WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CITATION : 2012 WAIRC 00088 CORAM : COMMISSIONER J L HARRISON HEARD : FRIDAY, 16 DECEMBER 2011 FURTHER WRITTEN SUBMISSIONS: FRIDAY, 30 DECEMBER 2011, MONDAY 16 JANUARY 2012, MONDAY 23 JANUARY 2012 DELIVERED : TUESDAY, 21 FEBRUARY 2012 FILE NO. : B 180 OF 2010 BETWEEN : DIANE ELIZABETH SHAW Applicant AND CITY OF WANNEROO Respondent Catchwords : Industrial Law (WA) - Contractual benefits claim - Claim for payment of balance of contract or payment in lieu of notice - Applicant denied a contractual benefit of remaining in employment for term of contract - Further reasons for decision - Amount owing to applicant in light of reasons for decision - Determination of compensation - Principles applied - Commission not satisfied applicant mitigated loss reasonably - An amount for compensation awarded - Order issued - Application for costs - Whether an extreme case warranting costs - Application for costs dismissed - Whether suppression order should issue - Some employees' names not to be in the public domain - Order issued Legislation : Industrial Relation Act 1979 s 26(1)(a), s 27(1)(c) and s 29(1)(b)(ii) Result : Order issued Representation: Applicant : Mr M Cox of counsel Respondent : Mr R Kelly of counsel Case(s) referred to in reasons: Adam William McConkey v M & A’s of Denmark [2001] 81 WAIG 1434 Addis v Gramophone Co Ltd [1909] AC 488 Anne Margaret Stonham v The Speaker of the Legislative Assembly of New South Wales [1999] 649 BHP Billiton Iron Ore Pty Ltd v The Transport Workers' Union of Australia, Industrial Union of Workers, Western Australian Branch (2006) 86 WAIG 642 Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 Caroline Jan Spivey v The Frosh Personnel Trust (2005) 81 WAIG 3359 Claire Pauline Houareau v Patson Enterprises Pty Ltd t/a Tiny Turtle Childcare Centre (2001) 81 WAIG 1659 Denise Brailey v Mendex Pty Ltd t/a Mair and Co Maylands (1992) 73 WAIG 26 Diane Elizabeth Shaw v City of Wanneroo [2011] WAIRC 00924 Goldburg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711 (FC) Grant Raymond Lukies v AlintaGas Networks Pty Ltd (2002) 82 WAIG 2217 Gregory Richard Shuttleworth v Silviculture Management Pty Ltd (2001) 81 WAIG 2784 Growers Market Butchers v Backman (1999) 79 WAIG 1313 Hotcopper Australia Ltd v David Saab [2002] WASCA 190 John Fairfax & Sons v Police Tribunal (1985) 5 NSWLR 465 John Fairfax Group v Local Court (1991) 26 NSWLR 131 Matthews v Cool or Cosy Pty Ltd & Anor (2004) 84 WAIG 2152 Medical Board of Western Australia v Medical Practitioner [2011] WASCA 151 Metal Fabrications (Vic) Pty Ltd v Kelcey [1986] VR 507(FC) Mr Luke Webster v Mercury Colleges Pty Limited [2011] FWA 4772 92 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 319 Perth Finishing College v Susan Watts (1989) 69 WAIG 2307 Prisoners Review Board v Freeman (No 2) 2010 WASCA 167 The St Cecilia’s College School Board v Carmelina Grigson (2006) 86 WAIG 3146 The St Cecilia’s College School Board v Carmelina Grigson (2006) 86 WAIG 3159 Transport Workers Union of Australia Industrial Union of Workers, WA Branch v Tip Top Bakeries (1994) 75 WAIG 9 Trevor Don v Greening Australia (WA) Inc (2005) 85 WAIG 1787 Yetton v Eastwoods Froy Ltd [1966] 3 All ER 353 Further Reasons for Decision 1 On 29 September 2011 the Commission issued Reasons for Decision in relation to this application and the parties were directed to confer within 14 days on an amount owing to the applicant in light of these reasons. Several extensions to this timeframe were granted to the parties and the Commission was advised on 18 November 2011 that the parties could not reach agreement and the matter was then listed for further hearing and determination in relation to this issue. After a further hearing was held in relation to the amount owing to the applicant the parties provided written submissions on the issue of confidentiality in relation to naming certain employees referred to during the proceedings and an application by the applicant for costs. Amount owing to applicant in light of reasons for decision Respondent’s submissions 2 The respondent maintains that the applicant has not satisfied the obligation on her to mitigate her loss. 3 The respondent argues that the assessment of the loss the applicant has suffered by reason of the denied contractual benefit include the requirement on her to mitigate and whether the applicant has acted reasonably in satisfying that requirement. 4 The respondent submits that the contractual benefit which the applicant was denied was the benefit of her remaining in her employment in accordance with the terms of her contract from 20 October 2010 to 16 May 2012 and the compensation for a denied contractual benefit in these circumstances is a monetary award for compensation by way of damages. 5 The respondent submits that at the substantive hearing there was no evidence that the applicant had or has any psychiatric illness and the applicant has no cognitive impairment and she was at the time and remains fit to work. The respondent relies on the applicant telling Dr Gemma Edwards-Smith that she ‘had not sought work but was thinking of attending training that her husband organises through his organisation to work as a facilitator’. Dr Edwards-Smith also stated that it was not feasible for the applicant to return to her employment with the respondent however, she was not unfit in any other way to undertake employment. 6 From 2010 the applicant undertook only limited work for at least three clients. Since 2011 she has also been enrolled in a post- graduate course, Masters in Sustainability, at Curtin University and these studies will continue in 2012 when it is expected the applicant will complete her Master’s degree. The applicant is also enrolled in Certificate IV Training and Assessment. 7 The respondent relies on the Commission’s finding that ‘the applicant [had an] exemplary, successful, meritorious and lengthy work history prior to commencing employment with the respondent with a number of employers undertaking similar work’ (Diane Elizabeth Shaw v City of Wanneroo [2011] WAIRC 00924 [286]). The respondent also relies on the following evidence of the applicant’s witnesses in this regard. Mr Peter McMullin gave evidence that the ‘[a]llegations against [the applicant] “stun me”. I worked with [the applicant] in a highly productive, stimulating and creative environment for over four years in Geelong and I, along with many others, considered her to be a leader in the field of arts and culture management’ and ‘[the applicant] was well regarded, respected and popular. She was a friend to a lot of people’. Mr McMullin also gave evidence that ‘I would employ [the applicant] again if I had the opportunity’. Ms Patti Manolis gave evidence that ‘[m]y experience of [the applicant] was that she demonstrated politically and socially astute judgements with a respectful and empathetic approach to all people across all levels with an eye on the main objective - to have community responsive and sustainable services’ and that she had ‘no concerns whatsoever’ about working with the applicant in the future. Ms Allanah Lucas gave evidence that the applicant’s ‘reputation precedes her. In my work over the years, I have from time to time come across a number of people who know [the applicant] and speak highly of her and she concludes ‘that her work was of a very high standard’. Ms Lucas gave evidence that she considered the applicant a ‘highly professional person in the workplace’ and had ‘no’ concerns about employing the applicant in the future. Ms Laura Stocker gave evidence that in relation to the work for which the applicant was employed by Ms Stocker in the period March 2011 and April 2011 (after she left her employment with the respondent) her work was ‘fantastic’, the applicant is ‘highly competent’ and ‘professional, and brought powerful cognitive, creative and communicative skills to the workshop’. Ms Jacqueline Allen stated that ‘[i]n my interactions with [the applicant] I found her to be professional and positive. ... I personally enjoyed my working relationship with her. … In my personal experience of [the applicant], I had no cause for concern with regard to her interpersonal skills, or her organisational and organising skills’. Ms Allen also stated that ‘I had proactively poached [the applicant] as she relocated to Perth from Melbourne’. 8 The respondent relies on the following authorities. 320 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 92 W.A.I.G. 9 When assessing the monetary award of compensation in the nature of damages for a denied contractual benefit claim the Commission has previously applied common law principles applicable to a breach of contract. In Matthews v Cool or Cosy Pty Ltd & Anor (2004) 84 WAIG 2152 (Matthews) Heenan J said: ‘[A]ny amount to which the claimant is entitled’ or payment of ‘a benefit, not being a benefit under an award or order, to which he is entitled under his contract of employment’ (s 29(l)(b)(ii)) are each entitlements which the employee has arising out of his contract of employment with the employer. They are contractual and, therefore, common law claims which exist independently of the provisions of the Act and which could, if necessary be pursued in any court of appropriate civil jurisdiction [60]. … The nature of the common law entitlement which may exist in these, or like circumstances, includes: ... a claim for unliquidated damages for breach of the contract of employment [75]. 10 Where a claim for unliquidated damages is sought for a breach of contract the amount of damages which may be awarded must be that which is necessary to place the aggrieved party in the position he or she would have been in had the breach of contract not occurred. The purpose is to compensate the aggrieved party, rather than to punish the party in breach (Addis v Gramophone Co Ltd [1909] AC 488). 11 The respondent cited the Commission’s finding that ‘any loss or damages due to the applicant if and when this two year contract ceased within its term is the remuneration due to her that would have been payable for the duration of the contract, less any amounts earned by way of mitigation, when taking into account the likelihood of the employment continuing to the conclusion of the contract [254]’ citing Hotcopper Australia Ltd v David Saab [2002] WASCA 190 and Matthews. 12 In Matthews, Heenan J said: [A] claim for unliquidated damages for breach of the contract of employment [is] determined by taking into account the amount which would have been earned by the employee had he been permitted to continue to perform the services for which he was employed, less any amount which may be attributable to the effect of, or the need for, mitigation of those damages, or of other intervening effects which might have prevented the applicant from receiving those earnings or which might have diminished those earnings, had the employment relationship continued until it had been lawfully determined at [75]. 13 Further, in The St Cecilia’s College School Board v Carmelina Grigson (2006) 86 WAIG 3159 (St Cecilia’s College School Board) the Full Bench of the Commission at [9] cited Growers Market Butchers v Backman (1999) 79 WAIG 1313 (Growers Market Butchers) at 1316, and held that the requirement to mitigate loss applies to an assessment of a denied contractual benefits claim, saying ‘[t]he same principles discussed by Sharkey P in [Growers Market Butchers] apply to the present assessment of contractual benefits. When assessing mitigation in contractual benefit claims the principles are the same as the principles that apply to unfair dismissal cases’ [11]. 14 The obligation to mitigate loss is an obligation to act reasonably in the mitigation of loss so as to minimise the loss suffered, or at least, not increase it. McGregor on Damages (18th ed) (which was relied on in Growers Market Butchers) identifies the most important rule of mitigation as follows: [T]he claimant must take all reasonable steps to mitigate the loss to him consequent upon the defendant’s wrong and cannot recover damages for any such loss which he could thus have avoided but has failed, through unreasonable action or inaction, to avoid. Put shortly, the claimant cannot recover for avoidable loss [7-004]. 15 McGregor on Damages then states: Even persons against whom wrongs have been committed are not entitled to sit back and suffer loss which could be avoided by reasonable efforts or to continue an activity unreasonably so as to increase the loss [7-014]. 16 In taking action to mitigate her loss, the applicant must also take into account the interests of the respondent (see McGregor on Damages [7-072]). 17 In Growers Market Butchers Sharkey P described the requirement of a person to mitigate his or her loss (which was affirmed in St Cecilia’s College School Board as applying to a denied contractual benefits claim) as ‘[i]n practical terms, this requires the employee to diligently seek suitable alternative employment’ (1316). 18 This was qualified by the Full Bench in BHP Billiton Iron Ore Pty Ltd v The Transport Workers' Union of Australia, Industrial Union of Workers, Western Australian Branch (2006) 86 WAIG 642 (BHP Billiton) where Ritter AP stated: In my view, however, this observation made by Sharkey P in the Growers Market Butchers case does not mean that in every case it will be unreasonable for a dismissed employee to do other than immediately set about the task of obtaining alternative employment. The observation made by Sharkey P is, in my opinion, simply a manifestation of what in many if not most cases would be the reasonable course required of a dismissed employee. In my opinion, the reasonableness of the conduct, overall, remains the touchstone of whether mitigation of loss has occurred [101]. 19 In Claire Pauline Houareau v Patson Enterprises Pty Ltd t/a Tiny Turtle Childcare Centre (2001) 81 WAIG 1659 Wood C found as follows: [M]y task is then to decide whether the applicant has suffered any loss, has sought to mitigate her loss, and whether she should be compensated for that loss. Ms Houareau's own evidence leads me to conclude that she has not sought to mitigate her loss. She gained temporary employment and chose to change careers and return to study almost immediately … In those circumstances I find that no award of compensation should be made [11]. 92 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 321 20 In Gregory Richard Shuttleworth v Silviculture Management Pty Ltd (2001) 81 WAIG 2784, the applicant was unfairly dismissed from his employment under a fixed term contract. One month following the termination of his employment he commenced full time study and earned no money for that reason. In deciding whether or not the applicant had properly mitigated his loss, Wood C found that ‘[b]ased on this evidence I find that the applicant has not sought to properly mitigate his loss upon taking up the course of full-time study. Therefore the loss suffered is limited by these actions, it is not ongoing’ [21]. 21 In a recent Fair Work Australia decision, Mr Luke Webster v Mercury Colleges Pty Limited [2011] FWA 4772, Drake SDP found that ‘[f]rom October 2010 Mr Webster has been studying for his Masters degree and has not had any social security benefits or any income. I find that from this date Mr Webster was not attempting to mitigate his loss’ [11]. 22 The respondent argues that the cases it has cited support the position that in an employment setting mitigation requires the person in question to diligently seek suitable alternative employment provided that doing so would be considered reasonable in the circumstances and in many case, if not most, this would require immediately seeking alternative employment and commencement of study in lieu of working or seeking suitable alternative employment represents a failure to reasonably mitigate an employee’s loss. Mitigation must also take into account monies earned by the applicant since the cessation of her employment, being for work completed by her during the period 23 September 2010 to 13 October 2011. 23 In Diane Elizabeth Shaw v City of Wanneroo the Commission found that ‘the applicant would have continued in her employment with the respondent for the duration of her two year contract if she had not been inappropriately stood down on 11 August 2010 and constructively dismissed as at 20 October 2010’ [298]. If this is not the case, then the quantum of damages should be reduced taking into account at least the issues and tension in the working relationship between the applicant and the respondent and the respondent’s ability and right to terminate the contract of employment at any time with the payment of three months’ remuneration pursuant to clause 14 of the contract and it is unlikely that the applicant would have continued in her position from 20 October 2010 until 16 May 2012, a period of approximately 17 months, given this (see Trevor Don v Greening Australia (WA) Inc (2005) 85 WAIG 1787 [42]). 24 In assessing the loss arising out of a denied contractual benefits claim for the balance of a fixed or maximum term employment contract, the proper assessment of the loss payable to the applicant is the value of the balance of the term of the contract minus, in the situation where the applicant has properly mitigated her losses, any money earned by way of that mitigation minus, in the situation where the applicant has failed to properly mitigate her losses, an amount which represents that which would have been earned by the applicant had she properly mitigated her losses minus an amount, if any, to take into account the likelihood of the applicant’s employment not continuing for the balance of the employment contract term. 25 The respondent argues that in this case the applicant has failed to act reasonably and prudently in mitigating her losses following the termination of her employment as the applicant did not and has not actively sought suitable alternative employment. Despite the period of time that has passed the applicant did not and has not sought suitable alternative employment at a lower status or salary (see Yetton v Eastwoods Froy Ltd [1966] 3 All ER 353, 366 cited in Growers Market Butchers). The applicant voluntarily put herself in a position where her ability to obtain suitable alternative employment and therefore mitigate her losses has been significantly curtailed as a result of undergoing university studies and further, it is reasonable to infer that at least from the time the applicant applied for university studies, not just from the date of commencement, she had no intention to obtain suitable alternative employment. As a result, what work the applicant has undertaken has been of a limited and temporary nature (see Claire Pauline Houareau v Patson Enterprises Pty Ltd t/a Tiny Turtle Childcare Centre; Gregory Richard Shuttleworth v Silviculture Management Pty Ltd; Mr Luke Webster v Mercury Colleges Pty Limited). 26 In the circumstances, the respondent submits that the monetary award of compensation owing to the applicant must be significantly reduced from the outer limit as follows: • to the extent the Commission finds that there has been no attempt by the applicant to properly mitigate her losses by acting reasonably and prudently in seeking suitable alternative employment, then no or only a limited award of compensation should be made; • at a minimum no award of compensation should accrue by reference to the period starting on the date on which the applicant’s university studies commenced and ending on 16 May 2012. Assuming a start date of university studies of 28 February 2011 this equates to a maximum loss between the period 20 October 2010 to 28 February 2011 of $48,310.32 if: ¾ no reduction is made on the basis that the applicant has not sought to mitigate her losses during this period; and ¾ no monies were in fact earned during this period (it is not clear from the applicant’s letter from her accountant and her Tax Declaration the proportion of monies earned to 13 October 2011 that apply to this period, if at all); and • if appropriate in light of the Commission’s earlier reasons for decision, a reduction based on an assessment of the likelihood of any intervening eventualities which would otherwise have terminated the applicant’s entitlement to wages prior to 16 May 2012, although this may not be practically relevant given the preceding matters. 27 The respondent maintains that mitigation relates to the actual loss suffered by an employee not damage to an employee’s reputation. The respondent also maintains that the claim for damages relates to the period up to 16 May 2012 and does not relate to assisting the applicant’s ability to find work after that point in time and it is also not compensation in relation to whether it is more difficult for the applicant to obtain fresh employment or damage to her reputation within the broader community. 322 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 92 W.A.I.G. 28 The respondent maintains that it is reasonable for an employee to endeavour to initially attempt to obtain employment in line with their existing salary but if this is not possible then other employment at a lower rate of income should be contemplated and the respondent submits that damages is not meant to confer a windfall on the applicant and the applicant is required to take into account the interests of the respondent when mitigating her loss. The respondent argues that the applicant should have and still be diligently seeking alternative employment and the respondent argues that in this instance the applicant had no intention of obtaining alternative employment in a lesser role. Of her own volition the applicant has limited herself to seeking employment in local government in Perth and the applicant is not prepared to change her attitude with respect to the level of employment she is seeking. When the applicant became aware that no job was available in local government at the same level as her position with the respondent she should have sought alternative employment elsewhere and as at November 2010 the applicant had not sought out alternative employment and was not looking for it even though she was fit for work. Additionally she enrolled at Curtin University shortly after this date. 29 There was no dispute that the applicant is fit for work, she has a successful and exemplary employment history and she is a leader in her field and highly regarded. Given this, the respondent argues that the applicant’s employment opportunities are not limited to a specific role, employer or industry given her extensive history and transferrable skills. Even though the applicant gave evidence during the hearing that her preference is to work in local government in the future this is not her only option. Despite previous employers being willing to employ the applicant as stated by some of the applicant’s witnesses at the hearing, the applicant has not approached these employers to see if work is available except for Ms Stocker where the applicant was successful in obtaining work subject to the constraints of her studies. 30 The respondent rejects the applicant’s claim that her reputation has been damaged in local government in Western Australia and the respondent maintains that there is no evidence that her reputation has been damaged in the broader marketplace. This claim is also not based on rejection of job opportunities as the applicant has only applied for limited positions. Furthermore, the applicant enrolled in her studies before the hearing commenced. 31 The respondent maintains that the applicant has acted unreasonably in her attempts to obtain alternative employment by limiting herself to a particular role and type of employer and the respondent maintains that she should have contemplated employment outside of local government given that the applicant has previously worked in the arts and culture sector in general as well as having managerial experience (see Yetton v Eastwoods Froy Ltd). Previously the applicant has also been prepared to shift her geographic location and she also should have considered a move of this nature. 32 The respondent maintains that undertaking study is not a reasonable or valid attempt by an employee to mitigate his or her loss. The respondent also submits that even though the applicant has said the purpose of her studies is to gain employment in the future this is irrelevant to the question of the amount of loss the respondent must pay to the applicant and what must be mitigated. 33 The respondent maintains that the applicant has restricted her job prospects of her own volition, it maintains that her skills are transferable and the respondent argues that the applicant has not genuinely attempted to look for alternative employment. Applicant’s submissions 34 The applicant maintains that the starting point for calculating the applicant’s damages is the amount she would have earned had the respondent not wrongly terminated the contract of employment before its expiry with the effluxion of time which is $196,027.44. The applicant argues that she has complied with her duty to mitigate the losses flowing from the termination of her employment by acting to minimise her lost earnings. The applicant is also pursuing post-graduate studies to be able to embark on work outside of local government. The applicant has therefore acted reasonably to minimise the losses flowing from the termination of her employment. 35 The parties agreed that the date up to which the applicant was paid by the respondent was 23 September 2010 and it is for damages for lost salary from that date to 16 May 2012 that she is entitled, less what she has earned during that time. 36 The applicant relies on the following authorities. 37 Damages for breach of a fixed term contract of employment are calculated by reference to the balance of unpaid wages remaining under the contract less any amounts earned, or that should have been earned, in mitigation (see Perth Finishing College v Susan Watts (1989) 69 WAIG 2307, 2315; The St Cecilia’s College School Board v Carmelina Grigson (2006) 86 WAIG 3146 [94]). 38 The applicant relies on the principles with respect to the mitigation of loss in a denied contractual benefit claim set out in St Cecilia’s College School Board. In that case the Full Bench cited with approval the following propositions set out in Growers Market Butchers: 4. (a) The obligation to mitigate loss is an obligation to act reasonably in the mitigation of loss but not an obligation which a reasonable and prudent person would not undertake. (b) This duty to act reasonably to mitigate damage does not generally require the employee to take employment of a different or inferior kind (see “Truth” and “Sportsman” Limited v Molesworth [1956] AR (NSW) 924; Bostik (Australia) Pty Ltd [1991] v Gorgevski (No 1) 36 FCR 20; 41 IR 452 and compare Dunstan v The National Mutual Life Association of Australia Ltd (1992) 5 VIR 73). (c) In some cases, it may be unreasonable not to accept employment at a lower status and salary level (see Yetton v Eastwoods Froy Ltd [1967] 1 WLR 104, for example). 92 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 323 5. (a) There is, of course, no recovery for the loss avoided, unless the matter is collateral (see W R Freedland “The Contract of Employment” (1976) at page 26). (b) Salary or wages, including any fringe benefits received from a new employer, will reduce the damages payable (see Bold v Brough Nicholson and Hall Ltd [1964] 1 WLR 201; Lavarack v Woods of Cochester [1967] 1 QB 278 at 301; Hutt v The Cascade Brewery Ltd (unreported) (Supreme Crt Tas) per Wright J and Golja v Lord (unreported) 21 February 1996 (IRC of Aust) per Madgwick J) (1316). 39 The duty to mitigate loss does not in all cases require an employee to diligently seek suitable alternative employment. Rather ‘the reasonableness of the conduct, overall, remains the touchstone of whether mitigation of loss has occurred’ and it may not be reasonable to require an employee to mitigate loss by relocating to pursue suitable alternative employment (see BHP Billiton [101], [97], [99]). 40 An employee cannot be required to mitigate loss by returning to work for the former employer where the relationship of trust and confidence has broken down and relies on Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 [53]. 41 The onus of proof of failure to mitigate loss is on the respondent (see Metal Fabrications (Vic) Pty Ltd v Kelcey [1986] VR 507(FC), 509, 513; Goldburg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711 (FC), [8], [16]; St Cecilia’s College School Board). 42 The applicant argues that as she has worked in the area of arts and culture at a senior management level in local government since 2001 and prior to this she worked in various roles in local government at less senior levels and the manner and circumstances of the termination of her employment have had a significant and detrimental impact on her ability to find employment in local government in Western Australia. The applicant maintains that an equivalent position to her former position is a local government senior management position at an equivalent level to the applicant’s former position with the majority of the responsibilities and duties in the area of arts and culture. The applicant argues that there are only two equivalent positions in Western Australia and one of these is the applicant’s former position with the respondent. There are only three other councils in Western Australia with positions in the relevant areas but they are less senior management positions and have a lesser degree of arts and culture responsibilities than the applicant’s position with the respondent. Given the very limited number of alternative opportunities it was not reasonable to expect the applicant to seek alternative employment in local government in Western Australia. Additionally, as the applicant and her husband made a decision to relocate to Perth to enable the applicant to take up employment with the respondent, it is not reasonable to expect her to pursue employment in local government outside of Perth. 43 The applicant submits that in order to increase her employment prospects outside of the area of local government arts and culture she enrolled in a Masters of Sustainability Studies at Curtin University in 2010. The applicant also sought paid work in the period October 2010 to-date to the extent possible within the constraints of her study commitments and the availability of work for which she is suited. 44 The applicant unsuccessfully sought work as a facilitator with Curtin University and the Department of Food and Agriculture in relation to the pilot Farm Business Resilience Program. The applicant has worked for the Curtin University Sustainability Policy Institute on a number of projects and she has worked with Mr Peddie on several projects assisting him to prepare for and deliver facilitation workshops and assisting with business planning. Through these activities the applicant earned $16,019 between October 2010 and 13 October 2011. 45 The applicant relies on her uncontested evidence that her reputation in Western Australia has been damaged within local government and the respondent has not provided any evidence of any equivalent position for which the applicant failed to apply. In the circumstances, it was and is neither reasonable nor possible for the applicant to mitigate her loss by seeking equivalent employment in local government. The applicant submits that due to the unavailability of suitable alternative employment she has attempted to mitigate her loss by undertaking further study which will enable her to find employment outside the area of arts and culture in local government and seeking and obtaining part-time work to the extent possible given her study load and her qualifications. 46 The applicant maintains that she has conducted herself reasonably with respect to mitigating her loss. The applicant argues that she is precluded from working in local government given the conduct of the respondent in bringing about her termination and there was no evidence that she has not taken all reasonable steps to seek out alternative employment. The applicant has already lowered her sights as she is looking at working in another area. The applicant had already made a decision to relocate to Western Australia therefore it was unreasonable to expect her to move interstate. The respondent adduced no evidence and did not seek to diminish the applicant’s evidence in relation to mitigation and the respondent has not met its onus of proof that the applicant has unreasonably failed to mitigate her loss. 47 The applicant argues that the damage sustained by her as a result of the respondent’s constructive dismissal and denial of contractual benefit is equivalent to her salary under the employment contract between the termination date and the expiry date of her contract. The applicant’s earnings since the termination date must be subtracted from the total damages ($196,027.44 - $16,019.00 = $180,008.44). The applicant does not presently anticipate that she will earn any further income before the expiry date of her contract however, as she continues to diligently seek income earning activities there is some possibility that she may earn further income before the expiry date. The applicant is therefore prepared to accept a further deduction on the amount of damages to be ordered. Based on past earnings it is possible that the applicant will earn further income for the period December 2011 to 16 May 2012, which might reasonably be quantified as $8,000. Accordingly, the amount of damages should be reduced by a further $4,000 ($180,008.44 - $4,000.00 =$176,008.44). The appropriate amount therefore to be awarded to the applicant in this matter is $176,008.44. 324 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 92 W.A.I.G. 48 The applicant maintains that choosing to study does not constitute a failure to mitigate loss and whether it does depends on the particular circumstances (see BHP Billiton) and the applicant argues that this case is also distinguishable from the authorities relied upon by the applicant. The applicant’s study is relevant to her working career and future, there are few opportunities for the applicant in local government and Perth has a small local government community and this has been the industry within which the applicant has worked for at least the last ten years except for one temporary position with the Department for Culture and the Arts. The applicant argues that the circumstances of Claire Pauline Houareau v Patson Enterprises Pty Ltd t/a Tiny Turtle Childcare Centre are different as in that instance the applicant chose to work in a different industry and in this instance the applicant is not dissatisfied with the industry within which she works. The applicant maintains that arts and culture is a small field of employment opportunities and even though other opportunities lie with the Department of Culture and the Arts the applicant chose not to pursue further opportunities with this department. There was also no evidence of any further position being available in this department. The applicant maintains that the studies she is undertaking are designed to increase her employability and the applicant has explored other employment opportunities but none were available. The applicant also continues to seek alternative employment whilst studying and the applicant undertaking a TAFE course is further evidence of attempts by the applicant to mitigate her loss by further developing her skills. 49 The applicant submits that the Commission should not penalise the applicant for the statement made in November 2010 to Dr Edward-Smith that she was not looking for employment given this was stated within close proximity of her termination and given the trying circumstances at that time. There was also no evidence that the applicant’s skills are easily transferable. 50 In summary the applicant says that her actions post-employment have been entirely reasonable. The applicant embarked on a means of equipping her to work and to continue to develop the skills she had up to the time of her termination and her studies are consistent with that. The applicant says that in all the circumstances the respondent has not met its onus of proof showing that she has behaved unreasonably. Application for costs and suppression order Applicant’s submissions 51 Under s 27(1)(c) of the Industrial Relations Act 1979 (the Act) the Commission may, in relation to any matter before it ‘order any party to the matter to pay to any other party such costs and expenses including expenses of witnesses as are specified in the order, but so that no costs shall be allowed for the services of any legal practitioner, or agent’. The power to award costs under s 27(1)(c) of the Act is discretionary (see Denise Brailey v Mendex Pty Ltd t/a Mair and Co Maylands (1992) 73 WAIG 26, 28). The principle governing the award of costs in the Commission is set out in Denise Brailey v Mendex Pty Ltd t/a Mair and Co Maylands where the full bench stated that ‘[t]he general policy in industrial jurisdictions is that costs ought not be awarded, except in extreme cases’ (27). 52 Costs are not ordinarily awarded in the Commission (see Adam William McConkey v M & A’s of Denmark [2001] 81 WAIG 1434) and circumstances in which costs have been ordered under s 27(l)(c) of the Act include where an employer defended a claim in a manner that was frivolous or vexatious (see Caroline Jan Spivey v The Frosh Personnel Trust (2005) 81 WAIG 3359). 53 The costs that may be awarded include ‘all of the costs’ incurred by a party to a matter with the exception of professional legal costs, but including costs of an expert witness (see Denise Brailey v Mendex Pty Ltd t/a Mair and Co Maylands (29 – 30)). The Commission may make a costs order for the travel expenses of a party to a matter (see Adam William McConkey v M & A’s of Denmark [9]). 54 A case will be frivolous where it is ‘manifestly groundless or ‘so manifestly faulty that it does not admit of argument’ (see Transport Workers Union of Australia Industrial Union of Workers, WA Branch v Tip Top Bakeries (1994) 75 WAIG 9, 11). 55 The applicant argues that she incurred considerable costs due to the frivolous and unparticularised assertions made by the respondent regarding the applicant’s mental health and poor performance until the respondent’s witness statements in reply were lodged. 56 The applicant maintains that the respondent’s case was that the applicant’s conduct and or circumstances of the applicant grounded a reasonable basis to believe that the applicant was unfit for work by reason of cognitive dysfunction, and then that the same conduct and circumstances justified the imposition of a poor performance management regime. The applicant maintains that this assertion and therefore the entire case built upon it was manifestly groundless. The Commission found that the applicant did not suffer from any psychiatric illness and the allegations of conduct by the applicant on which the assertion or belief of unfitness and or of poor performance on the part of the applicant were found by the Commission to have been ‘petty, vague, exaggerated and untrue’ [264] and ‘were not based on fact nor ... supported by any evidence’ [268]. The applicant argues that as the respondent did not adduce any evidence apart from ‘exaggerated and untrue’ complaints made by its witnesses, which ‘were not based on fact nor ... supported by any evidence’ its case was therefore ‘manifestly groundless’ and ‘so manifestly faulty that it does not admit of argument’. The applicant maintains that the respondent’s case was also vexatious as the allegations had the ulterior motive of ending the applicant’s employment and or of causing her harm in her employment such that her employment was rendered untenable. 57 In these circumstances the applicant submits that it is appropriate to order that the respondent pay the costs of the applicant. 58 The applicant maintains that as a result of the respondent’s frivolous and vexatious allegations she was required to engage Dr Edwards-Smith as an expert witness and incurred the following expenses associated with her engagement as an expert witness: $1760 for a pre-hearing meeting, preparation and attendance at hearing; $1,210 for the preparation of a medical report; and $655 for consultations with the applicant. 92 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 325 59 The applicant submits that despite numerous requests, the respondent refused to provide any particulars of the allegations upon which it based its conclusions that the applicant was unfit for work and or performed poorly. It did not provide any particulars as part of the discovery process. The first time the applicant received any real details of the conduct she was alleged to have engaged in was in the respondent’s second round of witness statements - the witness statements in reply - shortly before the hearing. This conduct caused the applicant’s preparation for the hearing to be unnecessarily complex and protracted and in preparing for and during the hearing, the applicant incurred $140.53 in disbursements, $1,054 in office costs and $886.25 in file administration fees. 60 The applicant incurred $750 in costs associated with the production by her accountant of information and advice regarding the extent of her efforts to mitigate damage. The applicant has also incurred expenses of $426.98 for travel to and from conferences with MDC Legal and the Commission and $20.40 parking fees at conferences with MDC Legal and while attending the Commission. 61 The total amount claimed by the applicant is $7,362.06. 62 In relation to a suppression order, the applicant opposes any order that may limit the public release of the whole or any part of any evidence or decision of the Commission in this matter, save and except any reference to non-parties who were not witnesses in the matter and the applicant seeks the vindication of her reputation as one of the reasons she felt compelled to issue proceedings. 63 The applicant submits that the open justice rule requires that an order suppressing publication of evidence or a decision only be made in exceptional circumstances. The open justice rule was described by McHugh JA in John Fairfax & Sons v Police Tribunal (1985) 5 NSWLR 465 as follows (followed in Prisoners Review Board v Freeman (No 2) 2010 WASCA 167, [8]; Medical Board of Western Australia v Medical Practitioner [2011] WASCA 151, [83]; Anne Margaret Stonham v The Speaker of the Legislative Assembly of New South Wales [1999] 649, 35 - 36): The fundamental rule of the common law is that the administration of justice must take place in open court. A court can only depart from this rule where its observance would frustrate the administration of justice or some other public interest for whose protection Parliament has modified the open justice rule. ... Accordingly, an order of a court prohibiting the publication of evidence is only valid if it is really necessary to secure the proper administration of justice in proceedings before it (476 – 477). 64 A party seeking to overcome the open justice rule must demonstrate that the release of the relevant information would frustrate the administration of justice. It is insufficient to demonstrate that facts may become public which are merely embarrassing, damaging or dangerous (see John Fairfax Group v Local Court (1991) 26 NSWLR 131, 143; Prisoners Review Board v Freeman (No 2), [9]). 65 The applicant does not oppose an order preventing the public release of the names of employees who have been the subject of the respondent’s fitness for work procedure as it is not in the public interest. The applicant is one of those employees, but she opposes suppression of her name. 66 The applicant gave evidence to the Commission that the respondent damaged her reputation and prospects for employment by alleging that she may have a psychiatric illness and subjecting her to the fitness for work procedure. It is self-evident that purporting to subject her to a poor performance management regime would also have harmed her reputation as well. The Commission found there was no basis for believing that the applicant had a psychiatric illness and subjecting her to the fitness for work procedure or the poor performance management regime. These findings may potentially mitigate the damage to the applicant’s reputation and any effect on her future employment. In these circumstances, a suppression order would reduce the benefits to the applicant of its factual and legal findings and frustrate the administration of justice. 67 A party seeking an order prohibiting publication of evidence must provide evidence that the release of the information would frustrate the administration of justice and that mere belief that the order is necessary is insufficient (see John Fairfax & Sons v Police Tribunal, 477). There is no evidence that the order is necessary to prevent the frustration of the administration of justice. The order therefore cannot be made. 68 Where an order prohibiting the publication of evidence is made it must do no more than is necessary to achieve the due administration of justice (see John Fairfax & Sons v Police Tribunal, 477). If a suppression order is necessary in the view of the Commission, it must be limited to prevent only the publication of the names of those non-party employees subjected to the fitness for work procedure. An order which seeks to restrain publication of any further information, including the name of the applicant or any of the witnesses, would go beyond what is necessary to achieve the administration of justice or achieve the public interest of avoiding harm to persons with no connection to the proceedings. Respondent’s submissions 69 The respondent submits that the power of the Commission to order costs is to be exercised with a good degree of restraint and for the Commission to make an order awarding costs is considered to be rare and the well established test in this respect is that costs ought not to be awarded, except in extreme cases (see Denise Brailey v Mendex Pty Ltd t/a Mair and Co Maylands, 27). The application for costs and the amount claimed should only relate to the applicant’s denied contractual benefit claim rather than the applicant’s unfair dismissal claim and exclude costs for the services of any legal practitioner or agent. 70 The respondent refutes the applicant’s characterisation of its case and its motives and argues that the primary issues in contention were whether the applicant was constructively dismissed and if so, the terms of the employment contract for the purpose of determining any potential denied contractual benefit. This involves an assessment of a significantly different factual situation to that where an employer expressly dismisses an employee. A resignation can constitute a dismissal for the purposes of the Act, but whether or not a particular resignation will do so depends upon the circumstance of each case. This necessarily requires an assessment as to whether the employer is ‘guilty of conduct which is a significant breach going to the 326 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 92 W.A.I.G. root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract’ (Grant Raymond Lukies v AlintaGas Networks Pty Ltd (2002) 82 WAIG 2217, 2220; Diane Elizabeth Shaw v City of Wanneroo [256]). The respondent argues that the Commission’s findings relied on by the applicant formed part of the determination that the applicant was constructively dismissed, however, in the context of a constructive dismissal this is not such an extreme case to warrant a departure from the normal practice of the Commission not to order costs and the fact that a dismissal is unfair or that an employer is guilty of conduct which is a significant breach going to the root of the contract of employment is not an extreme case. 71 The respondent argues that the costs sought by the applicant including expenses associated with the engagement of Dr Edwards-Smith, preparation for and during the hearing, the accountant’s report of information and advice regarding extent of efforts to mitigate damage and travel expenses does not include supporting documentation such as invoices, what the amounts relate to and how they were calculated. With respect to the costs associated with Dr Edwards-Smith it is not known what the pre-hearing meeting and preparation involved and how the amount of $1,760 is broken up between the three components however, Dr Edwards-Smith was the first witness called on 25 May 2011 and her evidence was relatively short. The time charged for the actual consultations with the applicant and for the preparation of a medical report is significantly less than this amount. It is not known what the disbursements, office costs and file administration fees relate to or how these costs were incurred by or charged to the applicant. By way of example, the filing fee for a denied contractual benefit claim is $50. However the applicant has claimed $886.25 in file administration fees and $140.53 in disbursements. The costs associated with the production by the accountant setting out the applicant’s income and expenditure for the period 23 September 2010 to 13 October 2011 is a one page document setting out income and expenses (Exhibit A16). Relevantly the accountant also prepared the applicant’s electronic lodgement declaration. As such this information would have been readily available and easily presentable by the accountant and would have also been determined by the accountant in dealing with the applicant’s normal personal financial affairs such as preparing the individual tax return. It is not clear how the travel expenses have been calculated. 72 In the circumstances the respondent disputes that these proceedings are an extreme case warranting a departure from the Commission’s normal practice on costs and if the Commission determines that costs should be awarded to the applicant, a significant reduction needs to be made based on what is reasonable. 73 In relation to the suppression order, the respondent’s understanding prior to the filing of the applicant’s submissions with respect to this issue was that the applicant wanted to ensure that matters raised in the proceedings were kept confidential and in this respect the respondent did not separately seek a general suppression order but would consent to any general suppression orders sought by the applicant. In circumstances where the applicant does not seek a general suppression order the respondent does not seek any such order. 74 The respondent seeks an order preventing the public release and availability to the public of the names of employees who had been subject to the fitness for work procedure and the respondent understands that the applicant does not oppose such an order issuing. Findings and conclusions Amount owing to applicant in light of reasons for decision 75 The principles applying to mitigation were considered in St Cecilia’s College School Board. In this decision the Full Bench stated the following: Mitigation was considered by Sharkey P, with whom Parks C agreed in Growers Market Butchers v Backman (1999) 79 WAIG 1313 at 1316 as follows:- ‘1. The duty to mitigate loss in claims of unfair dismissal lies on the claimant employee (see Bogunovich v Bayside Western Australia Pty Ltd 79 WAIG 8 (FB)). 2. In practical terms, this requires the employee to diligently seek suitable alternative employment (see Brace v Calder and Others [1895] 2 QB 253). 3. The onus of proof of failure to mitigate loss is on the respondent (see Metal Fabrications (Vic) Pty Ltd v Kelcey [1986] VR 507 (FC), Goldburg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711 (FC), Prus- Grzybowski v Everingham and Others (1986) 45 ALR 468, 87 FLR 182 (Fed Ct FC) and McGregor on Damages (15th Edition, 1988) at page 723. 4. (a) The obligation to mitigate loss is an obligation to act reasonably in the mitigation of loss but not an obligation which a reasonable and prudent person would not undertake. (b) This duty to act reasonably to mitigate damage does not generally require the employee to take employment of a different or inferior kind (see “Truth” and “Sportsman” Limited v Molesworth [1956] AR (NSW) 924; Bostik (Australia) Pty Ltd [1991] v Gorgevski (No 1) 36 FCR 20; 41 IR 452 and compare Dunstan v The National Mutual Life Association of Australia Ltd (1992) 5 VIR 73). (c) In some cases, it may be unreasonable not to accept employment at a lower status and salary level (see Yetton v Eastwoods Froy Ltd [1967] 1 WLR 104, for example). 5. (a) There is, of course, no recovery for the loss avoided, unless the matter is collateral (see W R Freedland “The Contract of Employment” (1976) at page 26). 92 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 327 (b) Salary or wages, including any fringe benefits received from a new employer, will reduce the damages payable (see Bold v Brough Nicholson and Hall Ltd [1964] 1 WLR 201; Lavarack v Woods of Cochester [1967] 1 QB 278 at 301; Hutt v The Cascade Brewery Ltd (unreported) (Supreme Crt Tas) per Wright J and Golja v Lord (unreported) 21 February 1996 (IRC of Aust) per Madgwick J). 6. Expenses incurred in seeking alternative employment to mitigate one’s loss may be taken into account (see Brookton Holdings No V v Kara Kar Holdings Pty Ltd (1994) 57 IR 288.’ The principle in paragraph 2 of the passage quoted above has recently been qualified by the Full Bench. In BHP Billiton Iron Ore Pty Ltd v Transport Workers’ Union of Australia, Industrial Union of Workers, Western Australian Branch (2006) 86 WAIG 642 it was observed by Ritter AP at [104] (with whom Beech CC and Gregor SC agreed) that Brace v Calder [1895] 2 QB 253 is not an authority which supports the principle that an employee must diligently seek suitable alternative employment [9] – [10]. 76 I have already found that but for her dismissal the applicant would have continued to work for the respondent for the duration of her two year contract. 77 When taking into account the relevant authorities the Commission must assess whether the applicant has acted reasonably with respect to mitigating her loss and assess what was appropriate for the applicant to do by way of mitigation when taking into account the circumstances of this case and when mitigating loss a successful party must act reasonably to minimise the loss suffered and a claimant is not entitled to losses which were avoidable. An employee should diligently seek out alternative employment but this does not mean that in all cases an employee must immediately do so and in some instances commencing studies in lieu of working does not necessarily represent a failure to mitigate loss. It is also the case that the onus of proof of the failure to mitigate loss is on the respondent. 78 It was not in dispute and I find that: • The quantum the applicant is claiming for the balance of her contract of employment with the respondent by way of damages is $196,027.44 less $16,019 in earnings which equates to $180,008.44. The applicant is also prepared to accept a further deduction, based on past earnings, of possible future earnings to 16 May 2012 in the amount of $4,000, leaving a balance of $176,008.44. • After the applicant ceased working with the respondent Dr Edwards-Smith certified her as being fit for work, excluding returning to work with the respondent, and she remains fit for work. • Between 20 October 2010 and 13 October 2011 the applicant worked on a number of short term projects. • After the applicant was terminated she enrolled as a full-time student in a Masters in Sustainability course at Curtin University and she is expected to complete this course in 2012. • After her termination the applicant enrolled in a Certificate IV Training and Assessment course. 79 I have already found that the applicant is a highly skilled and competent professional and that she has had a successful career occupying senior management roles over many decades, both in the arts and culture sector and local government. 80 Following is a summary of the applicant’s employment history which the applicant tendered as evidence at the initial hearing: • 1983 – 1987 co-founder and Artistic Director of the Deck Chair Theatre Company • 1988 – 1992 various cultural and consultation projects • 1992 – 1998 consultant advising on social and cultural planning and marketing and promotion • 1998 – 2000 Coordinator of Cultural Development for the City of Joondalup • 2000 - 2001 Manager Events with the National Museum of Australia • 2001 – 2003 Manager Arts and Culture with the City of Glen Eira • 2003 – 2009 Manager of Arts and Culture for the City of Greater Geelong • April 2009 – December 2009 Manager Programs Department of Culture and the Arts Western Australian (Exhibit A7) 81 After carefully considering the submissions of the parties and the facts relevant to this issue I am satisfied and I find that the applicant has not acted reasonably with respect to mitigating the loss she has suffered by the premature cessation of her contract of employment with the respondent. As the applicant has had a lengthy and successful employment history in arts and culture and local government and as a consultant in the area of culture over many decades I reject the applicant’s claim that after her termination her only option was to seek employment in local government where she maintains there were only two suitable positions open for her to undertake and these positions were unavailable to her. 82 I find that commencing full-time study to enhance her employment options in a new industry was not the only option open to the applicant to the exclusion of seeking alternative employment either at the level of remuneration she was earning at termination or at a similar level to her previous level of remuneration and I find that the applicant could have and should have sought out suitable alternative full-time employment to mitigate her loss instead of relying on a career change by undertaking full-time study. I find that the applicant has an extensive range of skills and experience which would enable her to work outside of local government, in particular in the area of arts and culture where the applicant worked prior to commencing employment with the respondent. I find that the work undertaken by the applicant since her termination, which has been of a temporary nature, has been a deliberate strategy on the part of the applicant in order to focus on her studies and as a result her 328 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 92 W.A.I.G. earnings have been minimal, compared to what she could be earning in a senior management role similar to that which she was earning with the respondent. In reaching this conclusion I also find that there was no evidence to support the applicant’s claim that her treatment by the respondent and resultant termination fundamentally undermined her ability to seek out future employment in local government. 83 However, that is not the end of the matter. Even though I have found that the applicant has not acted reasonably with respect to fully mitigating her loss in my view the respondent has not identified specific jobs which would have been suitable for the applicant to apply for and undertake in the arts and culture sector or related industry or as a consultant at a similar level to that of her position with the respondent. I also find that given the applicant’s background in senior management it is inappropriate for her to accept a job at a significantly lower level and I find that relocation to take up an alternative position is unnecessary in this instance given the applicant’s relocation prior to commencing employment with the respondent. In any event, no positions outside of the Perth metropolitan area were put to the applicant by the respondent by way of consideration as suitable alternative employment. 84 In the circumstances and when taking into account s 26(1)(a) of the Act considerations and the duty on the Commission to consider the relief being sought on the basis of equity and good conscience I find that the applicant is due six months’ remuneration in the amount of $60,387.50 gross as damages for her claim for a denied contractual benefit (see Exhibit A8 applicant’s letter of appointment). In my view this timeframe would have been sufficient for the applicant to seek out and gain suitable alternative employment in the arts and culture sector or related industry in Perth or as a consultant at a similar level to her position with the respondent. In reaching this conclusion, I have taken into account the quantum earned by the applicant after her termination which is not to be deducted from this amount. Application for costs 85 Section 27(1)(c) of the Act gives the Commission the power to order any party to the matter to pay to any other party such costs and expenses, including witness expenses, as are specified in the order, but no costs are allowed for the services of any legal practitioner, or agent. 86 The test to be applied in awarding costs under s 27(1)(c) of the Act is set out in Denise Brailey v Mendex Pty Ltd t/a Mair and Co Maylands where the Full Bench held: The general policy in industrial jurisdictions is that costs ought not to be awarded, except in extreme cases. … The question is what does the phrase ‘costs and expenses’ mean? ‘Costs’, as defined above, includes all of the expenses. No costs are allowed for the services of a legal practitioner or agent. Thus, the professional costs element is eliminated. … The application, too, must be determined under s26 of the Act. However, part of that equity and good conscience includes what is settled law in industrial matters that costs ought not be awarded, except in extreme cases, (eg) where proceedings have been instituted without reasonable cause (see Hospital and Benevolent Homes Award (1983) AILR 409 where costs were awarded in a matter where the applicant terminated the proceedings after putting the respondent to the expense of defending without obtaining an order) (27). 87 Costs that may be awarded include costs incurred by a party to a matter including the costs of an expert witness and costs of travel expenses. A case will be frivolous where it is ‘manifestly groundless’ or ‘so manifestly faulty that it does not admit of argument’ and a finding that an employer is guilty of conduct which is a significant breach of the contract of employment is not always an extreme case. 88 The applicant is claiming $7,362.06 in expenses as follows, however on adding up these costs the Commission arrived at an amount of $6,903.16: • Expenses associated with Dr Edwards-Smith as an expert witness in the amount of $3,625; • $140.53 in disbursements; • $1054 in office costs; • $886.25 in file administration fees; • $750 in costs associated with her accountant providing information and advice regarding the applicant’s mitigation of her loss; • $426.98 for the applicant to travel to and from her representative’s office and to and from the Commission; and • $20.40 parking fees incurred by the applicant at her representative’s office and when attending the Commission. 89 No receipts were provided with respect to these claims, nor was any breakdown provided of the way in which these amounts were calculated. 90 The applicant argues that she incurred considerable costs due to the frivolous, unparticularised assertions made by the respondent with respect to the applicant’s mental health and poor performance and the applicant claims that the respondent’s case was vexatious as the allegations against the applicant were designed to cause the cessation of her employment or to cause the applicant harm such that her employment was rendered untenable. 92 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 329 91 I find that the way in which the respondent conducted its case did cause additional expense for the applicant, however, even though I have concerns about the way in which the respondent conducted its case and the manner in which it presented its defence when applying the test in Denise Brailey v Mendex Pty Ltd t/a Mair and Co Maylands I am of the view that this is not an extreme case so as to warrant an order for costs. I base this finding on my view that I am not satisfied that the respondent’s defence of the proceedings was frivolous or vexatious or totally without merit. The outcome of this case depended upon my findings on witness credit and I find that these findings and the resultant findings and conclusions I made with respect to this case were not obvious at the commencement of the proceedings such that it could be said that the respondent had absolutely no prospect of success in defending this application. Whilst I accept that the respondent’s case was weak and the applicant was not informed of all the respondent’s concerns about her behaviour and conduct immediately after she ceased employment with the respondent, I accept that the respondent invoked its fitness for work policy with respect to the applicant on the basis that it had genuine concerns about the welfare of a number of its employees, including the applicant. I therefore find that the respondent’s case was arguable. I also find that when the respondent enacted the fitness for work policy process with respect to the applicant it did not do so to cause the cessation of the applicant’s employment or to deliberately cause her harm. 92 I therefore reject the applicant’s claim for costs and an order will issue dismissing this application. Suppression Order 93 Both parties agree that the names of employees who were subjected to the fitness for work policy, excluding the applicant, not be included in the decision nor be in the public domain. In my view this is an appropriate course of action and an order to this effect will therefore issue as part of these proceedings. 2012 WAIRC 00090