Mitchell Donegan v Good Games Pty Limited
[2022] FWC 2474
•16 SEPTEMBER 2022
| [2022] FWC 2474 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Mitchell Donegan
v
Good Games Pty Limited
(C2022/3104)
| DEPUTY PRESIDENT MILLHOUSE | MELBOURNE, 16 SEPTEMBER 2022 |
Application to deal with contraventions involving dismissal – whether binding settlement agreement reached at conciliation – request to reopen.
This decision concerns an application by Mr Mitchell Donegan to reopen his general protections application, which was made pursuant to s 365 of the Fair Work Act 2009 (Cth) (Act).
The Commission’s file was closed on the basis that a binding settlement had been reached during a conciliation conference. Mr Donegan’s application is, in effect, a request to evaluate whether that settlement was effective.
Contentions
On 29 June 2022, a conciliation conference was conducted before the Commission. Upon the agreement of the parties, two matters were jointly conciliated at the conference. The basis for doing so was that the respondent was the same employer in both matters. Mr Donegan, the respondent and the other applicant were in attendance, and the conference proceeded by telephone.
It is not in dispute that the respondent made an offer in the same substantive terms to both Mr Donegan and the other applicant to settle the respective disputes.
The respondent contends that a settlement was reached with Mr Donegan, but that the other applicant was provided until close of business 4 July 2022 to consider the offer. The respondent was represented at the conference by its Managing Director, Mr Paul Van Der Werk and its lawyer, Ms Aileen Challinor. The respondent submits that it was clear to both Mr Van Der Werk and Ms Challinor that an agreement had been reached with respect to Mr Donegan at the conciliation. It contends that Mr Donegan is experiencing “buyer’s regret” and wants to back out of the deal.
Mr Donegan contends that he was told by the conciliator that he had until close of business on 4 July 2022 to either accept or reject the respondent’s offer, and that this deadline was provided so that he and the other applicant could seek legal advice. It is not in dispute that Mr Donegan returned to the Commission on 4 July 2022 rejecting the offer put by the respondent at the conference. Mr Donegan contemplates a potential misunderstanding or miscommunication as the basis for the Commission considering that his application was settled.
Consideration
It is uncontroversial to observe that a binding settlement agreement has the capacity to extinguish a person’s statutory right or rights in the Commission in exchange for a contractual right exercisable in another institution.[1] While the Commission is not a court, it has, as a matter of fact in the exercise of its jurisdiction under the Act, regularly recognised the existence of a binding settlement agreement as a basis upon which to consider a matter as finalised.[2] The issues which may arise in this respect concern whether a binding settlement agreement was reached at all, and whether the terms of that binding settlement agreement are sufficient for the Commission to consider the statutory right which gave rise to the application as extinguished. In this matter, it is necessary to only consider the former issue.
The Full Bench of the Commission Singh v Sydney Trains,[3] in summarising the law with respect to settlements in negotiations, said as follows:[4]
“[53] If parties who have been in negotiations reach agreement on terms of a contractual nature and also agree that those terms will be dealt with by subsequent formal documentation, there are several categories into which such negotiations fall. First, the parties reach finality, intend to be immediately bound, and propose restatement of the terms of settlement in a fuller or more precise form but not different in effect. Secondly, the parties have completely agreed all terms but performance of one or more terms is conditional on execution of a formal document. Thirdly, the parties did not intend to make a concluded bargain at all, unless and until they execute a formal contract. Fourthly, the parties intended to be bound immediately and exclusively by agreed terms while expecting to make a further contract in substitution containing, by concept, additional terms.
[54] When parties do reach an agreement of the first or fourth category referred to in Masters v Cameron and Baulkham Hills, they will be bound by the terms of their bargain, notwithstanding a later disagreement between the parties about the terms to be included in a deed or written agreement between them.”
(citations omitted)
It is not necessary to consider in any detail the particular categories identified in Singh as I am not satisfied on the evidence before me that there was any intention on the part of Mr Donegan to enter into a binding settlement agreement.
The respondent’s understanding is that during the conciliation conference, Mr Donegan was more open to the possibility of a settlement than the other applicant in attendance. Mr Donegan accepts the respondent’s position in this respect and submits that this was due to the advice received in conference. However, Mr Donegan considers that neither himself nor the other applicant committed to settlement at conference.
Ms Challinor gave the following evidence as to the position advanced by the respondent during the conciliation:[5]
“During the conciliation [the conciliator] said words to the effect of “Mitchell will settle today for $750 with a carve out for the underpayments and with a statement of service to be provided, but [other applicant] is still thinking about it.” I said words to the effect of “Why don’t we give [other applicant] until close of business Monday to accept the current offer.
The conciliator confirmed to the Respondent that he had communicated that position to the Applicants and that we would proceed with settling the matter today with Mr Donegan using the Fair Work Commission’s standard form Terms of Settlement. I asked [the conciliator] if we needed to draft the carve out for the alleged underpayments and [the conciliator] confirmed that the standard form already had an option to include a carve out so additional drafting was not required.”
The evidence of Mr Van Der Werk is in substantially the same terms.[6]
In support of the respondent’s position, the Commission has before it letters sent by the conciliator to both Mr Donegan and the other applicant following the conclusion of the conciliation on 29 June 2022. The letter to Mr Donegan is, relevantly, as follows:
Thank you for your involvement in the conciliation conference for this case. I confirm that the matter has settled with the substantive elements of the agreement being:
· payment of a gross amount of $750.00 taxed according to applicable law
· provision of a silent statement of service, and
· a carve out regarding entitlements.
A draft agreement reflecting the agreed terms and containing the standard terms for such agreements is attached.
The letter to the other applicant is, relevantly, as follows:
Thank you for your involvement in the conciliation conference for this case. I confirm that the Respondent has offered to settle the with the substantive elements of the agreement being:
· payment of a gross amount of $750.00 taxed according to applicable law
· provision of a silent statement of service, and
· a carve out regarding entitlements.
A draft agreement reflecting the agreed terms and containing the standard terms for such agreements is attached.
The parties have agreed to allow the Applicant until close of business Monday 4 July 2022 to consider the proposal made during conciliation.
If the Applicant decides they do not want to go ahead with the agreement, they must notify me before the date expiry of the consideration period.
If the Applicant decides they do agree with to the terms provided, they must sign the terms attached and send a copy to the Respondent.
(emphasis omitted)
It may be inferred from this correspondence that the conciliator was of the view that, different to the other applicant, Mr Donegan had reached a binding settlement agreement. This is consistent with the position advanced by the respondent, including with its post-conference conduct as it related to Mr Donegan whereby it returned a signed copy of the terms of settlement to the Commission on 4 July 2022.[7] While the letter is significant in establishing whether an agreement was reached at the conference, it is a reflection of the Commission’s understanding of Mr Donegan’s intention at the conference.
While I consider that a letter of the kind sent by the Commission to Mr Donegan would in usual circumstances be sufficient to demonstrate that a binding settlement agreement has been reached, there are unique factors in this application which establish that there has been no binding settlement.
It is not in dispute that the respondent’s offer was put to Mr Donegan in private conference with the other applicant, such that the respondent was not a party to the conversation. The only person who gave evidence in the proceeding who was privy to that conversation is Mr Donegan, whom I found to be a credible witness. Mr Donegan firmly holds the view that there was no difference in the outcome reached at the conference between himself and the other applicant.
The offers put to Mr Donegan and the other applicant were in substantively identical terms with the only purported difference being a condition which allowed the other applicant a period until 4 July 2022 to consider the offer. The evidence suggests that the conciliator put the condition to the other applicant with Mr Donegan present over a joint telephone conference, such that Mr Donegan was in a position to hear the words of the conciliator but could not read any body language. I consider that Mr Donegan genuinely held the belief that the same condition was applicable to his application, such that he had not entered into a binding settlement at the conference. This has arisen on account of a misunderstanding between Mr Donegan and the conciliator in the circumstances of a joint conference.
In support of this position, Mr Donegan relies upon his post-conference conduct which he says is demonstrative of his genuinely held position during the conciliation.
Mr Donegan submits that on 1 July 2022 he met with a legal representative to discuss the respondent’s offer. Mr Donegan said that he held this meeting on the understanding that the respondent’s offer remained open following the conference. Mr Donegan’s position is that he was advised that the offer should be declined. Accordingly, on 4 July 2022 being the date that Mr Donegan understood the offer would lapse, Mr Donegan advised the Commission that “I won’t be going ahead with the settlement…”
When asked whether he sought legal advice from the same lawyer as the other applicant, Mr Donegan responded that he did not know. I consider this supports a finding that Mr Donegan was acting independently of the other applicant.
Further, when asked for his response to the 29 June 2022 correspondence from the Commission which referred to the settlement of his application at the conference, Mr Donegan said that he did not read the correspondence. Nor did he provide a copy of it to his legal representative at the post-conference meeting that Mr Donegan attended on 1 July 2022. Mr Donegan submits that he became aware of the 29 June 2022 correspondence in preparation for the hearing convened for purposes of this decision. Mr Donegan explains that there was a large volume of correspondence from the Commission at the time, he was under a lot of stress, and he was firmly of the view that he had until close of business 4 July 2022 to consider the offer. I accept that Mr Donegan did not read this correspondence. While it is unreasonable for a party to not read correspondence from the Commission when they have sought a remedy in it, the unreasonableness is not determinative insofar as it relates to post-conference conduct indicating intention.
Given the short timeframe between the conference on 29 June 2022, Mr Donegan’s meeting with a legal representative on 1 July 2022 and the email to the Commission on 4 July 2022, I do not consider that Mr Donegan was trying to “back out” of any settlement agreement, as contended. Rather, I find that Mr Donegan was taking steps so as to make an informed decision so that he could respond to the offer which he understood to have remained open until 4 July 2022.
In determining whether a binding settlement agreement has been reached, it is necessary to identify Mr Donegan’s intention, not that of the Commission. I accept on the material before the Commission that the respondent conveyed its preferred position to the conciliator. The respondent subsequently proceeded on the understanding that Mr Donegan had accepted its settlement offer. However, I do not consider that the evidence establishes an intention for Mr Donegan to be bound by the settlement having regard to the following:
(a) the circumstances of the joint conciliation conference, whereby identical offers were put to Mr Donegan and another applicant over the telephone, raises the possibility for confusion to have arisen;
(b) Mr Donegan was the only person who gave evidence at the hearing who was privy to the conversation whereby it is suggested he agreed to the respondent’s offer, and I have accepted his evidence as credible; and
(c) Mr Donegan’s post-conference conduct is entirely consistent with an understanding that the respondent’s offer remained open for acceptance until 4 July 2022 and reflects the steps a person would take to inform themselves of whether to accept an offer.
Accordingly, I find that Mr Donegan did not intend to be bound by the settlement offer put to him at the conciliation conference on 29 June 2022.
Conclusion and disposition
Having regard to my findings, and the conclusion reached, I am satisfied that Mr Donegan did not enter into a binding settlement agreement with the respondent during the conciliation conference on 29 June 2022.
I therefore order as follows:
(a) The Commission’s file in respect of Mr Donegan’s s 365 general protections application (C2022/3104) will be reopened.
(b) My Chambers will correspond with the parties as to next steps.
DEPUTY PRESIDENT
Appearances:
Mr M Donegan on his own behalf
Ms A Challinor on behalf of the respondent
Hearing details:
9 August 2022, by Microsoft Teams
[1] Australian Postal Corporation v Gorman [2001] FCA 975
[2] See, eg, Kelly Thomas v Western Scaffold Pty Ltd[2020] FWC 2051; Paul Passehl v Link SA Pty Ltd[2015] FWC 2001; Caren Loxton v ADP Employer Services[2020] FWC 2341
[3] [2017] FWCFB 4562
[4] Singh v Sydney Trains[2017] FWCFB 4562 at [53]-[54] citing Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353 at CLR, 360; Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622
[5] Witness Statement A Challinor at [8]-[9]
[6] Witness Statement P Van Der Werk at [8]-[9]
[7] Witness Statement A Challinor at [11]; Witness Statement P Van Der Werk at [11]
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