Changes to cost orders in the Human Rights Commission Act

On 19 September 2024 the Commonwealth Parliament passed a Bill to amend the Human Rights Commission Act 1986 (Cth) (the Act) that alters how the courts are to make cost orders in anti-discrimination proceedings (Bill).[1]

The Bill drew on recommendations made in the Australian Human Rights Commission’s Respect@Work Report 2020 (Report) surrounding sexual harassment in the workplace. The Report recommended that the Bill draw upon section 570 of the Fair Work Act 2009 (Cth), which states that costs can only be ordered against another party if the court is satisfied that the party instituted proceedings vexatiously or without reasonable cause, or if the party’s unreasonable act or omission caused the other party to incur the costs.[2] The Bill passed by Parliament instead includes an ‘equal access’ approach that is intended to protect applicants from adverse costs orders if they are unsuccessful in legal proceedings.

 What are the changes?

Section 46PSA of the Act now states that if an applicant is successful on one or more grounds in a Federal anti-discrimination claim, the court must order that the respondent pay the applicant’s costs. This will be the case unless the court is satisfied that the applicant’s unreasonable act or omission caused the applicant to incur costs.[3]

If the respondent is successful in all proceedings the court will generally order that parties pay their own costs. The court may order the applicant to pay the respondent’s costs if they are satisfied that:

1. The applicant instituted the proceedings vexatiously or without reasonable cause; or
2. The applicant’s unreasonable act or omission caused the other party to incur the costs; or
3. All of the following apply:
   1. the other party is a respondent who was successful in the proceedings;
   2. the respondent does not have a significant power advantage over the applicant;
   3. the respondent does not have significant financial or other resources relative to the applicant.[4]

The changes made by the Bill came into effect on 2 October 2024, the day after the Bill received Royal Assent.

How will these changes impact employers?

Employers are more vulnerable to incurring costs for anti-discrimination court proceedings. For example, if an employee is unsuccessful in sex discrimination proceedings but successful in disability discrimination proceedings, the employer will likely need to pay the costs of the entire proceedings.

Employers should take a proactive approach to anti-discrimination in their workplace and ensure they understand their legal obligations to avoid becoming liable to legal action.

EMA Legal can assist employers in any questions that may arise from this process.

[1]  Australian Human Rights Commission Amendment (Costs Protection) Bill 2023 (Cth)

[2]  Fair Work Act 2009 (Cth) s 570(2)(a), (b)

[3]  Australian Human Rights Commission Amendment (Costs Protection) Act 2024 (Cth), 46PSA(4)

[4]  Australian Human Rights Commission Amendment (Costs Protection) Act 2024 (Cth), 46PSA(6)