Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mrs Kristee Heyden
v
Maa Ambe Group Pty Ltd ATF Maa Ambe Unit Trust T/A Red Rooster
(U2014/11210)

Application for relief from unfair dismissal.

Summary: whether application for relief under s. 394 on foot owing to purported settlement at conference - terms of settlement - whether any conditionality- state of mind of Applicant - whether duress or confusion - discussion of authorities

[1] In this matter, Ms Kristee Heyden is seeking to press her application for relief under s.394 of the Fair Work Act 2009 (“the Act”) in relation to the termination of her employment by Maa Ambe Group Pty Ltd ATF Maa Ambe Unit Trust T/A Red Rooster (‘the employer’).

[2] However, the employer contends that the Applicant is barred from seeking that relief for reason of the operation of an agreement entered into by the Applicant and the employer following a conciliation conference conducted on 26 August 2014.

[3] The correspondence from the conciliator to the parties dated on September 2014 relevantly provided as follows:

Thank you for your participation in the conciliation in the above matter. I confirm that you reached a settlement agreement and I attach terms of settlement.

As this is an agreement reached between the parties, you must send your signed terms to the other party.  Do not send a copy to the Commission as we do not keep any record of your agreement. You should however keep a signed copy of the agreement for your records. Any resignation or statement of service (if applicable) should be sent directly to the relevant party, not to the Commission.

[4] The correspondence from the conciliator does not indicate there was any conditionality in relation to the agreement that had been reached in that the conference.

[5] The terms of the settlement themselves do not include any conditionality in relation to the agreement that had been reached at the conciliation conference, either.

[6] The Applicant’s correspondence with the Commission on 26 September 2014 indicated that she was seeking to reopen her unfair dismissal application.

[7] In that correspondence to the Commission the Applicant stated:

At the end of one of our conciliations between myself and the other party we did come to an agreement as I felt I could not go any further than what I had with little evidence but now have the evidence to show.

[The conciliator] had typed a settlement/ agreement for both parties to sign in which I on my behalf never did sign which is why I am requesting to continue with the unfair dismissal Application. The other party had signed the document but I had not so requesting you please consider opening the case again. (sic)

[8] On Sunday, 2 November 2014, the Applicant provided further correspondence upon the matter being allocated to me. That correspondence read relevantly as follows:

I had a phone mediation with myself, my former employer [...] and a Fair work official [....]. After a lengthy discussion on the phone with fair work and back and forth between myself, former employer [...] and[...] the Official worker from Fair Work we did come to an agreement that the matter was settled but I thought I had no option at that time to take the matter further with no evidence to back my claim up and lack of confidence due to stress from the claim. I had been told by [the conciliator] from Fair Work that it would cost me money to take it further. In that state I did not have the funds to go further especially with the little evidence I had to back up my claim at the time. Since the Phone conciliation I had a letter of settlement sent to me from [the conciliator] approximately 5 days after the phone call with the agreement on paper. I chose not to sign the agreement because I still thought I was still unfairly treated and dismissed from my work based on untrue accusations. Did not want the matter to be settled because I felt the settlement was not in my favour either. (sic)

[9] The Applicant went on to explain that some 2 to 3 weeks after the telephone conciliation, she was in receipt of some further evidence from her work colleagues that supported her contention that she had been unfairly dismissed.

[10] The Applicant’s claims in the course of the hearing conducted in relation to this matter reflected her statements recorded above. She believed at the time of the conference that she "can't do anything about it"; "didn't think I could go any further"; had a "lack of evidence" and had taken into account "the cost of continuing".

[11] The Applicant claimed that in respect of the settlement, she "did agree to it as I didn't feel I could go any further than I could". The Applicant also claimed that she felt "kind of bizarre about it", referring to the settlement, and was “stressed”.

[12] This is not a matter in which there is any evidence of any substantive kind that the Applicant entered into an agreement unwittingly or under duress.

[13] The Applicant’s own commentary on her state of mind indicated that she weighed up the evidentiary case as it was at the time of the conciliation conference, along with the wider commercial circumstances of continuing, and entered into an agreement to resolve the matter given that context.

[14] That is, the Applicant’s evidence does not demonstrate a lack of awareness or the existence of any duress, quite the contrary (on the Applicant's own evidence).

[15] The fact that the Applicant reached a view some 2 to 3 weeks later that she may have a stronger evidentiary case than she believed, does not lend support to her claim that no agreement was reached at the time of the conciliation conference.

[16] The Applicant was candid in so far as she conceded openly that she had reached an agreement facilitated by the conciliator on 26 August 2014.

[17] Prior to the hearing of this matter I sent substantial correspondence to the Applicant informing her of the authorities in relation to the Applicant’s position to reach agreement but then seek to reopen their claims. The authorities that were referred to are:

1. Masters v Cameron (1954) 91 CLR HCA 353
2.  Zoiti-Licastro v Australian Taxation Office (2006) 154 IR 1
3. McKinnon v Eventide Homes (Stawell) Inc. [2013] FWCFB 8123

[18] Much of what I set out below I communicated to the Applicant prior to the hearing. That information remains salient for the purposes of the determination as to whether the Applicant’s case can be reopened or otherwise remains on foot.

[19] The question that I need to determine is whether in the circumstances of this case, because an agreement settlement in relation to an unfair dismissal application had not been executed or signed, there had been no agreement to settle the matter.

[20] In a decision of the Commission by a single member in McKinnon v Eventide Homes (Stawell) Inc. [2013] FWC 5273, which was upheld on appeal to a Full Bench ([2013] FWCFB 8123), the member concerned dismissed an application under s.394 of the Fair Work Act 2009 (“the Act”) where the Applicant had reached terms of an agreement to settle an application in the course of a conciliation conference, but had subsequently elected not to sign the agreement.

[21] The circumstances of the case appear to be similar to those which have arisen in this matter.

[22] The Respondent's case in that instance was as follows:

[28] The Respondent submits that a settlement agreement was reached between the parties in conciliation in March 2013 and that this settlement is a valid accord and satisfaction of all matters between the parties. Ms Berry for the Respondent says that the Applicant was aware that the agreement reached in conciliation was in respect of all matters between the parties.
[29] The Respondent submits that an inference to be drawn that the conciliator was satisfied that a settlement was reached because, at the conclusion of the conciliation the conciliator drew up the terms of the agreement between the parties. The evidence of Ms Blakey indicates that the Applicant’s solicitor agreed to arrange for the Applicant to sign the agreement. That the Applicant’s solicitor did not raise any issues of concern with the terms of the agreement allows an inference to be drawn that it did reflect the outcome of the conciliation.
[30] The Respondent’s evidence of the letter sent to the Applicant with the cheque in the settlement amount makes it clear that the cheque was sent arising from the conciliation of the unfair dismissal and that it was in respect of all matters. It says that the letter further supports its contention that the unfair dismissal, the 2010 matter and other outstanding matters were settled in conciliation.
[31] The Respondent submits it has done all it can to comply with the terms of agreement reached between the parties. Additionally, it contends that the cashing of the cheque amounts to part-performance of the agreement.
[32] In accordance with the principles established in Australian Postal Corporation v Gorman  (Gorman) the Respondent submits that the agreement is a valid accord and satisfaction of the claim and it extinguishes the pre-existing cause of action. Any pursuit of the original unfair dismissal claim is therefore capable of being found to be frivolous or vexatious.
[33] Whilst agreeing that the agreement document arising from the conciliation was not executed by the parties as it was not signed, the Respondent relies on the authority of Masters v Cameron  in support of its submission that a binding agreement can be reached without a document actually being signed. Ms Berry submits that the parties intended to be bound to the performance of the terms of the agreement reached in conciliation and this is evidenced by the fact that the Respondent paid the monetary amount specified in the agreement to the Applicant.
[34] For these reasons the Respondent submits that the application for relief from unfair dismissal should be dismissed in accordance with s.587(1)(b) of the Act on the grounds that it is frivolous or vexatious. The Respondent relies on Zoiti-Lacastro v Australian Taxation Office (Zoiti-Lacastro) where it was held that: ‘Subject to the resolution of any argument about the binding nature of the agreement, the settlement would provide a complete answer to the claim and there would be no point in hearing other evidence.’
[35] The Respondent also says that, for the same reasons outlined above, and, in the alternative, the application should be dismissed in accordance with s.587(1)(c) because it has no reasonable prospects of success.

[23] The Respondent's case was accepted and, as mentioned above, subsequently upheld by a Full Bench of the Commission.

[24] The single member found as follows:

Was an agreement reached between the Applicant and the Respondent in conciliation?
[45] In Masters v Cameron the High Court held that when parties reach agreement on terms of a contractual nature and agree that the negotiations will be dealt with by a formal contract, that the case may belong to any of three categories:

(1) the parties have agreed on all terms and intend to be immediately bound to perform those terms “but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect”; or
(2) the parties have agreed on all terms and intend no departure from or addition to that which there agreed terms express or implied, “but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document”; or
(3) the parties do not intend “to make a concluded bargain at all, unless and until they execute a formal contract.” 

[46] In the first two categories the High Court held that there was a binding contract.

[47] The principles in Masters v Cameron provide clear guidance as to the status of any agreement reached in conciliation and are applicable in determining this matter. Ms McKinnon suggests the decision can be ignored. To ignore established legal authority is not appropriate and would lead to uncertainty in decision making by the Commission. There are well established public policy reasons relating to sound administration and consistency in decision making that determine the applicability of the reasoning in Masters v Cameron and in other relevant decisions of the Courts and this Commission to this matter.

[48] The question of whether or not there was a binding agreement reached between the parties is a matter of fact. Even though the Applicant did not sign the agreement arising from conciliation this does not mean that a binding agreement was not reached. The question to be determined is if any agreement of the types described in Masters v Cameron was reached between the parties in conciliation. If the agreement reached is of the first or second category it would, following Masters v Cameron, be a binding agreement.

[49] I am satisfied that an agreement was reached in conciliation and that the agreement reached falls into the first category described in Masters v Cameron. Ms Blakey says an agreement was reached. The Applicant says an agreement was reached but says it was an agreement in principle only and that this is evidenced by the terms of the agreement not being read out. In either scenario it is clear agreement was reached.

[50] That the precise terms of the agreement were not read out during the conciliation conference or that it was not ultimately signed does not mean an agreement was not reached. I am satisfied that the terms were agreed, that the parties intended to be bound by those terms and that the parties intended that those terms be formalised in a form ‘more precise but not different in effect’ to those discussed.

[51] In Zoiti-Licastro it was argued that there were terms included in the final agreement that had not been specifically dealt with in the conciliation discussion.

[52] The relevant facts in Zoiti-Licastro are set out in paragraph 4 of that decision:

The evidence concerning the settlement discussions is set out in the Senior Deputy President’s decision. It is not necessary to repeat it all. It is clear that following discussions on 3 March 2005 between Mr Dowling on behalf of the appellant and Mr Niall on behalf of the ATO agreement was reached on the following terms:

(i) the ATO would pay the appellant $17,000 ($12,000 on the presentation of invoices for legal costs and $5,000 as an eligible termination payment);

(ii) a statement of service would be provided to the appellant;

(iii) payment would occur within 14 days of signing terms of settlement;
(iv) the appellant would adjourn the proceedings pending receipt of payment. 

[53] Whilst finding that the terms included in the written agreement that were not discussed went to mutual releases and confidentiality, the Full Bench found that:

It is clear that the settlement agreement drafted by the ATO’s solicitors contained mutual releases and those had not been specifically agreed in the discussions on 3 March. There were other terms included as well, such as a request for confidentiality. But the appellant’s focus on the settlement document seems to us to miss the point. The real question is what was agreed on 3 March between counsel. It is clear enough that a completed agreement was reached and that it was not conditional in any sense on an agreement being signed. Terms relating to mutual releases and confidentiality could hardly be said to be unusual. Even so, if they were objected to the proper course would be for the appellant to simply indicate that they were not part of the agreement. No such indication was given, at least not until after 31 March 2005. 

[54] The circumstances in this case are not substantially different to those of Zoiti- Licastro. On the basis of the principles in Zoiti-Licastro it can be concluded that the failure to read out, during conciliation, the precise wording of the terms of the agreement reached between the parties does not mean that a concluded agreement was not reached. Concentration on the words of the agreement ‘miss the point.’ On the evidence before me nothing was said in conciliation of this application that suggests the agreement was conditional in any sense.

[55] My conclusion that an agreement was reached in conciliation is further supported both by the drafting of a document titled ‘Terms of Settlement’ by the conciliator and by Mr Burdess, on 15 March 2013, confirming receipt of agreement document and advising Mr Catanese that he would make arrangements for the Applicant to sign it. Both of these events lend substantial weight to the conclusion I have reached that a concluded agreement was made.

[56] Even if, as the Applicant says, the agreement was one in principle as opposed to a final agreement there is no evidence as to what other matters were to be resolved or were to be subject to further negotiation before the agreement would be considered final. Whilst I acknowledge that the Applicant wanted her job back I accept the evidence of Ms Blakey that this was rejected as an option early in the conciliation and the discussion then turned to the terms of settlement finally agreed.

[57] I am satisfied on the basis of the evidence of Ms Blakey and the Applicant that it was discussed and agreed in the conciliation that the payment to be made to the Applicant would be eight weeks’ pay. It was also discussed and agreed that the Applicant would be given an opportunity to resign, and the Applicant would receive a statement of service. That the exact amount to be paid was not specified does not detract from my finding that an agreement was reached.

[58] The Applicant also suggests that the question of whether her dismissal was harsh, unjust or unreasonable was never discussed. Whilst she does not explicitly say so, I infer that this is another reason she says the agreement was in principle and not final. If this is the case the Applicant misunderstands the purpose of the conciliation. The conciliation is not to determine if the dismissal of the Applicant was harsh, unjust or unreasonable (such a finding could only be made after a hearing of the application) but rather to explore if there is a possibility of a mutually satisfactory settlement to the matters between the parties without having to go to a formal hearing. It was not necessary that the conciliator determine if the dismissal was harsh, unjust or unreasonable and it certainly was not necessary in the context of reaching an agreement to settle the claim between the parties.

[59] There is, therefore, no evidence on which I could conclude that the parties did not intend to be bound by the agreement in conciliation.

[25] The Full Bench, on appeal of the Member’s decision, concluded as follows in relation to the Member’s findings:

[2] The application for permission to appeal relates to a finding by the Commissioner at first instance that a binding agreement was reached between the parties at a telephone conciliation for the settlement of this matter, and that therefore the application has no reasonable prospects of success. Mrs McKinnon’s application was dismissed by Commissioner Bissett on this basis.
[3] The grounds of appeal challenge the finding made by the Commissioner and allege that the facts are distinguishable from cases relied on by the Commissioner. The key cases applied by the Commissioner were Masters v Cameron  and Australian Postal Corporation v Gorman and the application of these principles in the Full Bench decision of Zoiti-Licastro v Australian Taxation Office
[4] We are satisfied that these authorities were properly applied by the Commissioner.
[5] We are not persuaded that any of the findings of fact made by [the Commissioner] are erroneous. We do not accept that the Commissioner acted in a biased or inappropriate manner in hearing and determining this matter.
[6] We are therefore not of the view that it is in the public interest to grant permission to appeal. Nor do we consider that there is any other reason for permission to appeal to be granted, if such grounds are available. We dismiss the application for permission to appeal.

[26] On the basis of this reasoning, the Applicant’s case here has no foundation. The Applicant entered into an agreement on particular terms with her employer to settle the claim.

[27] The Applicant reached this agreement in a conference conducted on 26 August 2014, with the assistance of a Fair Work Commission conciliator. The terms of the deed provided for no conditionality of any kind. Further, the circumstances in which the agreement was reached do not indicate that the Applicant entered into an agreement by way of duress or that the judgement in any other respect was impaired.

[28] On the basis of these findings and in the context of the authorities discussed above, the Applicant cannot proceed with her application for relief under s. 394 of the Act. The agreement as entered into for purposes of the settlement of the application is a complete answer to the claims. The application under s. 394 of the Act is therefore dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

Ms K Heyden for the Applicant

Ms B Patel for the Respondent

Hearing details:

2014.

5 November.

Brisbane.

Final written submissions:

2 November 2014.

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