Gorman v Australia Post
[2010] FWA 7423
•28 SEPTEMBER 2010
Note: An appeal pursuant to s.604 (C2010/5339) was lodged against this decision - refer to Full Bench decision dated 16 December 2010 [[2010] FWAFB 9413] for result of appeal.
[2010] FWA 7423 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Brent Gorman
v
Australia Post
(U2009/10470)
SENIOR DEPUTY PRESIDENT O’CALLAGHAN | ADELAIDE, 28 SEPTEMBER 2010 |
Termination of employment - Motion to dismiss as frivolous and vexatious; was there a binding agreement; power of Fair Work Australia to dismiss.
[1] On 2 July 2010 Australia Post applied to Fair Work Australia for an order to dismiss an application which had been brought by Mr Gorman pursuant to section 394 of the Fair Work Act 2009 (the Act). The motion for dismissal was made on the grounds that the substantive application had been settled pursuant to a binding agreement between the parties. Australia Post sought that the application for unfair dismissal be dismissed and that Mr Gorman pay Australia Post’s fees.
[2] Before dealing with the Australia Post motion, it is appropriate that I detail the background to this matter.
[3] On 17 July 2009 Mr Gorman lodged an application under section 394 of the Act. The application was filed by Mr Townsend of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) as Mr Gorman’s representative. The application was not resolved through conciliation and, after several delays, was listed for hearing on 6 April 2010. In the earlier proceedings, Mr Gorman was initially represented by Mr Townsend and then by Mr Richard Ward of counsel. Mr Martin of counsel represented Australia Post.
[4] For the sake of completeness, I note that criminal proceedings against Mr Gorman relative to the allegations that gave rise to the termination of his employment were dismissed in March 2010.
[5] Directions relative to the hearing listed for 6th April 2010 were issued and a substantial quantity of material was filed and exchanged prior to the hearing day.
[6] Both parties were legally represented at the hearing on 6 April 2010. Australia Post was represented by Mr T Martin and Mr Gorman was represented by Mr R Ward and Mr J Noblet, both of counsel. For the avoidance of confusion, I note that Mr D Ward of counsel was also involved with Mr Gorman’s representatives in the proceedings on 6 April 2010 but did not actually appear in the brief proceeding.
[7] At the commencement of the hearing on 6 April 2010 Mr R Ward requested a brief adjournment to progress possible settlement discussions. On the resumption of the proceedings, Mr Ward advised:
“PN9
MR WARD: Senior Deputy President, we have good news. There has been an outcome.
....
PN11
MR WARD: So the hearing wont need to proceed.
....
PN13
MR WARD: So we will need a little time to - for arrangements to be put in place to facilitate the outcome and we wondered whether you would like to - would adjourn it to a convenient date for mention in the anticipation that we would endeavour to have the matter discontinued prior to that date if possible rather than coming back if that is satisfactory to you or whether you wish it to come back in any event.
PN14
THE SENIOR DEPUTY PRESIDENT: No, I wouldn’t anticipate coming back. If you tell me you’ve reached an agreement, Mr Ward, I would anticipate receiving a notice of discontinuance. If we work on the normal scheme of things, I’d anticipate that the parties will probably formalise that agreement over the next seven days or thereabouts.
PN15
MR WARD: Perhaps 14. There will be deed of some toing and froing.
PN16
THE SENIOR DEPUTY PRESIDENT: All right. Well, let’s work on a basis of 14.
PN17
MR WARD: Yes.
PN18
THE SENIOR DEPUTY PRESIDENT: Normally the execution of that deed would take something like seven days and I’d anticipate receiving a notice of discontinuance shortly after that. So within the three - maximum four week period.
PN19
MR WARD: Yes.
PN20
THE SENIOR DEPUTY PRESIDENT: If perchance you don’t send it in to me within that time you can expect the matter to be re-listed at short notice.
PN21
MR WARD: Yes. Very good, sir.
PN22
THE SENIOR DEPUTY PRESIDENT: Are you happy with that approach, Mr Martin?
PN23
MR MARTIN: Yes. Understood, Senior Deputy President. I think we can deal with it within that timeframe.”
[8] No Notice of Discontinuance was subsequently received. Mr Gorman’s wife, Mrs Gorman telephoned my Associate on a number of occasions with advice to the effect that she did not consider the matter to be resolved. On 19 May 2010 Mr David Ward of Morgan Ward Solicitors filed a Notice of representative ceasing to act for Mr Gorman. On 25 May 2010 Mrs Gorman provided written confirmation that Mr Gorman sought to pursue the application. On 15 June 2010 Mrs Gorman filed a Notice of representative commencing to act advising that she was now representing her husband. This was the first time that Mr Gorman had not been represented relative to his application.
[9] As a result of imminent leave on my part, the application was referred back to Her Honour Senior Deputy President Acton. It was subsequently listed for arbitration in August 2010.
[10] On 3 July 2010 Australia Post filed the application for directions on procedure. In this application, Australia Post sought that the matter be dismissed and also sought an order for costs. In later correspondence, Australia Post sought that the motion for dismissal be heard and determined before any hearing on the merits. This issue was the subject of a directions hearing before Acton SDP on 29 July 2010. At this hearing the Senior Deputy President cancelled the scheduled August hearing and referred the application back to me for consideration.
[11] At a further directions hearing on 2 September 2010 I determined that the Australia Post application would be the subject of initial consideration. However, I established provisional dates for a hearing on the merits.
[12] It is appropriate to note that, at this hearing, Mrs Gorman represented her husband and Mr Martin, of counsel was given permission to represent Australia Post on the basis that Mrs Gorman did not object to that permission being granted. Mr Martin had been involved in representing Australia Post throughout the duration of the matter. My grant of permission was made on the basis of advice from Mr Martin that Mr Short of counsel would appear for Australia Post at the hearing on the dismissal motion as Mr Martin would be giving evidence at this hearing. The directions I issued for the dismissal motion hearing took into account that Mrs Gorman was not legally qualified.
[13] Subsequent to the 2 September 2010 directions hearing, Mrs Gorman changed her position and objected to Australia Post’s continued legal representation. I refused this objection on the basis that Mrs Gorman had previously agreed that Australia Post should be represented. In my advice to this effect I referred to the conduct of the hearing on 2 September 2010, the account taken of Mrs Gorman’s non-legal background, and the fact that the directions I issued at this hearing were premised on Australia Post’s continued legal representation. I reserved Mrs Gorman’s right to seek that this representation arrangement could be reviewed should the matter proceed to a hearing on the merits.
[14] Both parties complied with the directions issued on 2 September 2010. On 16 September 2010 the hearing on the Australia Post application took place. Mr Short of counsel represented Australia Post and Mrs Gorman and Mr Klose represented Mr Gorman.
The Submissions
[15] Australia Post asserts that it reached a binding agreement with Mr Gorman on 6 April 2010 such that Mr Gorman is now not able to pursue his application. Australia Post seeks that the application be dismissed as frivolous or vexatious pursuant to section 587 of the Act. Australia Post asserts that Mr Gorman’s endeavours to now pursue the application are inconsistent with the objects of both the Act and Part 3-2, dealing with unfair dismissal. The Australia Post position was that the settlement agreement reached on 6 April 2010 should be honoured. In this respect, Australia Post advised that if Mr Gorman’s issue was with the specific phraseology of the settlement deed, it was prepared to apply the 6 April 2010 agreement in the form commonly used by Fair Work Australia to record settlement agreements.
[16] Mr Gorman’s position was that he agreed to a resignation and to a $5000 settlement amount on 6 April 2010 but that other components of the Deed, which was belatedly not provided to him until 28 April 2010, were not agreed. Consequently, Mr Gorman asserts that no agreement was reached in a manner which precludes the continued pursuit of the application.
The Evidence
[17] Mr Martin’s evidence went to his involvement in the matter as the Australia Post representative. His evidence included reference to correspondence between he and Mr D Ward prior to the hearing on 6 April 2010 with respect to settlement possibilities and to the discussions which occurred on 6 April 2010.
[18] Mr Martin’s evidence was that:
“10. A few minutes after that, one of Mr Gorman’s legal representatives, again I believe it was Mr Noblet, came into the courtroom and indicated that Mr Gorman wished to put an offer of $5000 as a settlement sum, with the substitution of a resignation.
11. I then discussed the settlement proposal with Garry and Thuy. The settlement sum and substitution of resignation was acceptable to Australia Post. I discussed with Garry and Thuy the other terms that ought to be included in the settlement agreement.
12. I took notes of the terms that we discussed. A true copy of my note of this discussion is annexed to this statement as TPM-4.
13. I then left the courtroom and went outside to talk to Mr Gorman’s legal representatives. I indicated that the settlement sum was acceptable. I then went through Australia Post’s proposed terms of settlement.
14. The terms of settlement were:
(a) Payment to Mr Gorman of $5000, with no admission of liability, subject to deduction of tax as required by law;
(b) The matter to be discontinued, with a full release from any and all claims arising from employment and the cessation thereof;
(c) The substitution of a resignation for the termination, with the effective date of 16 July 2009;
(d) Confidentiality as to the terms of settlement;
(e) Non-disparagement in relation to the employment and the cessation thereof; and
(f) The terms of settlement to be recorded in a Deed of Settlement and Release.
15. After going through the terms of settlement I made a special point of specifically stating that the agreement reached on that day would be binding and that the Deed of Settlement and Release would only record the terms of settlement. I remember using the words, ‘We’ve got a deal,’ to emphasise this point.”
[19] Mr Martin’s evidence clarified his witness statement such that he then returned to the courtroom and awaited confirmation from Mr Gorman’s representatives that the terms were acceptable to Mr Gorman. Soon after, Mr Noblet came back into the courtroom and indicated that the proposal was agreed. Mr R Ward and Mr D Ward then also returned and confirmed that agreement.
[20] Mr Martin’s evidence was that the Deed of Settlement and Release (the Deed) which he subsequently sent to Mr Ward was consistent with this agreement.
[21] Mr Martin advised that on 6 May 2010 he was informed that Mr Gorman did not intend to comply with the agreement that had been reached. He subsequently telephoned Mr Townsend of the CEPU who also understood that a binding agreement had been reached. Mr Martin then spoke with Mr D Ward who shared his view that the agreement was binding.
[22] Through subsequent discussions with and e-mails to Mr D Ward, Mr Martin understood that Mr D Ward was having difficulty contacting Mr and Mrs Gorman and that Mr D Ward was unlikely to continue to act for Mr Gorman. On 19 May 2010 Mr D Ward provided Mr Martin with confirmation that he was ceasing to act for Mr Gorman.
[23] Mr R Ward recounted his recollection of the negotiations of 6 April 2010. His understanding of the agreement reached was consistent with that of Mr Martin with the addition that he took into account the information provided directly to Mr Gorman. In this respect, Mr R Ward outlined the discussions he had with Mr and Mrs Gorman including his advice to them that this agreement would finalise the matter and allow Mr Gorman to get along with the rest of his life.
[24] Mr R Ward’s evidence went to his understanding that a binding agreement had been reached on 6 April 2010 and that this agreement was accurately reflected in the Deed subsequently provided by Mr Martin. Upon his receipt of that Deed, Mr R Ward confirmed his understanding of its accuracy with Mr D Ward before forwarding it to Mr Gorman.
[25] Mr R Ward’s evidence went to his limited understanding of the circumstances relating to the involvement of Mr Noblet at the hearing on 6 April 2010. Mr R Ward recalled that, subsequent to the agreement being reached on 6 April 2010, telephone contact was made with Mr Townsend of the CEPU to advise him that he would not be required to give evidence as an agreement had been reached.
[26] It is appropriate to note that, subsequent to the hearing of this matter Mrs Gorman filed a further application for Directions on Procedure. Whilst Mrs Gorman raised a number of issues in this application she particularly indicated some concern over the extent to which she was properly notified of Mr R Ward’s appearance at this hearing and had not had adequate time to formulate matters to be put to him. I do not see anything untoward in the process of summonsing Mr R Ward and have noted that Mrs Gorman was on notice about this possibility from at least 2 September 2010.
[27] Mrs Gorman gave evidence that she had been involved in all negotiations relative to Mr Gorman’s application. Her evidence related to the discussions she had with Mr Gorman’s lawyers prior to 6 April 2010. She understood from these discussions that Mr Gorman had a good chance of successfully pursuing his claim. Mrs Gorman advised of the involvement of the CEPU in the preparation for the hearing but the absence of contact from the CEPU relative to the Deed.
[28] Mrs Gorman’s evidence was that in the discussions on 6 April 2010 there was no agreement reached on anything other than the $5000 payment and resignation, although there was some vague reference to confidentiality.
[29] Mrs Gorman advised that when she received the Deed she concluded that it contained matters that had not been agreed. These matters, not discussed on 6 April 2010, included the reference to no admission of liability on the part of Australia Post, to the extent to which the $5000 payment resolved all claims and constituted a full and final release, indemnification undertakings, confidentiality and non-disparagement, warranty provisions and “counterpart” arrangements.
[30] Consequently, Mr Gorman was not prepared to sign the Deed and sought to pursue the application.
[31] Mrs Gorman had contacted Members of Parliament, a community legal centre and Unions SA. Her evidence went to her understanding that the agreement reached on 6 April 2010 was not binding until it was signed.
[32] Mrs Gorman’s evidence was that after she considered and discussed the Deed with Mr Gorman she telephoned Mr D Ward who advised her that if the Deed was not signed, the matter would be relisted.
[33] Mr Townsend’s evidence was that he was not present at Fair Work Australia on 6 April 2010 and was not involved in the development of the Deed. However, he confirmed that Mr Martin’s recollection of the telephone call made by Mr Martin to him on 6 May 2010 was correct and that in this discussion in that he had confirmed to Mr Martin his understanding that an agreement had been reached and also confirmed that he had sought advice from another lawyer to this effect.
[34] I note that subsequent to the hearing Mrs Gorman has forwarded further material to me going to the merits of the substantive application.
Findings
[35] Section 587 states:
“587 Dismissing applications
(1) Without limiting when FWA may dismiss an application, FWA 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.
(2) Despite paragraphs (1)(b) and (c), FWA 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) FWA may dismiss an application:
(a) on its own initiative; or
(b) on application.”
[36] This section must be applied in the context of the objects of the Act generally and the specific objects of Part 3-2 which deals with unfair dismissal. In this respect, the concept of a fair go all round is particularly pertinent.
[37] I have concluded that an application may be considered frivolous or vexatious on a number of bases. Without seeking to be exhaustive, it could be that an application is manifestly groundless on jurisdictional grounds so as to be regarded as frivolous or vexatious. Alternatively it may be so lacking in merit that it must be regarded as frivolous or vexatious. Thirdly, the circumstances surrounding the application or the remedy sought may cause an application to be so regarded.
[38] Finally, and of relevance to this issue, the continued pursuit of the application may occur in a circumstance which is considered frivolous or vexatious.
[39] I have had regard to the decision of a Full Bench of the Australian Industrial Relations Commission in Zoiti-Lancastro v Australian Taxation Office 1 which I provided to Mrs Gorman. That decision dealt with a circumstance inherently similar to that of Mr Gorman. Whilst that matter was determined under a different legislative regime, some critical aspects of that decision are particularly pertinent. Firstly, the Full Bench considered a dispute over whether the employer’s insistence on mutual releases in a written settlement agreement could be regarded as a standard term. In this respect the Full Bench stated:
“[10] We are satisfied that there was no relevant error in the Senior Deputy President’s reasoning on the release issue. It would be most unlikely, as the Senior Deputy President himself pointed out, that the ATO would pay money in settlement without receiving a release of some kind. Furthermore the release contained in the settlement agreement drafted by the ATO’s solicitors was in substance a release of the kind which Mr Dowling had advised the appellant she would have to accept in order to settle the case. It is not necessary that we comment further on the Senior Deputy President’s decision, because, regardless of the breadth of the release, nothing arising in connection with the question of the release casts doubt on the conclusion that there was a completed agreement.”
[40] Secondly, the Full Bench considered the extent to which the verbal agreement reached in that matter was subject to written terms and could not be regarded as completed until a document had been signed by the parties. In this respect the Full Bench stated:
“[12] It is clear that the settlement agreement drafted by the ATO’s solicitors contained mutual releases and those had not been specifically agreed in the discussions on 3 March. There were other terms included as well, such as a request for confidentiality. But the appellant’s focus on the settlement document seems to us to miss the point. The real question is what was agreed on 3 March between counsel. It is clear enough that a completed agreement was reached and that it was not conditional in any sense on an agreement being signed. Terms relating to mutual releases and confidentiality could hardly be said to be unusual. Even so, if they were objected to the proper course would be for the appellant to simply indicate that they were not part of the agreement. No such indication was given, at least not until after 31 March 2005.”
[41] Taking the Act in its present form and that decision into account, if I am satisfied that there was an agreement reached on 6 April 2010, and if I am satisfied that Australia Post’s subsequent actions in proposing the Deed to Mr Gorman were consistent with that agreement, then section 587 provides a jurisdictional basis upon which the application could be dismissed as frivolous or vexatious.
[42] Any alternative construction of section 587(1)(b) of the Act makes no sense in the context of the objects of the Act generally and Part 3-2 specifically. It would enable agreements to be reached and then renegotiated in circumstances which would severely disadvantage the parties who had negotiated in good faith. Further, it would severely impact on the capacity of Fair Work Australia to properly address the needs of employers and employees as these needs must relate to certainty and to cost minimisation. This is consistent with the requirement set out in section 577 that Fair Work Australia exercise its powers in a manner that is fair and just, quick and informal, and avoids unnecessary technicalities, and is open and transparent.
[43] My findings then commence with consideration of whether there was an agreement reached on 6 April 2010 and, if so, what constituted that agreement.
[44] The evidence before me is clear in establishing that there was such an agreement. I accept the evidence of Mr Martin as to the essential components of that agreement. I also accept the evidence of Mr Ward in terms of the information he provided to Mr and Mrs Gorman in that respect.
[45] The only evidence detailing an alternative position relative to the discussions on 6 April 2010 was given by Mrs Gorman. Mrs Gorman could have called Mr Gorman, other relatives present on 6 April 2010 or, even more significantly, Mr D Ward or Mr J Noblet - who were both involved in the negotiation process. It is open to me to draw an adverse inference from the fact that Mrs Gorman chose not to call these other persons, consistent with the rules in Jones and Dunkel 2. However, I have not applied this rule as I have concluded that Mrs Gorman’s lack of legal knowledge impacted on her decision-making with respect to who should be called to give evidence. Consequently, I have determined the question of whether there was an agreement, and if so, in what form, simply on the basis of the evidence put before me rather than concluding that the evidence of persons who were not called would contradict that of Mrs Gorman.
[46] I have concluded that there is no doubt that the $5000 payment was agreed and that together with the treatment of Mr Gorman’s dismissal as a resignation, these terms were agreed by Mr Gorman.
[47] I have concluded that Mr R Ward referred to a requirement for confidentiality. Mrs Gorman was unable to explain what she meant by the reference to confidentiality and I have concluded that, consistent with his experience in these matters, Mr R Ward explained a normal confidentiality requirement. I have concluded that Mr R Ward explained that the agreement involved a mutual release. This is consistent with his statement to Mr Gorman that the agreement allowed Mr Gorman to get on with the rest of his life.
[48] To the extent necessary, I prefer the evidence of Mr R Ward and Mr Martin with respect to the proceedings on 6 April 2010. Mrs Gorman’s construction of the agreement lacks commercial logic. As at 6 April 2010 the criminal proceedings had been dismissed but the unfair dismissal case remained. I am unable to conceive of a likely situation where Australia Post would agree to pay Mr Gorman $5000 but still allow him to pursue this or another form of action.
[49] My conclusions about the 6 April 2010 agreement must necessarily be founded on the evidence before me. I have concluded that the agreement reached on 6 April 2010 consisted of the components identified above. I then considered the extent to which the Deed which was later provided to Mr Gorman was fundamentally consistent with the agreement reached.
[50] In this respect I see nothing inconsistent with the Deed and that agreement. It may be that certain provisions of this Deed relating to the preservation of Mr Gorman’s capacity to pursue his worker’s compensation rights and certain mechanical or administrative provisions such as those dealing with counterpart arrangements could be expressed more simply or needed better explanation, but the Deed itself reflects a standard approach.
[51] In the course of the hearing I sought clarification from Mrs Gorman about the extent of her objection to the Deed by inviting her consideration of the standard terms of settlement adopted by many members of Fair Work Australia. Mrs Gorman objected to the standard confidentiality, mutual non-disparaging comment obligations and, most significantly, release provisions set out in these standard terms of settlement. I have concluded that the objections to the settlement deed are not premised on the deed proposed by Mr Martin but reflect a more fundamental concern and objection to these settlement terms. These terms were part of the agreement reached on 6 April 2010. I reject Mr Gorman’s position that they could not subsequently be included in the Deed, as they are, in my opinion, normal, and relative to the release provisions, essential elements of a document reflecting the agreement the parties had reached.
[52] Consequently, I am satisfied that the parties had, through their respective representatives, reached an agreement on the terms upon which Mr Gorman would discontinue his unfair dismissal claim in return for the payment of $5000, with the termination to be regarded as a resignation, the provision of a statement of service and confidentiality provisions. I am satisfied that Mr R Ward’s discussions with Mr Gorman meant that the hearing was then abandoned on the basis of the agreement that had been reached. While the Deed put in place these arrangements formally, there was a binding agreement reached on 6 April 2010. There was no basis to expect that Australia Post would pay more than $5000 or that Mr Gorman could ask for more.
[53] I have adopted the same position as Kaufman SDP at first instance in Zioti-Lacastro 3 when he observed that he was not required, and did not rule that there had been an enforceable contract. Those questions may need to be addressed in other jurisdictions.
[54] However, the agreement reached on 6 April 2010 was considered by both parties to involve benefits and Australia Post has indicated that it is prepared to honour the commitments made on that day. Mr Gorman should logically do likewise. Given that Mr Gorman had three lawyers assisting him on 6 April 2010, any dispute he may now have about the calibre of the legal advice afforded to him on 6 April 2010 is difficult to countenance, and in any event, is not an issue which I can consider here.
[55] Mrs Gorman’s request to pursue her husband’s unfair dismissal claim is consequently vexatious in that an agreement was reached on 6 April 2010 such that the continued pursuit of the application in that context is improper.
[56] The various applications Mrs Gorman has made since the 16 September 2010 hearing going to issues of process, her concerns about the conduct of that hearing and the merits of the application are matters which do not impact on the conclusion I have reached.
[57] Accordingly, an Order [PR502214] will be issued dismissing the application effective from today.
[58] It follows that the provisional dates for the arbitration of the substantive application will be vacated.
[59] Whilst Australia Post indicated that it sought to reserve its position with respect to its foreshadowed motion for an Order for Costs, Australia Post is on notice that if no advice is received within 14 days to confirm that this motion is pursued, I will take it that the motion is not pursued.
SENIOR DEPUTY PRESIDENT
Appearances:
A Short counsel for Australia Post.
V Gorman representing Mr Gorman.
Hearing details:
2010.
Adelaide:
September 16.
1 PR967544
2 (1959) 101 CLR 298
3 PR960411
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<Price code C, PR502002>
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