment contract is a matter for determination at trial.
  1. That then leads to the question as to whether such a claim could properly be said to enliven the court’s jurisdiction.  For the following reasons, I am satisfied that a claim framed in this way would arguably enliven the court’s small claims jurisdiction.
  1. As stated above, this court’s small claims jurisdiction is limited to claims seeking orders regarding an amount referred to in subsection 548(1A) of the FW Act. That is, a claim can only be brought in this court’s small claims jurisdiction if it relates to:

(a)          an amount that an employer was required to pay to, or on behalf of, an employee:

(i)     under this Act or a fair work instrument; or

(ii)    because of a safety net contractual entitlement; or

(iii)        because of an entitlement of the employee arising under subsection 542(1);

  1. For the reasons set out above, the applicant’s claim does not relate to a claim for a payment arising under the FW Act or a fair work instrument.
  1. A ‘safety net contractual entitlement’ is defined to mean:

… an entitlement under a contract between an employee and an employer that relates to any of the subject matters described in:

(a)          subsection 61(2) (which deals with the National Employment Standards); or

(b)          subsection 139(1) (which deals with modern awards).

  1. If, for the reasons set out above, I accept the applicant’s claim is that there was an implied term that he would be reimbursed for work related expenses incurred whilst in Canberra, the question then arises as to whether such an amount relates to one of the prescribed matters in either section 61(2) or section 139(1) of the FW Act.
  1. It clearly does not relate to the National Employment Standards. Therefore, the question is whether it relates to any of the matters contained in section 139(1).
  1. Relevantly, 139(1)(g) of the FW Act provides that the matters which can be included in a modern award, and therefore which could be the subject of a safety net contractual entitlement, include:

allowances, including for any of the following:

(i)          expenses incurred in the course of employment;

  1. In the course of the hearing, in response to a question from me as to whether it could be said that the applicant was claiming that the entitlement is a ‘safety net contractual entitlement’, counsel for the respondent said:

… there’s no case that’s advanced that suggests that it is.  There’s no term of a relevant contract that is identified.  Of course, the safety net contractual entitlement must be an entitlement under a contract that then relates to a relevant limb, but in order to attract that definition one would need to identify a relevant entitlement under a contract and, of course … even accounting for the fact that Mr Kotaidis … is self-represented and perhaps we give allowance to the way in which the claim is framed, there’s nothing, in my submission, in the materials that have been filed that would, in substance, articulate an entitlement under a contract.[35]

[35] Transcript page 12 at lines 43 to 47 and page 13 at lines 1 to 5.

  1. I am not persuaded by this submission. It is at the very least arguable that the claim made is that there was an implied term in the applicant’s employment contract that he would be reimbursed for reasonably incurred business expenses. As to whether the question of reimbursement falls within one of the matters set out in section 139(1)(g)(i), it was submitted that:

Allowances, in my submission, in the context of awards, whether modern awards or historically, are defined amounts paid in addition to wages which deal with some particular incident of employment, for example, the payment of a tool allowance to employees covered by a building award to set out either a particular dollar amount per week or a particular percentage of a weekly wage in order to compensate for a particular incident of employment, whether it’s expenses incurred or a particular disability associated with the performance of that work.  What appears to be alleged here, of course, is some sort of entitlement at large to reimbursement of expenses without any articulation of how the contract is said to provide for that entitlement, whatever the limits of that entitlement are said to be.[36]

[36] Transcript page 14 at lines 39 to 46 and page 15 at lines 1 and 2.

  1. I respectfully do not accept that submission. The FW Act is beneficial legislation and therefore ought to be given a generous construction. On the basis that it is arguable that the applicant’s claim is that there is an express or implied term in his contract, there may be a legitimate issue at trial in determining the limits of that term and what expenses are appropriate to be reimbursed, if any. However, at this preliminary stage, the issue for the court is to determine whether the applicant’s claim has no reasonable prospect of success.
  1. For each of these reasons, I am not satisfied that the applicant’s claim has no reasonable prospect of success, when properly and fairly understood, such that it warrants dismissal at this early stage of proceedings. Moreover, it is at least arguable that a claim for reimbursement of reasonably incurred expenses is a matter which falls within section 139(1)(g) of the FW Act, and therefore, it can properly be the subject matter of an application in this court’s small claims jurisdiction.
  1. For each of these reasons, I dismiss the respondent’s application in a case and direct the parties to attend on 3 February 2021 at 9:30am for the future programing (sic) of this matter.”

 

KOTAIDIS v FUJITSU AUSTRALIA LTD [2020] FCCA 3334 delivered 10 December 2020 per Mercuri J