Anna Obamwonyi (Applicant)v The Trustee for Saw Family Trust t/a DJS Melbourne Plumbing Solutions (Respondent)

[2020] FWC 797

[2020] FWC 797

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Anna Obamwonyi

(Applicant)

v
The Trustee for Saw Family Trust t/a DJS Melbourne Plumbing Solutions

(Respondent)

(U2019/10944)

DEPUTY PRESIDENT MANSINI MELBOURNE, 14 FEBRUARY 2020

Application for an unfair dismissal remedy – whether binding settlement agreement reached – application has no reasonable prospects of success – application dismissed pursuant to s.587.

[1] Ms Obamwonyi (Applicant) has applied for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (Cth) (Act).

[2] I have determined to dismiss the application pursuant to s.587(1)(c), on account of there being a binding settlement agreement which extinguishes the original claim such that it has no reasonable prospects of success. The reasons for this decision follow.

Context

[3] The application was filed on 27 September 2019.

[4] On 2 October 2019, the matter was listed for a conciliation conference before the Fair Work Commission (the Commission) which was to take place on 30 October 2019. The accompanying letter informed the Applicant as follows:

“If at any time you and the Trustee for Saw Family Trust T/A DJS Melbourne Plumbing Solutions resolve your application or you decide to discontinue your application, you must advise the Commission. A blank form F50 Notice of Discontinuance can be downloaded from the forms page of the Commission’s website […] for this purpose. Alternatively, you can advise the Commission of your decision to discontinue your application verbally by telephone or by sending an email, fax or letter.”

[5] On 11 October 2019, the Applicant emailed the Commission in which she advised that an in principle settlement agreement (Settlement Agreement) had been reached with DJS Melbourne Plumbing Solutions (the Respondent). Accordingly, she requested that the conciliation conference be vacated. The Applicant also advised of her intention to file a notice of discontinuance upon compliance with the Settlement Agreement. The conciliation conference of 30 October 2019 was subsequently cancelled and the file was closed.

[6] At around 10.00am on 6 November 2019, the Applicant telephoned the Commission and advised that the Settlement Agreement had not been complied with. The Applicant was informed by a member of the Commission’s Unfair Dismissals Team that she would need to make a written request for her application be re-opened which would proceed to a hearing. She was provided information about the Commission’s Workplace Advice Service for further assistance.

[7] At 11.24am on 6 November 2019, the Applicant emailed the Commission and advised that the Settlement Agreement had not been complied with and stated “I wish to progress with the matter either to conciliation or to a hearing”. She requested further information as to how to proceed.

[8] At 10.17pm on 6 November 2019, the Applicant followed up with a further email to the Commission, in which she asked if the Unfair Dismissals Team could inform her of “whether the conciliation that was cancelled can be rescheduled or does it now go to a conference or hearing since the terms of agreement in principal were not met by the employer?”.

[9] At 1.50pm on 7 November 2019, the Applicant telephoned the Commission and spoke to a different member of the Unfair Dismissals Team. Again, she advised that the Settlement Agreement had not been complied with and requested that the matter be reopened. The Applicant confirmed her understanding that her request would proceed to a hearing, and was informed that conciliation was “still possible”. The Applicant undertook to amend her written request to have the matter proceed to conciliation.

[10] At 1.55pm on 7 November 2019, the Applicant emailed the Commission and requested that the conciliation be “reinstated”.

[11] On 8 November 2019, the Respondent telephoned the Commission to advise that a deed of settlement had been executed and settlement monies paid. The Respondent was informed that the Commission would correspond with the parties as a next step.

[12] Also on 8 November 2019, the Unfair Dismissals Case Management Team wrote to the Applicant (copying the Respondent) in response to her request to reopen her unfair dismissal application. That letter explained the following:

a) That the Commission’s records showed that this application was settled prior to conciliation; and

b) If a binding settlement agreed was reached, but the Applicant considered the Respondent had not complied, that the Commission does not have authority to enforce that agreement, which would need to be enforced by a Court.

[13] The 8 November 2019 letter concluded by outlining the Applicant’s options to either:

a) By no later than 4pm on 15 November 2019, apply for the application to be reopened in which case there would be a Mention and a program for filing of materials; or

b) If the Applicant considered that the Respondent had not complied with a binding settlement agreement, advised it was open to her to seek to have that agreement enforced by a Court.

[14] On 14 November 2019, the Applicant emailed the Commission and confirmed that she would like to proceed with her application and wished for the matter to be “reopened for conciliation”. The Applicant explained that although she initially requested a cancellation of the 30 October 2019 conciliation she believed that she was able to “re-request” a conciliation and her file would not be closed pending her notice of discontinuance. The Applicant concluded by saying that she hoped she had understood the Commission’s 8 November 2019 letter correctly and apologised if not as it had been a stressful time and she had been unwell.

[15] On 15 November 2019, the Commission attempted to contact the Applicant on her nominated telephone number but she was not able to be reached and a voice message was left.

[16] On 13 December 2019, the Applicant telephoned the Commission to follow up on the matter. The Applicant spoke to another member of the Unfair Dismissals Team and reiterated her request to reopen the file which she had thought would not be closed until a notice of discontinuance was filed. In reply, the Applicant was informed that the file was closed because of the Applicant’s advice that settlement in principle had been reached and that the next step would likely be a mention.

[17] On 17 December 2019, the Unfair Dismissals Case Management Team wrote to the parties in the following terms:

“Dear Ms Obamwonyi and Mr Saw,

This matter has been referred to Deputy President Mansini, Deputy National Practice Lead for Unfair Dismissal Matters at the Fair Work Commission.

On 11 October 2019, the Fair Work Commission was advised that a settlement in principle was agreed between the parties. The Deputy President understands the Applicant has subsequently indicated that she wishes to have her unfair dismissal application heard and determined.

If there is a binding settlement agreement between parties to an unfair dismissal application then it is likely that the application has no reasonable prospects of success and may be dismissed. The parties should review the decisions which are authority for this (Curtis v Darwin City Council [2012] FWAFB 8021, Australian Postal Corporation v Gorman [2001] FCA 975).

Accordingly, the Deputy President is considering whether she should, of her own motion, dismiss Ms Obamwonyi’s application under s.587 of the Fair Work Act 2009 because it has no reasonable prospects of success.

Directions – what do you need to do?

Prior to deciding whether she should dismiss this application, the Deputy President directs that:

By 4pm on Monday 23 December 2019, the Applicant and the Respondent are to each file with the Commission and serve on the other party submissions and evidence as to whether a binding settlement agreement was reached between the parties and whether the application should or should not be dismissed on the basis that it has no reasonable prospects of success.

On receipt of the submissions the Deputy President will determine the next appropriate step.”

[18] On 20 December 2019, the Respondent filed submissions which contended that a binding settlement agreement had been reached and executed between the parties and that payment of the settlement monies had already been made to the Applicant.

[19] On 23 December 2019, the Applicant emailed the Commission and requested an extension to file her submissions. An extension was granted until 6 January 2020. As at the date of this Decision, the Applicant has not filed any material with the Commission in response to the Directions of 17 December 2019.

[20] On 11 February 2020, the matter was listed for a telephone Mention before me. Both parties were in attendance, and the matter proceeded by way of Mention/Conference. The Applicant emphasised it had been her understanding that she could request a conciliation to be relisted at any time even after the Settlement Agreement was reached. Notwithstanding this, during the Mention/Conference the parties confirmed their mutual understanding that:

a) As a result of their negotiations, a Settlement Agreement was reached on 11 October 2019 and was intended to be binding on both parties in resolution of the Applicant’s unfair dismissal application; and
b) Regarding the Settlement Agreement, the only outstanding dispute is about whether the Respondent has complied with the Settlement Agreement (in relation to its taxation of the settlement sum, a letter of employment which had not been provided and a letter of apology which was offered in writing but had not been provided).

[21] Also during the Mention/Conference, the Applicant requested an amendment to her employment separation certificate.

[22] The Respondent undertook to provide the letter of employment, written apology and an amended separation certificate within 24 hours. It maintained that its taxation treatment of the settlement sum was appropriate.

[23] At the conclusion of the Mention/Conference, I foreshadowed that on the materials before the Commission it appeared uncontentious that a binding settlement agreement was reached and I was minded to dismiss the application for no reasonable prospects of success pursuant to s.587(1)(c) of the Act. However, I would consider all of the materials before the Commission and subsequently deliver my decision in writing.

Consideration

[24] Section 587 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.

Note: For another power of the FWC to dismiss an application for a remedy for unfair dismissal made under Division 5 of Part 3 2, see section 399A.

(2) Despite paragraphs (1)(b) and (c), the FWC must not dismiss an application under section 365 or 773 on the ground that the application:

(a) is frivolous or vexatious; or

(b) has no reasonable prospects of success.

(3) The FWC may dismiss an application:

(a) on its own initiative; or

(b) on application.”

[25] The High Court has provided clarity as to circumstances when a binding contract will exist, 1 as follows:

“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 cases. It may be one in which 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. Or, secondly, 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. Or, thirdly, 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.

In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution.” 2

[26] The Federal Court has considered that the Commission has the power to dismiss an unfair dismissal application under s.587where a binding settlement agreement exists. That is because the binding settlement agreement extinguishes the pre-existing cause of action and the continued pursuit of the application based on such cause of action is clearly capable of being considered to be frivolous or vexatious or without reasonable prospects of success.  3

[27] In the present case there is no dispute, and on the materials before the Commission, I am satisfied that a binding settlement agreement was reached between the parties. The unopposed evidence is that the parties negotiated and agreed a resolution to the Applicant’s application and intended to immediately be bound by that settlement agreement, which was recorded in writing and duly executed. This finding is further supported by the conduct of the respective parties: for example, the Applicant in requesting to cancel the conciliation and the Respondent in arranging payment of the settlement sum less tax (which the Applicant has received, albeit she does not agree constitutes full compliance).

[28] I have had regard to the Applicant’s suggestion that she may have misunderstood the Commission’s processes, and operated on a misapprehension that she could proceed to conciliation at any time. That the Applicant decided not to file a formal notice of discontinuance pending her satisfaction of compliance with the executed Settlement Agreement is an orthodox and perhaps sensible approach but does not assist in demonstrating that her application has reasonable prospects of success in the circumstances. Even if the Applicant thought that there was still some ability to pursue the application after the Settlement Agreement was reached, this did not form part of the agreement reached and ought not be implied as a term. As the Applicant has conceded (during the Mention/Conference), she understood that the terms of the Settlement Agreement were an agreed “compromise” and intended to be in full resolution of her unfair dismissal application. I am satisfied that there was genuine agreement and that there is no basis to conclude that the Settlement Agreement is void or voidable.

[29] To the extent of any suggestion that the Applicant was misinformed by the Commission, I note that the Applicant’s queries and information provided in response occurred after the Settlement Agreement was reached. As the Applicant’s email of 6 November 2019 reflects, at least as at that time she was unsure of whether the matter could be reconvened and was seeking information about her options. On my review of the materials, the Commission went to some lengths to provide the Applicant with clear information about the process, and even directed her to an appropriate source of advice for assistance.

[30] The only residual dispute between the parties, if any remains, relates to compliance with the Settlement Agreement. The performance of obligations under the Settlement Agreement may give rise to a separate cause of action but in any event is not a matter that the Commission is empowered to enforce.

Conclusion

[31] Where there is a binding settlement agreement, the Commission does have the power under s.587(1)(c) of the Act to dismiss an unfair dismissal application as the settlement agreement extinguishes the pre-existing cause of action and it is plain that further pursuit of the matter would have no reasonable prospects of success.

[32] I am satisfied that a binding settlement agreement was reached between the Applicant and Respondent and that the terms of that agreement have been executed. For the above reasons, I have determined that the application should be dismissed on the basis that it has no reasonable prospects of success. I order accordingly.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR716739>

 1   Masters v Cameron [1954] 91 CLR 353.

 2   Ibid at 360.

 3   Australia Postal Corporation v Gorman [2001] FCA 975; see also Curtis v Darwin City Council[2012] FWAFB 2021.