IR agent's conduct spurs FWC into action

By

Mike Toten

Mike Toten is a freelance writer, editor and media commentator.

The Fair Work Commission has formed a working group with the task of ensuring that paid agents conduct themselves appropriately. 

The move followed a case where the Commission criticised an agent who had been hired by an employee to represent him in an adverse action case. The agent discontinued proceedings without first obtaining the employee’s permission, and when the amount paid by the employer to “settle” the matter was less than the agent’s fee, it required him to pay the difference between the two amounts. 

The employee asked the agent to represent him before the FWC, claiming that his employer had taken adverse action against him by dismissing him. The agent made a “complimentary” assessment of his case and said it would represent him for a fee of $4490 + GST on a “no win, no fee” basis.

The employee immediately accepted and the agent sent him a lengthy and legalistic “terms and conditions plus instructions to act” document. The FWC described it as intended to be legally binding, and the contents as “problematic”. It added that the employee’s immediate acceptance of the document showed that he had not read it first, and the agent would have been aware of that.

The matter went to a conciliation conference before the FWC, at which the agent and employer agreed to a settlement amount of $2692, almost $1800 less than the agent’s fee. The agent then instructed the employer to send the payment to its own nominated account (not to the employee), which the employer did. The contract signed by the employee stated that this step would occur, but added that the agent would deduct its fee ($4490) from the settlement amount and then pay any surplus to the employee. The agent then filed a notice to discontinue proceedings in the FWC, without notifying the employee or seeking his permission to do so. Such notices are only valid if lodged by the employee, or the employee authorises an agent to do so. The FWC later ruled it to be invalid.

The outcome was that despite the “settlement”, the employee received no money. The agent did not notify him that it had received the payment until the employee contacted the FWC three weeks later. When it then notified him, it told him he would have to pay the difference between the agent’s fee and the settlement amount ($1798). The FWC pointed out that the contract did not make it clear to the employee that the terms of the “no win no fee guarantee” could mean that he might receive no settlement proceeds.

The FWC heavily criticised the agent, describing its conduct as “misleading and unethical”. It noted that at no time did it tell the employee that acceptance of its contract meant that if an amount to settle the claim was less than the agent’s fee, the employee would receive no money.

It recommended the agent repay the employer, the employer then pay the settlement amount directly to the employee, and then the employee file a notice to discontinue proceedings. It added that this recommendation must be adopted “in its entirety”, otherwise the FWC would issue a certificate stating that the case was not resolved.

Read the judgment

Samuel Howell v Elite Elevators Corporation Pty Ltd [2024] FWC 206 (24 January 2024)

Working party to be established

On 30 January 2024, the FWC established a Paid Agents Working Group. 

The group will be led by President Hatcher and made up of senior Commission Members and senior members of staff.

The working group will aim to establish standards similar to those that regulate conduct by solicitors/lawyers, to ensure that agents adhere to similar standards.

To do so, it will consult with regular representatives involved in individual dispute matters before the FWC, as well as with law societies, peak bodies, and other interested parties.