Zhaoquan Feng v The trustee for Gold Leaf (Springvale) Hybrid Unit Trust
[2024] FWC 3014
•31 OCTOBER 2024
| [2024] FWC 3014 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Zhaoquan Feng
v
The trustee for Gold Leaf (Springvale) Hybrid Unit Trust
(U2024/3974)
| DEPUTY PRESIDENT CLANCY | MELBOURNE, 31 OCTOBER 2024 |
Application for an unfair dismissal remedy – settlement agreement reached – application dismissed pursuant to s.587(1)(c) of the Act on the basis that it has no reasonable prospects of success.
Background
Mr Zhaoquan Feng (Applicant) applied to the Commission alleging that he was unfairly dismissed by The trustee for Gold Leaf (Springvale) Hybrid Unit Trust (Respondent). The application was the subject of a conciliation conference at 9.15am on 7 May 2024. At 4.54pm on the same day, email correspondence was sent by the Commission staff conciliator to the parties, including to the Applicant’s nominated email address. This email correspondence attached a letter dated 7 May 2024, which relevantly outlined:
“Thank you for your participation in today’s conciliation in the above case. I confirm that you reached a settlement agreement and I attach terms of settlement.
I confirm the parties have agreed to waive the cooling off period that applied to this agreement.
As this is an agreement reached between the parties, you must send your signed terms to the other party.”[1]
The Applicant disputes that he agreed to the terms of the settlement agreement document sent to the parties by the Commission staff conciliator. The Applicant submits that the matter did not settle at the conciliation conference on 7 May 2024 and seeks to have his unfair dismissal application listed for hearing. The Applicant’s contention and his request are opposed by the Respondent. Ordinarily, what is discussed during a conciliation conference is to remain confidential. However, in this matter, I consider the parties have waived any requirement for confidentiality because in arguing their competing positions, they have voluntarily disclosed details of what was discussed during the conciliation conference.
At the heart of Mr Feng’s complaint are two clauses in the settlement agreement document, which was attached to the 7 May 2024 letter:
a)Clause 7, which provides:
“Within 7 days of the Applicant and Respondent signing this agreement, the Applicant will withdraw his complaint to the Fair Work Ombudsman regarding alleged underpayment of entitlements.”[2]
b)Clause 9, which provides:
“On the Respondent complying with 4 and 8, the Applicant releases and discharges the Respondent and its directors, officers and employees from all claims, actions and liability:
·to which the Respondent may now be subject, or to which the Respondent may, but for this agreement, have been subject in the future, and
·that relate to the Applicant’s employment by the Respondent or the termination of that employment.”[3]
(my emphasis)
Correspondence before the Commission reveals that having received the settlement agreement document, the Applicant sent an email to the lawyer for the Respondent, Mr Christopher Tang, at 6.42pm on 7 May 2024. That email stated:
“Hi Christopher Tang
About the settlement agreement. I am not accept NO. 7 Withdarawl (sic) of FWO Complaint. That is really unfair for me.
therefore I refuse to accept this agreement.”[4]
Mr Tang sent an email in response on 8 May 2024, which relevantly included:
“As a binding agreement was reached at the end of yesterday’s conciliation with the assistance of the Fair Work Conciliator, it is now binding on you, leaving no room for refusal. I also note that, as confirmed by the Conciliator in his letter of 7 May 2024, you have willingly waived the cooling-off period.
Please now see the attached Terms of Settlement signed by my client.
Once I have the agreement signed by you, then my client will transfer the settlement money to your account.”[5]
In reply, Mr Casey Chow, lawyer, sent an email at 2.45pm on 13 May 2024 on behalf of the Applicant to Mr Tang and the Commission’s staff conciliator, which outlined:
“We are instructed that during the conciliation, discussions and negotiations were all related to settlement of the dismissal. It is also worth noting that the parties agreed to the terms for settling the unfair dismissal claim.
Nevertheless, the settlement terms proposed by the Respondent does not fully reflect the agreed terms. In particular, the Respondent intentionally included clause 7 and failed to address the scope of settlement as contained in clause 9 and 10.
In circumstances where the Respondent was legally represented at the material times, it should have brought into discussion at the conciliation other matters that it wished to become part of the settlement. We are instructed that throughout the entire course of the conciliation, the Respondent never raised any discussion about the Fair Work Ombudsman complaint and that such complaint never formed part of the settlement terms. It is our client’s position that the Respondent’s conduct in preparing the proposed terms of settlement and pressing our client to sign and return the same are unconscionable.
Accordingly, we attach herewith the terms of settlement which reflect the terms agreed at the conciliation for the Respondent’s signing. Changes are tracked for your easy reference.
Should the Respondent refuses to sign, we understand that our client will apply for the matter to be reopened.
We also invite conciliator [Conciliator Name] confirmation as to whether the parties expressly agreed to including the Fair Work Ombudsman Complaint to be part of the settlement.
For the purpose of clarity, Mr Feng is copied herein.”[6]
(my emphasis)
The Commission staff conciliator responded directly to Mr Chow in an email sent at 4.41pm on 13 May 2024, stating:
“Dear Casey,
I refer to your email dated 13 May 2024.
I can confirm that the terms of settlement prepared post conciliation reflect the agreement made at conciliation including the effect of the agreement on underpayment claims.
I note that my involvement with this matter has concluded. You should direct all future correspondence, including any request to reopen the matter, to the [email protected] email address.”
At 11.53am on 14 May 2024, Mr Tang responded with an email, which relevantly stated:
“We want to clarify that the Respondent did not prepare the terms of settlement and that we did not pressure your client to sign the agreement. The Fair Work Commission prepared the terms of settlement and accurately recorded the terms of settlement reached by the parties.
At the conciliation, your client agrees to settle all claims made by your client against the Respondent, including the unfair dismissal claim and any claim that she may have arising from her employment. Your client also agrees to withdraw his complaint to the Fair Work Ombudsman.”[7]
Mr Chow sent an email in reply at 11.30am on Monday 20 May 2024, in which he relevantly outlined:
“We have strong instructions that Mr. Feng clearly recollects that at no time did he agreed to withdrawing any Fair Work Ombudsman Complaint [sic], or to release the employer from all disputes relating to the employment. Furthermore, there was no mentioning about any Fair Work Ombudsman complaint at the conciliation conference.
With respect, it is our client’s position that it could have been the conciliator [Conciliator Name] who misunderstood our client, or that the interpreter misinterpreted our client's position. To note, Mr. Feng requested for a Cantonese interpreter and a Mandarin interpreter was arranged. As such we are unable to preclude the possibility of any misinterpretation.
At the conciliation conference, [Conciliator Name] also made clear to our client that any underpayment issues do not fall under his scope of work, and we reiterate that this matter concerns unfair dismissal.
Our client was employed by the Respondent and is pursing [sic] a salary and leave entitlement payment for over 10 years. Any reasonable person in our client’s position would not have settled all disputes pertaining to the employment on the current terms. To note, it is further our client’s position that the Respondent failed to provide payslips and pay the proper amount for superannuation.
In the circumstances and in the interest of natural justice, we respectfully submit to the Commission that this matter failed to settle at the conciliation conference, and request the Commission to list this matter for hearing”[8]
This prompted the following reply email from Mr Tang later at 5.18pm on 20 May 2024, which relevantly stated:
“It is very disappointing to see that your client has continue his stance on the terms of settlement reached at the conciliation, where the terms were clearly explained to your client (in Mandarin), and the terms were prepared by the Commission, which correctly reflects the terms reached.
We were not copied into email with [Conciliator Name] and therefore, we do not make any comments about what [Conciliator Name] may or may not have said in his email.
We note that your client’s position has changed from wrongly accusing the Respondent of changing the terms of settlement to accusing the conciliator of misunderstanding your client and the interpreter of misinterpreting at the conciliation and about the agreement.
We submit that there was no misunderstanding or misinterpreting; it is just an attempt by your client to resile from the agreement.
The settlement reached is to resolve any and all matters arising from the termination of the employment and from the employment itself. Your client also agrees to withdraw his complaints to the Fair Work Ombudsman.
We do not agree to re-listing this matter at the Commission, as we have a binding agreement in place. We will oppose any application to re-open the application on the basis that there was a valid term of settlement and your client has no basis for reopening the matter.”[9]
On 20 June 2024, I issued directions requiring the parties to file and serve material on the question of whether there was a binding settlement reached and listed the matter for a hearing, which I ultimately conducted as a determinative conference on 19 July 2024. The Applicant gave evidence with the assistance of a Cantonese interpreter and was granted permission to be represented by Mr Chow. The Respondent was granted permission to be represented by Ms Pase of Counsel and adduced evidence from Mr Tang.
Evidence and submissions
The Applicant’s position is that at no stage did he agree to withdraw his complaint to the Fair Work Ombudsman (FWO) and, further, that this was never discussed. Further, the Applicant maintains that he did not agree to release the Respondent from all disputes relating to his employment. The Applicant maintains that he understood the Commission process was different to the pursuit of underpayments through the FWO and that he was told by the staff conciliator that any underpayment issues did not fall under his (the conciliator’s) work.
The Applicant submits that there was no mutual intention to settle the dispute. He has agitated, either directly or through his solicitor, a range of possibilities:
a)The Respondent prepared the settlement agreement document and, in doing so, intentionally included clause 7 and failed to address the scope of the settlement;
b)The Respondent did not raise matters in the conciliation conference that it wanted to form part of the settlement;
c)He at no time agreed to withdrawing any FWO complaint, or to release the Respondent from all disputes relating to the employment and furthermore, there was no mention of any FWO complaint at the conciliation conference;
d)The Commission staff conciliator misunderstood him;
e)The interpreter misinterpreted his position;
f)The Commission staff conciliator made clear that any underpayment issues did not fall within his (the conciliator’s) scope of work;
g)Noting that he was pursuing salary and leave entitlements over a 10-year employment period, which he alleges total $100,000, any reasonable person in his position would not have settled all disputes pertaining to the employment on the terms in the settlement agreement document;
h)He knew what was to be dealt with by the Commission and that he knew he had to pursue underpayments through the FWO;
Even if the eventual release clause was mentioned at the conciliation conference, he did not understand what the terms of settlement meant until he received the settlement agreement document;
j)While the parties agreed to the gross sum of $28,897.44, he understood this represented compensation for unfair dismissal and not underpayments during the course of his employment;
k)During the joint session in the conciliation session prior to its conclusion, the withdrawal of the FWO complaint was not properly addressed; and
l)He did not change his position because upon receipt, he immediately communicated that the settlement agreement document did not reflect what he agreed to, in particular the reference to the withdrawal of the FWO complaint.
The Applicant denies having been told in the joint session of the conciliation conference that the Respondent wanted him to withdraw his FWO complaint, that he had agreed to withdraw the FWO complaint in exchange for the monetary payment and that in exchange for the payment, he had agreed to a full release such that he would not pursue the Respondent for any other claims.[10] As to the basis for the gross sum of $28,897.44 in the settlement agreement document, the essence of Applicant’s evidence at the determinative conference was that it represented a component of 10 weeks’ pay at the rate of $1,600 per week ($16,000) plus the balance of his entitlement for 4 weeks’ notice and 12 weeks’ long service leave, because he had only been paid about half of his entitlement on termination.
Mr Tang’s evidence was that the parties agreed at the conciliation conference to settle the dispute on terms which included the Applicant providing a full release (save for workers’ compensation claims and superannuation claims) and agreeing to withdrawing the FWO complaint. He said the Commission staff conciliator asked the Applicant whether he agreed to a full release and withdrawal from the FWO complaint[11] and that he heard the interpreter make clear reference to the release and withdrawal from the FWO complaint.[12] Mr Tang also submitted his contemporaneous handwritten notes from the conciliation conference and a typed summary of them he subsequently made. Mr Tang gave evidence that the unredacted parts of the handwritten notes outline what was discussed by the parties in joint session and that they record a summary the opening comments the Applicant made, including the assertion that in his final pay, he was paid less than half of what he was owed for his 4-weeks’ notice and 12-weeks’ long service leave entitlements.[13] The handwritten notes also subsequently outline:
a)“we want full release + withdraw Ombudsman”;
b)“28,897.44 Gross figure”;
c)“settled”;
d)“within 7 days settlement”;
e)“bank details still the same”;
f)“discontinuance form from the Applicant”; and
g)“withdraw ombudsman and non-disparagement”.[14]
As to the basis for the gross sum of $28,897.44 in the settlement agreement document, Mr Tang confirmed at the determinative conference that it represented a component of 10 weeks’ pay at the rate of $1,600 per week ($16,000). Mr Tang also explained that the component for the 4 weeks’ notice and the 12 weeks’ long service leave accrual ($12,897.44) was calculated by multiplying their combined total of 16 weeks by the difference between the weekly rate of $1,600 per week and the weekly rate that had been applied when Mr Tang was paid on termination. This difference was approximately $806.
Consideration
A review of Mr Tang’s unredacted handwritten notes from the conciliation conference suggests that the Applicant had been paid his entitlements for notice and long service leave at the rate of $793.91 per week on termination and that the difference between this rate and $1,600 per week is therefore $806.09 per week. I am satisfied, and the parties agree,[15] that the gross sum of $28,897.44 in the settlement agreement document represented an agreement for the Respondent to pay the Applicant 10 weeks’ pay at the rate of $1,600 per week ($16,000), plus $806.09 per week multiplied by the total 16 weeks’ notice and long service leave ($12,897.44).
Having considered the material before the Commission, I am also satisfied that the terms settlement agreement document otherwise reflect what was agreed by the parties at the conciliation conference. I consider the accounts of the Commission staff conciliator and Mr Tang are more reliable than that of the Applicant and note they are corroborated by the contemporaneous correspondence sent by the Commission staff conciliator, the settlement agreement document prepared immediately following the conciliation conference (and subsequently confirmed on 13 May 2024), and the contemporaneous file note of Mr Tang. In this regard, I have noted the Applicant has previously incorrectly asserted that the Respondent prepared the settlement agreement document and observe that his assertion that the Respondent did not raise matters it wanted to form part of the settlement during the conciliation conference, is also directly contradicted by the contemporaneous file note of Mr Tang. Further, the Applicant has subsequently qualified his early “strong instructions” to Mr Chow that there was no mention of any FWO complaint at the conciliation conference by firstly outlining in his witness statement that he discussed the FWO complaint with the Commission staff conciliator and then giving evidence at the determinative conference, under cross-examination, that he in fact meant to say that that there was no mention of “withdrawing” the FWO complaint.[16]
I am not persuaded by the Applicant’s assertions that either the Commission staff conciliator misunderstood him, or the interpreter misinterpreted his position in relation to the FWO complaint and its withdrawal (or both) because his final evidence was that there was simply no mention about the withdrawal of the FWO Complaint during the conciliation conference. More broadly, the Applicant was able to engage with the interpreter in Mandarin[17] and have the interpreter, and then the Commission staff conciliator, convey his allegation and calculation for an underpayment of notice and long service leave which was ultimately agreed. Relatedly, I consider the Applicant’s assertion that the Commission staff conciliator made clear that any underpayment issues did not fall within his (the conciliator’s) scope of work does not advance his case. This is because the Applicant also gave evidence that the Commission staff conciliator told him that he would assist with the underpayment relating to the notice and long service leave[18] and, ultimately, a significant proportion of the undisputed gross sum of $28,897.44 negotiated during the conciliation conference represented a response to the Applicant’s claim that his entitlement to notice and accrued long service leave had been underpaid.
By way of contrast, and as I have outlined above, when the Commission staff conciliator was invited to confirm whether the parties had expressly agreed to include the FWO complaint as part of the settlement, his almost immediate response was that the settlement agreement document reflected the agreement made at the conciliation conference, including the effect of the agreement on underpayment claims. Further, the terms of the settlement agreement document the Commission staff conciliator circulated on the same day as the conciliation conference reflect the unchallenged understanding and contemporaneous file note of Mr Tang.
The Applicant argued that he would not have settled all disputes pertaining to his employment on the terms in the settlement agreement document because he was pursuing salary and leave entitlements over a 10-year employment period totalling an alleged $100,000. This proposition can be met with a counterproposition of why would the Respondent have agreed to make the payment of a sum that included a not insignificant component for alleged underpayments and not seek for the release terms to reflect this? In weighing these competing propositions, I consider that the Applicant would already have been aware of the basis upon which the Respondent was prepared to negotiate before he attended the conciliation conference and so could not have been under any misapprehension. This is because the Applicant had previously met with the Respondent on 30 March 2024, at which time the Respondent put a proposal to pay the Applicant notice of termination, accrued annual leave and accrued long service leave, together with a ‘gratuity payment’ in return for a release from all claims the Applicant may have had against the Respondent in connection with his employment and the termination of it. This proposal had been contained in a deed of release which was provided to the Applicant for his consideration.[19] Regardless, accepting this proposition of the Applicant relies on making a finding that the Respondent’s offer to pay an amount that included a component equating to 10 weeks’ pay was made to settle the unfair dismissal application only. This is contradicted by the contemporaneous recollections of both the Commission staff conciliator and Mr Tang.
Accepting the Applicant’s proposition that he at no time agreed to withdrawing the FWO complaint or to release the Respondent from all claims relating to his employment relies on making findings that Commission staff conciliator inserted the disputed clauses into the settlement agreement document without having a basis for doing so, or by mistake. I am not prepared to make such findings having regard to the the unchallenged understanding and contemporaneous file note of Mr Tang and the early confirmation by the Commission staff conciliator that the settlement agreement document he circulated on the same day as the conciliation conference reflected the agreement made at the conciliation conference, including the effect of the agreement on underpayment claims.
Ultimately, the Applicant submitted that even if the eventual release clause was mentioned at the conciliation conference, he did not understand what the terms of settlement meant until he received the settlement agreement document. I do not find this persuasive in circumstances where the Applicant was otherwise able to both engage with negotiations and calculations required to resolve his not insignificant claim for underpaid notice and accrued long service leave, and grapple with the concept of a cooling off period and its waiver.[20]
Conclusion
In Masters v Cameron,[21] the High Court held that a binding agreement could come about in the following manner:
“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 classes. 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.”[22]
Having regard to the matters I have considered above, I am satisfied that the Applicant and the Respondent reached agreement at the conciliation conference on 7 May 2024 and that the settlement position was reflected in the terms of settlement agreement document drafted by the Commission staff conciliator and provided to them later that day. I am satisfied the agreement fell within either the first or second category described in Masters v Cameron and, in either case, that there was a binding contract.
In Australian Postal Corporation v Gorman[23], Besanko J held that the existence of a binding settlement or “accord and satisfaction” extinguishes an existing cause of action and replaces it with a new cause of action based on the agreement.[24]
His Honour stated:
“[33] There is nothing in the Act which suggests that an accord and satisfaction should not be recognised. At a general level the object of Ch 3 Pt 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 subs 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]
As can be seen from Australian Postal Corporation v Gorman, if there is a binding agreement between the parties, the Commission has the power under s.587(1) of the Act to dismiss an application on the basis that it has no reasonable prospects of success.
Section 587(1) of the Act relevantly 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.”
As I have found that the parties reached agreement and I am satisfied that the agreement was of the first or second type discussed in Masters v Cameron, I am persuaded that I should exercise my power under s.587(1)(c) of the Act to dismiss the application on the basis that it has no reasonable prospects of success. The settlement agreement that was made on 7 May 2024 is a complete answer to the Applicant’s claim that he was unfairly dismissed.
For the reasons outlined above, I find that the Applicant entered into a binding settlement of his claim and, therefore, his application for unfair dismissal remedy is dismissed. An order[26] to this effect will be issued in conjunction with this decision.
DEPUTY PRESIDENT
Appearances:
C Chow for the Applicant
C Pase of Counsel for the Respondent.
Hearing details:
2024.
Melbourne
19 July.
[1] Digital Court Book (DCB) at 30.
[2] DCB at 27.
[3] DCB at 28.
[4] DCB at 153.
[5] DCB at 155.
[6] DCB at 160.
[7] DCB at 165.
[8] DCB at 37.
[9] DCB at 36.
[10] Transcript PN240-245.
[11] Ibid at PN173.
[12] Ibid at PN181.
[13] DCB at 142-143.
[14] DCB at 143-144.
[15] Transcript PN137-139.
[16] Ibid at PN239.
[17] Ibid at PN204-208; DCB at 138(6).
[18] DCB at 57 (35).
[19] DCB at 56 (20) – (21); DCB at 85.
[20] Transcript at PN187.
[21] [1954] 91 CLR 353; [1954] HCA 72.
[22] Ibid at 360.
[23] (2011) 196 FCR 126; [2011] FCA 975.
[24] Ibid at paragraph [31].
[25] Ibid at paragraph [33].
[26] PR780780.
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