How far can an employee pursue a claim that has no merit?

Disputes between employees and employers can become personal and heated. And, when the employee has no access to legal counsel, he or she may pursue a claim that actually has no basis in law. It may be a matter of spite or a misunderstanding of the legal standard. Either way, it’s a difficult situation.

In the case where a claim has no merit, an employer may move for dismissal. But because dismissal involves prejudging a claim before it is fully argued, the Fair Work Commission sets a very high bar.

How far can an employee pursue a claim that has no merit? To be honest, the answer is fairly far. But where a claim can be shown to be genuinely frivolous, vexatious or to have no prospect for success, an employer may ultimately truncate the process.

Frivolous, vexatious or without any prospect for success

An application will be considered frivolous or vexatious where it:

  • is so obviously untenable that it cannot possibly succeed;
  • is manifestly groundless;
  • is so manifestly faulty that it does not admit of argument;
  • discloses a case which the Commission is satisfied cannot succeed, or
  • does not disclose a cause of action.

Generally, for an application to have no reasonable prospect of success, it must be manifestly untenable and groundless.

From a procedural perspective, the Commission might make this decision on the application from an employer after it hears the applicant’s case but before the employer has presented any evidence.

The threshold of proving that an application is vexatious or malicious is no easy feat. The usual examples are those where it appears that an employee is motivated by the idea of “making their employer pay” or “taking their employer down at all costs.”

Assessing costs

In general, each party to a matter before the Commission must bear its own costs in either bringing or defending a claim. However, the Fair Work Commission does have discretionary powers to require a claimant to bear some, or all of the costs incurred by the employer in relation to an application where the applicant made the application vexatiously or without reasonable cause or where it should have been reasonably apparent to the applicant that the application had no reasonable prospect of success.

It should be clear, however, that orders for costs are rarely made even when a claim is dismissed. Cost orders are not automatic when a claim is dismissed. Rather, this is a second and subsequent decision.

If you believe an employee’s claim has no merit you do have legal recourse. The key thing is to seek legal advice to help you navigate the process.

Rolf Howard, Managing Partner, Owen Hodge Lawyers

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