Nina Sky v She Designs Events

[2020] FWC 5608

[2020] FWC 5608

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Nina Sky
v
She Designs Events
(U2020/4138)

DEPUTY PRESIDENT MANSINI MELBOURNE, 2 DECEMBER 2020

Application for an unfair dismissal remedy – request to reopen application.

[1] Ms Nina Sky (Applicant) has applied for an unfair dismissal remedy pursuant to s 394 of the Fair Work Act 2009 (Cth) (Act).

[2] I have determined to dismiss the application pursuant to s 587(1)(c), on account of there being a binding settlement agreement which extinguishes the original claim such that it has no reasonable prospects of success. The reasons for this decision follow.

Context

[3] The relevant factual context is summarised below and is not contentious.

[4] The originating application was filed on 3 April 2020.

[5] On 19 May 2020, the matter proceeded to conciliation before a staff member of the Commission by consent of the parties. The Commission’s records indicate that the application was settled by agreement of the parties on 19 May 2020 and that there was agreement to waive any cooling off period that might otherwise have applied. The terms of settlement were recorded by the conciliator and emailed to the parties that same day. Accordingly, the Commission’s file was closed.

[6] The Applicant and the Respondent subsequently signed the terms of settlement document, on 21 May 2020 and 1 June 2020, respectively. Relevantly, the terms of settlement included the following terms of the agreement:

“[…]

The Respondent will pay to the Applicant the amount of $6,500.00 gross, taxed as applicable, in addition to any other monies previously paid to the Applicant by the Respondent.

On the Applicant and the Respondent signing these terms of settlement the dollar amount specified in these terms of settlement will be paid by the Respondent in two equal instalments occurring by 31 May 2020 and 30 June 2020.

[…]”

[7] The Applicant was provided with a payslip which reflected a payment date of 29 May 2020 in the amount of $6,500.00 gross and $3,311.00 net. No further payments were made.

[8] On 25 September 2020, the Applicant emailed the Commission to request that her application be reopened due to alleged non-compliance of She Designs Events (Respondent) with the terms of the settlement. The email said:

•  During FWC mediated conciliation, my representation & She Designs reached a settlement amount ($6500) to be paid in 2 installments.

•  The dates for payment and amount were set as actionable items in the contract that both parties signed.

•  She designs met the requirements for the first payment ($3311) however they have refused to pay the remaining balance of $2357 (after taxes).

•  I have sent them formal requests via email twice and they are continuing to disregard the agreement. [sic]

[9] In her email, the Applicant confirmed that her former representative was no longer instructed to act on her behalf (by reason of cost) and also attached the following documents:

•  the letter from the Commission, confirming that the parties reached an agreement at the conciliation conference, dated 19 May 2020; and

•  the terms of settlement, as drafted by the Commission and provided to the parties on 19 May 2020.

[10] On 1 October 2020, the Commission received further email correspondence from the Applicant confirming her request to reopen her application.

[11] The matter was subsequently referred to me for determination. Directions were issued inviting the parties to file submissions and evidence as to whether a binding settlement agreement was reached and whether the application should or should not be dismissed on the basis that it has no reasonable prospects of success.

[12] The parties respectively filed materials regarding the question of whether a binding settlement agreement had been reached and both requested the matter be determined on the papers. Taking into account the views of the parties, I considered it appropriate to proceed in that manner.

The respective contentions

[13] In her materials, the Applicant did not dispute that a binding settlement agreement was reached on 19 May 2020, as recorded in the terms of settlement distributed on same date. The Applicant contended that she has only been paid the first instalment of the settlement sum. The Applicant provided the following documents to the Commission:

•  A copy of the signed terms of settlement, signed by the Applicant on 21 May 2020 and by the Respondent on 1 June 2020;

•  A copy of the 29 May 2020 payslip; and

•  An exchange of email correspondence between the Applicant and Respondent or its agent(s).

[14] In its materials, the Respondent stated: “Both parties signed the agreement after settling the dispute at the FWC.” The Respondent further outlined its view that it had complied with the terms of settlement and there are no reasonable grounds for the matter to reopened. The Respondent also provided the Commission with a copy of the signed terms of settlement and the 29 May 2020 payslip.

Consideration

[15] Section 587 of the Act provides as follows:

“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.

Note: For another power of the FWC to dismiss an application for a remedy for unfair dismissal made under Division 5 of Part 3 2, see section 399A.

(2) Despite paragraphs (1)(b) and (c), the FWC 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) The FWC may dismiss an application:

(a) on its own initiative; or

(b) on application.”

[16] The High Court has provided clarity as to circumstances when a binding contract will exist, 1 as follows:

“Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three cases. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain 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. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.

In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution.” 2

[17] The Federal Court has considered that the Commission has the power to dismiss an unfair dismissal application under s 587where a binding settlement agreement exists. That is because the binding settlement agreement extinguishes the pre-existing cause of action and the continued pursuit of the application based on such cause of action is clearly capable of being considered to be frivolous or vexatious or without reasonable prospects of success.  3

[18] In the present case there is no dispute, and on the materials before the Commission I am satisfied that, a binding settlement agreement was reached between the parties. The mutually agreed facts are that the parties negotiated and agreed to a resolution of the application in the terms recorded by the conciliator on 19 May 2020, which was duly executed by 1 June 2020.

[19] The only residual dispute relates to compliance with the terms of settlement. The performance of obligations under the terms of settlement may give rise to a separate cause of action in a court. Whilst I make no finding in this respect, I observe that there would appear to be little if any utility to a separate cause of action if it is the case that the total value of the agreed settlement sum has been paid to the Applicant (albeit not in two equal parts, as was agreed). In any event, compliance with the terms of settlement is not a matter that the Commission is empowered to enforce.

Conclusion

[20] Given that the application for unfair dismissal has been settled and the parties have reached an agreement on that settlement I am satisfied that the application has been dealt with by the Commission. The file has been closed by the Commission and there are no grounds on which it could be reopened.

[21] I am satisfied that there are sound reasons for not reopening a matter where settlement has been reached. There is a need for there to be some finality to a matter before the Commission in circumstances where the parties willingly agree to the terms of that settlement. That concludes the action in the Commission. As said above any dispute about the enforcement of the terms of the agreement are now about that private agreement or contract of the parties. It is no longer a matter that falls within the jurisdiction of the Commission.

[22] I have therefore determined to dismiss the application of the Applicant to “reopen” her unfair dismissal application.

[23] Section 587 of the FW Act does not limit the circumstances in which the Commission may dismiss an application. I am satisfied that, given the agreement reached between the parties to settle the unfair dismissal application, the application to reopen the unfair dismissal should be dismissed. An order 4 dismissing the application will be issued in conjunction with this decision.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR723725>

 1   Masters v Cameron [1954] 91 CLR 353.

 2   Ibid at 360.

 3   Australia Postal Corporation v Gorman [2001] FCA 975; see also Curtis v Darwin City Council[2012] FWAFB 2021.

 4   PR723726