Peter Scicluna v Australian Postal Corporation T/A Australia Post

[2018] FWC 3467

[2018] FWC 3467

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Peter Scicluna
v
Australian Postal Corporation T/A Australia Post
(U2017/13534)

COMMISSIONER MCKINNON MELBOURNE, 14 JUNE 2018

Application for an unfair dismissal remedy – whether binding settlement agreement – no reasonable prospects - application dismissed.

[1] This decision concerns an application by Mr Peter Scicluna to re-open an unfair dismissal application under s.394 of the Fair Work Act 2009 (the Act) against Australia Post on the basis that a settlement agreement in the matter is not binding and/or has not been followed.

[2] It is common ground that the parties agreed on terms of settlement during conciliation of the unfair dismissal application, and 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

[3] Australia Post administers its own workers compensation regime under the Safety, Rehabilitation and Compensation Act 1988 (SRC Act). 1

[4] Prior to his dismissal, Mr Scicluna had an open claim for workers’ compensation under the SRC Act. He was not receiving incapacity payments under the SRC Act because he was being paid for working normal pre-injury hours, although he was suspended on pay pending an investigation into alleged misconduct. 2

[5] Mr Scicluna was dismissed for misconduct on 4 December 2017. 3 On 19 December 2017, he applied to the Commission for an unfair dismissal remedy.4

[6] The unfair dismissal application was conciliated on 19 January 2018. Mr Scicluna was represented by Brendan Henley, Organiser at the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and Australia Post was represented by Rodney Lemish.

[7] During the conciliation, offers and counter offers were exchanged through the Conciliator in an effort to settle and eventually, agreement was reached. Mr Scicluna was to be paid a settlement amount within 21 days and his dismissal was to be substituted with a resignation. The settlement of his unfair dismissal claim was to be “separate from” his workers’ compensation claim. 5

[8] The parties agreed that the settlement would be recorded in the Commission’s standard Terms of Settlement 6 and also agreed to waive the option of a three day cooling off period.7 Terms of Settlement were then prepared by the Conciliator and sent to the parties for signature, with advice that the Commission’s file would be closed.8

[9] On 14 February 2018, Australia Post refused Mr Scicluna’s workers’ compensation claim for incapacity payments, citing his resignation as evidence that he had “failed to continue in suitable employment” as required to qualify for the payments. 9 On 19 February 2018, this decision was challenged by Mr Scicluna’s lawyers, Maurice Blackburn.10 On 15 March 2018, Australia Post revised its decision by substituting reliance on Mr Scicluna’s resignation with its view that the “mutuality of the employment relationship” had been “severed”, against the backdrop of an investigation and findings into alleged misconduct.11 The decision to refuse incapacity payments was appealed and is currently before the Administrative Appeals Tribunal (AAT).

Submissions

[10] Mr Scicluna says the settlement agreement with Australia Post is not binding because it was conditional. He says he was concerned about agreeing to resign without clarifying his entitlement to weekly payments of compensation, because Australia Post “might decide not to pay weekly payments for incapacity for work”. 12 He agreed to settle his unfair dismissal claim but says he understood he had 21 days to “check it out” and make sure it did not affect his workers’ compensation claim.13 He also says he raised this concern with his union representative, Mr Henley, but not until after the conciliation conference on 19 January 2018.14 According to Mr Scicluna, he received the Terms of Settlement from Mr Henley a few days after they were sent. He then rang his lawyers who advised him not to sign them.15

[11] Mr Lemish says the settlement of Mr Sciclina’s unfair dismissal claim was not conditional. His recollection is that Mr Scicluna agreed to provide a letter of resignation and Australia Post agreed to pay him a settlement amount within 21 days.  16 He agreed to Mr Scicluna’s request that any settlement would be separate from his workers’ compensation claim because his understanding was that it was not possible to contract out of the statutory workers’ compensation scheme in any event.17

[12] Mr Scicluna says that after the settlement, and despite his agreement with Australia Post, his claim for “incapacity payments” was affected by his ‘resignation’.

[13] In response, Australia Post says it was Mr Scicluna who offered resignation in the first place and when offered a choice between resignation and termination, he chose the option of resignation. 18

[14] Australia Post says it was agreed that Mr Scicluna would sign the terms of settlement and return them, following which Australia Post would deposit the agreed sum in his bank account. It says:

“No further terms were to be agreed, there were no conditions attached to the agreement and it was not expressed to be “in principle” or “subject to contract”. It was only performance of the Payment Term that the parties intended to be conditional upon the Terms being executed...”

[15] Australia Post relies on documents prepared after the conciliation as evidence of its understanding that parties had reached agreement to settle the application. One of those documents is an email from Mr Lemish to his colleagues at Australia Post on the same day as the conciliation. 19 It says:

“Our offer in the end was to give Mr Scicluna the option of 1.5 weeks and a resignation; or 2 weeks and the termination would remain. Mr Scicluna accepted 1.5 weeks plus a resignation. The Fair Work Commission will prepare the Terms of Settlement which I will get you to sign next week. Payment can be processed and made in the next pay.”

[16] In my view, the email is a reliable record of the outcome of the conciliation conference, albeit from Australia Post’s perspective. No challenge was made to the email in the hearing, which suggests that there was an agreement between the parties and that it was not conditional in any respect, although it was to be recorded in the Commission’s standard Terms of Settlement. While Australia Post says payment of the settlement amount was subject to its receipt of the signed terms by Mr Scicluna, the email suggests to the contrary. I accept that it is common practice for parties to wait for signed terms to be exchanged before proceeding with other agreed settlement terms. However, I am not satisfied in this case that Mr Scicluna’s signature was a necessary pre-condition to payment of the settlement amount.

[17] Mr Scicluna relies on the fact that he made inquiries of his lawyers after conciliation as evidence of his understanding that there was no binding agreement at that time. That is one possibility. Another is that he had resolved the unfair dismissal claim and now wished to progress his claim for incapacity payments. In my view, the latter is the more likely of the two. It was then that, regrettably, he discovered that his purported resignation may affect his workers’ compensation claim and decided not to take any further steps to give effect to the settlement agreement.

Is the settlement agreement binding on the parties?

[18] The question is whether a binding settlement agreement has been reached between Mr Scicluna and Australia Post.

[19] It is well established that an agreement that is not signed can nevertheless be binding on the parties to it. 20

[20] In Masters v Cameron 21, 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’.

[21] Masters v Cameron has since been relied on in a number of decisions of this Commission. 22

[22] In reaching the settlement agreement, Mr Scicluna relied on his union representative who I am satisfied was experienced in matters of this type. 23 Mr Henley was not called to give evidence and so could not corroborate or contradict the evidence of either Mr Scicluna or Mr Lemish. While most facts were agreed, the parties had different recollections of some of the content of negotiations during conciliation which may in part be explained by the fact that it appears to have been conducted largely through the Conciliator in separate private conferences with the parties.

[23] Mr Scicluna says he didn’t ask for resignation in the conciliation. He says the option of resignation was offered to him by Australia Post and Mr Lemish disagrees. The contemporaneous notes kept by Mr Lemish throughout the conciliation conference are the best evidence of the sequence of offers and counter offers during conciliation. In my view, they establish that Mr Scicluna (through his union representative) sought that the record be amended so show that Mr Scicluna had resigned – a not uncommon feature of the settlement of unfair dismissal claims. The notes also corroborate Mr Lemish’s evidence that given the choice between resignation and termination, Mr Scicluna chose resignation.

[24] Mr Scicluna says he was told twice that the settlement would not affect his claim for workers’ compensation. Mr Lemish does not recall that discussion but does recall agreeing to keep the matter of workers’ compensation separate. I consider it likely that, given Mr Lemish’s understanding that he could not contract out of the statutory workers’ compensation scheme, Mr Scicluna was told through the Conciliator that any settlement would not affect his workers’ compensation claim. If that was the case, it was unfortunate as it is not apparent that the participants in the conciliation conference had any particular expertise in relation to workers’ compensation.

[25] Mr Scicluna does not recall agreeing to waive the cooling off period or to have the settlement recorded in the Commissions’ Terms of Settlement. Mr Lemish gave detailed evidence about each of those matters. His evidence was consistent with the Conciliator’s conduct after the conference in his covering email forwarding Terms of Settlement to them. I am satisfied that the parties agreed to waive the cooling off period and to record the agreement in those Terms of Settlement.

[26] There is a dispute over whether the 21 day period for payment of the settlement amount was also a further period for Mr Scicluna to seek advice. Mr Scicluna recalled a discussion about whether payment of the settlement amount would be made within 7 days. He recalls Australia Post communicating some difficulty with that timeframe and says he agreed to “leave it at 21 days”. As Mr Scicluna put it, “I accepted the offer but I wanted 21 days because I wanted to check it out”. Unfortunately, he did not communicate this desire to his union representative until after the conciliation conference, by which time the settlement agreement had been made.

[27] There is no hint in the contemporaneous documentation filed in the proceeding that the settlement was subject to a further period of consideration by Mr Scicluna or that it was conditional on his obtaining advice about how it might affect his workers’ compensation claim. 24

[28] In my view, the settlement agreement reached in this matter was of the more common form described in category one of Masters v Cameron. The parties reached agreement on all of the terms they required in settlement of the unfair dismissal application. They agreed to waive the cooling off period, which indicates that they intended to be immediately bound by the terms of the agreement reached. They agreed that the settlement would be formally recorded, but with no different effect, in Terms of Settlement prepared by the Commission.

[29] Properly characterised, in my view Mr Scicluna’s actual complaint is that Australia Post has not done what it promised to do in keeping his workers’ compensation separate from the settlement of the unfair dismissal claim. That is, it refused his claim for incapacity payments in reliance on his resignation, despite agreeing that the settlement would not affect his workers’ compensation claim.

[30] Mr Scicluna says in this respect, he was misled. Australia Post denies misleading Mr Scicluna or misrepresenting the nature or legal effect of the settlement agreement in any way. It says Mr Scicluna was represented by an experienced industrial advocate at conciliation when the agreement was made and that as a matter of fact, the settlement agreement did not affect his claim.

[31] Mary Costello, Reconsideration Delegate at Australia Post, explained that after an employee becomes incapacitated for work, if the employee fails to engage, or continue to engage in suitable employment provided by Australia Post, the weekly amount they would have been earning had suitable employment continued with Australia Post is relevant to determining any claim for incapacity payment. 25

[32] She says at the time of dismissal on 4 December 2017, Mr Scicluna had claimed compensation under the SRC Act but was not receiving incapacity payments because he was earning at least his pre-injury weekly wage. 26

[33] Ms Costello says she was informed in January 2018 that Mr Scicluna was no longer an employee of Australia Post and a decision was subsequently made that he was not entitled to incapacity payment. The initial decision to refuse incapacity payments referred to his resignation from employment (as agreed at conciliation). She says that the outcome would have been the same if it had instead referred to his dismissal for misconduct because Australia Post deemed that Mr Scicluna, through his own actions, failed to engage or continue to engage in suitable employment provided by Australia Post. On either basis, Australia Post says he was not entitled to incapacity payment.  27

[34] There is no evidence that Mr Scicluna’s entitlement to incapacity payment was discussed at the conciliation on 19 January 2018. The evidence is that the parties agreed to keep the matter of his claim separate to the unfair dismissal application. 28

[35] As noted earlier, Mr Scicluna’s entitlement to incapacity payments is currently before the AAT. If it transpires that his claim was affected by the settlement agreement, it is appropriate that he pursue that matter in another jurisdiction.

[36] I also observe that, notwithstanding the agreement reached, neither party has complied with its terms. Mr Scicluna has not provided a letter of resignation and Australia Post has not paid the agreed settlement sum. Neither party has signed the Terms of Settlement. If there is a concern about compliance with the settlement agreement, that is a matter for the Courts.

Conclusion

[37] I am satisfied that the parties agreed to settle Mr Scicluna’s unfair dismissal application on 19 January 2018. The agreement falls within the first category in Masters v Cameron and is binding on the parties.

[38] In Australia Postal Corporation v Gorman 29, Besanko J held that the existence of a binding settlement or “accord and satisfaction” extinguishes the existing cause of action and replaces it with a new cause of action based on the agreement.30 The Commission has the power under section 587(1) of the Act to recognise a binding settlement and accordingly, to dismiss an application that has no reasonable prospects of success.31

[39] I am satisfied that the binding agreement reached between the parties in this matter is a complete answer to Mr Scicluna’s unfair dismissal application. For that reason, Mr Scicluna’s unfair dismissal application has no reasonable prospects of success.

[40] The application for an unfair dismissal remedy is dismissed.

COMMISSIONER

Appearances:

J Wallace of Counsel for the Applicant

W Spargo for Australia Post

Hearing details:

2018.

Melbourne:

June 12.

Printed by authority of the Commonwealth Government Printer

<PR608088>

 1   Exhibit 2, Statement of Mary Costello

 2   Exhibits 2, Statement of Mary Costello, and 3, Statement of Rodney Lemish

 3   Exhibit 3, Rodney Lemish

 4   Form F2 Application

 5   Exhibit 3, Statement of Rodney Lemish, Attachment “RL 1”

 6   Audio recording of hearing on 12 June 2018

 7   Exhibit 3, Statement of Rodney Lemish, Attachment “RL 4”

 8   Exhibit 3, Statement of Rodney Lemish, Attachment “RL 4”

 9   Exhibit 2, Statement of Mary Costello, Attachment “MC 1”

 10   Exhibit 2, Statement of Mary Costello, Attachment “MC 2”

 11   Exhibit 2, Statement of Mary Costello, Attachment “MC 3”

 12   Exhibit 3, Statement of Rodney Lemish, Attachment “RL 6”

 13   Audio recording of hearing on 12 June 2018

 14   Audio recording of hearing on 12 June 2018

 15   Audio recording of hearing on 12 June 2018

 16   Audio recording of hearing on 12 June 2018

 17   Audio recording of hearing on 12 June 2018

 18   Audio recording of hearing on 12 June 2018

 19   Exhibit 3, Statement of Rodney Lemish, Attachment “RL 2”

 20 (1954) 91 CLR 353 at [23]

 21   Ibid

 22   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

 23   Evidence of Mr Lemish, Audio recording of hearing on 12 June 2018

 24   Exhibit 3, Statement of Rodney Lemish

 25   Exhibit 2, Statement of Mary Costello

 26   Exhibit 2, Statement of Mary Costello

 27   Exhibit 2, Statement of Mary Costello

 28   Audio recording of hearing on 12 June 2018; Exhibit 3, Statement of Rodney Lemish, Attachment “RL 1”

 29 [2011] FCA 975

 30   Ibid at [31]

 31   Ibid at [33]