Mr Dante Stanuovo v Plastic Systems Plus Pty Ltd
[2011] FWA 7470
•1 NOVEMBER 2011
[2011] FWA 7470 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Dante Stanuovo
v
Plastic Systems Plus Pty Ltd
(U2011/5744)
COMMISSIONER STEEL | ADELAIDE, 1 NOVEMBER 2011 |
Termination of employment - Jurisdiction - Frivolous or vexatious.
Background
[1] This matter arises out of an application under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy by Mr Dante Stanuovo (the applicant) against his former employer Plastic Systems Plus Pty Ltd (the respondent).
[2] The respondent subsequently filed an application under s.587 of the Act for Fair Work Australia (FWA) to dismiss the application on the grounds outlined in ss.587(1)(b) and (c). They assert that the application is frivolous or vexatious and/or the application has no reasonable prospects of success.
[3] The respondent declined conciliation on these matters and the application has proceeded to hearing on the s.587 application.
[4] Pursuant to s.596 both parties were represented by counsel.
[5] Mr Follett, of counsel for the respondent, encouraged the tribunal that the matter turned on the narrow basis of whether there exists a binding deed between the parties that estopped the applicant’s s.394 claim for unfair dismissal. If such a binding deed exists further claims under s.394 should be excluded and hence this application is described as per s.587(a) and (b) above.
[6] Mr Manuel, for the applicant, encouraged the tribunal to determine the matter of the deed and its “enforceability” on the basis of fairness rather than a judgement of the common law in that the circumstances which gave rise to its making indicated a lack of regard to the obligations of an employer under the Act and were prejudicial to the applicant. Hence it should not be relied upon to dismiss the application.
The Act
[7] Section 381 of the Act provides a framework for dealing with unfair dismissals with an emphasis on the needs of the participants and procedures that are quick, flexible and informal. The tribunal must ensure a “fair go all round” is provided to the parties in determining the relevant procedures and an appropriate remedy when an unfair dismissal is identified.
[8] Section 577 sets out the guidelines as to the manner in which FWA is to perform its functions and exercise its powers:
577Performance of functions etc. by FWA
FWA must perform its functions and exercise its powers in a manner that:
(a) is fair and just; and
(b) is quick, informal and avoids unnecessary technicalities; and
(c) is open and transparent; and
(d) promotes harmonious and cooperative workplace relations.
[9] Section 578 sets out the matters that FWA must take into account in performing its functions or exercising its powers:
578 Matters FWA must take into account in performing functions etc.
In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), FWA must take into account:
(a) the objects of this Act, and any objects of the part of this Act; and
(b) equity, good conscience and the merits of the matter; and
(c) the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
[10] Section 587 deals with the conduct of matters and contains the following terms:
587 Dismissing applications
(1) Without limiting when FWA may dismiss an application, FWA 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.
(2) Despite paragraphs (1)(b) and (c), FWA must not dismiss an application under section 365 or 773 on the ground that the application:
(a) is frivolous or vexatious; or
(b) has no reasonable prospects of success.
(3) FWA may dismiss an application:
(a) on its own initiative; or
(b) on application.
Evidence
[11] The tribunal was provided with witness evidence from the respondent’s Managing Director, Mr Nigel Langridge and the applicant, Mr Stanuovo.
[12] Mr Langridge demonstrated a considered approach to his evidence. He was economical with his answers and recalled much of the detail without assistance. The tribunal found him a reliable witness given significant time had passed since the events in question.
[13] Mr Stanuovo appeared to be a methodical and careful witness. He had some issues with recall of events and his evidence was confused in relation to facts on occasion. 1
[14] Both witnesses were examined by counsel and indicated some hesitation in responses at times. However, the tribunal found them co-operative witnesses.
[15] The tribunal has had regard to all the documentation provided, the witness evidence and has considered the material with due regard to the requirements of s.578 of the Act.
The facts giving rise to the deed of release and findings
[16] The respondent company is a small plastics sales company. It is associated with a larger company in Victoria. It employs two people currently in South Australia and eleven in the Victorian associated company.
[17] Mr Langridge is the sole director of the respondent. The applicant was employed from 1 May 2006 as Area Sales Manager/Business Development Manager and reported to Mr Langridge. There is no history of disciplinary or performance issues evident. The applicant was offered and accepted a shareholding in the business in 2007 and paid $10000 for such share. He was issued with a share certificate dated 20 February 2008.
[18] Mr Langridge travelled to South Australia to meet with the applicant on 22 February 2011. The trip was ostensibly about performance appraisals of the South Australian staff, however he was at this time concerned as to the performance of the applicant and had serious reservations as to his performance. The respondent asserts such concerns date back to May 2010 and some matters concerned the various financial records provided by the applicant. Mr Langridge had discussed his concerns with his legal advisors and was forearmed with two documents.
[19] The first document was a letter headed “Proposed Arrangements for Termination of Employment”. 2 This letter was addressed to the applicant and the contents would confirm to him that the respondent had concluded he was considered to have been involved in “serious misconduct” and it was intended he be terminated in employment. It went on to say:
“Prior to implementing this decision, we wish to provide you with an opportunity to resign.” 3
[20] The letter then elaborated on various proposals for resolution between the parties in the form of an “enhanced separation package”, subject to the applicant resigning.
[21] The second document was an associated deed of release to complete the provisions of the agreement between the parties to achieve an “amicable transition”. 4 Both were prepared documents to be used subject to the outcome of the respondent’s discussions with the applicant and intended to expedite the termination decision if made. The deed document is comprehensive as to the settlement of all matters, the respondent being irrevocably and unconditionally discharged from all claims, consent to plead the deed in any proceedings, warrants that the applicant entered into the deed voluntarily and that he understood the terms of the deed and warrants that the applicant understood the respondent would rely upon the warranties given by the applicant. These documents were dated 21 February 2011, prior to the event in question.
[22] On interviewing the applicant on 22 February 2011 (the first interview), the discussion was wide ranging and referred to the performance of the South Australian staff including the applicant and the company. They also went to the various expense claims the respondent had concerns with from the applicant. The parties were in some disagreement as to these matters and the respondent asserts he formed a view that he was not happy with the applicant’s performance. He did not advise that to the applicant at that time.
[23] The respondent subsequently interviewed the other South Australian employee, Mr Hill, and in such meeting formed the view that the applicant was involved in improper conduct and poor performance and that he should be separated from the company. In preparation for a further meeting with the applicant the respondent had Mr Hill sign the deed document as a witness, although Mr Hill was not involved in the meeting that followed with the applicant.
[24] The discussion and events in that second meeting are certainly contentious between the parties. The respondent’s evidence is that he advised the applicant that it was considered his actions amounted to a breach of trust of the respondent and that the respondent believed he had grounds for termination of his employment. He provided the applicant with the two documents (Ex R1, Attachments NL-3 and NL-4) and advised the applicant “let’s review the documents and move on.” 5 The parties then discussed the documents and the included terms of resolution within the letter provided. Those terms went essentially to the applicant resigning and the nature of a separation package to be available contingent on the applicant’s resignation and the various documents be completed. The applicant signed the deed given to him and requested various changes to the wording. He was offered to take home the documents for his consideration.
[25] The applicant’s evidence is that he had no choice but to resign and sign the deed. 6 He accepts he was not told to sign the deed and that he had the opportunity to read it but did not do so.7 He accepts that he discussed the terms of the letter provided but asserts he felt he had no choice but to accept them.8 The applicant asserts he was under duress and was angry and stunned and was not aware of the effects of the deed.
[26] The tribunal finds that the applicant was not aware of his potential dismissal until advised by the respondent at that time and he was somewhat shocked at the situation he faced. 9 He was made aware that his employer wanted him to resign and in absence of that resignation he would be dismissed. He had not been dismissed and then given the opportunity to resign but the conduct of the employer was such that the applicant had no option other than to resign or he would be dismissed.10
[27] The tribunal finds that this scenario would fall within the definition of s.386(1) of the Act - “Meaning of dismissed.”
[28] The tribunal finds that discussions in this meeting covered the financial and timing details of the applicant’s separation from the company (“an enhanced separation package”). 11 The tribunal, having observed the witnesses and their testimony cannot identify that the applicant would have been under sufficient stressful circumstances to affect his consideration of reading the documents given to him, consideration of their contents and consideration of affixing his signature to them. He was provided with a copy of each document and left the premises on the understanding he had to complete various arrangements for return of property to the respondent and to remove his personal property from the premises within specific timeframes.
[29] The discussions also covered the details of the purchase of the applicant’s $1 shareholding in the respondent company for the amount of $10000 for such share, although the deed referred to the price of $1 only. 12
[30] The applicant, early the next day, returned to the business premises accompanied by several friends and family members and proceeded to retrieve various personal records and possessions. This took some time to complete.
[31] Whilst such people were removing his property, the applicant gave a handwritten letter to the respondent dated 22 February 2011 which provided for various requests. 13
[32] In this letter the applicant requested an acceptance of his resignation letter and various changes to the deed in terms of the references to the applicant “resigning” rather than “termination”, the supply of a share transfer document by the respondent to initiate the share transfer, access to computer records to retrieve personal information and to receive all money within seven days.
[33] The letter also stated:
“Sure this is a lot, at short notice, however your notice/demands upon me is equally as short. In lieu of me not given the right to exercise clauses 7(d) and 9(h), I believe fair and reasonable this request.” 14.
[34] The final paragraph states:
“I trust the above, as well as the commitment to provide a written reference by 4pm 23/2 is favourably met, without the need for further deliberation between the parties or by professions permitted by law.” 15
[35] Notably the applicant does not take issue with the deed that he has signed but seeks additional matters which go to his benefit.
[36] The respondent agreed to the applicant’s requests and the deed was subsequently changed by the respondent to reflect the changes requested by the applicant. 16 However the amended document was not specifically executed or re-signed by the parties. It was provided to the applicant later that day with a letter of acceptance of his resignation.17 The applicant was on site from 8.15 am to 9.30 am and from 1.00 pm to 3.00 pm.
[37] The tribunal identifies that the applicant had at this time further considered his situation and had provided a number of requests in regard to outstanding matters and the documentation for consideration by the respondent. The applicant was successful in that the respondent agreed to these further matters in general and indicated they would comply. The applicant and respondent have a signed deed document and an amended document reflecting the further negotiations between them.
[38] The respondent paid the applicant his moneys expeditiously within a few days.
[39] On 4 March 2011 the applicant corresponded with the respondent. 18 This letter thanked the respondent for the prompt payment of entitlements, requested a further payment of an amount for annual leave loading because the applicant had resigned and requested the settlement of the share purchase and appropriate paperwork for completion by close of business on 8 March 2011. Notably the applicant again does not take issue with the signed deed.
[40] The tribunal finds that the applicant was successful in his requests for a further benefit in that the respondent paid the requested loading to the applicant on 7 or 8 March 2011 and sent some share documentation to the applicant. 19 It is evident such share documentation is still in contention between the parties and the share transaction was still an outstanding matter at the time of the hearing. The applicant filed for unfair dismissal on 9 March 2011.
[41] The tribunal finds that in the above scenario the applicant on 23 February 2011 and 4 March 2011 was successful in negotiating various changes and additional matters to the arrangements formerly to prevail within the signed deed of release documentation. Those changes, putting aside the share transfer issue, which is not resolved and is potentially for another jurisdiction, generally provided a benefit to the applicant and some were considered on 23 February by him as “fair and reasonable.”
[42] The applicant never made further representations to the respondent after 23 February as to not wanting to be bound by the deed at anytime despite having the availability of legal advice and in face of his success in achieving outcomes with the respondent. 20
[43] Having had the benefit of legal advice on 4 March 2011, the applicant’s letter of that date is directed at securing a further benefit at that time and to resolve the share issue. 21 The applicant at that time must have understood the nature of a deed of release yet still endeavoured to procure a further issue to benefit himself.22 He sought a response compliance by 8 March 2011. Notably at that time he did not take issue with the deed.
Considerations
[44] Mr Manual submitted that in this matter the evidence of the applicant should be preferred as the respondent’s witness evidence was of an insufficient standard due to flaws in his statement and that the respondent’s intent was always to sack the applicant.
[45] In respect to the deed, Mr Manual asserts that the deed is flawed and should not be relied upon. It has changed three times and does not reflect the agreement of the parties. Further, the issue of the sale of the share within the deed is grossly unfair and does not reflect the true situation between the parties.
[46] In support Mr Manual referred to the decision of a full-bench of this tribunal in the matter of Gorman v Australia Post. 23 In this decision the references suggest that consideration of the merits of the applicant’s case must be considered as to a finding of “frivolous or vexatious” to be applied and that the applicant has an arguable case. Further, that FWA is an equity and good conscience jurisdiction and the applicant should be allowed to proceed to trial and not have his claim dismissed.
[47] Mt Follett articulated that the focus of the tribunal should be a determination as to whether there is a binding and enforceable deed between the parties. If one is identified I am encouraged that this all the decision making required to dismiss the application.
Did the parties form a binding deed?
[48] Giving regard to the above facts and findings the tribunal finds that the parties formed an agreement and signed a deed of release. They then agreed to further changes which they intended to apply to their agreement. Those further arrangements were recorded between them and some of them were completed. In any effect, the tribunal considers they do not disturb, replace or negate the deed signed by them on 22 February 2011. The tribunal finds the evidence does not provide a basis to question the signed deed is not binding on the parties.
[49] Both parties referred the tribunal to various case law decisions and the tribunal has had due regard to those references.
[50] Having done so the tribunal has concluded that this matter is assisted by the decision of Besanko J in the matter of Australian Postal Corporation v Gorman and Fair Work Australia. 24
[51] In that decision the learned justice provided that an accord and satisfaction which he took to be a lesser indication of agreement than a signed deed could be raised in a preliminary point such as a s.587(b) application.
“There is nothing in the Act which suggests that an accord and satisfaction should not be recognised. At a general level the object of Chapter 3 Part 3-2 and the general statements of the manner in which FWA is to perform its functions and the matters to which it is to have regard are consistent with the recognition of an accord and satisfaction. Furthermore, the words of subsection 587(1) are wide enough to include the recognition of an accord and satisfaction. As I have said, a valid and effective accord and satisfaction extinguishes the pre-existing cause of action and continued pursuit of an application based on such cause of action is clearly capable of being considered to be frivolous or vexatious or without reasonable prospects of success.” 25
[52] His honour’s decision further reinforces a decision of a full-bench of the Australian Industrial Relations Commission in the matter of Zoiti-Licastro v Australian Taxation Office. 26 The decision endorsed the conclusion that the Act provided the power to the Commission to dismiss an application on a summary basis on the ground that there was a “binding settlement agreement.”
[53] The “binding settlement agreement” referred to in the learned justice’s decision was a reference to circumstances described by O’Callaghan SDP in Gorman v Australia Post (the case at first instance). 27 The settlement was not in writing but was the subject of evidence of intent and action by witnesses. The learned Senior Deputy President described the agreement in his decision as an “enforceable contract”.
[54] The learned justice concluded on this:
“In his reasons the Senior Deputy President drew a distinction between finding that there was a binding settlement agreement and a finding that ‘there had been an enforceable contract’. It is not entirely clear what he meant by that but I take him to mean that any action to enforce the contract may need to be taken in another jurisdiction and that is almost certainly so. However, that circumstance is not a reason to conclude that FWA cannot recognise a binding settlement agreement. It might mean that in a particular case FWA will adapt its remedies, that is, a temporary stay rather than a dismissal, to meet the particular circumstances.” 28
[55] The tribunal therefore determines that there is a binding deed identified between the parties and there is a binding settlement agreement. The tribunal therefore finds that the application under s.587 is a valid application as to the claim that such a binding deed is sufficient grounds for dismissal of the application under s.587 (1)(b) and (c). The tribunal does so with regard to those sections and the general power under s 587(3).
Decision
[56] For the above reasons the respondent’s application is upheld and the application for unfair dismissal remedy by Mr Stanuovo is dismissed.
COMMISSIONER
Appearances:
Mr R Manuel for the applicant
Mr M Follett for the respondent
Hearing details:
Adelaide
2011:
August 1
1 PN 318-319, 338, 352
2 Exhibit R1, Attachment NL-3
3 Exhibit R1, Attachment NL-3
4 Exhibit R1, Attachment NL-4
5 Exhibit R1, pp 6-7
6 PN 319
7 PN 337
8 PN 401
9 PN 191
10 PN 201
11 PN 324
12 PN 237
13 Exhibit R1, Attachment NL-5
14 Exhibit R1, Attachment NL-5
15 Exhibit R1, Attachment NL-5
16 Exhibit R1, Attachment NL-7
17 Exhibit R1, Attachment NL-6
18 Exhibit R1, Attachment NL-8
19 PN 387
20 PN 436
21 PN 485
22 PN 449-450
23 [2010] FWAFB 9413
24 [2011] FCA 975
25 Ibid at para 33
26 (2006) 154 IR 1
27 [2010] FWA 7423
28 [2011] FCA 975 at para 35
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