Johannes Machiel Erasmus v GJ Consulting T/A A&K Lievesley Electrical & Solar

[2018] FWC 4135

[2018] FWC 4135

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

Johannes Machiel Erasmus

v

GJ Consulting T/A A&K Lievesley Electrical & Solar

(U2018/4933)

Commissioner McKinnon MELBOURNE, 11 JULY 2018

Application for an unfair dismissal remedy – no evidence of terms of purported release – matter referred for arbitration.

1. This decision concerns an application by Mr Johannes Erasmus to re-open an unfair dismissal application under s.394 of the Fair Work Act 2009 (the Act) against GJ Consulting T/A A&K Lievesley Electrical & Solar (GJ Consulting) on the basis that a settlement agreement reached in the matter is not binding and/or has not been followed.

1. The unfair dismissal application was conciliated on 7 June 2018.

1. It is common ground that there was an agreement between the parties on terms of settlement, but that no written terms were signed. The question is 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.

Background

1. The material before me indicates that the conciliation conference on 7 June 2018 led to an agreement between the parties to settle the unfair dismissal application.

1. Mr Erasmus says at the conclusion of the conciliation conference, the Conciliator summarised the agreement reached and both parties confirmed their agreement and agreed to waive the option of a three day cooling off period. The Conciliator then advised that the agreement would be recorded in the Commission’s standard terms of settlement and sent to the parties for signature, while the file would be closed.

1. The Conciliator sent draft terms of settlement to the parties that afternoon.[1] The following day, GJ Consulting advised that it would not be signing the terms of settlement as it did not agree to release Mr Erasmus from liability for losses it says it incurred in connection with his employment.

Is there a settlement agreement in this case?

1. The question is whether a binding settlement agreement has been reached between Mr Erasmus and A&K Lievesley Electrical & Solar.

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

1. In Masters v Cameron[3], 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’.

1. Consideration may also need to be given to the fourth category or class identified by McLelland J in Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622 at 628. Masters v Cameron has since been relied on in a number of decisions of this Commission.[4]

1. Directions were issued for the parties to file material in support of Mr Erasmus’ application to have his application heard. Mr Erasmus filed his material on 18 June 2018. GJ Consulting did not file any material in reply.

1. While there is evidence that the parties reached agreement to settle the unfair dismissal application, there is no evidence about the extent to which the parties agreed to release each other from future claims. That matter remains in dispute. On the material before me, I am not satisfied that there is a settlement agreement between the parties.

Conclusion

1. The matter will be referred for arbitration.

COMMISSIONER

<PR608962>

[1] Letter from the Commission to the parties dated 7 June 2018.

[2] (1954) 91 CLR 353 at [23]

[3] Ibid

[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

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