David Mackenzie v Luban Homes Pty Ltd
[2023] FWC 569
•8 MARCH 2023
| [2023] FWC 569 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
David Mackenzie
v
Luban Homes Pty Ltd
(U2022/12336)
| COMMISSIONER SIMPSON | BRISBANE, 8 MARCH 2023 |
Application for an unfair dismissal remedy – jurisdictional objection – deed execution - whether matter subject to agreement to settle.
On 28 December 2022, Mr David Mackenzie (the Applicant) made an application to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy against Luban Homes Pty Ltd (the Respondent).
On 20 January 2023, the Respondent filed a Form F3 Employer’s response objecting to the application on the jurisdictional grounds that the Applicant and Respondent agreed to a settlement payment on termination of employment where the Applicant signed a deed of settlement that released the Respondent from any liability from all claims out of or connected with the Applicant’s employment.
As the matter could not be resolved by conciliation, directions were issued for the filing of material and the matter was listed for hearing on 7 March 2023 to determine the jurisdiction of the application.
At the hearing the Applicant’s witness statement was admitted into evidence[1], and for the Respondent the witness statements of Ms. Jingjing Song, Director,[2] and Mr Hayden Donnelly, Site Supervisor,[3] from the Respondent, as well as a document referred to a signed settlement letter[4], and a Terms of Settlement Document.[5]
Background
On 16 November 2020, the Applicant commenced employment with the Respondent, who is engaged in the business of designing and constructing houses, as an apprentice carpenter based in the Gold Coast, Queensland.
The Applicant alleges in his witness statement that he worked more than 38 hours each week, regularly amounting to 50 hours per 5-day week but was not paid this overtime despite requests made by the Applicant in December 2021 and several request during 2022. The Applicant states that the Respondent assured him that he would be paid but received no payments relating to overtime.
This overtime payment dispute was running concurrent with the Applicant’s termination. The Applicant had been provided several warning letters from 26 September 2022 to 11 October 2022 due to the Applicant’s absence from work, which can be split into two different events where the Applicant did not attend work.
The first portion of Applicant’s absence from work occurred from 26 September 2022 to 7 October 2022. The Applicant did not attend work for this period without notice and was subsequently invited to a management meeting on 10 October 2022 with Ms Jingjing Song, Director, and Mr Hayden Donnelly, Site Supervisor, from the Respondent. At the meeting, the Applicant was advised that he had not attended work without notice for several days, which was considered unacceptable and amounted to unsatisfactory conduct in the Respondent’s view. The following performance expectations were reminded to the Applicant:
“Attending work on time (your supervisor has agreed you starting at fixied 9.00am and finishing at 5.00pm due to your duty of drop children to school, unless other instructed)
Notify your supervisor or Company if you are unable to come into work (notification has to be given at on the day before or on the start of the day latest for urgent event)
Notify your supervisor or Company if you will be late for work.”
During the meeting the Applicant explained during his absence from work he was attending treatment from a Chiropractor twice a week for his spine muscle, and that the reason for not providing notice to the Respondent was due to his supervisor being away on annual leave during the week before he needed to receive treatment. The Respondent advised the Applicant that he had the option to either inform Ms Song directly or the office if his supervisor was not available. The Respondent considered that it was appropriate to issue a first and final warning that the same or similar behaviour may result in the termination of employment.
The second portion of the Applicant’s absence from work was from 11 October 2022 until his termination on 7 December 2022. The Applicant did not attend work from 11 October 2022 onwards, advising the Respondent that this was due to him not having access to a vehicle. The Respondent, in its email to the Applicant dated 3 November 2022, did not find this to be an acceptable reason to not attend work. Further noting that under his employment agreement, he had an obligation to ensure that he arrived at the site and was ready for work at his starting time of 9:00am. Whether the Applicant travelled to the site in a personal vehicle or public transport was not the concern of the Respondent. Further, the Applicant was advised that he was allocated to the one work site and that all tools could be provided by the Respondent, therefore there was no requirement for the Applicant to have a vehicle to complete the inherent requirements of his role. The Respondent advised that this was his first warning, and noted they expected the Applicant to be on-site and ready to work the following day at 9:00am, with failure to attend work may result in further disciplinary action being taken.
On 16 November 2022, the Respondent sent a follow up email to the Applicant as he continued to not attend work since 11 October 2022. The email noted that the Applicant had several verbal conversations with his supervisor where he was instructed to attend the site. As such, the Respondent considered the Applicant’s actions as a failure to follow a lawful and reasonable instruction which was viewed as serious misconduct where termination of employment will be considered. The Respondent requested that the Applicant attend a meeting on 18 November 2022 to respond to the issues raised. The Respondent noted that if the Applicant did not attend the meeting, then a decision would be made based on the information that is have available to the Respondent.
On 21 November 2022, the Respondent emailed the Applicant noting that he contacted Mr Donnelly on 18 November 2022 by phone to inform him that he was unable to attend the meeting scheduled for that day as he still did not have a car. As such, the Respondent requested the Applicant attend a meeting on 22 November 2022 instead, noting he may bring a support person. The Respondent reiterated that if the Applicant did not attend, then they would make a decision about his on-going employment based on the information available.
It is unclear from the evidence whether the rescheduled meeting took place on 22 November 2022, however Ms Song in her witness statements says that on 25 November 2022, the Applicant attended a meeting with her and Mr Donnelly, where Ms Song provided documentation by Master Builders Queensland regarding award entitlements relevant to the Applicant which provided that there was no underpayment owing. Ms Song invited the Applicant to go through the documentation but stated that he was not interested, instead contesting that he is owed $20,000 in overtime payments and would raise this at the Fair Work Commission, referencing printouts of employer responsibilities regarding payments of overtime. Ms Song stated that it was the Applicant’s right to go to the Fair Work Commission if he chose to. Interestingly, Ms Song states that the Applicant showed her and Mr Donnelly photos of a car that he wished to purchase which was valued at $20,000, noting that he would utilise the payment he sought from the Respondent to purchase the car. Ms Song explained that the Respondent would be willing to come to an agreement to resolve the issue but it would not be the $20,000 sought by the Applicant.
However, Mr Donnelly makes no reference in his witness statement to this car that the Applicant had showed to him and Ms Song during the 25 November 2022 meeting. Mr Donnelly notes that he does not remember the details of this meeting clearly, but recalls that the purpose of the meeting was to discuss the Applicant’s termination of employment and listen to his dispute regarding underpayment of overtime. Mr Donnelly’s statement is consistent with Ms Song’s regarding the Applicant raising different entitlements that he believed had not been paid and was therefore owed to him. Further to that, Ms. Song had provided Master Builders Queensland’s calculations to the Applicant and advising that the calculations showed there was no underpayment. Mr Donnelly states that at the conclusion of the meeting, it was decided that the Respondent would be willing to provide some payment and that the Applicant needed to provide a figure of what he thought would be reasonable.
According to Ms Song, on 30 November 2022, she spoke with the Applicant over the telephone to advise that the Respondent had agreed to settle the matter for $10,500 inclusive of annual leave accruals. The Applicant advised that he needed time to consider the offer and would get back to Ms Song. On 5 December 2022, the Applicant called Ms Song where it was noted that the settlement sum would be paid before the business closes for Christmas. Ms Song went on further to state that if the Applicant decided to not accept the terms of settlement then the management of the matter, due to family circumstances, would be passed over to Ms Song’s financial partner, ‘Victor’ meaning it would likely not resolve till 2023. The Applicant noted he would prefer the matter to resolve now. Ms Song advised that she would have the accountant draft up the payslip in order for ‘Victor’ to approve it, as well as have the termination letter and settlement drafted together. The Applicant advised that he still needed more time.
On 6 December 2022, Ms Song called the Applicant to confirm that he was willing to attend the meeting on 7 December 2022, per her 21 November 2022 email. Ms Song states that she had the impression that the Applicant was giving serious consideration to the settlement sum. Ms Song subsequently called the Applicant on the following day confirming the meeting location and noting the settlement agreement and termination was printed in preparation for the meeting.
On 7 December 2022, the Applicant received a letter advising his employment had been terminated by the Respondent on the basis of serious misconduct, which made reference to the Applicant failing to attend work between 11 October 2022 and 21 November 2022.
On the same day, the Applicant attended a meeting with Ms Song and Mr Donnelly from the Respondent. The Applicant was offered $10,500 to settle the overtime dispute, however the Applicant accepted $15,080.50 which would consist of two separate payments - the first being a payment of $10,500 as the settlement sum, with the remaining $4,580.50 being paid out as a final payment based on accrued hours and leave. The Applicant signed a document he said he believed to be a mutual termination agreement.
According to the Respondent, the Applicant had signed a deed of settlement which prevented him from making further claims against the Respondent, with reference being made to clauses 3.5 and 3.6 which provides:
“Release
3.5 The Employee will on the Employer complying with clauses 3.1, 3.3. and 3.4 above, the Employee releases and forever discharges the Employer, its directors, employees, assignees or successors from any lability past, present or future from all claims, suits, demands, actions or proceedings arising out of or connected with the Employee’s employment with the Employer, including but not limited to the cessation of employment.
3.6 The Employer releases and forever discharges the Employee from any liability past, present or future from all claims, suits, demands, actions or proceedings arising out of or connected with the Employee’s employment with the Employer, including but not limited to the cessations of the employment.”
In oral evidence the Applicant said the purpose of the meeting on 7 December was to resolve the dispute about the payment of his overtime. The Applicant agreed the meeting was following up on earlier discussions with Ms Song. The Applicant agreed that he had declined an earlier offer of $10,500. The Applicant agreed that he managed to get an additional $4,513.55 from Ms Song over and above the sum she had originally offered. The Applicant agreed he then accepted that offer. The Applicant accepted that he believed he was signing a mutual termination agreement, and that he was ending his employment with the Respondent.
The Applicant said in his oral evidence he signed the signature page of the Terms of Settlement document marked as exhibit 5 but claimed that it was not connected to other pages of exhibit 5. The Applicant accepted that he wrote and signed the settlement letter document marked as exhibit 3.
The Applicant agreed that he received and accepted the payment amounts. It was put to the Applicant that he was subsequently emailed a copy of the Terms of Settlement document on 12 December however he said he did not read it. His evidence appeared to be to the effect that it was his understanding he could still pursue his entitlement to additional overtime payment. The Applicant submitted the meeting was to be about the payment of overtime and it was only during the meeting that the Terms of Settlement document was raised.
In his witness statement, he said he merely signed a mutual termination agreement, claiming he had not read or agreed to any terms or conditions listed in the settlement agreement.
Ms Song explained in her oral evidence that the settlement letter was prepared by the Applicant after settlement discussions were held on 7 December and an agreement was reached that the extra amount of $4,513.55 would be paid. Ms Song also said they had a long conversation focussed on the monetary figure; however, they also went through the Terms of Settlement document paragraph by paragraph together and the Applicant did not raise any issues about it.
It was put to Ms Song by the Applicant that she used to her advantage her knowledge about the Applicant’s financial difficulties to persuade him to make the settlement. Ms Song did not accept that. Ms Song gave evidence that if the Applicant wanted to take the overtime dispute to “Fair Work” she had no concern about that as she did not believe the Respondent had done anything wrong.
The Applicant put to Ms Song that Ms Song represented that the settlement was for the termination, but the Applicant could still pursue an entitlement to unpaid overtime if he wished. Ms Song said the Applicant was fully aware that he was settling that matter by signing the Terms of Settlement.
The Applicant raised an issue with Ms Song about her evidence where she said she believed that the Applicant had forgotten to take the hard copy of the Terms of Settlement document. Ms Song said she believed the Applicant’s signed copy got mixed up in her papers, but she emailed a scanned copy of it to the Applicant on 12 December because she believed that he did not have a hard copy of the Terms of Settlement document.
Ms Song said the Applicant never raised any issues about the Terms of Settlement after it was sent to the Applicant on 12 December. The Applicant asked why Ms Song did not send it to him earlier. Ms Song that she believed the Applicant had the hard copy of the Terms of Settlement, and it was only when she later discovered that she had two hard copies that she scanned and sent the document to the Applicant.
Mr Donnelly gave oral evidence that he did recall seeing the Applicant and Ms Song going through paperwork together. Mr Donnelly accepted that he did not know what the Terms of Settlement document said. Mr Donnelly said he did ask the Applicant what they had agreed on and said he didn’t recall what the Applicant’s response was. Mr Donnelly’s evidence was they had a couple of drinks however he believed the parties were not intoxicated, and could drive, and he had his wits about him. Mr Donnelly’s evidence was he did not believe the Applicant was impaired from drinking.
Respondent’s Submissions
The Respondent submitted that the Applicant is barred from making an Unfair Dismissal claim as he signed with full understanding and knowledge, a settlement agreement that released the Respondent from any liability past, present or future from all claims, suits, demands, action or proceedings arising out or connected with the Applicant’s employment with the Respondent including but not limited to the cessation of employment.
The Respondent disputes the Applicant’s contention that this agreement should be voided as he signed it under financial duress noting that at no time did the Respondent pressure, threaten or misrepresent information to the Applicant.
In closing oral submissions that Respondent submitted that the Applicant has argued that he should not be bound as he was under financial duress, and has also claimed he did not read the settlement document as he thought it was a mutual separation document.
The Respondent submitted the Applicant accepted he declined the initial settlement offer, and only chose to accept the payment once it was raised to a level he would accept.
The Respondent submitted that whether Ms Song’s evidence is accepted about what the sum was being paid for, or the Applicant’s version, it remains the case that the Applicant signed an agreement that would prevent him from lodging this unfair dismissal claim.
The Respondent submitted that the settlement letter document written by the Applicant himself, makes clear that he signed pending payment of $10,500 and payment of outstanding leave and hours accumulated totalling $4,513.55. The Respondent contends the Terms of Settlement were knowingly and properly executed.
Applicant’s Submissions
The Applicant submitted that the settlement letter was not in reference to any other document. The Applicant said the Terms of Settlement were apparently drafted on 7 December, and despite discussions in the weeks earlier negotiations only happened on 7 December.
The Applicant submitted he denied signing the Terms of Settlement and it was only brought up on 7 December. The Applicant submitted that Ms Song was rushed, and he was offered $10,500 on 5 December, and the Ms Song was aware of his financial position and used it to her advantage. The Applicant submitted the Terms of Settlement should be set aside to deal with the real issue which is about unpaid overtime.
Consideration of Jurisdictional Objection
The Respondent submitted that the application is barred by the terms of a binding agreement between the parties. Relevantly to this matter s.587 provides:
“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.”
The High Court has provided clarity as to circumstances when a binding contract will exist, 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.”[6]
The Federal Court has considered that the Commission has the power to dismiss an unfair dismissal application under s.587 where 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.[7]
I am satisfied that a binding settlement agreement was reached between the parties based on the evidence of Ms Song and Mr Donnelly, which indicates that the parties negotiated and agreed on a resolution to the Applicant’s overtime dispute. It appears an offer was made in writing by the Respondent, noting a portion of the payment was written on the Applicant’s notebook but was signed by Ms Song, all of which was accepted in writing by the Applicant.
This finding is further supported by the conduct of the Applicant who in his own witness statement provided that he agreed to terms of settlement and had signed the deed without any pressure, threats or misrepresentations made by the Respondent. Further, the Applicant had stayed at the meeting venue with Ms Song and Mr Donnelly for several hours after signing the deed of settlement where the parties ordered drinks and had dinner together, at which on the evidence at no time did the Applicant express any discontent with the finalisation of the deed of settlement.
I have had regard to the Applicant’s assertion that he did not know the document he signed was a deed of settlement and that he felt pressured to sign, however it notable that his written statement did not make any reference to discussions that had been occurring prior to 7 December 2022. I am inclined to prefer the evidence of Ms Song, that the Applicant and herself went through the terms of the Deed of Settlement before it was signed and witnessed, and that the Applicant understood what he was signing.
The Applicant did not contest that he did not sign the signature page of the Terms of Settlement.[8] He submitted it was not attached to the Terms of Settlement document itself. I find this less plausible than the evidence of Ms Song that the document was gone through and then signed by both parties and witnessed by Mr Donnelly. The version as provided by the Respondent that the Terms of Settlements was agreed, as well as the other signed settlement letter setting out the additional payment of $4,513.55 is more likely to be true than the Applicant’s version which appears to be that he signed the signature page of the Terms of Settlement document, and the settlement letter without reading and understanding the Terms of Settlement.
I am not satisfied that he did not read the Terms of Settlement, or that he entered the agreement under duress, or was coerced into signing the Deed of Settlement. I am satisfied that the Applicant is bound by the Agreement made.
As I have made that determination, the application is dismissed in accordance with section 587 of the Act on the basis that it is frivolous or vexatious and has no reasonable prospects of success.
COMMISSIONER
Appearances:
Ms D. Mackenzie appearing on his own behalf
Ms D. Lynam and Ms J. Song appearing on behalf of the Respondent
Hearing details:
7 March 2023
Via Microsoft Teams
[1] Exhibit 1.
[2] Exhibit 2.
[3] Exhibit 4.
[4] Exhibit 3.
[5] Exhibit 5.
[6] Masters v Cameron [1954] 91 CLR 353 at 360.
[7] Australia Postal Corporation v Gorman [2001] FCA 975; see also Curtis v Darwin City Council[2012] FWAFB 2021.
[8] Page 40 of the Digital Court Book.
Printed by authority of the Commonwealth Government Printer
<PR760136>
0