Indu Sareen v University of Southern Queensland

[2018] FWC 4659

[2018] FWC 4659 [Note: An appeal pursuant to s.604 (C2018/4774) was lodged against this decision - refer to Full Bench decision dated 5 November 2018 [[2018] FWCFB 6798] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Indu Sareen
v
University of Southern Queensland
(U2018/3040)

COMMISSIONER MCKINNON MELBOURNE, 13 AUGUST 2018

Application for an unfair dismissal remedy – whether binding settlement agreement - terms agreed – no reasonable prospects of success - application dismissed.

[1] This decision concerns an application by Ms Indu Sareen to re-open an unfair dismissal application under s.394 of the Fair Work Act 2009 (the Act) against the University of Southern Queensland (USQ) on the basis that a settlement agreement reached in the matter is not binding.

[2] The unfair dismissal application was conciliated on 24 April 2018. Both parties were legally represented at the conciliation. It is common ground that during the conciliation, the parties reached agreement on terms of settlement, but that no written terms were signed.

[3] Ms Sareen now seeks that her unfair dismissal application proceed to hearing. Before that can occur, it is necessary to determine whether there remains a matter before the Commission or whether the agreement reached at conciliation was binding and brought an end to the unfair dismissal application, such that the application should now be dismissed.

[4] USQ says that there was a binding agreement that falls within the second category referred to in High Court decision in Masters v Cameron 1. Ms Sareen says the outcome of the conciliation conference is more properly characterised as the third category in Masters v Cameron, where the intention of the parties was not to make a concluded agreement at all, unless and until a formal contract was signed.

[5] The question of whether a binding settlement agreement was made was heard on 8 August 2018. Ms Sareen was not represented. USQ was represented by Clayton Utz.

Is there a settlement agreement in this case?

[6] It is well established that an agreement that is not signed can nevertheless be binding on the parties to it. 2

[7] In Masters v Cameron 3, which has since been relied on in a number of decisions4 of this Commission, 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:

1. 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;

2. 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

3. 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’.

[8] 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 wherethe 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

[9] Ms Sareen gave evidence in the hearing about the discussion in conciliation on 24 April 2018. In my observation, Ms Sareen appeared reluctant to give evidence about any terms that were agreed in conciliation. She said her focus was on obtaining a reference from USQ and confirmed that compensation was discussed but that she could not remember the details. She did recall that her lawyers’ first offer was 26 weeks’ salary. She accepted that there was an understanding that her employment record would be changed to reflect her resignation from employment. She also agreed that a statement of service was discussed and that Chris Smith of USQ was to be the contact person for future employment inquiries.

[10] Ms Sareen gave evidence that a Deed of Release forwarded to her after the conciliation conference contained a number of terms and conditions that were not discussed at all during conciliation and that were all in USQ’s favour. She said she was not told that after conciliation there would be “no other avenue available”. She also said that since the conciliation, Mr Smith would not take her phone calls.

[11] Mr Madeley, who is employed by USQ, also participated in the conciliation conference on 24 April 2018. He gave evidence that offers were exchanged during the conference and that Ms Sareen’s legal representative made an offer to settle the unfair dismissal claim for 12 weeks’ salary. He said USQ accepted the offer and also agreed that a statement of service would be provided, with Chris Smith of USQ to be the point of contact for any inquiries. Mr Madeley said it was understood that Clayton Utz was to prepare the Deed of Release reflecting the terms agreed.

[12] Mr Madeley said there was no doubt in his mind at the end of the conciliation conference that agreement had been reached with Ms Sareen to settle her unfair dismissal claim, which was subject to her signing the Deed of Release.

[13] I am satisfied on the evidence that there was an agreement to settle Ms Sareen’s unfair dismissal application in return for payment of 12 weeks’ salary, substitution of her dismissal with a resignation, a statement of service and a nominated point of contact for any queries from potential future employers being Chris Smith. 6 I find that these were the only terms of settlement agreed and that the settlement agreement was to be formalised in a Deed of Release to be prepared by Clayton Utz.

[14] Mr Madeley also said at the conclusion of the conciliation conference there was discussion between the parties’ legal representatives about ‘standard terms’ in the Deed of Release dealing with confidentiality and non-disparagement. Ms Sareen was adamant that there was no discussion about confidentiality, non-disparagement or mutual release. Mr Madeley’s evidence on this question was after prompting from his legal representative and I do not consider it reliable. The evidence before me does not establish that those matters were agreed between the parties.

What is the effect of the settlement agreement?

[15] I am satisfied that there was an accord and satisfaction reached between the parties in this matter on 24 April 2018. All terms of settlement were agreed, and at the time of the agreement, there was no mutual intention between the parties about any departure from, or addition to, their agreement. USQ’s performance of the agreed terms was conditional upon Ms Sareen’s execution of a Deed of Release.

[16] The accord and satisfaction binds the parties to join in bringing the formal contract into existence and then to carry it to execution. Unfortunately, that has not occurred because of certain post-conciliation conduct as well as a dispute over whether the proposed Deed of Release contains more expansive terms of settlement than had been agreed. The latter difficulty can be overcome by USQ revising its proposed Deed of Release to reflect simply what was agreed, and no more.

[17] As to the former, both Ms Sareen and Mr Madeley gave evidence about post-conciliation conduct which might be inconsistent with the agreement reached on 24 April 2018. That is relevant to whether the parties have complied with their agreement, but it is not relevant to the matter before me.

[18] If neither party now seeks to be bound by the agreement reached on 24 April 2018, they can enter into a new agreement to vary or extinguish that agreement. In the meantime, the existence of an accord and satisfaction extinguishes the existing cause of action and replaces it with a new cause of action based on the agreement of 24 April 2018. 7 The Commission can recognise a binding settlement and dismiss an application that has no reasonable prospects of success on that basis under section 587 of the Act.8

[19] I am satisfied that the accord and satisfaction between the parties is a complete answer to Ms Sareen’s unfair dismissal application. For that reason, her unfair dismissal application has no reasonable prospects of success.

[20] The application is dismissed.

COMMISSIONER

Appearances:

I Sareen on her own behalf

L Hillman for University of Southern Queensland

Hearing details:

2018

Melbourne and Sydney (video link)

August 8.

Printed by authority of the Commonwealth Government Printer

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 1 (1954) 91 CLR 353

 2 (1954) 91 CLR 353 at [23]

 3 (1954) 91 CLR 353

 4   See, for example, Tomas v Symbion Health[2011] FWA 5458 at [43]; Csontos v QT Hotels & Resorts Pty Ltd[2016] FWC 3632; Zoiti-Licastro v Australian Taxation Office (2006) 154 IR 1

 5 (1986) 40 NSWLR 622 at [628]

 6   Respondent’s Letter to the Commission dated 2 July 2018, Attachment 2 (Email from Mr Ellis dated 24 April 2018); Exhibit 1, Statement of David Madeley, Audio file of hearing, 8 August 2018

 7   Australia Postal Corporation v Gorman at [31] per Besanko J

 8   Ibid at [33]