Diana Phillips v Northern Golf Club

[2020] FWC 4324

[2020] FWC 4324

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Diana Phillips
v
Northern Golf Club
(U2020/8098)

COMMISSIONER BISSETT MELBOURNE, 20 AUGUST 2020

Application for an unfair dismissal remedy – binding settlement agreement – application dismissed pursuant to s.587 of the FW Act.

[1] Ms Dianne Phillips has made an application seeking relief from unfair dismissal pursuant to section 394 of the Fair Work Act 2009 (the FW Act). Her employment was terminated with Northern Golf Club (Respondent) with effect from 20 April 2020. Ms Phillips made her application for unfair dismissal on 12 June 2020.

[2] On 17 June 2020, Ms Phillips’ application was subject to a conciliation before Deputy President Mansini. Arising from that conciliation the Respondent submits that an agreement was reached to fully settle the application for unfair dismissal.

[3] Following from the conciliation, the Associate to the Deputy President sent a written copy of the terms of the agreement under cover of an email which said, in part:

…To confirm, agreement was reached to resolve the matter on a strictly non-admissions and confidential basis…

[4] The terms of agreement reached were that, without admission of liability, within 7 days of Ms Phillips signing the agreement the Respondent would:

•  pay $1,500 to Ms Phillips;

•  provide to Ms Phillips a statement of service.

[5] The settlement agreement contained a mutual release clause, a confidentiality clause and a non-disparagement clause. The release clause in relation to Ms Phillips indicated that she released the Respondent from all claims in relation to her employment excluding any workers’ compensation or superannuation claims.

[6] The Respondent signed the terms of settlement on 18 June 2020.

[7] On the evening of 18 June 2020 at 8.10 pm, Ms Phillips sent an email to the chambers of the Deputy President as follows:

Dear Deputy President Mansini,

Before I sign the document I don’t completely understand 3.1 or 3.2 as I discussed with you I don’t want this to have any effect on my work cover claim now or in the future, if I resign my position will this effect [sic] any payments as I no longer will be employed by Northern Golf Club.

Also what will be the best way for me to sign this as I don’t have a printer, I am travelling interstate on Friday morning at 7am until Monday so if possible can you please extend this until I return? Wednesday until 4pm if possible?

Regards Diana Phillips.

[8] On 24 June 2020, the Associate to the Deputy President rang Ms Phillips and said she could have an extension to sign and return the settlement agreement. The file note of the conversation indicates that Ms Phillips advised she no longer wished to sign the agreement and that she was sorry for changing her mind and would send an email and advise accordingly.

[9] Ms Phillips sent a further email to the Deputy President on 8 July 2020 in which she said that:

What I am not happy with is the amount of money that I was offered, at the time of agreeing to the deal I felt overwhelmed and under pressure. However if Northern will agree to a higher settlement then my considerations may be different.

[10] Ms Phillips also said:

…this ordeal has effected me and if I was to sign the paperwork I read it as I waive all my rights against Charles and Northern Golf Club which does not make me happy because clearly this has effected me greatly. [sic]

[11] In a telephone call with Ms Phillips on 10 July 2020, the Associate to the Deputy President explained that the settlement agreement would not affect the ability of Ms Phillips to pursue workers’ compensation or superannuation claims against the Respondent. It was also explained that, if Ms Phillips wished to pursue her application she may have to argue why a settlement agreement had not been reached and why her claim should otherwise be allowed to proceed before the Commission.

[12] On 13 July 2020, my chambers issued directions that required both Ms Phillips and the Respondent to file submissions and relevant evidence as to why they said a binding agreement had not been reached. Both filed submissions in accordance with the directions. Ms Phillips indicated that she wished to be heard on her application.

[13] At the commencement of the hearing of the matter I granted the Respondent permission to be represented by a lawyer, being satisfied that the requirements of s.592(2)(b) of the FW Act had been met.

SUBMISSIONS AND EVIDENCE OF MS PHILLIPS

[14] Ms Phillips gave evidence that, prior to the conciliation, she had sought advice from a lawyer who told her that the Respondent was obligated to keep her job available for her for a period of 52 weeks whilst she was on workers’ compensation. She said that the Deputy President raised “something about 3 months” although agreed that the Deputy President told her that her Workcover would continue and the payments would not be affected by a settlement. Ms Phillips said that she thought she should accept the amount so said “okay” and said “yes” to the proposal.

[15] Ms Phillips stated that the Deputy President said she would send through the paperwork on the agreement. She read the settlement document but did not agree with the release clause and was concerned she would lose her ability to pursue matters associated with Workcover. Ms Phillips said she contacted the Deputy President’s chambers and the Deputy President’s Associate explained clauses 3.1 and 3.2 (the release clauses) of the agreement to her.

[16] Ms Phillips said that she was aware that Workcover payments were excluded from the release and that she knew she would have to discontinue her unfair dismissal application if she reached agreement.

[17] Ms Phillips also said she read the written agreement and thought about it. She said she knew she was “supposed to have a 3 day cooling off period”.

[18] Ms Phillips confirmed in questioning by the Respondent that she had told the Deputy President that she accepted the process.

[19] In her written submissions Ms Phillips said that she:

•  understood the Respondent was required to keep her job for her for 52 weeks while on Workcover so was confused when the Deputy President mentioned 3 months. The law does not allow the termination of her employment while she is on Workcover and she was “shocked” by the advice of the Deputy President;

•  felt pressured to accept the amount offered;

•  did not have the release term explained to her and would never agree that the injury (for which she was receiving Workcover payments) was not caused by the Respondent;

•  did not agree with the settlement amount as she did nothing wrong;

•  might consider a settlement if the amount was reasonable; and

•  had previously rejected a higher amount in a separate employment related matter.

SUBMISSIONS OF THE RESPONDENT

[20] The Respondent submits that, while the statements of Ms Phillips cannot be tested as to what occurred in conciliation:

•  Ms Phillips clearly had received some legal advice prior to the conciliation otherwise she could not have been “shocked” by any advice given by the Deputy President in relation to employment periods. It is more likely Ms Phillips misunderstood what the Deputy President said and that the Deputy President was conveying to her the operation of other provisions of the FW Act that do not protect an employee who has been absent for greater than 3 months;

•  the Deputy President would have caveated her advice as not being legal advice and would not have provided any concluded view as to the strength or otherwise of the case, particularly in circumstances where the Respondent had not filed its Form F3 – Employer response;

•  a mutual release was always a term of the agreement and the Deputy President had explained to Ms Phillips that the agreement would not affect her Workcover claim and, in any event, any attempt to secure a release to “drop all workcover claims” would be invalid and unenforceable;

•  it is likely that Ms Phillips seeks to walk away from the settlement agreement in an attempt to secure a greater settlement amount given the current uncertain economic environment.

[21] The Respondent says that the agreement reached is a legally binding agreement on Ms Phillips and the Respondent. It submits that it is either of the first or second class of agreement considered by the High Court in Masters v Cameron. 1 That is, the Respondent says the parties reached finality on the terms of the agreement and intended to be immediately bound by it but have the terms restated in a more fuller or precise manner but not different in effect (the first class) or had completely agreed on all terms, intended no departure from them, but made performance of one or more terms conditional upon execution (that is signing) of the formal document (second class). That this is the case is evidenced by the email from the Deputy President’s chambers which expressly confirms that agreement was reached to resolve the matter. The Respondent submits that the agreement reached can be distinguished from the third class of agreement considered in Masters v Cameron.

[22] The Respondent submits that it is significant that Ms Phillips did not raise any objection to the agreement, or the email from the Deputy President’s chambers sent the day of the conciliation until sometime after receiving that email. 2

[23] The Respondent submits that the inclusion of a release term in an agreement is not unusual but, even if it is accepted that Ms Phillips was not aware of the release provision, it is not a reason to find that agreement was not reached.

[24] The mere fact that Ms Phillips did not sign and return the settlement agreement or that Ms Phillips felt “rushed” during conciliation does not mean a binding settlement agreement was not reached.

CONSIDERATION

[25] In Masters v Cameron, the High Court held that:

9. 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.

[26] This principle was clearly articulated by the Full Bench of the Commission in Curtis v Darwin City Council 3 (Curtis) where the Full Bench said:

[61] At first instance the respondent submitted that the agreement fell into either class 2 or, in the alternative class 1 as identified in Masters v Cameron.  In that case 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 deal 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.

[62] 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.

[63] Cases of the third class are fundamentally different. They are cases in which the terms of agreement are not intended to have, and therefore do not have any, any binding effect of their own. The expressions ‘subject to contract’, ‘subject to the preparation of a formal contract’ and others of similar import prima facie create an overriding condition so that what has been agreed upon must be regarded as the intended basis for a future contract and not as constituting a contract of itself.”

[27] In Zoito-Licastro v Australian Taxation Office 4 (Zoiti-Licastro) the Full Bench of the Australian Industrial Relations Commission observed that “[i]t would be most unlikely…that the ATO would pay money in settlement without receiving a release of some kind.”5

[28] Ms Phillips agrees that she reached agreement in the conciliation. In her email of 18 June 2020 Ms Phillips said “before I sign the document…” suggesting that the agreement document sent to her was expected. That she had reached agreement was reinforced by her email of 8 July where she said, in part, “[w]hat I am not happy with is the amount of money that I was offered, at the time of agreeing to the deal I felt overwhelmed and under pressure…” [underlining added]

[29] I am satisfied that it was most likely of the first class in Masters v Cameron but, even if it was the second class this does not detract from the fact the agreement was reached and that Ms Phillips conveyed her agreement to the Deputy President.

[30] When Ms Phillips replied to the email of 17 June 2020 from the Deputy President’s chambers, she did not indicate that the statement in the email that “agreement has been reached” was in anyway incorrect. Rather she had a query of the effect of the release clause on her Workcover payments and further advised that she would require time to sign and return the agreement as she was going away early the next morning and would not have access to a printer or facilities. It was three weeks later that she indicated a dissatisfaction with the settlement amount and that she felt pressured at the conciliation.

[31] On this basis, I conclude that Ms Phillips did agree to the settlement in the conciliation and it was only later, in her email of 24 June 2020 that she conveyed a possible change of mind when she said “so at this present time I will not be signing this agreement…” and in her email of 8 July 2020 she indicated she would not sign the agreement (but indicated she may change her mind if the amount offered was improved).

[32] Ms Phillips might argue that she conveyed that she had not reached agreement to the Associate to the Deputy President on 24 June 2020 but the file note of that conversation, as attached to the Commission’s file, suggests that Ms Phillips, in that conversation, apologised for changing her mind, reinforcing that she had agreed to the settlement at the conciliation. As the content of this file note, in particular the apology by Ms Phillips that she had changed her mind, was not put to Ms Phillips during the hearing of this application, I have not had regard to it, rather I rely on the various correspondence sent to the Deputy President after the conciliation.

[33] To the extent Ms Phillips says she felt pressured in the conciliation, her complaint appears to be in relation to her Workcover claim yet, in her evidence, she agreed that she had sought, and gained clarification of this from the Deputy President.

[34] To the extent Ms Phillips was confused in the conciliation about Workcover and a 52 week period and the Deputy President’s mention of 3 months, Ms Phillips did not suggest in her evidence that the Deputy President said that the legal advice given to Ms Phillips was wrong in any respect or that the Deputy President said that 52 weeks was wrong and the correct period was 3 months.

[35] In this matter I do not accept that Ms Phillips was misled in the conciliation. That Ms Phillips may have been under this misapprehension that her employment could not be terminated while she was in receipt of Workcover payments is confirmed in her Form F2 – Unfair Dismissal Application in which she said that her dismissal was unfair as “I am currently on work cover and was told he cannot terminate my employment while i [sic] am on this.” In these circumstances it is conceivable that the Deputy President sought to clarify the issue with Ms Phillips.

[36] The existence of a release provision in the agreement is to be expected. The observation of the Full Bench in Zoiti-Licastro is apposite in this regard. Ms Phillips reached an agreement to settle her unfair dismissal application. She was to be paid a sum of money and provided with a statement of service. The Respondent reasonably expected something in return for the “consideration” granted. Even if Ms Phillips did not explicitly agree to the release clause in conciliation, as the Full Bench said in Curtis:

[71] Contrary to the Appellant’s submission the ratio of the decision in Zoiti-Licastro is relevant to the present matter. In that matter, a draft deed was prepared which went beyond the terms of the parties’ agreement. The Full Bench held that such a circumstance did not mean that the agreement reached was not binding. The same issue arises in this case and we are not persuaded that we should depart from the decision in Zoiti-Licastro.

[37] Likewise, I am not convinced I should depart from that reasoning either.

[38] To the extent Ms Phillips says that she had a 3 day cooling off period, there is nothing in the conduct of the parties or correspondence of the Commission to support this. The email from the Deputy President’s chambers on 17 June 2020 did not mention a cooling off period and neither did the reply from Ms Phillips on 18 June 2020 nor any later correspondence from her suggests she was operating on the basis that she had a cooling off period. Further, the Respondent signed and returned the agreement on 18 June 2020 and it makes no sense that it would do so before it knew that Ms Phillips had agreed. I therefore reject that there was an agreement that Ms Phillips would have a 3 day cooling off period. There is otherwise nothing to suggest that Ms Phillips considered, at the time of the conciliation as opposed to the time of this hearing, that she had a cooling off period.

Conclusion

[39] In Australian Postal Corporation v Gorman 6 (Gorman) Besanko J said:

30 The applicant’s case is that there was an accord and satisfaction between it and the first respondent. It is not suggested that the agreement constituted an accord executory (McDermott v Black (1940) 63 CLR 161 at 184 per Dixon J (as his Honour then was)). It would not matter if the accord and satisfaction was conditional as the applicant is prepared to carry out its obligations under the agreement (Seddon N and Ellinghaus M, Cheshire and Fifoot’s Law of Contract (8th Australian ed, LexisNexis Butterworths, 2002) [4.24]).

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 considered to be frivolous or vexatious or without reasonable prospects of success.

[40] It is apparent from Masters v Cameron and from Gorman above that, if I find an agreement was reached between the parties on 17 June 2020 of the first class or second class described in Masters v Cameron, this “extinguishes the existing cause of action” – that is, the unfair dismissal application is concluded.

[41] For the reasons given above, I am satisfied that an agreement was reached at the conciliation before the Deputy President. That agreement brings to a conclusion the unfair dismissal application.

[42] The application for unfair dismissal is therefore dismissed pursuant to s.587 of the FW Act on the grounds that it has no reasonable prospect of success as there exists a binding settlement agreement between Ms Phillips and the Respondent. An order 7 to this effect will be issued with this decision.

COMMISSIONER

Appearances:

D. Phillips on her own behalf.

N. Davis for the Respondent.

Hearing details:

2020.
Melbourne by telephone:
August 7.

Printed by authority of the Commonwealth Government Printer

<PR721884>

 1 [1954] HCA 72; (1954) 91 CLR 353.

 2   See Zoiti-Licastro v Australian Taxation Office, PR967544 cited in Curtis v Darwin City Council[2012] FWAFB 8021 at [69].

 3   [2012] FWAFB 8021; (2012) 224 IR 174.

 4   PR967544; (2006) 154 IR 1.

 5 Ibid, para [10].

 6 [2011] FCA 975; (2011) 211 IR 450.

 7   PR721885.