Candice Spagnuolo v Qatar Airways

[2020] FWC 4473

[2020] FWC 4473

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Candice Spagnuolo
v
Qatar Airways
(U2020/6170)

DEPUTY PRESIDENT BEAUMONT PERTH, 28 AUGUST 2020

Application for an unfair dismissal remedy - application to dismiss pursuant to ss 399A(1)(c) or 587(1)(c) – deed of release signed – setting aside a deed no authority to do so – ‘accord and satisfaction’

[1] On 05 May 2020, Ms Candice Spagnuolo made an unfair dismissal application under s 394 of the Fair Work Act 2009 (Cth)(the Act) (the original application). Ms Spagnuolo was a former Senior Airport Services Agent of the respondent employer, Qatar Airways (Qatar). She had been dismissed by way of redundancy on 29 April 2020, and on that same day, was provided with a deed of release (Deed). An extension of time was provided in which to consider the Deed. Ms Spagnuolo later signed and returned the Deed to Qatar on 1 May 2020.

[2] Qatar has responded to the original application by filing its own application to dismiss Ms Spagnuolo’s claim for unfair dismissal. It does so on the basis that:

a) Ms Spagnuolo signed and returned the Deed;

b) the Deed included an unconditional release of Qatar from all claims connected with the employment and its cessation; and

c) the Deed constitutes an ‘accord and satisfaction’ between the parties, and as such is a complete answer to the original application.

[3] The power to dismiss the original application arises by virtue of ss 587(1)(c) and 399A(1)(c) of the Act. Under s 587(1)(c), the Commission may dismiss an application before it, if it has no reasonable prospects of success. Qatar contends this is one such case. The Deed operates as a bar to the original application, and it follows, said Qatar, the application must be dismissed.

[4] With respect to s 399A(1)(c), Qatar advanced that the original application should be dismissed on the basis of an unreasonable failure to discontinue the original application after a settlement had been concluded.

[5] Ms Spagnuolo’s argument can essentially be distilled into two propositions. The first, there are multiple reasons why the Deed ought not preclude her from pursuing the original application, the high watermark - she was coerced into signing the Deed.

[6] The second, it is not open to ‘contract out’ of the Act. Referring to several Federal Court authorities, 1 Ms Spagnuolo concluded that ‘from these rulings it is clear that the requirements of the FWA 2009 and associated Awards cannot be “contracted out” – they are statutory.’

[7] Having considered the evidence and arguments of both parties, I have concluded that the Deed constitutes an ‘accord and satisfaction’ between the parties and is a complete answer to the original application. It follows the original application is dismissed under s 587(1)(c) on the basis it has no reasonable prospects of success.

[8] Considering this conclusion, it is unnecessary to consider the position under s 399A(1)(c). However, if I were obliged to do so, my view is that Ms Spagnuolo unreasonably failed to discontinue the original application after the Deed had been concluded. Noting that in respect to the conclusion of unreasonableness, my reasoning at paragraphs [29]-[38] of this decision is relevant.

Background

[9] Ms Diana Maneva, HR Officer for Qatar, gave evidence that she was responsible for meeting with those employees whose positions had been made redundant as part of a transformation plan to reduce headcount. 2 Qatar had implemented the plan in order to meet the challenges posed by the Covid-19 pandemic.3

[10] A calendar invite was sent to Ms Spagnuolo on 28 April 2020 for a meeting on 29 April 2020. The video meeting on 29 April 2020, was conducted by Ms Maneva, with Mr Amr Yassin, Airport Services Manager, in attendance. Qatar had arranged for an audio recording to be taken of the meeting. Ms Spagnuolo appeared to have consented to such recording, and relied upon it, as part of her evidence.

[11] The audio recording ran for approximately 25 minutes. During that recording, Ms Maneva is heard communicating that Qatar had no interest in withholding any of Ms Spagnuolo’s entitlements, and she would receive them all paid in full. Ms Maneva then explained that there had been a negotiation with head office to provide an ex gratia amount of $3000.00 on top of the payment Ms Spagnuolo was entitled to. Information was provided that a redundancy pack would be sent to Ms Spagnuolo’s personal email. Ms Maneva then informed Ms Spagnuolo that if she chose to accept the Deed with the ex gratia payment the offer would be open until midday tomorrow.

[12] It was evident, having listened to the recording, that Ms Spagnuolo was upset. She expressed as much. There were long pauses prior to giving responses at times, and at times Ms Spagnuolo could be heard crying.

[13] On 29 April 2020, Ms Leang sent an email to Ms Spagnuolo with the subject line, ‘Electronic Redundancy Package – Candice Spagnuolo LWD 29 April 2020’. Relevant parts of Ms Leang’s email read:

…

Please find attached the Electronic Redundancy Pack as discussed during the meeting, consisting various information as listed below, including full and final settlement in line with out financial obligations under the Fairwork [sic] Act. An Ex-Gratia payment of $3000AUD indicated in the Deed of Release attached is offered to assist seeking outplacement during this difficult time.

We acknowledge that you must clearly understand the terms of the agreement provided and how those terms affect you once you sign the Deed of Release. If you choose to accept it, you will be required to sign the Deed of Release by midday tomorrow 30 April 2020 and return the signed document back to HR along with rest of the required documentation. Please note that we won’t be able to honor [sic] the Ex-Gratia after midday tomorrow 12 noon…

[14] Attached to the Ms Leang’s email was the Deed. The cover page of the Deed included the branding of Qatar’s legal representative, HWL Ebsworth Lawyers. The ‘Background’ section of the Deed included an acknowledgement that the parties denied liability and the parties had agreed to settle all matters relating to the ‘Employment and the Cessation and on the terms set out in this Deed of Release’. 4 Perhaps the most pertinent of clauses within the Deed included:

2.4 Without limiting clause 3, the Employee acknowledges that the Settlement Payment is inclusive of and paid in full and final satisfaction of any and all payments, entitlements or benefits the Employer owes to the Employee in connection with the Employment, the Cessation or any other matter referred to or concerning the same subject matter as that referred to in the Background to this Deed.

3 Release and Discharge

3.1 The Employee unconditionally releases and discharges the Employer, each person and entity in the Employer Group and their respective associates, directors, employees, servants, agents, shareholders, assigns and insurers from all Claims no matter how the same arose and on every count which now exists or which but for this Deed would exist in relation to or arising from or in connection with the Employment, the Cessation or any other matter referred to or connecting the same subject matter as that referred to in the Background of this Deed, save any claim under workers’ compensation legislation or superannuation guarantee legislation.

4 Full and Final Settlement

4.1 The Employee acknowledges that the Settlement Payment is made in full and final satisfaction of every entitlement, right or Claim, which, but for the existence of this Deed, the Employee has or may have had against the Employer, each person and entity in the Employer Group and their respective associates, directors, employees, servants, shareholders, agents, assigns and insurers arising out of or related to: (a) the Employment; and (b) the Cessation; any entitlements or Claims that the Employee may have had…

8. Warranties

8.1 The Employee warrants that:

(a) this Deed is voluntarily entered into;

(b) the Employee has had the full opportunity to consult with her legal advisors as to the nature and effect of this Deed;

(c) the Employee understands the legal significance and effect of executing this Deed;

(d) none of the Employer, the Employer Group or their respective associates, directors, employees, servants, agents, shareholders, assigns or insurers have made any promise, representation or inducement or been party to any conduct material to the entry into this Deed other than as set out in this Deed; and

(e) the Employee is aware that the Employer is relying on these warranties.

10. General

10.1 This Deed may be pleaded as a full and complete defence by the Employer, its Associated Entities and their respective associates, directors, employees, servants, agents, shareholders, assigns and insurers, including as a bar to any Claim or action commenced, continued or taken by or on behalf of the Employee in connection with any of the matters referred to in this Deed.

[15] Over 29 and 30 April 2020, there were a number of emails between Qatar and Ms Spagnuolo. These included requests by Ms Spagnuolo regarding payment of overtime hours worked, enquiries about her Bupa membership and the return of information she had stored on Qatar’s computer system. 5

[16] On 1 May 2020, Ms Mavena sent an email to Ms Spagnuolo which included the following:

We also note that the deadline stated in the email was by midday 30-April-2020.

We have satisfied all your queries, since our consultation on 29-April-2020.

Can we assume that you have no interest in accessing the Ex gratia payment of $AUD3000?

If we do not hear back from you by midnight tonight we will instruct the final payment to be drawn up without the $AUD3000.

[17] Text messages were then exchanged between Ms Spagnuolo and Ms Mavena regarding the witnessing of the Deed. Ms Spagnuolo asked Ms Mavena whether she needed a witness to sign the Deed, and sought information about the dating of the Deed. Ms Mavena responded that the ‘[D]ating is not a problem as I have requested an extension for you, based on our correspondence’. 6 Thereafter, Ms Spagnuolo asked Ms Mavena whether she could just scan and send the signature page of the Deed or all of the pages.7 Ms Spagnuolo later confirmed by text message that she had sent the Deed.8

Ms Spagnuolo’s submissions

[18] Ms Spagnuolo has referred to multiple reasons why the Deed ought not to preclude her pursuing her original application, including:

a) she was coerced into signing the Deed; 9

b) Qatar misrepresented her rights; 10

c) that the ex gratia payment was offered for outplacement services; 11

d) that she did not ‘negotiate’ the Deed; 12

e) the time she had to review the Deed was insufficient; 13

f) the manner in which the Deed was executed; 14

g) that the Deed was ‘…NEVER specifically described to me as being in return for signing away my rights under the Fair Work Act 2009’. 15

Qatar’s submissions

[19] Qatar argued that the terms of the Deed unconditionally released and discharged the airline from all claims. The original application is a ‘Claim’ as defined in the Deed and is in connection with the ‘Cessation’ of her employment. It is a claim, submitted Qatar, which Ms Spagnuolo has released it from and one which she is barred from making.

[20] In accordance with the Deed, Ms Spagnuolo received an ex gratia payment. 16 There is no dispute that Ms Spagnuolo executed the Deed and its terms are clear. Qatar submitted that it is beyond doubt that the Deed constitutes an ‘accord and satisfaction’ and as such is a complete answer to the original application.

[21] While Ms Spagnuolo has raised multiple reasons why the Deed ought not preclude her pursuing the original application, Qatar submitted Ms Spagnuolo’s position should be rejected, primarily for two reasons. First, there is no apparent power under which the Commission may set the Deed aside. 17 Second, even if the Commission had the power, the materials before the Commission did not support a conclusion that the Deed was legally vitiated by reason of the matters raised by Ms Spagnuolo.

[22] Ms Spagnuolo had, in addition, argued it was not open to contract out of the obligations of the Act. While she had referred to several Federal Court authorities in that respect, Qatar submitted those authorities were readily distinguished from the present circumstances.

Consideration

[23] Under s 587(1)(c), the Commission may dismiss an application before it if it has no reasonable prospects of success. A predecessor to this Commission held it had power to dismiss an application for relief from unfair dismissal, on the grounds there was a binding settlement between the parties. 18 In Salisbury v Sigmatek Pty Ltd,19 the Commissioner observed while the predecessor’s decision was made in relation to earlier legislation there was no reason to find the reasoning did not continue to apply under the Act.

[24] Having considered the evidence and submissions led by both parties, I have concluded the original application is absent of any reasonable prospects of success and, therefore, must be dismissed.

Matters relating to the Deed

[25] The first reason for this conclusion is that I accept Qatar’s contention that there is no apparent power under the Act by which the Commission may set the Deed aside. In Salisbury v Sigmatek Pty Ltd (Sigmatek) 20 the Commissioner stated:

Even if I formed the view that the Deed had been signed under duress it is not apparent that the Commission could, in any event, remedy that situation to enable Mr Salisbury’s claim for unfair dismissal [to] proceed. An application to set aside a Deed is not a matter to be entertained by the Commission. This is not a matter where the mere existence of an agreement to settle a matter is in dispute. The existence and the terms of the Deed are clear. The Deed has been signed and is legally binding on the parties to it until such time as it is set aside.”

[26] The Commissioner reiterated that reasoning in Thinagaran Segran v Certis Security Australia (Victoria) Pty Ltd T/A BRI Security, 21 where it was said:

If it is claimed that the Applicant was coerced into the agreement (although this does not appear to be put in such terms) it is unclear how the Commission can deal with that. To set aside an agreement reached or to claim the agreement is void are not matters, it would appear to me, within the jurisdiction of the Commission.

[27] While the Commission is not reposed with power to set aside a deed of release, it has nonetheless considered whether particular conduct vitiates a deed of settlement. In Sigmatek, the Commissioner considered Mr Salisbury’s argument that the deed in question was not properly made as he was put under ‘duress’ to sign it. When considering the legal term ‘duress’, the Commissioner referred to the decision of Kaufman SDP in Thomas v Logica Pty Ltd (citations omitted), where the Senior Deputy President expressed: 22

[35] The leading case on duress is Crescendo Management Pty Ltd v Westpac Banking Corporation. In the judgment of McHugh JA, as he then was, at page 46 appears an exposition of what constitutes duress, an exposition that has been consistently adopted and applied since his Honour's reasons were delivered. His Honour said:

...The proper approach, in my opinion, is to ask whether any applied pressure induced the victim to enter into the contract and then ask whether that pressure went beyond what the law is prepared to countenance as legitimate? Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct. But the categories are not closed. Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, will not necessarily constitute economic duress.

In their dissenting advice in Barton v Armstrong [1973] 2 NSWLR 59; [1976] AC 104, Lord Wilberforce and Lord Simon of Glazedale pointed out (at 634; 121):

...in life, including the life of commerce and finance, many acts are done under pressure, sometimes overwhelming pressure, so that one can say that the actor had no choice but to act. Absence of choice in this sense does not negate consent in law: for this the pressure must be one of a kind which the law does not regard as illegitimate. Thus, out of the various means by which consent may be obtained - advice, persuasion, influence, inducement, representation, commercial pressure - the law has come to select some which it will not accept as a reason for voluntary action: fraud, abuse of relation of confidence, undue influence, duress or coercion.

[28] The Commissioner, thereafter, considered whether Mr Salisbury had been subject to duress, and in doing so considered the factual matrix with three essential elements in mind:

1. Did Sigmatek put physical, economic of psychological pressure on Mr Salisbury in order to have Mr Salisbury sign the Deed?

2. Did that pressure cause Mr Salisbury to sign the Deed?

3. Did Mr Salisbury have no reasonable alternative but to sign the Deed? 23

[29] In Mr Brett Jiggins v Toll Pty LtdI, 24 a matter involving an unfair dismissal application, the Senior Deputy President similarly considered whether the evidence showed that Mr Jiggens had been subjected to duress regarding the execution of the deed of release, he stated:

[43] When my view of the direct evidence is weighed along with the surrounding evidence, I conclude that the Applicant was not subject to any duress etc in relation to the execution of the deed of release…

[45] There is no evidence that the Applicant was subject to some measure of unconscionable conduct that vitiated the deed of settlement. On the evidence that I have heard, the Applicant knowingly entered into a deed for his financial benefit, and in so doing waived his rights to further action against his employer.

[30] If the Commission is absent power to set aside the Deed, the consideration of whether Ms Spagnuolo was coerced into signing the deed or was subject to duress, would appear to be a moot point. However, if the Commission were reposed with that power, the evidence nevertheless is unsupportive of a conclusion that the Deed was legally vitiated by the reasons raised by Ms Spagnuolo (see paragraph 18 of this decision).

[31] Qatar provided Ms Spagnuolo with the Deed on 29 April 2019, at 3.32 pm (AWST), and it was returned, executed, by email on 1 May 2020, at 6.18 pm (AWST). In the audio recording played at hearing, Ms Mavena is heard explaining to Ms Spagnuolo that Qatar has no interest in withholding any of Ms Spagnuolo’s entitlements and she would receive those entitlements paid in full. Ms Mavena then goes on to explain that there had been negotiations with head office of Qatar to provide a $3000.00 ex gratia payment on top of the payment she was entitled to.

[32] In her submissions, Ms Spagnuolo stated with respect to the ex gratia payment:

I saw it as part of the Electronic Redundancy Pack that quantified the amount of $3000 as being an amount paid in recognition of the “unfortunate and sad situation” and that alone was why I was signing – all other payments were required however the $3000 was offered as the amount of payment – staff at Qatar Airways wanted agreement and surety that the dollar amount of $3000 was agreed rather than me coming back later and asking for more money.

[33] On a fair and balanced reading of the correspondence, and more importantly the Deed, it is readily discernible the ex gratia payment was conditional upon Ms Spagnuolo executing the Deed and unconditionally releasing Qatar from liability with respect to any claims arising out of the cessation of her employment. There was no indication that Ms Spagnuolo would not receive her entitlements if she did not sign the Deed.

[34] The communications between Ms Spagnuolo and the representatives of Qatar indicate that at all times, Ms Spagnuolo was free to choose whether or not to accept the Deed. 25 At hearing, Ms Spagnuolo acknowledged she voluntarily signed the Deed.

[35] While Ms Spagnuolo submitted, she did not understand the Deed was a legal document, and that the ex gratia payment was only to assist with outplacement services, not to release Qatar from claims, the submission is unpersuasive. The Deed carries the name of the legal firm that prepared it. It includes express terms that indicate very clearly its effect once signed. These terms are not difficult for a literate person to understand. Ms Spagnuolo took the time and enquired as to how the Deed should be signed and witnessed. In addition, with respect to the ‘deeds notice’, Ms Spagnuolo asked ‘I can just scan the final one of signatures or you need all pages again?’. I am of the view that Ms Spagnuolo knew very well she was signing a legal document. Her submission at paragraph [32] indicates as much.

[36] Much was made at hearing about the time pressure Ms Spagnuolo considered she was placed under to sign the Deed. Ms Spagnuolo submitted to the effect that there was insufficient time for her to consider the Deed. However, communications between Ms Spagnuolo and Ms  Mavena show that Qatar extended the deadline for the return of the Deed, when it was not provided in the requisite period. When asked if Qatar would have extended the period in which the Deed had to be signed, Ms Mavena confirmed that it would – as it had already done so.

[37] Ms Spagnuolo was provided with the opportunity to ask questions about the Deed - its proper execution, the form and content of the document, and to have sought legal advice as to its effect. Her lack of input into the terms of the Deed does not detract from its operation. She received the $3000.00 and although Ms Spagnuolo claims she was not mentally fit and/ or upset on receiving the Deed, it is observed that Ms Spagnuolo returned the Deed some two days after its receipt, having asked cogent questions about its execution and return.

[38] As far as it is relevant, I have concluded that there was no illegitimate pressure put to bear on Ms Spagnuolo such that she was placed under duress. Further, there is no evidence before the Commission to indicate that Ms Spagnuolo was coerced into signing the Deed. Ms Spagnuolo’s evidence was clear – she signed the Deed voluntarily.

Contracting out of the Act

[39] As observed, Ms Spagnuolo directed the Commission’s attention to several Federal Court authorities in support of the proposition that it is not open to parties to ‘contract out’ of the Act. However, as identified by Counsel for Qatar, those authorities are readily distinguished from the present circumstances.

[40] In Atkins Freight Services Pty Ltd v Fair Work Ombudsman (Atkins), 26 White J observed that deeds signed by two employees did not limit the jurisdiction of the Industrial Relations Commission of South Australia or the powers of the Fair Work Ombudsman. This was because the FWO was not a party to the deeds in question. Clearly, in this matter, there is no issue in this respect because Ms Spagnuolo is a party to the Deed, and therefore, the case of Atkins has no bearing.

[41] Thereafter, Ms Spagnuolo relied on Atkins, in addition to Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd and Metropolitan Health Service Board v Australian Nursing Federation, to support the proposition that employers cannot contract out of minimum entitlements established by awards. However, that principle is evidently not relevant as there is no claim before me regarding unpaid award entitlements. These cases do not stand for the proposition that an employee cannot release an employer from claims relating to her employment that may otherwise be available under the Act. In Atkins, White J stated:

The FWO’s first contention on the appeal concerning the Deeds was that no effect should be given to them because it is not possible for employers and employees to contract out of the minimum entitlements established by awards. That principle is well established: Josephson v Walker (1914) 18 CLR 691 at 700; Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd [2002] FCA 1406 at [23]-[35]; Metropolitan Health Service Board v Australian Nursing Federation [2000] FCA 784, (2000) 99 FCR 95 at [17]-[25]. The FWO accepted that this general principle does not preclude parties from compromising bona fide current and contemplated litigation. (bold my emphasis).

Conclusion

[42] The Deed is an ‘accord and satisfaction’. It releases Qatar in relation to claims associated with Ms Spagnuolo’s employment and its termination, and operates as a complete answer to the original application. 27 In this respect, I note and adopt the reasoning in Australian Postal Corporation v Gorman,28 where the Federal Court (Besanko J) opined:

[31] An accord and satisfaction extinguishes the existing cause of action and replaces it with a new cause of action based on the agreement. A valid accord and satisfaction is not a discretionary factor relevant to the subsequent litigation of the original claim; it is an answer to the claim.

[32] It seems to me that the fact of an accord and satisfaction can either be raised under the Act at an ‘interlocutory’ stage and at the final hearing or it cannot be raised at all. As it is a complete answer to a claim there would be no reason why it could be raised at a final hearing but not at a preliminary stage under a section such as s 587.

[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

[43] The original application is dismissed, and an order will issue to that effect concurrently.

DEPUTY PRESIDENT

Appearances:

Mr Andrew Crocker of Counsel, of List G Barristers, for the Applicant.
Mr Jonathan Nguyen, Special Counsel, of HWL Ebsworth, for the Applicant.
Ms Candice Spagnuolo, Respondent.

Hearing details:

2020:
Perth;
August 26

Final written submissions:

August 24, 2020
August 25, 2020

Printed by authority of the Commonwealth Government Printer

<PR722107>

 1   Atkins Freight Services Pty Ltd v Fair Work Ombudsman [2017] FCA 1134; Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd [2002] FAC 1406; Metropolitan Health Service Board v Australian Nursing Federation [2000] FCA 784.

 2 Witness Statement of Diana Maneva [3].

 3   Ibid.

 4   Supplementary Statement of Diana Maneva Annexure DXM-2.

 5   Ibid, [6].

 6   Ibid, DXM-4.

 7   Ibid.

 8  Ibid.

 9   Applicants Submissions p 4.

 10   Ibid, 2 - 4.

 11   Ibid, 2.

 12   Ibid, 3.

 13   Ibid, 4-5.

 14   Ibid, 3-4.

 15   Ibid, 13.

 16   Supplementary Witness Statement Diana Maneva DXM-5.

 17   John Salisbury v Sigmatek Pty Ltd[2020] FWC 2, [34]; Sergan v Certis[2020] FWC 4192, [37].

 18   Zoiti-Licastro v Australian Taxation Office (2006) 154 IR 1.

 19   [2020] FWC 2, [16].

 20   [2020] FWC 2 [34].

 21   [2020] FWC 4192 [37].

 22   [2003] AIRC 694; (20 June 2003).

 23   [2020] FWC 2, [21].

 24   [2014] FWC 940.

 25   Supplementary Witness Statement Diana Maneva DXM-1.

 26   Atkins Freight Services Pty Ltd v Fair Work Ombudsman [2017] FCA 1134; Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd [2002] FAC 1406; Metropolitan Health Service Board v Australian Nursing Federation [2000] FCA 784.

 27   Australian Postal Corporation v Gorman [2011] FCA 975.

 28 [2011] FCA 975.