Ajith Nissanka v Are You Cool Enough Refrigeration Contractors Pty Ltd T/A Ayce Refrigeration

[2017] FWC 5692

[2017] FWC 5692

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Ajith Nissanka
v
Are You Cool Enough Refrigeration Contractors Pty Ltd T/A AYCE Refrigeration
(U2017/3645)

DEPUTY PRESIDENT CLANCY MELBOURNE, 1 NOVEMBER 2017

Application for an unfair dismissal remedy - whether binding settlement reached - binding settlement found to have been reached - whether application should be dismissed pursuant to s.587 on the basis that it has no reasonable prospects of success - application dismissed.

[1] On 4 April 2017, Mr Ajith Nissanka made an application for remedy for unfair dismissal under s.394 of the Fair Work Act 2009 (the Act).

[2] The matter was referred to conciliation and this took place on Monday 8 May 2017. Mr Nissanka attended and was represented by Ms Jennifer Worthing of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (ETU). Mr Joel D’Souza, Director, attended for Are You Cool Enough Refrigeration Contractors Pty Ltd T/A AYCE Refrigeration (AYCE Refrigeration).

[3] The Fair Work Commission (Commission) file reflects that the matter settled at conciliation. Ms Worthing submitted that the parties agreed to settle the matter on the following bases:

1. AYCE Refrigeration would pay Mr Nissanka $4,800.00 net;

2. AYCE Refrigeration would provide Mr Nissanka with a Statement of Service; and

3. Mr Nissanka would provide the normal release to AYCE Refrigeration, except for a carve-out, which would stipulate that Mr Nissanka would not release AYCE Refrigeration with respect to any wages or entitlements that remain owing to him (“carve-out clause”).

[4] A terms of settlement document was attached to a letter subsequently sent by the conciliator but the carve-out clause was omitted from the terms. This letter dated 8 May 2017 also confirmed a three day cooling off period applied and contained advice from the conciliator that “[i]f one of the parties does not want to proceed with the settlement and advises me during the cooling off period, I will refer the matter for arbitration before a Member of the Commission.”

[5] No correspondence was received from either party advising they did not want to proceed with the settlement during the cooling off period and so, on 12 May 2017, a note was made on the Commission file recording the matter as closed.

[6] On 30 June 2017, Ms Worthing sent an email to the Commission requesting the matter be listed for a directions hearing. In response, I caused correspondence dated 18 July 2017 to be sent to the parties which noted the Commission’s records showed the matter was settled at conciliation and I was considering whether, on my own motion, I should dismiss Mr Nissanka’s application under s.587 of the Act because it has no reasonable prospects of success. Mr Nissanka was directed to file submissions and evidence as to why his application should not be dismissed by close of business on 25 July 2017.

[7] Mr Nissanka filed submissions as directed and a witness statement from Ms Worthing and correspondence was then sent to Mr D’Souza via email and post, inviting submissions in reply by close of business on 9 August 2017. No material was received and so on 10 August 2017, the Commission sent a Short Message Service (SMS) message to Mr D’Souza asking that he urgently telephone back. A further SMS message was sent to Mr D’Souza on 30 August 2017 and he was also left a voicemail message requesting that he return the Commission’s call.

[8] The matter was then listed for a Mention hearing. This took place by telephone, before me on 15 September 2017. Mr Nissanka attended with Ms Worthing and Ms Lucy Weber of the ETU. Mr D’Souza could not be contacted, despite numerous attempts. After I advised the parties in attendance as to how the matter would proceed, the following correspondence was sent to Mr D’Souza on 18 September 2017:

“Dear Mr D’Souza,

You have a final opportunity to provide any response to the Applicant’s submissions and witness statement of Ms Worthing previously sent to you. Your response is required to be sent to the Commission by 4pm on Thursday 21 September 2017. The Applicant also has the opportunity to file and serve any final submissions by then.

The Deputy President advises that he will likely hold a telephone mention during the week commencing 25 September 2017. You will have the opportunity to make any submissions at this, including in response to any further material received from the Applicant.

If you do not provide any material or participate in the foreshadowed telephone mention, the Deputy President will then determine the question of whether or not there has been a binding agreement between the parties based on the material before him.”

[9] Additional submissions were filed by Ms Weber of the ETU on behalf of Mr Nissanka on 21 September 2017.

[10] No material was received from Mr D’Souza by the due date and so the matter was listed for another telephone Mention hearing before me on 27 September 2017.

[11] Mr Nissanka attended this telephone Mention with Ms Weber and Ms Worthing but Mr D’Souza was again not able to be reached despite multiple attempts. Consequently, I advised the matter would be determined on the basis of the material filed in the Commission. At no stage has Mr D’Souza or AYCE Refrigeration provided submissions or material addressing whether or not the matter had settled.

Statement of Ms Worthing

[12] In her statement filed 25 July 2017, Ms Worthing said she noted upon reading the terms of settlement provided by the conciliator on Monday 8 May 2017 that the carve-out clause had not been included. She said she emailed Mr D’Souza on 9 May 2017 to advise him that the carve-out clause had been omitted and attached a revised terms of settlement document incorporating the carve-out clause. Ms Worthing said her initial email to Mr D’Souza was not delivered and her attempt to re-send it later the same day was also unsuccessful.

[13] Ms Worthing said further attempts to contact Mr D’Souza regarding the undeliverable emails were made on 12 May 2017 but she was able to speak with him on 15 May 2017. She said Mr D’Souza confirmed he did not receive the emails sent on 9 May 2017. Ms Worthing also said she informed Mr D’Souza that her email, which she advised would be re-sent, referenced an amendment made to the written terms of settlement to include the carve-out clause discussed during the conciliation and asked whether he had any issues with this. Ms Worthing said Mr D’Souza did not raise any issues and when she subsequently re-sent the email, it did not bounce back. Ms Worthing also said she sent a text message to Mr D’Souza asking that he confirm receipt of the email but did not receive a response to her email or text message.

[14] Ms Worthing said over the following weeks she attempted to contact both Mr D’Souza and Mr Brenton Kirkpatrick, the second-in-charge at AYCE Refrigeration.

[15] Ms Worthing said she spoke with Mr D’Souza on 23 May 2017 and while he advised he would sign the terms of settlement document, he raised Mr Nissanka’s alleged retention of company property, including keys, two drills and a mobile phone and stated he would like a term regarding the return of this property inserted into the settlement agreement. Ms Worthing stated Mr D’Souza accepted these issues were not raised at the conciliation but claimed this was because he had not considered them at the time. Ms Worthing said she told Mr D’Souza she would obtain further instructions from Mr Nissanka.

[16] Ms Worthing said Mr Nissanka subsequently advised her that he did not take issue with including a term requiring him to return any company materials in his possession. She said she amended the terms of settlement document to include a term that Mr Nissanka return any and all equipment, tools and work materials owned by AYCE Refrigeration, provided to and retained by him during the course of his employment, and sent this to Mr D’Souza on 29 May 2017. No response was received.

[17] On 2 June 2017, Ms Worthing again sent to Mr D’Souza a copy of the most recently amended terms of settlement document signed by Ms Nissanka but again, no response was received.

[18] Ms Worthing said she attempted to contact Mr D’Souza via telephone over the following weeks without success.

[19] On 29 June 2017, Ms Worthing said that she sent correspondence to the conciliator, enquiring whether she had received any further correspondence from Mr D’Souza. The conciliator advised that she had not had any contact with AYCE Refrigeration.

[20] Ms Worthing said Mr Reno Lia, ETU Organiser, informed her on 19 July 2017 that he had spoken with Mr D’Souza, who had said words to the effect as follows:

1. he did not believe he had any obligation to pay Mr Nissanka any money;

2. AYCE Refrigeration was facing financial pressures and could not pay the settlement sum agreed to at the conciliation conference; and

3. he believed that his business would be wound up soon as a result of his financial problems.

[21] Ms Worthing said she left two messages for Mr D’Souza on 20 July 2017 seeking a return telephone call but there was no response to either.

Submissions of Mr Nissanka dated 21 September 2017

[22] Mr Nissanka’s submissions filed on 21 September 2017 state he had been invited to provide further submissions as to:

a) which class of agreement was reached (if any) at the telephone conciliation on 8 May 2017, by reference to the classes of contract identified in Masters v Cameron 1; and

b) what (if any) effect the conversation of 23 May 2017 had on the agreement.

[23] Mr Nissanka submitted his understanding during conciliation on 8 May 2017 was that the parties had reached a binding settlement agreement subject only to the applicable cooling off period and this would be reduced to a formal written document, to be drafted by the conciliator and provided to parties. It was submitted that the parties agreed to the essential terms outlined at paragraph [3] above and that both parties had accepted these terms would be reflected by a comprehensive written agreement. It was further submitted that the expectation of Mr Nissanka at this stage was consistent with an agreement contemplated by the first class of agreements discussed in Masters v Cameron.

[24] Mr Nissanka submitted that while AYCE Refrigeration was entitled to exercise its rights within the three-day cooling off period, it did not elect to do so and this meant there was a binding agreement to perform the terms whether the contemplated formal document came into existence or not. 2

[25] As to the proposed term relating to the return of company property, Mr Nissanka submitted that this request of Mr D’Souza was accepted and the proposed term was subsequently incorporated into the agreement document.

[26] Mr Nissanka submitted the inclusion of this term involving the delivery of equipment to AYCE Refrigeration “did not affect the essential terms of the agreement… which were not altered or replaced”. 3 He further asserted that a minor alteration to the terms of an agreement “does not qualify the essential ingredient of the settlement” and placed reliance on the Full Bench decision in A.Zoiti-Licastro v Australian Taxation Office4, a case which he said confirmed that although a draft deed included terms that went beyond those which the parties had discussed or agreed to, a binding agreement was still found to exist. Mr Nissanka also submitted that AYCE Refrigeration’s failure to sign the terms of settlement document is not determinative of whether there was a binding agreement, but rather its subsequent failure to comply with the terms is indicative of it having reneged on the agreement reached by the parties.

[27] Mr Nissanka acknowledged that if a binding settlement agreement is found to exist, the application would ordinarily be dismissed by the Commission pursuant to s.587 of the Act. 5 He relies on Gill v Rio Tinto Aluminium Limited T/A Rio Tinto Weipa6 (Gill v Rio Tinto), to submit that a settlement agreement is in existence but has not been “concluded” due to the failure of AYCE Refrigeration to fulfil its obligations.

[28] Mr Nissanka seeks an order from the Commission which acknowledges the existence of a binding agreement between the parties.

Consideration

[29] In Masters v Cameron 7, the High Court held that where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three classes. The three classes are:

1. The parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of 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.

2. It may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document.

3. The case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.

[30] Having regard to the material before me, I am persuaded that an agreement between the parties that comes within the first or second class of agreements outlined in Masters v Cameron was reached. This is clear from the letter from the conciliator to the parties dated 8 May 2017, which was not challenged and in which it was stated:

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

…

If any queries arise about implementing the terms of settlement, please contact the other party directly.” (my emphasis)

[31] I am satisfied, on the basis of the unchallenged statement of Ms Worthing and the email correspondence from her to Mr D’Souza dated 9 May 2017, 8 that the agreement reached at the conciliation included the carve-out clause but that the terms of settlement drafted and circulated by the conciliator on 8 May 2017 required amendment in order to reflect this. Further, Mr D’Souza did not challenge the terms of settlement during the three day cooling off period and I accept Ms Worthing’s statement that he raised no objection to the amendment she advised him she had made in order to reflect the agreement reached at the conciliation, when they discussed this matter on 15 May 2017.

[32] I have noted Ms Worthing and Mr D’Souza appear to have had a subsequent discussion on 23 May 2017, during which Mr D’Souza requested a new item relating to the return of company property be included in the terms of settlement document. While Mr Nissanka appeared to agree to an amendment being made to the terms of settlement document and Ms Worthing sent a further, amended version of the terms of settlement by email dated 29 May 2017 which included proposed wording for the new item, I do not find that this varied the agreement that had been reached at the conciliation. This is because in sending the further, amended version of the terms of settlement, Ms Worthing requested Mr D’Souza read them and confirm agreement had been reached. 9 There is nothing in the material before me to suggest that Mr D’Souza responded with the requested confirmation.

[33] I am therefore satisfied that the parties reached agreement by way of a binding settlement at the conciliation on 8 May 2017 which was not departed from during the cooling off period, nor subsequently and that the agreement was in the nature of the first or second classes discussed in Masters v Cameron and immediately binding.

[34] In Australia Postal Corporation v Gorman 10, Besanko J held that the existence of a binding settlement or “accord and satisfaction” extinguishes the existing cause of action and replaces it with a new cause of action based on the agreement.11

[35] His Honour stated:

“[33] There is nothing in the Act which suggests that an accord and satisfaction should not be recognised. At a general level the object of Chapter 3 Part 3-2 and the general statements of the manner in which FWA is to perform its functions and the matters to which it is to have regard are consistent with the recognition of an accord and satisfaction. Furthermore, the words of subsection 587(1) are wide enough to include the recognition of an accord and satisfaction. As I have said, a valid and effective accord and satisfaction extinguishes the pre-existing cause of action and continued pursuit of an application based on such cause of action is clearly capable of being considered to be frivolous or vexatious or without reasonable prospects of success.” 12

[36] As can be seen from Australia Postal Corporation v Gorman, if there is a binding agreement between the parties, the Commission has the power to dismiss an application on the basis that it has no reasonable prospects of success.

[37] Section 587(1) of the Act provides as follows:

587 Dismissing applications

(1) Without limiting when the FWC may dismiss an application, the FWC may dismiss an application if:

(a) the application is not made in accordance with this Act; or

(b) the application is frivolous or vexatious; or

(c) the application has no reasonable prospects of success.

[38] As I have found that the parties reached agreement at the conciliation on 8 May 2017 and I am satisfied that the agreement was of the first or second type discussed in Masters v Cameron, I am persuaded that I should exercise my power under s.587(1)(c) of the Act to dismiss the application on the basis that it has no reasonable prospects of success. An order to this effect will be issued in conjunction with this decision.

DEPUTY PRESIDENT

 1 (1954) 91 CLR 353.

 2   Masters v Cameron (1954) 91 CLR 353 at [10].

 3 Applicant’s Outline of Submissions dated 21 September 2017 at [14].

 4 (2006) 154 IR 1.

 5   Curtis v Darwin City Council [2012] 224 IR 174.

 6   [2017] FWC 2903.

 7 (1954) 91 CLR 353 at [360]-[361].

 8   Attachment JW3 to Witness Statement of Jennifer Worthing dated 25 July 2017.

 9   Attachment JW9 to Witness Statement of Jennifer Worthing dated 25 July 2017.

 10 [2011] FCA 975.

 11 Ibid at [31].

 12 Ibid at [33].

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