the Applicant v Technology One Limited (No 7)
At a glance
- 1
What happened
This case is the seventh set of proceedings arising from a general protections dispute between the Applicant and Technology One Limited. After the substantive matter was resolved, Technology One applied for a costs order under section 570 of the Fair Work Act 2009. The key event was a Calderbank offer, which is a formal settlement offer made outside court that can affect who pays costs later, of $2.2 million made by Technology One to the Applicant during the trial. The Applicant did not accept the offer. The Federal Court was asked to decide whether that rejection amounted to unreasonable conduct justifying a costs order against the Applicant.
What was decided
The Federal Court found that the Applicant's failure to accept the $2.2 million Calderbank offer was unreasonable in the circumstances. As a result, the court ordered the Applicant to pay Technology One's costs from the date the offer was made. Under section 570 of the Fair Work Act, costs in workplace matters are generally not awarded unless a party acted unreasonably. The court concluded that the size of the offer and the stage of proceedings at which it was made meant that rejecting it without adequate justification crossed that threshold.
What it means for employers
Employers in general protections litigation can protect their cost position by making a well-timed, genuine Calderbank offer during proceedings. If the offer is substantial and the other party unreasonably refuses it, a court may order that party to pay costs from the date of refusal. This decision shows that the usual rule against awarding costs in Fair Work matters is not absolute, and a carefully structured settlement offer can shift financial risk onto an applicant who holds out unreasonably.
What it means for employees
Employees involved in Fair Work litigation should take formal settlement offers seriously, particularly when made during a trial. Rejecting a substantial offer without good reason can result in a personal costs order, meaning the employee must pay the employer's legal fees from the date of refusal. This outcome is a reminder that the general rule protecting employees from costs in Fair Work cases does not apply where a court finds the employee's conduct in refusing to settle was unreasonable.
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