James Baker v Wigtown Bear Pty Ltd T/A Subnet

[2014] FWC 1326

[2014] FWC 1326

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

James Baker
v
Wigtown Bear Pty Ltd T/A Subnet
(U2012/12646)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 21 FEBRUARY 2014

Application for unfair dismissal remedy.

[1] On 23 August 2012, Mr James Baker filed an application alleging his dismissal by Wigtown Bear Pty Ltd (Wigtown) was unfair.

[2] A conciliation of Mr Baker’s claim was held on 10 September 2012. On the same day the Fair Work Commission’s (the Commission) case management system marked the file settled and the file was closed.

[3] The parties are in dispute about whether a binding agreement was reached at that conciliation.

[4] On 4 December 2012, the solicitors for Wigtown advised the conciliator that Mr Baker had refused to honour the terms of the agreement reached at the conciliation and asked that a file note be placed on the Commission’s file to confirm that the claim had been settled and that the action be discontinued. This request was repeated in a further letter to the Commission dated 19 December 2012.

[5] On 6 February 2013, Ms Alexandra Thompson a legal practitioner acting for Mr Baker, wrote to the Commission stating that her client believed that no resolution was reached between the parties at the conciliation and sought a record of the outcome of the conciliation. Ms Thompson was advised that the file was closed as there was an agreement reached at the conciliation and that Wigtown’s representative was to draft the terms of settlement but no notice of discontinuance had been filed.

[6] On 8 May 2013, Mr Baker sent an email to the Commission asking if his application was open or closed. Mr Baker emailed the Commission again on 12 September 2013 seeking assistance in resolving the matter as he stated there had not been an agreed outcome of the conciliation. It does not appear that there was any response to these requests.

[7] On 12 November 2013, Mr Baker again wrote to the Commission advising that Wigtown had altered the amounts of his entitlements by reclaiming two weeks annual leave and stating that the deed of settlement had never been finalised.

[8] On 14 November 2013, a letter was sent by the Commission seeking advice from Mr Baker as to whether a binding agreement had been reached or if only an in-principle agreement had been reached.

[9] On 15 November 2013, Mr Baker responded that “the mediator encouraged me to agree/accept a financial figure & walk away, so an in-principle agreement was decided upon.” He said that between the conciliation and his receipt of the proposed deed, he had found out that there were errors in his annual leave entitlements which would see him have 50+ hours deducted from this termination pay which he did not know about at the time of the conciliation. He advised that he had sought amendments to the deed and made a further offer to settle the claim which had been rejected. It was his position that he was “fairly sure the mediator used the term in-principle.”

[10] On 21 November 2013, the solicitors for Wigtown advised that they had transferred the monies payable pursuant to the agreement to Mr Baker on 3 December 2012.

[11] The matter was listed for mention on 6 December 2013 and on 20 December 2013 Wigtown filed an application to have Mr Baker’s claim dismissed under s. 587(1)(b) and (c) of the Fair Work Act 2009 (the Act).

[12] To support that application Wigtown filed three statutory declarations, one from Mr Brett Lodge a project manager with Wigtown, one from Mr Christos Bouras Wigtown’s solicitor and one from Mr Matthew Thom a director of Wigtown, all of whom participated in the conciliation.

[13] On 15 January 2014, Mr Baker was directed to file any submissions or evidence in opposition to Wigtown’s application by close of business on 31 January 2014.

[14] On 31 January 2014, Mr Baker sent an email in which he reiterated that what was agreed at the conciliation was “in-principle” and it was subject to the signing of a deed. He submitted that there was never a signed agreement or a legally enforceable verbal agreement. Mr Baker sent another email on 4 February 2014 in which he submitted that he had sought variations to the deed of settlement but never received an updated version.

[15] On the same day Wigtown asked that their application be determined without the need for a further hearing. On 20 February 2014, Mr Baker advised that he was content to have the application dealt with on the papers.

[16] The issue to be determined is whether on 10 September 2012 a binding agreement was reached between the parties.

[17] Mr Bouras deposed that in the joint session, the conciliator read out the agreed terms of settlement as follows:

a. six weeks wages (net tax);

b. two weeks wages (net tax) described as ‘extra pay”;

c. any annual leave entitlements (at the time estimated to be approximately 92 hours);

d. reimbursement of mobile phone expenses; and

e. a deduction for the cost of hardware purchased by Mr Baker from the employer (at the time estimated at approximately $1500).

[18] Mr Bouras said that the conciliator then said “are those terms agreed” and Mr Baker said words to the effect of “I agree” or “yes” and then Mr Lodge and Mr Thom said words to the effect of ‘we agree” or “yes.”

[19] It was his evidence that Mr Lodge suggested that the terms of settlement should be recorded in writing and it was agreed that Mr Bouras would draft a written agreement that “legally reflected the terms of settlement in the form of a deed of settlement.” He denied that the terms of settlement were to be subject to or conditional on the execution of a written agreement or deed.

[20] Mr Thom deposed that he recalled the conciliator saying that they had an agreement and he recalled the conciliator going through the terms of the settlement in joint session and asking each party if they accepted the terms of settlement and both parties acknowledged their acceptance. He recalled that they then “spoke about recording the settlement in writing after the deal was confirmed as being accepted.” It was his view that the deed was “merely to record the terms of settlement in writing.”

[21] Mr Lodge agreed with Mr Bouras’s statement and added that he had proposed, after the conciliator confirmed the terms of the agreement, that the terms should be recorded in writing. He said the agreement had been reached and was not conditional upon the parties entering any written agreement.

[22] The deed put to Mr Baker, Wigtown set out the terms of the settlement as they understood them. The settlement sum consisted of six weeks pay and reimbursement of mobile phone expenses.

Was there a binding agreement reached between the parties at conciliation.

[23] In Masters v Cameron, the High Court held that when parties reach agreement on terms of a contractual nature and agree that the negotiations will be dealt with by a formal contract, that the case may belong to any of three classes:

(1) the 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 of their bargain restated in a form which will be fuller or more precise but not different in effect; or

(2) the parties have agreed on all terms and intend no departure from or addition to that which there 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

(3) the parties do not intend “to make a concluded bargain at all, unless and until they execute a formal contract.”

[24] In the first two classes, the High Court held that there was a binding contract.

[25] The question before the Commission is not whether the deed reflects the terms agreed but whether the terms, as described by Mr Bouras in his statutory declaration, were binding on the parties.

[26] Mr Baker says that the agreement was only an in-principle agreement and that it was not enforceable.

[27] I find on the balance of probabilities that there was a binding agreement reached between the parties at conciliation. The evidence of Mr Bouras on this is clear and it is consistent with the records of the Commission which show that the application was closed because it had been settled. It is also consistent with the evidence of Mr Lodge and Mr Thom.

[28] Further, the earlier exchanges between the parties support a finding that they considered the agreement binding.

[29] There was no suggestion in the communication between Mr Baker and Mr Lodge in early September 2012 that there was no binding agreement. Those emails disclose discussions about annual leave calculations and the fact that two weeks pay minus the deduction for hardware had already been paid. Even in his email of 8 October 2012, responding to the email from Mr Bouras which attached the proposed deed, Mr Baker did not state that there had not been an agreement reached. He advised that he was seeking advice before he signed the deed.

[30] It was only after Mr Bouras stated on 10 October 2012 that there had been a binding agreement reached that Mr Baker asserted that he doubted any discussion held within the mediation was enforceable because the conciliator had advised at the commencement of the conciliation that “comments made within the meeting were not legally binding.” He asked in this email, that his initial request for eight weeks pay be reconsidered. Mr Baker in this email confused the opening comment of the conciliator with the outcome of the conciliation. Of course what is said in conciliation is not legally binding unless the parties reach an agreement and that agreement is intended to be binding.

[31] On 31 October 2012, Mr Baker asserted that the deed was not binding until he signed it. It appears that Mr Baker saw the deed as an opportunity to renegotiate the terms that had already been agreed. While Mr Baker could not be compelled to sign the deed of settlement and release, that is a separate question to whether the agreement reached on 10 September 2012, was binding.

[32] Section 587 of the Act provides that a matter may be dismissed if the application has no reasonable prospects of success.

[33] In Australian Postal Corporation v Gorman 1, Besanko J observed:

“...a valid and effective accord and satisfaction extinguishes the pre existing cause of action and continued pursuant of an application based on such a cause of action is clearly capable of being considered to be frivolous or vexatious or without reasonable prospect of success”.

[34] Wigtown have complied with the terms of the agreement and paid Mr Baker the monies payable under the agreement. While Mr Baker advised Wigtown at the time that the payment did not represent in any way his acceptance of the terms of settlement or a closure of the negotiations, he did not return the monies to Wigtown.

[35] I have decided to exercise my discretion in this matter to dismiss Mr Baker’s claim for an unfair dismissal remedy because the agreement reached at the conciliation means that his claim has no reasonable prospect of success. While Mr Baker was not represented at the conciliation there is no evidence to suggest he was at any disadvantage in the negotiations such that he should not now be held to the bargain he made.

DEPUTY PRESIDENT

 1 [2011] FCA 975 at [33].

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