[2022] FWC 445

The attached document replaces the document previously issued with the above code on 4 March 2022.

Typographical error amended at [48].

Associate to Deputy President Anderson

Dated 21 March 2022

Fair Work Act 2009
Section 394 - Application for unfair dismissal remedy

Rubin Sharif
v
Calvary Health Care Adelaide Ltd
(U2021/10666)

Application for an unfair dismissal remedy – interlocutory matters - strike-out – security for costs - hospital employee – failure to be vaccinated against COVID-19 – whether no reasonable prospects of success – considerations relevant to security for costs – interlocutory applications dismissed

[1] On 22 November 2021 Rubin Sharif (the applicant or Mr Sharif) applied to the Commission under section 394 of the Fair Work Act 2009 (the FW Act) for an unfair dismissal remedy. He was dismissed on 30 October 2021 by Calvary Health Care Adelaide Ltd (Calvary or the respondent).

[2] Mr Sharif claims his dismissal was harsh, unjust or unreasonable. He seeks an order of compensation.

[3] Calvary oppose the application. It contends Mr Sharif’s dismissal was not unfair and no issue of remedy arises.

[4] Conciliation was conducted on 18 January 2022. The matter did not resolve.

[5] Three interlocutory matters arise for determination.

[6] Firstly, whether Mr Sharif’s application is out of time (and if so whether an extension should be granted).

[7] Secondly, an application by Calvary that Mr Sharif’s unfair dismissal application be dismissed under s 587 of the FW Act on the ground that it has no reasonable prospects of success (the strike-out application).

[8] Thirdly, an application by the employer, in the alternative, that (if the proceedings are not summarily dismissed) Mr Sharif should be ordered under s 404 of the FW Act and r 55 of the Fair Work Commission Rules 2013 (FW Rules) to lodge security for the payment of costs in the sum of $40,000.

[9] I issued directions on the interlocutory matters on 1 February 2022.

[10] In advance of the interlocutory hearing, I received materials from Mr Sharif and Calvary.

[11] I heard the interlocutory matters by video on 24 February 2022.

[12] By consent, permission was granted for Mr Sharif to be legally represented (Mr Videnage of Old Port Chambers). Calvary was represented by internal officers Mr Douglas (Industrial Relations) and Ms Watson (Human Resources).

[13] Calvary relied on written materials filed in its name 1 and the evidence of Mr Sharif.

[14] Mr Sharif gave oral evidence on a statement filed in his name 2 and on fourteen documents accompanying his materials.3

[15] Mr Sharif gave evidence conscientiously. He had reasonable recall and was willing to make concessions when pressed. The factual maters in dispute are limited. I make findings relevant to the interlocutory matters largely on the documentary evidence. Where required, I have regard to Mr Sharif’s evidence and, broadly speaking, consider it to be reliable noting however that this was not a merit hearing and my credit findings are limited. More substantive testing and probing of Mr Sharif’s evidence would likely occur at a full hearing.

Facts

[16] I make the following findings. They only deal with the evidence insofar as I consider it necessary to determine the interlocutory matters.

[17] Calvary operates private hospitals in South Australia, including at North Adelaide where Mr Sharif worked.

[18] At the date of dismissal, Mr Sharif was employed as a Servicing Theatre Supply Officer. He served more than nine years.

[19] Mr Sharif adheres to the Muslim faith.

[20] Approximately six years ago Mr Sharif was requested by Calvary to be vaccinated against hepatitis. He declined. He was permitted by Calvary to continue in employment upon the presentation of evidence of relevant blood tests. He complied.

[21] On 28 September 2021 Calvary introduced a policy requiring vaccination against COVID-19 by hospital employees, the Mandatory COVID-19 Vaccination Policy (Policy). 4

[22] The Policy required employees to receive a first dose of vaccine by 1 November 2021, a second dose within the time recommended by the vaccine manufacturer and a booster dose (if recommended); and provide evidence of vaccination to the employer.

[23] The Policy made allowance for exemptions in the following terms:

“Where a Calvary Worker has a medical contraindication or conscientious objection to the COVID-19 Vaccination, they must make a COVID-19 vaccine exemption request and then participate in a risk assessment process as prescribed by this policy.”.

[24] Mr Sharif read the Policy around the time it was introduced.

[25] A dispute almost immediately arose between Mr Sharif and Calvary over the vaccine mandate.

[26] At least two of Mr Sharif’s co-workers also had concerns with the mandate. Mr Sharif liaised with those persons in dealings with Calvary.

[27] Mr Sharif attended a staff meeting convened by Calvary to discuss the Policy on 30 September 2021. Arising from that meeting, Mr Sharif was not satisfied with the Policy. In particular, Mr Sharif considered a Calvary COVID-19 Exemption Request Form (Conscientious Objection) to be flawed and a ‘set-up’.

[28] Mr Sharif and Calvary exchanged multiple correspondence over the following month. This included:

● a letter of concern (undated) from Mr Shariff (and the two co-workers) which sought answers to fourteen questions and requested a response within three to seven business days;

● an email from Calvary on 30 September 2021 to Mr Sharif (and the co-workers) responding to their letter of concern;

● an email from Mr Sharif to Calvary on 11 October 2021 repeating his concerns and re-stating his earlier request for “the necessary information”. In this email Mr Sharif indicated that a letter sent to Calvary by one of the co-workers on 5 October 2021 (which had requested a meeting) had also been sent on his behalf;

● an email from Calvary on 12 October 2021 to Mr Sharif (responding to his email of 11 October 2021) providing links to information and advising that an employee seeking exemption must lodge the appropriate form with Calvary “as soon as possible”;

● a further email from Mr Sharif to Calvary re-stating his earlier requests for response to his questions, stating that he was not a conscientious objector, and repeating his views about the vaccine;

● a letter from Calvary to Mr Sharif on 25 October 2021 in which Calvary advised that a direction had recently been issued by the South Australian government that required vaccination or exemption, indicated that Calvary had not identified suitable alternate duties for him, invited further feedback and set a deadline of 27 October 2021 for written response; and

● a letter in response from Mr Sharif to Calvary on 26 October 2021 “correcting a number of inaccuracies in your letter”, stating his belief that the employer’s requirement to be vaccinated was unreasonable, stating that the information he sought had not been supplied, and that he would not resign and wished to remain employed.

[29] Mr Sharif consulted his general practitioner on 11 October 2021 with whom he discussed vaccination issues. He was certified unfit to work from 11 October to 24 October 2021. He provided that certificate to Calvary.

[30] On 20 October 2021 the Commissioner of Police and State Co-ordinator for South Australia under the Emergency Management Act 2004 (SA) issued a direction whereby a person was prohibited from working in a public or private hospital from 1 November 2021 unless the person has received a first dose of an approved vaccine against COVID-19 and received or booked a second dose (the Direction). Provision existed for persons presenting with an appropriate medical exemption. 5

[31] By letter dated 29 October 2021, Calvary terminated Mr Sharif’s employment on notice effective 30 October 2021 (the day prior to the mandate coming into operation). The letter of termination referred to both the (Calvary) Policy and the (government) Direction. Mr Sharif was paid in lieu of notice.

[32] As at the date of dismissal, Mr Sharif had not been vaccinated against COVID-19, nor produced an exemption.

Submissions

[33] Mr Sharif submits:

● no extension of time is required given the operation of the Acts Interpretation Act 1901;

● his unfair dismissal application does not have no reasonable prospects of success. Therefore it cannot be summarily dismissed; and

● it is not appropriate to make a security for costs order given that the unfair dismissal application has prospects of success, and such orders should only be rarely made given that the Commission’s jurisdiction is one where each party generally bears their own costs.

[34] Calvary submit:

● for reasons stated by Mr Sharif, no extension of time is required;

● the application meets the threshold of having no reasonable prospects of success because none of the factors in s 387 of the FW Act relevant to merit are in favour of Mr Sharif, and all relevant factors (particularly valid reason) are strongly against. It would be unreasonable to burden Calvary with defending a claim that is meritless; and

● in the alternative, if the application is not struck-out summarily, Mr Sharif, having elected to prosecute a weak claim and one where a costs order is capable of being made against him, should be compelled to deposit security for costs to at least cover a portion of the expenses likely to be incurred by Calvary.

Consideration

Extension of time

[35] Mr Sharif’s dismissal took effect on 30 October 2021. His application was received by the Commission on 22 November 2021; that is, twenty-three calendar days later.

[36] The twenty-first of those days was 20 November 2021. That day fell on a Saturday. Section 36(2) of the Acts Interpretation Act 1901 (AI Act) provides:

“(2) If:

(a)  an Act requires or allows a thing to be done; and

(b)  the last day for doing the thing is a Saturday, a Sunday or a holiday;

then the thing may be done on the next day that is not a Saturday, a Sunday or holiday.

Example:    If a person has until 31 March to make an application and 31 March is a Saturday, the application may be made on Monday 2 April.”

[37] Consequently, as both the twenty-first and twenty-second days were a Saturday and Sunday respectively, s 36(2) of the AI Act permitted Mr Sharif’s application to be lodged on the twenty-third day after dismissal took effect, but to have it treated as if it had been lodged two days earlier. That is what occurred. The application was lodged by email sent to the Commission by Mr Sharif’s legal representative at 4.54pm Monday 22 November 2021.

[38] Accordingly, Mr Sharif’s unfair dismissal application is within time. 6 No extension is required.

Strike-out application

[39] Section 587 of the FW Act provides:

“587 Dismissing applications

(1) Without limiting when the FWC may dismiss an application, the FWC may dismiss an application if:

(a) the application is not made in accordance with this Act; or

(b) the application is frivolous or vexatious; or

(c) the application has no reasonable prospects of success.

(2) Despite paragraphs (1)(b) and (c), the FWC must not dismiss an application under section 365 or 773 on the ground that the application:

(a) is frivolous or vexatious; or

(b) has no reasonable prospects of success.

(3) The FWC may dismiss an application:

(a) on its own initiative; or

(b) on application.” (notes omitted)

[40] A decision whether to summarily dismiss is discretionary. The power to do so only exists where a jurisdictional pre-condition is made out, in this instance, if the application has no reasonable prospects of success. This involves an assessment of merit that is necessarily provisional (a full hearing having not been conducted) and a fair characterisation of the nature of the proceeding and issues raised.

[41] It is a significant step to dismiss an application that is otherwise within jurisdiction without a merits hearing. 7 The power should be “sparingly employed” and used only in a “clear case”.8

[42] It is well-established that to conclude an application has no reasonable prospects of success should only be reached with caution and in circumstances where the application is “manifestly untenable or groundless or so lacking in merit or substance to be not reasonably arguable”. 9

[43] The rationale for adopting this cautious approach is self-evident. The legislature has enacted a cause of action available to persons who are dismissed from employment and who are protected (within the meaning of the FW Act) from unfair dismissal. The effect of a strike-out order would be to extinguish an applicant’s right to have their substantive application heard and determined by the Commission. It is often not until a matter is fully heard and evidence (both in support and in response) taken and tested that the actual strength or weakness of a case emerges. 10 Further, a dismissed employee is entitled to test the case against them and may pursue litigation not just for the sake of remedy but to also to protect their reputation.11

[44] That said, an overambitious litigant or one indifferent to the case against them runs the risk of conduct that falls foul of these statutory provisions. 12 Just as the legislature has enacted the unfair dismissal cause of action, it has also imposed checks on vexatious or hopeless cases by permitting applications to be summarily dismissed on s 587 grounds, and by permitting cost orders against parties or representatives in limited circumstances (either generally under ss 611(2) or specifically in the unfair dismissal jurisdiction under ss 400A and 401), at the Commission’s discretion.

[45] The ground on which Calvary advance the strike-out application is that Mr Sharif’s unfair dismissal application has no reasonable prospects of success.

[46] The bar to establish this proposition, particularly at this stage of proceedings where the case has not been fully tested, is high.

[47] Is Mr Sharif’s case manifestly untenable or groundless or so lacking in merit or substance to be not reasonably arguable?

[48] My provisional assessment is that Mr Sharif’s application is not strong and substantial hurdles to success appear to exist. However, for the following reasons it does not meet the high jurisdictional threshold Calvary is required to establish to be struck out under s 587(1)(c).

[49] Firstly, there appear to be some factual matters in dispute that may bear on substantive or procedural fairness. For example, whether Mr Sharif made (as a matter of fact) an application for exemption (either as a conscientious objector based on religious faith or otherwise); or whether Calvary conducted a ‘risk assessment’ (as mentioned in its letter of 25 October 2021) and whether that was requested by or provided to Mr Sharif; and whether Mr Sharif sought a face-to-face meeting about the Policy (either directly or via the agency of a co-worker) and (if a request was made) whether it was denied.

[50] Secondly, whether Mr Sharif was dismissed for a valid reason (s 387(a) FW Act) appears to concern a vaccination mandate first imposed by the employer’s Policy and then (only in the days prior to dismissal) overlaid by a government direction. Issues relevant to valid reason may differ depending on the instrument(s) relied upon by Calvary. For example, the lawfulness and reasonableness of the employer’s Policy may involve some different considerations than whether the government Direction made it unlawful for Calvary to continue to employ Mr Sharif in his regular duties. Given that the Direction was in operation at the time of dismissal and the dismissal letter refers to both instruments, my provisional view is that Calvary’s case on valid reason has considerable force, though its conclusion that no alternate duties could reasonably have been made available has not yet been tested.

[51] Thirdly, though the employer’s case on valid reason appears strong, unfair dismissal applications are multi-factorial. 13 A dismissal can be unfair notwithstanding a valid reason, for example if the employer has manifestly failed to provide procedural fairness (for example, ss 387(b), (c) and (d) considerations). Even in the case of statutory intervention by a third party rendering continued employment unlawful, an employer is obligated to act fairly towards a dismissed employee.14 Whether “significant mitigating factors”15 exist to render Mr Sharif’s dismissal (if for a valid reason) “harsh” is not plainly apparent from the materials though again, my provisional view is that his case is not strong on that ground. However, findings on the disputed facts may be relevant to this question, as may be Mr Sharif’s submission that dismissal was harsh because he ought to have been permitted to ‘buy time’ and exhaust leave accruals before being dismissed.

[52] Fourthly, whilst the issue of vaccination mandates against COVID-19 (by employer policy or government direction) has attracted considerable public debate, the application of s 387 considerations to the dismissal of unvaccinated employees is in relative infancy in Commission jurisprudence. To date, the issue (in unfair dismissal proceedings) has been considered by single members of the Commission only and not been the subject of full bench guidance. 16 Whilst single member decisions on merit have largely dismissed such applications to date, the absence of full bench consideration underscores the caution required in assessing whether Mr Sharif’s application is reasonably arguable.

[53] Considered overall, and particularly having regard to the fact that evidence has not been fully tested and the merit of submissions not fully explored, my provisional view is that Mr Sharif’s application has low reasonable prospects of success but is not so groundless that it can be said, at this stage, to have no reasonable prospects of success.

[54] As the jurisdictional pre-condition in s 587(1)(c) has not been made out, I need not consider whether discretion to summarily dismiss should be exercised.

[55] For the sake of completeness, I observe that this conclusion does not mean that Mr Sharif (or his legal representative) are not exposed to the future potential of a costs order once the application is determined including on the basis that the application “had” (under s 611(2)(b) or s 401(1A)(a)) no reasonable prospects of success. As evidence emerges at a merit hearing, Mr Sharif’s case may strengthen or weaken. Further, in the conduct of litigation a party should reasonably be expected, in managing their case, to have regard to their prospects of success and what that success may look like. Further single member authority or future full bench guidance may be relevant in this regard.

Security for costs

[56] Section 404 of the FW Act provides:

“404 Security for costs

The procedural rules may provide for the furnishing of security for the payment of costs in relation to matters arising under this Part.”

[57] Rule 55 of the FW Rules provide:

“55  Order for security for payment of unfair dismissal matter costs

(1) A respondent or applicant in a matter before the Commission arising under Part 3-2 of the Act (unfair dismissal) may apply to the Commission for an order that a person provide security for the payment of costs in respect of the matter or part of the matter.

Note 1: The application must be in the approved form—see subrule 8(2).

Note 2: The Commission will not ordinarily make such an order before the conclusion of conciliation.

(2) The person to whom an order made under subrule (1) applies must pay the amount of security at the time, and in the manner and form, required by the order.

(3) If the Commission orders that security for the payment of costs be given in respect of a matter or part of a matter arising under Part 3-2 of the Act, a respondent or applicant in the matter may apply to the Commission to:

(a) reduce or increase the amount of security to be provided; or

(b) vary the time at which, or manner or form in which, the security is to be provided.

(4) Without limiting any other power which the Commission may exercise, if the Commission directs a person to provide security for costs in relation to a matter or part of a matter arising under Part 3-2 of the Act, the Commission may order that the matter be:

(a) adjourned until security is provided; or

(b) adjourned indefinitely.”

[58] Whether to make a security for costs order (and the quantum and conditions attached thereto) is a discretionary matter.

[59] Principles governing the exercise of discretion include: 17

● there is no absolute rule controlling the exercise of discretion. What should be done in each case depends on the circumstances with the governing consideration being what is required by the justice of the matter;

● the particular statutory scheme is relevant, including the circumstances in which a costs order may or may not be made, and against whom;

● making an order for security for costs should not be oppressive. Its purpose is to ensure that a party is able to enforce an order for costs if one is made at a future time in their favour. It should not be used to stifle litigation or deter a reasonably arguable claim (different considerations may apply on appeal given that a party has, by then, ‘had their day in court’);

● the prospects of success and the strength of the case of the party resisting the order is relevant; and

● the financial position of the party against whom the order is sought will be relevant however there is no absolute rule that impecuniosity of a party will entitle its opponent to an order. There is also a general rule that poverty should not be a bar to a person prosecuting a claim at first instance.

[60] In relation to the FW Act’s statutory scheme, three issues are of particular relevance.

[61] Firstly, the starting proposition expressed in s 611(1) (and described in the explanatory memorandum as a “general rule”) that a person must bear the person’s own costs in relation to a matter before the Commission. In Hansen v Calvary Health Care Adelaide Limited 18 a Full Bench said:

“[15] It is trite to observe that the statutory and policy imperative underpinning a costs application under the Act, is that a person in a matter before the Commission must bear their own costs. So much is plainly obvious by the precise and unambiguous language of s 611(1).

[16] However, the statutory scheme sets out the relatively circumscribed circumstances in which an order for costs might be found by the Commission to be appropriate in a particular case. It includes the exercise of discretionary power where the Commission is satisfied that one, or more of the circumstances set out ins 611(2), has been established. If such circumstances are established, the Commission, in the broad exercise of its discretion, may make an order that a person/s bear some, or all of the costs of another person, in relation to the application, including on an indemnity basis, or decline to make any order at all.”

[62] Secondly, the legislature has provided specific pathways (additional to s 611) for costs orders to be made against parties or their representatives in unfair dismissal proceedings (ss 400A and 401). Those specific costs rules are intended to better provide a ‘fair go all round’ in the unfair dismissal context by deterring vexatious unfair dismissal claims or unreasonable conduct of such litigation. The provisions are intended to capture “a broad range of conduct” but the power is only intended to apply “where there is clear evidence of unreasonable conduct”. 19

[63] Thirdly, to the extent a party incurs costs arising from representation by a lawyer or paid agent, that party is only able to be so represented in proceedings before the Commission if permission has been granted under s 596 of the FW Act.

[64] In this matter, Calvary seeks an order for security of costs on the ground that Mr Sharif’s application either has no or low prospects of success and that Calvary will incur future costs in defending its position including legal costs as it intends to seek external legal representation if the matter proceeds.

[65] There is some force in Calvary’s submission given that I have expressed the provisional view that Mr Sharif’s unfair dismissal application has low prospects of success and that the potential for a future costs order against Mr Sharif cannot be discounted.

[66] However, these factors must be weighed against the fact that a costs order is only a contingent future risk, that a costs order could only be made against the backdrop of the general rule that parties bear their own costs, that permission (for Calvary) to be represented has not yet been sought let alone granted (though if sought the case for granting permission would be strong given that Mr Sharif has been granted permission), that Mr Sharif appears to have a genuine desire to litigate the fairness of his dismissal and comply with Commission directions, that no decision on the merits has yet been made, and that Mr Sharif’s circumstances (including financial position) may be relevant to a costs order.

[67] Orders for security for costs against applicants or respondents are rare. As Kirby J said in Merribee Pastoral v ANZ Banking Group 20:

“Such a consideration would need to be exercised with care, given that the real merits of a case might not emerge until the final hearing or might not sufficiently emerge in the necessarily brief proceedings typically involved in an application for security of costs.”

[68] This is particularly so given the FW Act’s statutory scheme. In Zornada v St John Ambulance Australia (Western Australia) Inc a full bench of the Commission observed: 21

“…costs orders in this jurisdiction are extraordinary, and security for costs orders even more so”.

[69] On balance, and weighing these considerations, I am not satisfied that the justice of the matter requires an order for the security of costs.

[70] This conclusion does not mean that a costs order could not be made against Mr Sharif or his representative at a future date. As noted, that is a contingent possibility – but contingent on an application for costs being made by Calvary, a finding by the Commission that a statutory pre-condition for a costs order exists, and a further finding by the Commission that a discretion to order costs should be exercised.

[71] However, if a future costs order was made against a party or their representative, it would need to be complied with notwithstanding that the Commission has not made an order for payment of security for costs.

Conclusion

[72] The application by Calvary for dismissal of unfair dismissal application U2021/10666 under s 587 of the FW Act is dismissed.

[73] The application by Calvary for a security for costs order under s 404 of the FW Act and r 55 of the FW Rules in unfair dismissal application U2021/10666 is dismissed.

[74] An order 22 giving effect to this decision is issued in conjunction with its publication.

[75] Matter U2021/10666 will be re-listed for directions at a date and time to be advised.

DEPUTY PRESIDENT

Appearances:

J Videnage, with permission on behalf of. Rubin Sharif

M Douglas and B Watson, of and on behalf of, Calvary Health Care Adelaide Ltd

Hearing details:

2022

Adelaide (by video)

24 February

Printed by authority of the Commonwealth Government Printer

<PR738878>

 1   C1 and Direction marked MFI-2

 2   RMS1 (including Attachments A to O)

 3   noting attachment F was marked MFI-1 and not admitted into evidence

 4   Attachment B (Policy subsequently updated 11 November 2021 C1)

 5   MFI2 Emergency Management (Healthcare Setting Workers Vaccination No 2) (COVID-19) Direction 2021 clause 4

 6   See, for example, a similar outcome in Daley v Ambulance Victoria [2022] FWC 122

 7   Raschilla v Ausino West Pty Ltd ATF The Supercrane Unit Trust T/A Supercrane Engineered Lifting Technology [2017] FWCFB 5952

 8   General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 at 8

 9   Baker v Salva Resources Pty Ltd [2011] FWAFB 4014; see also Go To Court Franchising Pty Ltd T/A Go To Court Lawyers v Lewis [2018] FWCFB 630

 10   Mitchell Shaw v Australia and New Zealand Banking Group Limited ta ANZ Bank; Bianca Haines [2014] FWC 3408 at 11

 11   Roy Morgan Research Ltd v Baker, Karen [2014] FWCFB 1175 at [12] citing Brazilian Butterfly Pty Ltd and Charalambous PR968915

 12   Roy Morgan Research v Baker [2014] FWCFB 1175 at [13]

 13   Jones v Brite Services [2013] FWC 4280 at [24]

 14   DA v Baptist Care SA [2020] FWCFB 6046 at [32]

 15   Parmalat Food Products Pty Ltd v Wililo [2011] FWAFB 1166 at 24

 16   full bench consideration has occurred in the context of dispute notification under s739: CFMMEU v Mt Arthur Coal Pty Ltd [2021] FWCFB 6059

 17   Harris v Home Theatre Group Pty Ltd [2011] FWA 2910 at [7] to [12]

 18   [2016] FWCFB 8162 at [15] – [16]

 19   Explanatory Memorandum to Amending Act No 174 of 2012 at 169

 20   [1998] HCA 41; 193 CLR 502 at 513

 21   [2013] FWCFB 8255 at [35]; see also Velasquez v Cabrini Health Ltd [2018] FWCFB 888 at [18]

 22   PR738879