Industrial Relations Commission of New South Wales CITATION: Dee Donovan and Tanya Sullivan t/as Blaze on Stage Pty Ltd [2005] NSWIRComm 362 APPELLANT Mr Dee Donovan PARTIES: RESPONDENT Tanya Sullivan t/as Blaze on Stage Pty Ltd FILE NUMBER(S): IRC 248 & 2513 of 2005 CORAM: Walton J Vice-President; Sams DP; Ritchie C CATCHWORDS: Appeals - applications for leave to appeal - jurisdictional and costs decisions at first instance - whether employee an independent contractor when performing promotional work in the club industry - nature of employment relationship - relevance of the provisions of the Entertainment Industry Act - principles in Hollis v Vabu - appellant an employee employed by the Club not the respondent - leave to appeal granted - Commissioner's decision correct but for the wrong reasons - appeal dismissed - costs decision at first instance - whether claim frivolous or vexatious - whether the appellant unreasonably refused to settle claim - conduct of appellant - unrepresented litigant - case involved complex and difficult legal issues - costs not automatic - principles to be applied in costs applications in unfair dismissal proceedings - relevance of appeal of jurisdictional decision - claim not frivolous or vexatious - appellant's offer to settle claim not unreasonable - respondent's offer to settle claim unreasonable - leave to appeal granted - appeal upheld - costs decision and orders set aside. Industrial Relations Act 1996 LEGISLATION CITED: Entertainment Industry Act 1999 Bankstown City Council v Paris (1999) 93 IR 209 Caltex Petroleum Pty Ltd v Harmer (1999) 92 IR 264 Hollis v Vabu Pty Ltd (2001) 207 CLR 21 House v the King (1936) 55 CLR 499 Knowles v Anglican Church Property Trust (No 2) (1999) 95 I IR 380 CASES CITED: Peden v Lake Macquarie Refrigeration Pty Limited [2004] NSWIRComm 66 Perrott v Xcellenet Australia Limited (1998) 84 IR 255 Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 Weisser v Spur Group Pty Ltd (2003) 121 IR 89 HEARING DATES: 08/02/2005 DATE OF JUDGMENT: 11/04/2005 APPELLANT Mr D Donovan, unrepresented LEGAL REPRESENTATIVES: RESPONDENT Mr R Berry, Solicitor Heazlewoods Bushby International JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: WALTON J Vice-President SAMS DP RITCHIE C 4 November 2005 Matter No IRC05/248 Dee Donovan and Tanya Sullivan t/as Blaze on Stage Pty Ltd Application by Dee Donovan for leave to appeal and appeal against a decision of Commissioner Tabbaa given on 30.12.2004 in matter no. IRC5385 of 2003 Matter No IRC05/2513 Dee Donovan and Tanya Sullivan t/as Blaze on Stage Pty Ltd Application by Dee Donovan for leave to appeal and appeal against a decision of Commissioner Tabbaa given on 6.5.2005 in matter no. IRC5385 of 2003 DECISION OF THE FULL BENCH [2005] NSWIRComm 362 1 This decision determines two applications filed by Dee Donovan ('the appellant') for leave to appeal and, if leave be granted, appeals pursuant to ss 187 and 188 of the Industrial Relations Act 1996 ('the Act') from decisions and costs orders of Tabbaa, C in Donovan and Blaze on Stage Pty Ltd, Matter No IRC 5385 of 2003 and Donovan and Blaze on Stage Pty Ltd [2005] NSWIRComm 1056. For convenience, we shall refer to the two decisions respectively as, the jurisdictional decision and the costs decision. 2 Shortly stated, on 30 December 2004 Tabbaa, C dismissed the appellant's s84 claim of alleged unfair dismissal for want of jurisdiction. The Commissioner found that the appellant was an independent contractor when he was performing promotional work at the Ryde Eastwood Leagues Club. It followed, in the Commissioner's view that he was therefore not entitled to bring a claim of unfair dismissal under Pt 6 ch 2 of the Act. 3 Consequent upon that decision an application for indemnity costs against the appellant was made by the respondent, Blaze on Stage Pty Ltd. On 6 May 2005 Tabbaa, C published a decision and made orders pursuant to ss 181(2)(c) and 181(1) of the Act requiring the appellant to pay the respondent's costs on a party to party basis in respect to all proceedings in the matter commencing after the 19 December 2003. 4 By agreement, the two appeals were heard together on 2 August 2005. It is pertinent to note that the appellant appeared unrepresented in the proceedings before Tabbaa, C and this appeal. Mr Berry (Solicitor) appeared for the respondent in both proceedings. 5 Notwithstanding some irrelevant aspects of the appellant's submissions, the parties agreed that the issue raised by the appeal of the jurisdictional decision was confined to whether the appellant was truly an employee or an independent contractor. Determination of that matter might impact on the question of leave to appeal and the appeal of the costs decision; although we readily acknowledge that the two appeals raise substantially different issues for consideration by the Full Bench. We propose to firstly consider the issues raised by the jurisdictional appeal. THE APPEAL AS TO JURISDICTIONAL FINDINGS The Commissioner's decision 6 The background to the appellant's claim was summarised by the Commissioner as follows: Briefly, Mr Donovan contended that he had been approached by Ms Tanya Sullivan, Managing Director of Blaze on Stage Pty Ltd, and offered part-time weekly employment on a permanent basis at the Ryde-Eastwood Leagues Club at West Ryde (the "Club"). The position offered training, which he accepted over a period of several days, to work on a series of weekly in-house promotions. He stated that he had been concerned about the alleged requirement for him to issue invoices under his trading name for work carried out on five promotions for varying hours three days per week every week. He had been required to include GST. He had used that system of payment when engaged to perform as a variety entertainer but not in the context described above. Nevertheless, he alleged that he had reluctantly acquiesced to that request over the 18 months of that contract. Approximately six months prior to his dismissal, two promotions had been taken away from him and offered to someone else. He did not accept the reason he was given that it was because management of the Club was unhappy with his performance. He believed that it was because Ms Sullivan wanted to provide another male entertainer she had been managing with additional work. On 9 September, 2003 Ms Sullivan allegedly telephoned him and terminated his services at of the Club without explanation. There were two other calls over the next two days offering limited performances at the same venue. During those discussions, he had allegedly indicated that he considered his termination unfair and that he ought to have received at least one month's notice or payment in lieu. He had further allegedly indicated that he might have to contact the Industrial Relations Commission. That statement had allegedly resulted in his employment being terminated forthwith. It was contended on behalf of the respondent that Ms Sullivan was licensed under the Entertainment Industry Act as a Venue Consultant and Entertainment Industry Agent. That Act, it was explained, was designed to clarify the legal positions of the various players in that industry. The Respondent further relied on the Workplace Injury Management and Workers' Compensation Act , which, it was alleged, deemed the employer of an entertainer as being the venue or the party that was benefiting from the performance. Finally, correspondence was tendered from the Club directing the Respondent to remove the Applicant from their promotions at that venue because of complaints from staff and patrons of the Club. 7 The Commissioner in a detailed way then dealt with the evidence of the applicant and witnesses for the respondent. The respondent's witnesses included other entertainers and various managers of the Club. Submissions of the parties 8 The appellant had submitted - and did so in this appeal - that the master/ servant relationship was clearly evident between himself and the respondent. He said this was demonstrated by the following factors: i) he had attended a two-day training course organised by the respondent; ii) the 18 months' duration of his employment; iii) the degree of control and direction by the respondent over his hours of work and days on which he worked through a roster; iv) he had received regular weekly payments; v) he had not supplied his own tools of trade; vi) the respondent's instruction to wear a name badge with " Blaze on Stage " engraved on it; vii) when he was first offered employment, the appellant inquired as to what benefits he would be entitled to as an employee, and was told that no benefits would apply; viii) the respondent had required the appellant to wear a uniform at all times; ix) the appellant had signed an in-house Safety Corrective Request Form at the direction of the respondent. 9 The respondent argued that if there was an employee/employer relationship, it was between the appellant and the Club. This was demonstrated by the arrangement entered into between the Club and the respondent as a licensed venue consultant under the Entertainment Industry Act. It was the Club which determined what performers were required and when. The Club provided all the materials for the promotions. It was the Club which directed the respondent to reduce the appellant's work and ultimately withdrew all his promotions at the Club. 10 The respondent, by reference to Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16 and Hollis v Vabu Pty Ltd (2001) 207 CLR 21, outlined the indicia which determine the existence, or otherwise, of an employment relationship and, concluded that other than the wearing of a badge identifying the appellant's association with the respondent (a factor plainly acknowledged by the Commissioner), "every test applied by the High Court in Vabu fell squarely in favour of the respondent". 11 Mr Berry solicitor who appeared for the respondent, noted that Tabbaa, C agreed with this assessment and found that the appellant had been engaged as an independent contractor when performing promotional work at the Club. 12 In the respondent's submissions, Mr Berry identified a host of indicia which, he submitted, fell squarely in favour of the respondent's contention that it was not, and could not be the employer of the appellant. These indicia were: a) The appellant had been registered with the respondent over a period of several years as a freelance variety entertainer to perform on stage. b) The Club, and not the respondent, directed the dates and times that promotions were required. c) The appellant had promoted his own services in running a game similar to Bingo, called "Zingo", in which he suggested the duration of each game, the number of games, the time of day of each session and when to hold the breaks. d) The Club, and not the respondent, provided the equipment that was necessary to conduct the promotions. e) It was management of the Club, and not the respondent, that suggested a cape for use with a clairvoyant poker machine promotion. It was the Club, and not the respondent, which reimbursed the appellant for the cost of this cape. f) The Bingo tickets, which featured a great deal in the proceedings, were provided by the Club, and not the respondent, and stored at the Club's premises, so as to be accessible to the appellant. g) The appellant was free to accept engagements at other venues throughout the period of his so-called "employment". h) The respondent never refused a request by the appellant that he be relieved from a promotion at the Club in favour of work commitments elsewhere. i) The appellant has operated as a sole trader for many years. j) The appellant had his own business name. k) The appellant had his own business postal address. l) The appellant had his own letterhead. m) The appellant had his own web site. n) The appellant had his own ABN number. o) Throughout his alleged "employment" the appellant had prepared and distributed promotional material to the respondent and other agents, he was also registered with, "selling himself" as a variety artist. p) The appellant had invoiced the respondent weekly for promotions. q) The appellant was paid per promotion and not on an hourly basis. r) The appellant relied upon his lengthy experience and skills as an entertainer to sell himself in the area of promotions. 13 Mr Berry concluded that the Commissioner correctly applied the common law tests in finding that the appellant was an independent contractor. The Commissioner correctly applied the principles enunciated in Stevens v Brodribb Sawmilling and Hollis v Vabu which are both authority for the proposition that the control test is but one of a range of factors which should be considered in determining whether an employment relationship exists. 14 Mr Berry submitted that while it was not critical to the respondent's case, if there was an employer, it was the Club. He referred to the provisions of the Entertainment Industry Act 1999 and in particular the definitions in s4 of the Act: An "entertainment industry employer" means a person who employs any performer for the purposes of a performance. A "venue consultant" means a person who acts on behalf of an entertainment industry employer to, for a fee or remuneration paid by such employer, and who arranges for a performance by a performer at a particular venue, but does not include a person who arranges for a performance solely as an employee of a venue consultant or an employer. 15 Section 18 of the Act deals with the licensing of entertainment industry representatives: (1) A person must not carry on (or advertise that the person carries on) the business of, or otherwise acts as: a) an entertainment industry agent unless the person is the holder of an entertainment industry agent's license, or b) a manager unless the person is the holder of a manager's license, or c) a venue consultant unless the person is the holder of a venue consultant's license. 16 Mr Berry said that the respondent acted on behalf of the Club. She located the performers for the Club for a fee and she was licensed to do that. This is a completely different role to the role of the employer. The appellant was engaged to perform for the Club. The respondent was merely a conduit through which entertainers were located for the Club's purposes. 17 Mr Berry made reference to the various indicia identified by the High Court in Hollis v Vabu and applied these indicia to the instant case. 18 Firstly, the appellant represented himself and had done so for many years, as a skilled performer. He drew on his particular skills and experience to conduct the promotional work at the Club. 19 Secondly, the Club determined what performances were to be conducted and when those performances were conducted. The appellant was free to refuse work and, on several occasions, had arranged for other people to fill in for him so he could accept work elsewhere. 20 Thirdly, it was accepted that the appellant was required to wear a "Blaze on Stage" badge. 21 Fourthly, it was the Club which was responsible for any workplace injury the appellant might incur. 22 Fifthly, the appellant conducted his business as an independent contractor. He is a listed business with an ABN. He submits his tax invoices, collects GST and remits tax to the Australian Tax Office. 23 Sixthly, the appellant provided no tools or equipment to perform his work. All the equipment was supplied by the Club; not the respondent. 24 Seventhly, the respondent had no control over the appellant's performances. It did not supervise his work on a daily basics. The Club supervised, controlled and commented critically on his work and directed the respondent to end the appellant's services. The respondent had no view of the appellant's work performance, but merely communicated the Club's decision to the appellant. CONSIDERATION AS TO JURISDICTIONAL FINDINGS 25 Although the relationship between the appellant, the respondent and the Club was regulated by the Entertainment Industry Act 1989, we do not consider that this is determinative of any employment relationships between them. So much is clear from the terms of the Act itself: the definition of "employment" includes an engagement or other arrangement, whether or not constituting a contract of employment. In order to determine whether the appellant was an employee or independent contractor, it is necessary to consider that the totality of the relationship between the parties, as the High Court noted in Hollis v Vabu Pty Ltd at [44] - [45]. 26 In determining this appeal we intend to determine the matter upon the following findings of fact: (a) The appellant was engaged on a regular basis for an 18 month period to perform promotional work at the Club. (b) The appellant received regular weekly payments for his work of an amount which came from a fee paid by the Club to the respondent. (c) The Club trained the applicant in a system that was already in place (including bingo and the various games) and which had to be strictly adhered to. (d) Rather than giving a "performance as such" (in his words), the appellant worked as a member of the Club's "promotions team", a cohesive group which was expected to present a "positive atmosphere" and in which individuals were expected to behave as "team players". (e) The Club determined the nature of the promotions, and when and how the appellant was required to carry out the promotions. (f) The Club supplied all the 'tools of the trade' being the equipment and materials required by the appellant to carry out the promotions. (g) The Club was responsible for any workers' compensation obligations for any injury incurred while the appellant was performing promotions at the Club. (h) The Club directed the respondent to cut back the number of promotions performed by the appellant. The respondent was obliged to accept this direction. (i) The Club directed the respondent to inform the appellant that he would be offered no further promotional work. The respondent was obliged to accept this direction. 27 We agree with Tabbaa C that the appellant was not the respondent's employee. However, we are unable to agree with the Commissioner's conclusion that he was therefore an independent contractor. In our view, the findings referred to above support the conclusion that the appellant was an employee but was engaged by the Club and not the respondent. Although it is true that his work was skilled (unlike the bicycle couriers in Hollis v Vabu Pty Ltd), the appellant did not exercise artistic control over the promotions (as he did in variety show performances). Rather, he had to conform to an established programme devised by the Club (using "tools of the trade" supplied by the Club) and perform within a cohesive team, each of whom was following that programme. The appellant was paid a regular weekly amount which came from a fee paid by the Club to the respondent. We do not consider that the requirement for the appellant to wear a badge referring to the respondent (or to wear a uniform) is sufficient, on balance, to displace this conclusion. 28 It follows that the Commissioner's decision to dismiss the appellant's claim for want of jurisdiction was correct, but for the wrong reason. On this basis, we grant leave to appeal the jurisdictional decision and decline the appeal. APPEAL OF THE COSTS DECISION The Commissioner's decision 29 The Commissioner found that the appellant's claim was frivolous and vexatious and that he unreasonably refused to settle the claim. We note however that the Commissioner described it in the alternative; that is, that the respondent's offer to settle the matter demonstrated a reasonable attempt to settle the claim. 30 After correctly referring to the principles discussed in Bankstown City Council v Paris (1999) 93 IR 209 the Commissioner observed that the appellant had been on notice since 30 September 2003 that a costs application would be made on the basis that his claim was frivolous and vexatious because it was outside the jurisdictional scope of the Commission as he was an independent contractor and the respondent was a licensed venue consultant under the Entertainment Industry Act. 31 The Commissioner observed that in October and November 2003 the appellant had offered to settle his claim by proposing a payment of $1200 representing one month's notice of termination. The respondent was not prepared to make any offer of financial settlement as it would appear to be an acknowledgement that the appellant was its employee. With 3,000 entertainers on its database, this would be a precedent that it could not agree to. The Commissioner also observed that the appellant had not undertaken a careful assessment of the prospects of litigation, in particular having regard to the provisions of the Entertainment Industry Act. 32 The Commissioner found that the application was vexatious because the appellant had not disputed the veracity of the evidence of the witnesses who complained about his performance and because he continued to make unsubstantiated assertions against the respondent of perjury, bias, collusion and defamation. 33 The Commissioner also found that the appellant's claim was frivolous because it was without foundation. He had ample notice to consider the jurisdictional issue and failed to do so. In any event, there were no grounds on which he might have realistically expected his claim to succeed on its merits. Submissions on the Costs Appeal 34 The appellant submitted that at all times, he was entitled to commence proceedings against the respondent, as it was his firm belief that the respondent was his employer. After he was dismissed, he suffered a substantial loss of income and in the circumstances, had only one course open to him. 35 The appellant said his claim was not frivolous or vexatious, in that it was worthy of serious investigation and attention and it was of substantial importance to his livelihood. His strong responses to the conduct of the respondent and the respondent's solicitor were nothing more than his right of reply. His only intention was to have his unfair dismissal claim determined by the Commission in a fair and equitable manner. There was no other deliberate intention. 36 The appellant submitted that an offer to settle the claim by the respondent on the basis of a reference only was not, in any way, a serious or genuine attempt to settle the matter. It was an offer of no substance which the appellant's refusal to accept could not amount to an unreasonable failure to agree to a settlement. On three occasions the appellant had made a nominal offer of $1200. The offer had been refused each time. These were honest attempts to settle the matter, whereas the respondent would not agree to any compromise. 37 He further submitted that he was in no position to seek legal advice and the rejection of his offer to settle the matter left him with no choice but to litigate his claim. 38 In oral submissions, the appellant explained that his responses to the respondent and Mr Berry were natural because of the pressure Mr Berry put him under by phoning him at home and sending him intimidating letters. 39 He added that there was nothing frivolous or vexatious about pursuing his claim when he had been given no notice of, or reason for being finished up after his 42 years' experience in the entertainment industry. 40 The appellant maintained that all he was seeking in settlement of his claim was four weeks' pay in lieu of notice. He had honestly tried to settle the matter on that basis. Respondent's submissions 41 Mr Berry submitted that the Commissioner correctly applied the principles from the relevant authorities in determining that the appellant's claim was frivolous and vexatious and that the appellant unreasonably failed to agree to a settlement of his claim. He further submitted that the Commissioner properly exercised her discretion in finding that the respondent's offer to settle the claim was reasonable. 42 Mr Berry noted that the Commissioner afforded the appellant a reasonable leniency in awarding costs from a date some 11 weeks after the commencement of his claim. This enabled him to recognise the futility of his claim. 43 Mr Berry referred to and relied on his own affidavit filed in the costs proceedings below. Mr Berry traced the history of the matter and his repeated communications to the appellant in writing and in the conciliation proceedings, that the application was without merit and the appellant faced a costs application if he proceeded. 44 Mr Berry submitted that all the allegations of improper conduct by himself and the respondent were not supported by any evidence or the findings of the Commissioner. These matters should be rejected as being irrelevant to these appeals. 45 Mr Berry identified total costs of the proceedings below at $22,667.65. This did not include unbilled costs associated with these appeals. 46 In oral submissions, Mr Berry highlighted extracts from the transcript below and various documents in which the appellant alleged that the respondent's evidence was manufactured. However, even though the appellant was unable to challenge this evidence, he maintained his attacks on the credibility of the respondent and continued to make unsubstantiated assertions in these appeal proceedings. 47 In relying on Peden v Lake Macquarie Refrigeration Pty Limited, [2004] NSWIRComm 66 Mr Berry put that the appellant's focus was to embarrass and annoy the respondent and to personally attack the respondent's legal representative for no other purpose than to embarrass and annoy. Leave to appeal 48 The principles applicable to the granting of leave have been settled by the Commission in Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 (at 381 - 382), and the Full Bench authorities which have followed and applied that decision. They may be summarised as follows: (1) Leave will not lightly or automatically be granted: Perrott v Xcellenet Australia Limited (1998) 84 IR 255 at 265). The legislative intention is to restrict access to appeals to "appropriate cases meeting the public interest test stated in s188(2)". (2) Leave would ordinarily be refused where an appeal raises arguments which were not squarely raised at first instance, that is, where the appellant has brought, in substance, a new or materially different case on appeal: Caltex Petroleum Pty Ltd v Harmer (1999) 92 IR 264. (3) An appeal should raise substantial and important considerations, and any public interest considerations need to be evaluated "in the light of the nature of the issues raised in the appeal, including whether the appeal raises substantial issues of principle or law or has wider implications for the jurisprudence of this Commission, including whether the decision has widespread practical application". Consideration of the appeal as to Costs 49 The power to award costs under s181(2) is a discretionary one. The relevant principles governing a review of discretionary decisions are well established and are set out in the majority decision in House v The King (1936) 55 CLR 499 at 504 - 505: The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. 50 Those principles were recently applied by a Full Bench of the Commission in Weisser v Spur Group Pty Limited (2003) 121 IR 89 at [34]: It is well established that where the appeal is from a discretionary decision, the appellate court must not interfere with the decision unless "it reaches the clear conclusion that by reason of some error, whether of fact or of law, the primary judge not only has taken a different view but has failed properly to exercise the discretion conferred": Ace Business Brokers Pty Ltd v Phillips-Treby (2000) 100 IR 420 at 428. The locus classicus for the principle is the judgment of the High Court in House v King at 504 - 505. See also Mace v Murray (1955) 92 CLR 370 at 378; Port Macquarie Golf Club Ltd v Stead (1996) 64 IR 53 at 58 - 60; Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 at 446 and Abboud v The State of New South Wales (Department of School Education) at 42 - 43. 51 Our findings as to the substantive appeal must result in a reversal of the Commissioner's findings that the appellant's application below was frivolous and vexatious. Leave to appeal should be granted in this case on that basis alone to correct that error. 52 In our view it is also appropriate to grant leave to appeal in this matter as the issues raised by this appeal are of importance to the proper administration of the costs jurisdiction of the Commission in unfair dismissal cases. 53 We note that the Commissioner correctly identified the two staged process in costs applications under Pt 6 of ch 2 of the Act. The Commission is firstly required to make a positive finding on the specific provisions of s181(2)(c) of the Act which is expressed as follows: The Commission may award costs against a party to proceedings under Part 6 of Chapter 2 (Unfair dismissal) who, in the opinion of the Commission, unreasonably failed to agree to settlement of the claim or whose application was frivolous or vexatious. 54 If the Commission is satisfied that one or more of the specific requirements of s181(2)(c) has been made out, then a discretionary order may be made under s181(1). 55 In this regard, we refer to and adopt the oft quoted authority of Bankstown City Council v Paris: The relevant part of s 181(2)(c), on the other hand, does not require the Commission to focus upon the circumstances of the commencement of the proceedings, or to consider only the situation of the applicant. Instead the Commission is required to consider in a more general way, the conduct of the party in respect of which an application for costs is made; and, in that regard, to consider the conduct of the party in relation to the question of settlement of the claim. An understanding of the meaning and purpose of s 181(2)(c) is assisted by reference to the particular provisions in Pt 6, Unfair Dismissals, of Ch 2 of the Act, which relate to conciliation or settlement of unfair dismissal applications. Section 86 for example, provides: "The Commission must endeavour, by all means it considers properly necessary, to settle the applicant's claim by conciliation." Section 87(1) is also relevant. Its effect is to preclude the Commission from proceeding to determine the claim by arbitration until "all reasonable attempts to settle the applicant's claim by conciliation have been made but have been unsuccessful". Section 87(2) continues the statutory emphasis upon conciliation by specifying that the earlier provisions do not prevent further conciliation from being attempted at any time before the Commission makes an order in the proceeding. Construing the relevant part of s 181(2)(c) in its overall statutory context, we conclude that the evident purpose of the provision is to encourage the settlement of proceedings to which it applies. The criterion set out in the provision is to be applied objectively and requires a consideration of the whole of the conduct of the party against whom the order is sought, or some discrete part of that party's conduct, with a view to ascertaining whether it unreasonably failed to agree to a settlement of the claim. We also consider that on the proper construction of the provision, an affirmative conclusion may be reached on at least two bases. First, where there was a proposal put by a party which could be described as a reasonable settlement of the claim and that was not agreed by the other party. The second situation in which the criterion could be satisfied is where the course of conduct of the party over a relevant period could be said to amount to conduct inconsistent with an intention to settle the proceedings on any basis that could be considered reasonable. We emphasise that, although the legislature has clearly intended that there be strict limits on the power of the Commission to award costs in unfair dismissal proceedings, the legislature has also evinced a clear intention that costs orders be available in circumstances where there has been a failure on the part of a party to properly conciliate proceedings to the extent that they have failed reasonably to facilitate a potential settlement of them. Further, the Commission is obliged to consider all relevant circumstances in deciding whether such failure has occurred. Once the statutory criterion has been met, the Commission's broad power and discretions under s 181(1) are available for exercise. 56 An offer by an unrepresented litigant to accept $1200 in settlement of a claim which he strongly felt affected his livelihood and which was attended by complex and difficult legal questions, could not, in our view, be properly held to be an unreasonable refusal to settle the matter. 57 Moreover, it was really not the point that the respondent vehemently opposed such a settlement because it represented an acknowledgement the appellant was an employee. As discussed in Bankstown City Council v Paris, 93 IR 209 the emphasis in the Act is to encourage settlement of unfair dismissal claims. The settlement of unfair dismissal claims should not be viewed as an acknowledgement of any one party's view of the proceedings. The settlement of claims are a without prejudice endeavour to resolve litigation without any admissions and, are usually confidential. 58 Viewed in this way, we believe the Commissioner placed far too much reliance on the respondent's argument as to the effect of settling his claim on what was, on any view of it, a rather modest basis. 59 For these reasons, we uphold the appellant's appeal of the costs decision. ORDERS 1. Leave to appeal is granted in appeals in Matter No IRC 248 of 2005 and Matter No IRC 2513 of 2005. 2. The appeal in Matter No IRC 248 of 2005 is dismissed. 3. The appeal in Matter No IRC 2513 of 2005 is upheld. 4. The costs decision and order made by Tabbaa C in Matter No IRC 5385 of 2003 (see [2005] NSWIRComm 1056) is set aside. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.