Haralambos Demetriou v iHelp It Australia Pty Ltd
[2024] FWC 2084
•6 AUGUST 2024
| [2024] FWC 2084 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Haralambos Demetriou
v
iHelp IT Australia Pty Ltd
(U2024/4107)
| COMMISSIONER MCKINNON | SYDNEY, 6 AUGUST 2024 |
Application for an unfair dismissal remedy – binding settlement agreement – application dismissed
This decision is about an application by Mr Haralambos Demetriou to re-open an unfair dismissal application under section 394 of the Fair Work Act 2009 (the Act) on the basis that a settlement agreement reached in the matter has not been followed.
The unfair dismissal application was conciliated by a staff member of the Commission on 7 May 2024. The parties were not represented. It is common ground that there was an agreement on terms of settlement and that the parties agreed to waive the standard ‘cooling off period’ provided to parties who participate in staff conciliation. It is also not in dispute that no written terms were executed by the parties. Only Mr Demetriou signed the terms of settlement provided to him after the conciliation.
The question is whether the agreement reached at conciliation was binding on the parties and brought an end to the unfair dismissal application.
I find that a binding settlement agreement has been reached between the parties. The application will be dismissed.
Background
There is no dispute, and I find, that the conciliation conference on 7 May 2024 led to an agreement between the parties to settle the unfair dismissal application made by Mr Demetriou in relation to his employment with iHelp IT Australia Pty Ltd (iHelp IT). Both parties confirmed their agreement to settle the case on the terms discussed and agreed to waive the cooling off period. The Conciliator then wrote to the parties on 7 May 2024 confirming that a settlement had been reached and providing terms of settlement for the parties to sign.
The terms of settlement were signed by Mr Demetriou and sent to iHelp IT on 9 May 2024. The terms of settlement included the following release:
“Release
8. On the Respondent complying with clause 4, the Applicant releases and discharges the Respondent and its directors, officers and employees from all claims, actions and liability:
·to which the Respondent may now be subject, or to which the Respondent may, but for this agreement, have become subject in the future, and
·that relate to the Applicant's employment by the Respondent or the termination of that employment.
9. The Respondent releases and discharges the Applicant from all claims, actions
and liability:·to which the Applicant may now be subject, or to which the Applicant may, but for this agreement, have become subject in the future, and
·that relate to the Applicant's employment by the Respondent or the termination of that employment.
10. Despite clause 8, this agreement does not affect any claims or actions the Applicant may have at any time:
·under workers’ compensation legislation or common law for a work-related injury, illness, disease or death, or
·for unpaid superannuation guarantee contributions.”
It is not in dispute that the Respondent (being iHelp IT) did not comply with clause 4 of the terms of settlement, which dealt with payment of the agreed settlement sum.
Is the settlement agreement binding on the parties?
Whether a binding settlement agreement has been reached between Mr Demetriou and iHelp IT is a question of fact. It is well established that an agreement that is not signed can nevertheless be binding on the parties to it.[1]
The nature of an ‘accord and satisfaction was discussed in McDermott v Black[2] as follows:
“The essence of accord and satisfaction is the acceptance by the plaintiff of something in place of his cause of action. What he takes is a matter depending on his own consent or agreement. It may be a promise or contract or it may be the act or thing promised. But, whatever it is, until it is provided and accepted the cause of action remains alive and unimpaired. The accord is the agreement or consent to accept the satisfaction. Until the satisfaction is given the accord remains executory and cannot bar the claim. The distinction between an accord executory and an accord and satisfaction remains as valid and as important as ever. An accord executory neither extinguishes the old cause of action nor affords a new one. The decision of the Court of Appeal in British Russian Gazette &c. Ltd. and Talbot v. Associated Newspapers Ltd, though doubtless some of the reasons display less zeal for principle than for reform, does not appear to me to be inconsistent with the received doctrine that no new cause of action is given by an accord executory. In that case, the agreement constituting the accord was made as a compromise of three several causes of action vested in three persons respectively. It was made by one of them purporting to act not only on his own behalf but also as agent for the other two. In fact he had no authority to do so, and he was held liable for damages for breach of warranty of authority. This result might perhaps be supported, even if the agreement were an accord executory, on the ground that, at all events, the opposite party had acted to some extent on his representation of authority, but the intention of the parties appears to have been that the agreement of compromise should itself have been accepted as in satisfaction of the causes of action, so amounting to an accord and satisfaction. The case, therefore, provides no more than a late illustration of the doctrine, finally established perhaps by Flockton v. Hall, that of accord and satisfaction there are two cases, one where the making of the agreement itself is what is stipulated for, and the other, where it is the doing of the things promised by the agreement. The distinction depends on what exactly is agreed to be taken in place of the existing cause of action or claim. An executory promise or series of promises given in consideration of the abandonment of the claim may be accepted in substitution or satisfaction of the existing liability. Or, on the other hand, promises may be given by the party liable that he will satisfy the claim by doing an act, making over a thing or paying an ascertained sum of money and the other party may agree to accept, not the promise, but the act, thing or money in satisfaction of his claim. If the agreement is to accept the promise in satisfaction, the discharge of the liability is immediate; if the performance, then there is no discharge unless and until the promise is performed.”
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.[3]
In Masters v Cameron[4], the High Court considered the difference between binding contracts and non-binding terms agreed to form the basis for negotiation of a contract. It described three separate categories, as follows:
The more common form of a binding contract, where parties have agreed on all terms and intend to be immediately bound to perform those terms but at the same time propose to have the terms restated in a form which will be fuller or more precise while not different in effect. The contract is binding whether the contemplated formal document comes into existence or not;
A binding contract, where the parties have agreed on all terms 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. The contract binds the parties to join in bringing the formal contract into existence and then to carry it into execution; or
A record of terms, where the intention of the parties is not to make a concluded agreement at all, unless and until they execute a formal contract. A typical example is an agreement made ‘subject to contract’.
There is also a fourth category or class identified by McLelland J in Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd where the parties intend to be bound by agreed terms, but on the basis that a further more formalised contract would be substituted for the original agreement.[5]
In my view, the settlement agreement made between the parties in this matter on 7 May 2024 was of the more common form of binding contract described in category 1 above. The parties reached agreement on all of the terms they required in settlement of the unfair dismissal application. Their agreement to waive the cooling off period establishes their intention to immediately be bound by the terms of the agreement. Each understood that what had been orally agreed would be reduced to writing, but with no different effect, in standard terms prepared for their assistance by a staff member of the Commission, and that is what occurred although ultimately only one party acted to bring the formal settlement terms into existence.
Conclusion
I find that the parties reached agreement to settle Mr Demetriou’s agreed unfair dismissal application on 7 May 2024. The agreement is as described in the terms of settlement prepared on 7 May 2024 and signed by Mr Demetriou on 9 May 2024. The agreement is binding on the parties.
In Australia Postal Corporation v Gorman[6], Besanko J held that the existence of a binding settlement or “accord and satisfaction” extinguishes the existing cause of action and replaces it with a new cause of action based on the agreement.[7] The Commission has the power under section 587(1) of the Act to recognise a binding settlement and accordingly, to dismiss an application that has no reasonable prospects of success.[8]
I am satisfied that the binding agreement reached between the parties in this matter is a complete answer to Mr Demetriou’s unfair dismissal application. For that reason, the unfair dismissal application has no reasonable prospects of success. If iHelp IT now seeks to resile from the settlement agreement, or Mr Demetriou to enforce the agreement, they can do so in a court of competent jurisdiction.
The application for an unfair dismissal remedy is dismissed under section 587(1).
COMMISSIONER
Appearances:
B Cooper of Cooper Legal Services on behalf of the applicant.
P Abadee of PW Lawyers on behalf of the respondent.
Hearing details:
2024.
Sydney (by video):
July 25.
[1] Masters v Cameron (1954) 91 CLR 353.
[2] (1940) 63 CLR 161 at [183] – [185].
[3] Australia Postal Corporation v Gorman [2011] FCA 975.
[4] (1954) 91 CLR 353; see also Zoiti-Licastro v Australian Taxation Office (2006) 154 IR 1.
[5] (1986) 40 NSWLR 622 at [628].
[6] [2011] FCA 975.
[7] Ibid at [31].
[8] Ibid at [33].
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