Jake Kakies v HJ Building Services

[2016] FWC 5140

[2016] FWC 5140

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Jake Kakies
v
HJ Building Services
(U2016/5853)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 29 JULY 2016

Application for relief from unfair dismissal.

[1] Mr Jake Kakies lodged an application for an unfair dismissal remedy on 1 April 2016. Mr Kakies and HJ Building services had discussions between themselves about settling a range of Mr Kakies’ claims including his unfair dismissal claim.

[2] Mr Bruce Jenkins, on behalf of Mr Kakies, made an open offer of settlement which was not before me. On 22 June 2016, Ms Ariel Curtis, on behalf of HJ, made a counter-offer and relevantly proposed a payment of $4000 (gross). Mr Jenkins replied and offered to settle the matter for $4250. He provided a draft deed of settlement and advised that he would provide a signed copy. He asked Ms Curtis to advise if her client accepted the offer. Ms Curtis replied that the offer was $4000 gross and requested the deed of release be sent to her in word form so that she could make some slight changes. That offer was rejected that day.

[3] On 24 June 2016, Mr Jenkins sent a deed of release. That deed included the amount of $4250. The deed signed by Mr Kakies provided that HJ would pay Mr Kakies $4250 (gross). This was in effect a new offer by Mr Kakies to settle the claim.

[4] On 27 June 2016, Ms Curtis replied advising that her client would agree to the figure of $4250 (gross) subject to acceptance of the deed of release provided by her (the 27 June deed). That deed was in the same terms as the 24 June deed.

[5] The email further said that “if you are happy to accept these terms, could you please email the FWC and advise of the in-principle settlement.”

[6] Mr Jenkins replied as follows:

“I confirm the matter is settled subject to receipt by the applicant of the settlement sum of $4250. An executed copy of the amended settlement agreement will be provided to you today or tomorrow. I will confirm with the FWC that agreement has been reached in a settlement and that a notice of discontinuance will be filed after compliance with the settlement terms, expected to be within 7 days of today’s date.”

[7] A similar email was sent to the Commission.

[8] On 29 June 2016, at 10.53am, Mr Jenkins sent an email with a copy of the agreement signed by Mr Kakies (the 29 June deed) and asked for HJ to sign to a counterpart and provide a copy of the remittance advice for the payment of $4250 to his client. This deed provided that the settlement sum would be $4250 (gross).

[9] On 29 June 2016, at 1.54 pm Ms Curtis advised of some minor changes to the deed which Mr Jenkins accepted.

[10] On 5 July 2016, Mr Jenkins provided a further amended signed deed (the 5 July deed). Interestingly that deed did not include the word “gross” but provided that “upon execution of the agreement signed by the Respondent and receipt of the net settlement sum, Mr Kakies would file a notice of discontinuance and advise that the matter has settled and provide a copy of the notice of discontinuance to the Respondent” (my emphasis). It also contained the amendments referred to in Ms Curtis’ email dated 29 June 2016. Despite Mr Jenkins advising me that he did not have a copy of this deed, I am satisfied that it was provided by him to Ms Curtis.

[11] On 6 July 2016, Mr Jenkins wrote to Ms Curtis seeking an executed counterpart agreement and a payment advice. I presume Mr Jenkins was requiring HJ sign a counterpart to the deed signed by Mr Kakies.

[12] On the same day Ms Curtis advised that her client would provide a signed deed and payment of $4250 gross would be provided within seven days of the deed being exchanged.

[13] Ms Curtis provided the deed signed by HJ. It was not a signed counterpart to the one provided by Mr Kakies as it had inserted the words “gross” in paragraph 1 (the 6 July deed).

[14] On 6 July 2016, Mr Jenkins advised that Ms Curtis’ proposed deed had an unauthorised amendment. He advised that the $4250 was required to be paid without deduction.

[15] On 12 July 2016, the monies minus tax, was paid to Mr Kakies.

[16] On 13 July 2016, Mr Jenkins contacted the Commission and sought to have the matter referred to conciliation. Ms Curtis objected to that proposal on the grounds that the matter had settled and there was a signed deed of release. On 15 July 2016, I request a copy of the signed deeds of release and was provided with two deeds signed by Mr Kakies (the 29 June deed and the 5 July deed) and the 6 July deed signed by HJ.

[17] On 20 July 2016, I caused to be sent an email to the parties directing them to file material in response to my advice that I was considering dismissing the matter because there was a binding agreement between the parties.

[18] The matter was heard by telephone conference on 26 July 2016.

The submissions of the Applicant

[19] Mr Jenkins submitted that there was no agreement because the parties agreed had not on the final terms of settlement. He relied on the negotiations which occurred after his email of 27 June 2016 to support that contention. He submitted that there was an intention to be bound on 27 June 2016 subject to an agreement on terms satisfactory to the parties. He said an in principle agreement was reached. He said it was a fundamental term of the agreement that the payment of the monies would be without deduction.

[20] Mr Jenkins submitted that even if there was an agreement, HJ has not complied with it because it deducted tax from the settlement sum. He submitted that it would be unfair to require Mr Kakies to have to take the matter to court to enforce the agreement.

The submissions of the Respondent

[21] HJ submitted that a binding agreement was reached on 6 July 2016 and payment was made. It submitted that it had complied with the deed and the matter should be dismissed. Ms Curtis submitted that it was always made clear that the sum was a gross amount and it is not the role of the Commission to determine if the terms of settlement had been complied with. It submitted that the parties had agreed on all terms but it was going to be reduced to writing.

Consideration

[22] Ms Curtis submitted that the agreement was made on 6 July 2016. The last documents exchanged between the parties were the 5 July and 6 July deeds. However those documents were not identical as HJ had made an alteration to the 5 July deed. There were no submissions that a binding agreement had been made prior to this date.

[23] I am therefore unable to conclude that there was a binding agreement reached between the parties notwithstanding that HJ paid the settlement monies.

[24] I would consider that the parties’ representatives have not served their clients well in this dispute.

[25] The 5 July deed signed by Mr Kakies clearly stated that the monies paid would be a net settlement sum. A net settlement sum is a sum with taxation according to law being deducted. I am concerned that despite asking Mr Jenkins to confirm that the 5 July deed was signed by his client, he advised that he did not have a copy of the document.

[26] This dispute could have been avoided. If Mr Jenkins sought to have the settlement sum paid without deduction because it was to recompense Mr Kakies for amounts paid by him post tax, then it was incumbent on him to make such a provision in the deed otherwise he exposed his client to a potential tax liability.

[27] Surprisingly HJ considered it acceptable to make changes to the deed after the final version had been signed by Mr Kakies. Had it signed the 5 July deed without alteration, I would have dismissed Mr Kakies’ claim and any dispute about whether it had been complied with the terms of settlement would have needed to be resolved elsewhere.

[28] The parties are arguing about $1196. While I accept that this is a significant amount of money for Mr Kakies, nevertheless if this was truly reimbursement for monies already incurred by Mr Kakies, he would be able to recover the monies from the Australian Taxation Office.

[29] Mr Kakies, given he contends there was no settlement, is obliged to repay the monies, and will need to institute separate proceedings to recover what he says were underpayments. The Commission does not have the jurisdiction to deal with these matters as part of his unfair dismissal application. Both parties will also be put to the expense of conducting a hearing to determine if the dismissal was unfair.

[30] All this could have been avoided if the parties’ representatives had made their respective positions clear, as well as ensured that the documents being exchanged were agreed before the documents were signed.

[31] Directions will be issued so that the unfair dismissal application can be heard and determined without further delay.

DEPUTY PRESIDENT

Appearances:

B. Jenkins for the Applicant.

A. Curtis for the Respondent.

Hearing details:

2016.

Melbourne and Brisbane, by telephone link:

26 July.

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