If your business has a matter before the Fair Work Commission (“FWC”) you may automatically think that the you are entitled to legal representation in that matter and that your legal representative is able to appear for the business in the FWC proceedings. You would be wrong. The issue of legal representation before the FWC has become a hot topic as a result of a number of recent decisions. In this client alert we consider the extent to which employers have a right to be legally represented in FWC proceedings, and what this means for companies involved in such matters.
The Legal Principles
Section 596 of the Fair Work Act 2009 (Cth) (“FW Act”) requires a party who is seeking to be represented by a lawyer or a paid agent in proceedings before the FWC to seek the permission of the FWC for such representation. In particular, s596(2) provides that the FWC may only grant permission for a party to be represented, if:
- It would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or
- It would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or
- It would be unfair not to allow the person to be represented taking into account fairness between the person and other person in the same matter.
Section 596 also provides an additional note which sets out circumstances in which the FWC might grant permission for a person to be represented by a lawyer or paid agent. These circumstances include: if the person is from a non-English speaking background or has difficulty reading or writing, or whether a small business is a party to a matter and has no specialist human resources staff while the other party is represented by an officer or employee or other person with experience in workplace relations advocacy. Section 596 of the FW Act and its requirements however, do not apply to in-house lawyers or advocates employed by a union or employer association.
Whether the prescribed conditions set out in section 596 of the FW Act have been met is an objective exercise and each member of the FWC may have a different opinion on the issue. It has been stated that “reasonable minds will differ as to whether legal representation will result in added efficiency, whether a certain circumstance is unfair or not, or whether a person is unable to be represented effectively”[1].
However, it was the Commonwealth government’s desire (as set out in the Explanatory Memorandum) for the FW Act to operate efficiently and informally, and in a non-adversarial manner. Until recently, it was widely accepted however, that this provision regarding legal representation extended only to actual representation in hearings or conferences, and for the most part, leave for the lawyer to appear was usually given. In some instances, no real enquiry into the requirements of section 596 were even considered before leave was granted. This was certainly the case when both parties had legal representation. There has been a significant shift in this regard, not only as to the question of representation in hearings and conferences but also in relation to the preparation for the relevant hearing or conference.
Recent Case Law
The recent decision in Stephen Fitzgerald v Woolworths Limited [2017] FWCFB 2797 has redefined representation before the FWC. In this matter, a full bench decision which was handed down at the end of last year, held that permission for lawyers and paid agents to represent a client in a matter extends to out of court activities (including preparing applications and making submissions).
In summary, Mr Fitzgerald who was employed by Woolworths Ltd sent a letter to his manager stating that he was forced to resign because of continued bullying, harassment and intimidation by another employee. Subsequently, Mr Fitzgerald brought an unfair dismissal application in the FWC. As can be expected, Woolworths raised a technical objection and argued that he had voluntarily resigned.
During the proceedings, Mr Fitzgerald represented himself, while Woolworths was represented by an internal Employee Relations Specialist. However, Woolworths also engaged the services of a law firm which assisted with a number of background matters including sending a without prejudice offer of settlement on behalf of Woolworths and having a legal representative sit next to the Woolworths representative at the bar table and provide assistance to her while the matter was heard.
Woolworths did not at any time before the hearing apply for permission to be represented by the law firm pursuant to s596. In particular, the commonly understood operation of s596 was that permission to represent a party was limited to oral advocacy. Given that the legal representative only sat next to the Woolworths representative at the bar table and provided assistance to her but was not engaging in oral advocacy the Commissioner did not consider that the legal representative was in fact representing Woolworths. Ultimately, Woolworths was successful with its technical objection and Mr Fitzgerald appealed the initial decision.
One of the issues Mr Fitzgerald raised in his appeal was that the FWC had misled him about the issue of legal representation by Woolworths.
After considering the provisions of s596, the Full Bench of the Commission found that the Commissioner’s view that lawyers and paid agents need seek permission to represent a party only when it came to oral advocacy was incorrect. The Full Bench held that references in s596 to the “representation of a matter” were not limited to the hearing of the matter. They considered the only relevant limitation on the scope of representation in accordance with s596 is that is must be in a matter before the FWC.
Although this decision would, on its face, require lawyers to seek permission to represent clients for all out of court activities, the Full Bench clarified that it did not include the following:
- Legal representation before an application had been made to the FWC; and
- Legal representation after an application had been made to the FWC:
- If a party obtained legal advice from a lawyer or paid agent which did not involve interaction with the FWC itself; or
- Any representational activities undertaken prior to, or outside of a conciliation conference, determinative conference, or interlocutory or final hearing, or any written applications and written submissions, lodgement of document with the FWC and correspondence with the FWC – unless the other party objected to these activities.
Since handing down its decision late last year, the Full Bench decision has had a continuing impact and a number of recent decisions have been required to further examine the stringency of the rules in relation to obtaining the right to appear in a FWC matter. In Tyrone v Taiepa v Shinsen Taijutsu Pty Ltd t/a MMA247, the FWC was required to examine the meaning of “representation” and “paid agent” in light of the Fitzgerald v Woolworths decision, in order to determine whether the Employer was able to claim costs in relation to the work of a “paid agent” it had used to assist with the matter.
In summary, Mr Taiepa made an unfair dismissal application to which his employer, Shinsen, raised a jurisdictional objection. However, Mr Taiepa took no steps to participate in the process and did not attend the conciliation conference or comply with any of the FWC directions in the matter. As a result of Mr Taiepa unreasonably failing to both comply with the directions and attend the non-compliance hearing, Shinsen filed an application for costs. The application was filed by a company named Innovative Bookkeeping Studio (“Innovative”) on behalf of Shinsen and it sought to claim the costs of Innovative for preparing and assisting Shinsen throughout the matter before the FWC.
Mr Taiepa objected to the claim for costs for Innovative on the basis that he was unaware that Shinsen had engaged legal or other representation as this was never disclosed. The preliminary issue was that at the time of filing the Employer’s Response Form, Shinsen did not provide details of any person or business that was representing them during the unfair dismissal proceedings, and leave was not sought.
Innovative responded to the Deputy President on behalf of Shinsen and stated that the Employer’s Response requires that representation only be disclosed if the Employer is being represented orally. Innovative submitted that the correct answer was provided by the Respondent in the Employer Response, as they spoke on their own behalf in the proceedings before the FWC. Whereas, Innovative was contracted to assist with the application process, they were not contracted to speak on behalf of Shinsen. Innovation also stated “if the question [on the Employer’s Response Form] required the Respondent to outline any assistance provided by external persons/companies, then maybe a rewording to this question is required. At this stage, the question is clear and was answered accordingly”.
In light of this issue, Deputy President Clancy referred to the Full Bench decision of Fitzgerald v Woolworths and confirmed that the Full Bench stated that “representation”, in the legal context included the preparation of documents and as such, was satisfied that the definition of “paid agent” in the FW Act was broad enough to encompass Innovative, and thus the work undertaken for Shinsen was capable of falling within the scope of representation by a paid agent. In the circumstances, Deputy President Clancy considered that the way in which Shinsen answered the question should not necessarily count against it and that they were able to pursue the costs incurred by engaging Innovative.
The more recent decision in Robert Caruana v Shace Tooop Trust T/A Toop & Toop Real Estate [2018] FWC 22 31 examined the above Full Bench ruling and went even further in defining the limits of legal representation. In particular, the Full Bench imposed stringent conditions on an employer’s legal representation rights.
In this matter, Mr Caruana had submitted an application for unfair dismissal and his employer raised a number of jurisdictional arguments in response. The matter did not settle at conciliation and was subsequently listed for hearing. Prior to the hearing, the employer foreshadowed that they would be seeking to be legally represented at the hearing. In response, Mr Caruana foreshadowed that he would oppose such a request. As a result, DP Anderson directed the parties to make written submissions in relation to the issue of representation.
As part of his considerations, DP Anderson stated that the relevant starting point is that the exercise of the discretion in granting permission should be seen as a departure from the default position, and a party in a matter before the FWC must normally appear on its own behalf. DP Anderson then went on to consider the jurisdictional objection and agreed that it involved some complexity. In summary and having regard to the overall circumstances, the Commissioner was satisfied that permission should be granted to the employer to have legal representation having regard to the fact that the hearing is a jurisdictional hearing considering complex issues of fact and law. However, he did impose a number of conditions including:
- The proceedings would be conducted by a determinative conference, not in open court which will allow more informal procedures;
- If the Commissioner felt that it was necessary and consistent with his independent role, he may intervene during the hearing and provide an appropriate level of guidance to Mr Caruana on the conduct of proceedings and the testing of evidence; and
- Should circumstances alter or if the Commissioner forms the view that the employer’s legal representation is not contributing to the efficient conduct of proceedings, he will consider whether the grant of permission should be revoked. Furthermore, the granting of permission related only to the jurisdictional issue and if the matter proceeded, a party seeking to be represented by a lawyer or paid agent will need to make a fresh request.
Lessons for Employers
The decision of Fitzgerald v Woolworths clarifies the FWC’s views on the use of “shadow lawyers”. Specifically, permission for shadow lawyers must still be sought under s596 of the FW Act. Notwithstanding Fitzgerald v Woolworths, the FWC evidently has still shown a willingness to grant permission where the circumstances so warrant. In this regard, it is evident that each member of the Commission will consider the position of both parties and their decision will be based on the facts and circumstances before them. It will more likely be the case that smaller employers with no dedicated Human Resources or in-house legal function will be granted permission for legal representation, particularly if the matter is complex and/or the employee is also legally represented.
However, larger employers who are represented by lawyers or paid agents in disputes before the FWC should no longer assume that their representatives will be granted permission to represent them not only at the hearing of the dispute but also during the course of the matter, specifically where the other party objects to the representation. For instance, very recently Qantas has had (for the second time within an 8-day period) an application for legal representation before the FWC refused.
Our suggestion in dealing with the current uncertainty includes:
- Legal representation is always advisable, but should be made overt and leave sought early;
- Where a lawyer or paid agent is representing a party in any conference or hearing before the FWC, the representative should seek permission to appear, even if they will not be the primary advocate;
- Legal representatives should always prepare robust submissions as to why representation is necessary;
- Legal representatives acting as shadow lawyers must still seek permission pursuant to s596 of the FW Act; and
- Employers should ensure that they are able to represent themselves if leave is refused. In this regard, it is important that any capable representation included a full briefing by the legal representative so as to equip the Employer should they need to advocate or appear themselves.
Despite the clear objectives of the Act to limit legal representation and the move in this direction by the decision in Fitzgerald, it is our experience that self-represented litigants who appear before the FWC usually lack a clear sense of the issues to be determined and are usually underprepared and/or overwhelmed. The failure in identifying the relevant issues coupled with the uncertainty in relation to the FWC process can create great difficulty in resolving the dispute. Competent legal representation may be an advantage for both parties and usually ensures the matter is dealt with more efficiently for all concerned.
At the moment, given that in-house lawyers and union representatives do not require leave to appear, the failure to allow the other party legal representation may create a significant imbalance. For these reasons, many legal specialists and/or experts within the employment area would be pleased to see the FW Act amended to allow all parties to be legally represented as a matter of right.
If further information in relation to any aspect of this alert is required, please do not hesitate to contact our office.
This alert is not intended to constitute, and should not be treated as, legal advice.
[1] Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v UGL Resources Pty Limited (Project Aurora) [2012] FWA 2966 at [9]