Applicants’ right to recover costs in claims for unlawful discrimination

Employment Law: 05 September 2025

Author: Stephen Curtain - Our People

Amendments to the Australian Human Rights Commission Act introduced late in 2024 provide greater protection for those bringing claims based on unlawful discrimination or sexual harassment. The amendments effectively change the effect of section 570 of the Fair Work Act, which provides that parties usually bear their own costs of proceedings, whether successful or not, for claims brought in the Federal Court and the Federal Circuit and Family Court of Australia.

Those courts must now make an order for costs in favour of successful applicants in unlawful discrimination and sexual harassment claims except for costs incurred by the other party incurred due to the applicant’s unreasonable act or omission. Further, the courts have a discretion to make such a costs order an order for indemnity costs.

Furthermore, even if unsuccessful, applicants must not be ordered to pay the other party’s costs unless:

  a. the proceedings were instituted vexatiously or without reasonable cause; or

  b. the applicant’s unreasonable act or omission caused the other party to incur costs; or

  c. all of the following apply:

(i) the other party succeeded in defending all of the claims in the proceeding;

(ii) the other party does not have significant power advantage over the applicant; and

(iii) the other party does not have significant financial or other resources relative to the applicant.

The new rules will encourage victims of unlawful discrimination or sexual harassment to pursue claims safe in the knowledge that they will obtain orders for costs if successful.

Employers should ensure to implement policies in relation to unlawful discrimination and sexual harassment and ensure employees are aware of their obligations under the policies and act promptly to obtain legal advice in the event a claim is made.