John Salisbury v Sigmatek Pty Ltd

[2020] FWC 2

[2020] FWC 2

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

John Salisbury
v
Sigmatek Pty Ltd
(U2019/11529)

COMMISSIONER BISSETT MELBOURNE, 3 JANUARY 2020

Application for an unfair dismissal remedy.

[1] Mr John Salisbury has made an application seeking relief from termination of his employment pursuant to s.394 of the Fair Work Act 2009 (FW Act). Mr Salisbury was employed by Sigmatek Pty Ltd (Sigmatek) for over 20 years most recently, as Director/Regional Sales Manager.

[2] Mr Salisbury was made redundant but says that the dismissal was unfair as other employees of the company are performing the duties he once did.

[3] At the time of the termination of his employment Mr Salisbury signed a Deed of Release (Deed) with Sigmatek. Sigmatek says that the Deed acts as a bar to any further proceedings in relation to Mr Salisbury’s employment including this application for relief from unfair dismissal. It has therefore applied to the Commission to dismiss Mr Salisbury’s application pursuant to s.587 of the FW Act on the grounds either that it is frivolous and vexatious or that it has no reasonable prospects of success.

[4] Section 587 of the FW Act states:

587 Dismissing applications

(1) Without limiting when the FWC may dismiss an application, the FWC may dismiss an application if:

(a) the application is not made in accordance with this Act; or

(b) the application is frivolous or vexatious; or

(c) the application has no reasonable prospects of success.

[5] A hearing with respect to the jurisdictional objection was held by telephone on Monday 23 December 2019.

[6] Being satisfied that the requirements of s.596(2)(a) of the FW Act were met, I granted permission to Sigmatek to be represented by a lawyer in proceedings. Mr Salisbury represented himself.

Evidence and submissions

[7] Ms Helen Durham is the Global Compliance and HR Manager for Sigmatek. She provided a witness statement 1 and gave evidence in proceedings. Her evidence can be summarised as follows:

•  In July 2019 the Sigmatek Group reached a decision to reduce its workforce of about 300 employees globally;

•  In Australia this led to the decision that the job performed by Mr Salisbury was no longer required with Australian sales team members instead reporting to the relevant Director in Asia. A similar decision was reached with respect to a position in the Korean operations;

•  As part of the restructure it was decided all employees made redundant would be offered an additional payment in addition to their statutory entitlements. An employee not taking up the offer of the additional payment or willing to sign a deed would receive their statutory entitlements;

•  Implementation of the restructure commenced on 19 September 2019 (Cincinnati time). A meeting was arranged with Mr Salisbury that day (20 September 2019 AEST). The meeting was attended by Mr Salisbury, Ms Durham and Mr Robbie Payne, CEO of Sigmatek. The meeting went for 25-30 minutes;

•  During the meeting the decision to restructure and the loss of Mr Salisbury’s job was explained. A draft Deed had been emailed to Mr Salisbury prior to the meeting. Mr Payne explained to Mr Salisbury that Sigmatek was ‘committed to fulfilling all of the expectations under Australian law…’. Ms Durham indicated she would like to go over the document with Mr Salisbury and that any questions he had could be discussed at a further meeting scheduled the following week;

•  Mr Salisbury was not told of any time period within which he was required to sign the Deed, was told he did not need to do ‘anything right away’, advised of the meeting the following week and told he should review the Deed over the weekend and raise any questions at the next meeting;

•  Immediately following the meeting Ms Durham received a meeting invite from Mr Payne to herself and Mr Salisbury for 24 September 2019 (AEST), a meeting Mr Salisbury did not attend;

•  On 20 September 2019 Mr Salisbury sent an email to Ms Durham requesting a letter of reference and indicating he would sign the Deed;

•  The signed Deed was returned by Mr Salisbury on 23 September 2019 (Cincinnati time). This was signed for Sigmatek and the fully executed Deed returned to Mr Salisbury; and

•  Mr Salisbury ‘was co-operative, sensible and coherent’ throughout the process, did not appear or express confusion and never raised questions although afforded the opportunity to do so.

[8] Sigmatek provided detailed written submission in accordance with the directions of the Commission which I have had regard to. It states that there is no allegation or evidence, and the Commission can accept, that it did not engage in fraud, Mr Salisbury was not subject to undue influence and that his judgement was not impaired. Further, there is no evidence that Sigmatek suggested to Mr Salisbury that his statutory entitlements would not be paid if he did not sign the Deed.

[9] Sigmatek said that no pressure was exerted on Mr Salisbury to sign the Deed and he entered into the Deed of his own free will. Further, Sigmatek said that Mr Salisbury had adequate time to seek legal advice, was told he did not need to sign the Deed straight away and a second meeting was arranged with him.

[10] Sigmatek submitted that Mr Salisbury has done no more than make generalised assertions with no direct evidence and this is not enough to support his claim of duress.

[11] Sigmatek said that the Deed is a binding legal agreement freely entered into by Mr Salisbury. The Commission has no power to set aside a Deed and no application to do so has been made. The Deed, by its terms, operates as a bar to further proceedings in the Commission.

[12] The Commission has the power under s.587 of the FW Act to dismiss an application that has no reasonable prospects of success. Sigmatek submitted that the existence of the Deed and its content, in particular clause 3 (the release clause), suggests that the application for relief from unfair dismissal cannot succeed.

[13] Mr Salisbury gave evidence on his own behalf. His evidence is that:

•  He did sign the Deed but under duress;

•  No-one ever explained the terms of the Deed to him but he did not seek any further meeting with anyone from Sigmatek to discuss the Deed although he knew this was available to him;

•  He knew he had at least 10 days before he was required to sign the Deed (having been advised of the redundancy and offered the Deed on 20 September 2019, he was due to depart from Sigmatek on 30 September 2019) and he was not given any particular day by which the Deed had to be returned;

•  He believed he had to sign the Deed to access the money specified in the Deed from his accrued leave and entitlements to enable him to pay his mortgage and upcoming bills. No-one told him he would receive his leave and accrued benefits if he did not sign the Deed;

•  He did not seek advice as to the content of the Deed because he did not think nine days would be long enough to do so;

•  He did not ask any questions of Sigmatek about the content of the Deed; and

•  He did not receive the documents referred to in the email of Ms Durham dated 23 September 2019 2 although he did sign the resignation as a director document3 attached to the mail and he did attach the executed Deed and Letter of reference which were also attached to that email to his application for relief from unfair dismissal filed on 15 October 2019.

[14] Mr Salisbury submitted that his redundancy was unfair.

[15] Mr Salisbury said he was coerced into signing the Deed and/or he signed the Deed under duress as Sigmatek listed his accrued leave and benefits in the agreed terms of the Deed making it apparent that the only way to access these was by signing the Deed.

Consideration

[16] In Zoiti-Licastro v Australian Taxation Office 4 it was held that the AIRC had power to dismiss an application for relief from unfair dismissal on the grounds that there was a binding settlement between the parties. Whilst that decision was made in relation to earlier legislation there is no reason to find that the reasoning does not continue to apply under the FW Act.

[17] In this case Mr Salisbury says that the Deed was not properly made as he was put under duress to sign it.

[18] In Thomas v Logica Pty Ltd 5 SDP Kaufman said:

[35] The leading case on duress is Crescendo Management Pty Ltd v Westpac Banking Corporation. 6 In the judgment of McHugh JA, as he then was, at page 46 appears an exposition of what constitutes duress, an exposition that has been consistently adopted and applied since his Honour's reasons were delivered. His Honour said:

...The proper approach in my opinion is to ask whether any applied pressure induced the victim to enter into the contract and then ask whether that pressure went beyond what the law is prepared to countenance as legitimate? Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct. But the categories are not closed. Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, will not necessarily constitute economic duress.

In their dissenting advice in Barton v Armstrong [1973] 2 NSWLR 59; [1976] AC 104, Lord Wilberforce and Lord Simon of Glazedale pointed out (at 634; 121):

"...in life, including the life of commerce and finance, many acts are done under pressure, sometimes overwhelming pressure, so that one can say that the actor had no choice but to act. Absence of choice in this sense does not negate consent in law: for this the pressure must be one of a kind which the law does not regard as illegitimate. Thus, out of the various means by which consent may be obtained - advice, persuasion, influence, inducement, representation, commercial pressure - the law has come to select some which it will not accept as a reason for voluntary action: fraud, abuse of relation of confidence, undue influence, duress or coercion."

[19] If duress or coercion cannot be identified in relation to the signing of the Deed by Mr Salisbury it is difficult to see how the Deed could be put aside or not considered binding by the Commission such that the unfair dismissal application should proceed. 7

[20] Mr Salisbury does not suggest fraud, undue influence or coercion in the making of the Deed. Rather he relies on duress.

[21] There are three essential elements to the consideration of duress as set out above in the context of the matter before me:

1. Did Sigmatek put physical, economic of psychological pressure on Mr Salisbury in order to have Mr Salisbury sign the Deed?

2. Did that pressure cause Mr Salisbury to sign the Deed?

3. Did Mr Salisbury have no reasonable alternative but to sign the Deed?

[22] There is no dispute in the case presently before me that Mr Salisbury was given the Deed at the time of the meeting he attended on 20 September 2019 when he was advised that his employment was to be terminated by reason of redundancy. While the notice of redundancy may be seen as some form of psychological pressure Mr Salisbury was to be made redundant in any case, whether he signed the Deed or not. The notification of redundancy to this extent was not a form of pressure placed on Mr Salisbury designed to make him act in some way.

[23] Mr Salisbury said that economic pressure was placed on him to sign the Deed – that is, if he did not sign the Deed he would be denied his accrued entitlements.

[24] There is no evidence to suggest that Mr Salisbury was told, or that it was intimated, that a failure to sign the Deed would result in him not receiving entitlements due to him on the termination of his employment (redundancy pay, accrued leave). Mr Salisbury does not suggest that this was put to him in the meeting of 20 September 2019 and Ms Durham does not give evidence that this was the case. Rather, as Mr Salisbury said, this is what he thought would happen as he was not told he would receive his entitlements even if he did not sign the Deed. Mr Salisbury said that this pressure did cause him to sign the Deed. Why Mr Salisbury believed this is not clear. In this regard I accept the evidence of Ms Durham that Mr Salisbury was not told he had to sign the Deed or that he would be denied any statutory entitlements if he did not sign the Deed.

[25] Mr Salisbury agreed that he had (at least) nine or ten days in which to consider the Deed. To the extent that his employment was to be terminated on 30 September 2019 it was generally understandable as to why Mr Salisbury thought that he would be required to return the signed Deed within that timeframe although I do accept that Sigmatek put no timeframe with which the Deed was required to be returned.

[26] Mr Salisbury received a copy of the Deed on 20 September 2019 prior to the meeting with Ms Durham. As she said in her email to Mr Salisbury ‘Attached is the document for us to discuss.’ 8

[27] Ms Durham’s uncontested evidence is that, after being advised of his redundancy she said to Mr Salisbury:

“John, we are committed to making this process as positive as possible. I am going to go over the document that I have just sent to you and the timeline for the next steps. It is not necessary for you to follow everything that I am going to explain to you because everything is laid out in the document and we can discuss any questions that you have in our next conversation that we’ve scheduled for Monday evening our time and Tuesday morning on the 24 September your time.” 9

[emphasis added]

[28] That same day, presumably following the meeting, Mr Salisbury emailed Ms Durham and said he ‘will sign the redundancy letter, I’m taking it tomorrow to a notary.’ 10 On 23 September 2019 Mr Salisbury emailed the Deed signed by him back to Ms Durham attached to an email which read ‘Hi Helen, Signed redundancy form attached.’11

[29] Mr Salisbury chose not to seek any advice on the Deed prior to signing it. Whilst he said he did not think he would have enough time to get advice he took no steps to determine if he could get advice within the timeframe he assumed existed. Further, it was apparent from Ms Durham’s comments in the meeting that Sigmatek was prepared to discuss the content of the Deed with Mr Salisbury at the meeting planned for the following Tuesday. Mr Salisbury chose not to wait for that meeting or seek any other meeting with Sigmatek before signing the Deed and returning it to Sigmatek.

[30] Mr Salisbury had a number of reasonable alternatives to him even within the timetable he believed existed (that is, until 30 September 2019). He could have undertaken some research of his own to determine if he was entitled to his accrued entitlements if he did not sign the Deed (he could, for example have contacted the Fair Work Ombudsman or looked at its website), he could have sought legal advice as to the content of the Deed or he could have raised his concerns and/or clarified alternatives with Sigmatek. There were alternatives available to him but Mr Salisbury chose not to explore any of them. Rather, he chose to act on assumptions that had no foundation in fact.

[31] Mr Salisbury was under no undue pressure to sign the Deed on the day that he did. He said that he had to sign the Deed to get his entitlements so he could pay his mortgage and bills. Mr Salisbury’s employment was not to be terminated until 30 September 2019. He advised the Commission, in response to a question from the Bench, that he was paid monthly around the first of the month so he would, in any event at least have received his normal pay around the time of his redundancy. Further, he said that he still had the money paid to him under the Deed (less tax) in his bank account. None of this suggests that he needed the accrued entitlements so desperately he was forced to sign the Deed when he did.

[32] For these reasons I cannot find that Mr Salisbury was placed under duress to sign the Deed.

[33] Under the terms of the Deed Mr Salisbury received an additional 12 weeks’ pay and an additional 42 days of leave claimed by Mr Salisbury that Sigmatek did not believe he was entitled to. This amounted to an additional payment of about 20 weeks’ pay that he was not otherwise entitled to. This was in addition to his accrued entitlement and statutory redundancy entitlement. Mr Salisbury had real choices he could exercise prior to signing the Deed and accepting the payment. He chose not to exercise these but rather to sign the Deed.

[34] Even if I formed the view that the Deed had been signed under duress it is not apparent that the Commission could, in any event, remedy that situation to enable Mr Salisbury’s claim for unfair dismissal proceed. An application to set aside a Deed is not a matter to be entertained by the Commission. This is not a matter where the mere existence of an agreement to settle a matter is in dispute. The existence and the terms of the Deed are clear. The Deed has been signed and is legally binding on the parties to it until such time as it is set aside.

[35] Mr Salisbury believes that his redundancy was not a genuine redundancy, it seems because he believed a ‘last on first off’ principle should apply and that his work is still being done by others. Whilst I do not intend to consider these matters I would observe that whether a dismissal is a genuine redundancy does not go to the process of selection for redundancy and that, in a restructure, the enquiry is not whether the duties have survived but whether the job has. On its face it would appear, on these bases, that Mr Salisbury was not unfairly dismissed. I stress however, that this is my observation made on the basis of the limited material before me. This observation is not material to my decision as to duress.

[36] Given my finding that there was no duress applied to Mr Salisbury to sign the Deed and that the existence of the Deed, and by its terms, 12 acts as a bar to the unfair dismissal matter proceeding, I am therefore not satisfied that Mr Salisbury’s application for unfair dismissal has a reasonable prospect of success.13 For this reason I have decided to dismiss Mr Salisbury’s application under s.587(1)(c) of the FW Act.

[37] An order 14 to this effect will be issued with this decision.

COMMISSIONER

Appearances:

J Salisbury on his own behalf.

H Eager (Minter Ellison)for the Respondent.

Hearing details:

2019.

Melbourne by telephone.

December 23.

Printed by authority of the Commonwealth Government Printer

<PR715662>

 1   Exhibit R1.

 2   Exhibit R1, attachment HD-5.

 3   Exhibit R1, attachment HD-10.

 4 (2006) 154 IR 1.

 5   [2003] AIRC 694; (20 June 2003).

 6 (1988) 19 NSWLR 40.

 7   Putting aside the question of whether the Commission actually has power to set aside a Deed as described in this matter.

 8   Exhibit R1, attachment HD-1.

 9   Exhibit R1.

 10   Exhibit R1, attachment HD-2.

 11   Exhibit R1, attachment HD-4.

 12   Clause 3 of the Deed states that the Employee (Mr Salisbury) releases the Beneficiaries (Sigmatek and their related bodies, current and former officers, directors, employees and agents) from all present and future claims relating to the employment … the termination of the employment … and agrees that the Beneficiaries may please this deed as a bar to any such claims.

 13   See Australian Postal Corporation v Gorman [2011] FCA 975 (25 August 2011) at paras 31‒33.

 14   PR715597.