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Employers blind to Fair Work retributions

Adam Zuchetti
Adam Zuchetti
16 August 2018 3 minute readShare
Blind, blindfold, business

Employers have complained that there are no penalties for, or deterrents against, employees making false claims to the Fair Work Commission, but My Business can confirm this isn’t exactly true.

Responding to a story about employers being treated as adult day care centres, one My Business reader said a major problem with the dispute resolution processes at the Fair Work Commission (FWC) and other workplace agencies was that there is no onus on employees to tell the truth.

“One of the biggest issues I have come across in dealing with FWC, Work Place Health and Safety, and Work Cover is that claims made by employees do not have to be on Stat Decs and there is NO recourse or accountability on someone who makes proven false and misleading claims. If they implemented some form of punishment for false claims, then the system would get a whole lot fairer for everyone,” the reader commented.

“The whole system is geared to suit ‘bullying’ employees who will stop at nothing to cause their employer grief and get a claim up on them for a ‘pay day’.”

The reader then provided a first-hand example to demonstrate their point, and the impacts it had on the business.

“After following the ‘reasonable management’ process in handing out three written warnings, I was subject to nine weeks of grief from a false and derogative bullying claim against me.

“This cost us a small fortune in temp staff to cover the person and paying sick leave and legal fees. And after nine weeks, the claim was not approved. We responded to the claim within the first week with substantial evidence that the claimant was the perpetrator and bully. My own health and safety as the business owner has no value to the system.”

‘Costs can be awarded for false claims’: FWC

The Fair Work Commission denied that there is no recourse available to employers who have been impacted by malicious claims. But it admitted that it does not universally require statutory declarations at the point of application.

“Only a limited number of applications to the Fair Work Commission require a statutory declaration to be provided at the time the application is lodged. In general, statutory declarations are required where the applications are likely to be dealt with on the papers rather than by hearings or other proceedings,” a spokesperson for the FWC told My Business.

“Examples include applications to make, vary or terminate enterprise agreements or applications for right of entry permits. Other applications, such as for unfair dismissal, general protections or workplace bullying do not require a statutory declaration to be lodged at the time the application is made.”

However, the spokesperson said that there are provisions for the awarding of costs where false or misleading claims are made.

“The Fair Work Act sets out various offences in Division 9 of Part 5–1. This includes giving false or misleading evidence (s.678),” they said.

“In addition, Part 5–1 of the Fair Work Act also gives the Commission the power to award costs against a party in some circumstances:

  • Where a person made an application, or responded to an application, vexatiously or without reasonable cause (s.611(2)(a)); or
  • Where a person made an application, or responded to an application and it should have been reasonably apparent to the person that their application, or response to an application, had no reasonable prospects of success (s.611(2)(b)).

“For general protections dismissal (s.365), unfair dismissal (s.394), and unlawful termination (s.773) matters, the Commission may also award costs against a person where that person has caused costs to be incurred because of an unreasonable act or omission by that person in connection with the conduct or continuation of the dispute (s.375B, s.400A, and s.779A).”

Yet these is “no automatic entitlement to costs” and any awarding of costs is at the Commission’s discretion. As such, it would be up to the business to push for the awarding of costs as part of its defence of a spurious claim, rather than simply hoping any costs are awarded.

False claims are punishable

A spokesperson for Craig Laundy, the federal Minister for Small and Family Business, The Workplace and Deregulation, also denied that there are no penalties for making false statements to the FWC.

“It is an offence under the Fair Work Act for a witness (including an applicant) to give sworn or affirmed evidence that is false or misleading in a matter before the FWC or a person taking evidence on behalf of the FWC. The maximum penalty is 12 months imprisonment,” the Minister’s spokesperson told My Business.

Yet it was confirmed that there is a catch specifically relating to unfair dismissal claims, effectively supporting employer gripes with the system.

“This [penalty] would not apply to statements made in an unfair dismissal application form (which is not required to be sworn or affirmed), it would apply to statements made in an unfair dismissal hearing, for example,” the spokesperson said.

“Although there is no specific penalty for giving false or misleading information in an unfair dismissal application form, a business could seek a costs order against an applicant who has made false or misleading claims to the FWC. The FWC can order a costs order if it is satisfied that the application was made vexatiously or without reasonable cause, or had no reasonable prospect of success.

Employers blind to Fair Work retributions
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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