Amber Walsh v Eastern Health [2024] FWC 3340

1 Fair Work Act 2009 s.394—Unfair dismissal Amber Walsh v Eastern Health (U2023/9810) DEPUTY PRESIDENT O’NEILL MELBOURNE, 2 DECEMBER 2024 Application for an unfair dismissal remedy – binding agreement reached at conciliation – application dismissed. [1] This decision deals with the issue of whether the Applicant and Eastern Health reached a binding agreement to settle Ms Walsh’s application for an unfair dismissal remedy in matter U2023/9810 (the UFD Application). [2] The Applicant has filed a Form F1 Application (F1 Application) seeking orders that the UFD Application be listed for a member assisted conciliation or, alternatively, that the UFD Application be listed for merits arbitration. [3] The Respondent opposes the F1 Application and contends the Commission lacks jurisdiction to make the orders sought and submits that the UFD Application should be dismissed pursuant to s.587 of the Fair Work Act 2009 (Cth) (FW Act). [4] Both parties were previously granted permission to be legally represented. [5] For the reasons that follow, I have concluded that a binding agreement to settle the UFD Application was reached, and I have decided to dismiss the application pursuant to s.587 of the FW Act. Any dispute about the terms of the agreement reached is not a matter for the Commission. Factual context and findings [6] The UFD Application was made on 9 October 2023 following the dismissal of the Applicant for misconduct. One of the remedies sought in the application form was the removal of termination from the Applicant’s personal record to give effect to the separate remedy sought, namely conversion of the dismissal to a resignation. Following staff conciliation on 6 November 2023, the conciliator emailed the parties: [2024] FWC 3340 DECISION -- 1 of 7 -- [2024] FWC 3340 2 Thank you for your involvement in the conciliation conference for this case. I confirm that the terms of settlement are to be sent out by the Respondent’s representative. I confirm that the matter has settled with the substantive elements of the agreement being: • payment of a gross amount of $2437.47, taxed according to applicable law, • acceptance of a resignation, • removal of the dismissal from the Applicant’s personnel file, • provision of a statement of service reflecting the resignation, and • mutual non disparagement. As this is an agreement reached between the parties, you must send your signed terms to the other party. … This concludes my role in the process. If any queries that arise about implementing the terms of settlement, please contact the other party directly. … [7] The controversy that ensued, largely relates to the third dot point “removal of the dismissal from the Applicant’s personnel file”. [8] Following receipt of the conciliator’s email, which clearly stated that an agreement had been reached and identifying the substantive elements making up the agreement reached, the Applicant did not object or assert that either no agreement had been reached nor that the conciliator’s description of the agreed terms was inaccurate. [9] The parties went on and exchanged extensive correspondence regarding the written terms of settlement over several weeks, however no terms of settlement have ever been executed. The most controversial issue related to the Applicant’s representative pursuing the inclusion of a term that the Respondent would remove all references to the investigation, allegations and suspension that culminated in the termination of the Applicant’s employment. The Respondent maintained that the agreement reached in conciliation was limited to the Respondent removing references of the termination from the Applicant’s file. [10] The Applicant, Ms Walsh, provided a witness statement.1 Her evidence includes that she agrees, on one level, that a final and binding agreement was reached at the conciliation conference, but she believes that the Respondent has not “honoured the agreement by removing certain materials from my personnel file/HR record.”2 Her subjective understanding was that everything on her personnel file was going to be removed so that she could have a ‘second chance’ at future employment with the Respondent. [11] Ms Walsh’s legal representative, Mr Pick, also provided a witness statement,3 which provided context about the instructions he received from Ms Walsh, his opinion about the importance of non-monetary terms in any settlement, his subjective understanding of what was agreed at the conciliation, and his interpretation of the dot point “removal of the dismissal from the Applicant’s personnel file” in the agreement that was reached. He states that “[i]n hindsight, given the importance of this issue for my client, me and Ms Belot should have hammered-out -- 2 of 7 -- [2024] FWC 3340 3 this specific item.”4 Much of Mr Pick’s witness statement was objected to by the Respondent on the ground of a lack of relevance, and that it was largely Mr Pick’s subjective opinion and belief.5 The Commission is not bound by the rules of evidence, and I have admitted Mr Pick’s witness statement into evidence. However, for reasons discussed later in this decision, I have placed little weight on his evidence and consider it of limited probative value. Relevant Principles [12] The principles concerning whether a binding agreement has been reached are well- settled. [13] The leading authority is the High Court judgment in Masters v Cameron6 where the plurality said: 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 there agreed terms express or implied, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal agreement. 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. Of these two cases the first is the more common. … Cases of the third class are fundamentally different. They are cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own. The parties may have so provided either because they have dealt only with major matters and contemplate that others will or may be regulated by provisions to be introduced into the formal document… or simply because they wish to reserve to themselves a right to withdraw at any time until the formal document is signed. … [Footnotes omitted] [14] A fourth category was described in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd7 where McLelland J said that there is a fourth type of agreement where 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. -- 3 of 7 -- [2024] FWC 3340 4 [15] The question of whether there was or was not a binding settlement agreement is a question of fact.8 The issue is to be determined objectively, and the ultimate question, simply put, “is whether each party, by their words or conduct, led a reasonable person in the position of the other party to believe there was an immediately binding agreement at the time the alleged agreement was made”.9 Submissions [16] The F1 Application included that “[t]he Applicant acknowledges and accepts that an ‘in-principle’ agreement was reached at the conciliation” and submitted that the agreement fell within the third category identified in Masters v Cameron.10 [17] However, at the hearing, the Applicant also submitted that no binding agreement was reached to settle the UFD Application at the conciliation, because the arrangements were too uncertain and/or incomplete to constitute an ‘accord and satisfaction’. The third dot point in the conciliator’s statement of the terms of the agreement, being “removal of the dismissal from the Applicant’s personnel file,” is said to be so uncertain as to be devoid of meaning. [18] A further alternative submission by the Applicant is that the settlement agreement included a term requiring the Respondent to remove all records relating to the Applicant’s termination of employment (Clean Slate Term) and the Commission can and should make orders, issue a recommendation or express an opinion giving effect to the Clean Slate Term pursuant to s.589 and/or s.595 of the FW Act. [19] The Respondent submits that the parties reached binding terms of settlement at the conciliation conference which constituted an accord and satisfaction that extinguished the Applicant’s cause of action. It contends that the agreement reached falls within the second class identified in Masters v Cameron. [20] The Respondent submits that as the Applicant’s unfair dismissal application was extinguished by the agreement, there is no jurisdiction for the Commission to exercise any powers under section 589 or 595 of the FW Act. The only power available is to dismiss the application pursuant to s.587 of the FW Act, which it seeks the Commission exercise. Consideration [21] The Full Bench in Curtis v Darwin City Council,11 dealt with similar circumstances to those present in this case. The Full Bench dismissed an appeal against a decision of Simpson C, dismissing an unfair dismissal application under s.587 of the FW Act in circumstances where the parties agreed to resolve an unfair dismissal application on the basis of: “right to resign; statement of service (detailed dates of employment and job title) and; deed of release encompassing the above and wording that either party cannot make disparaging remarks.” -- 4 of 7 -- [2024] FWC 3340 5 [22] The Full Bench found that a binding agreement had been reached although no deed of release was ever signed and although the draft deed provided included provisions additional to the agreed terms set out above. The Full Bench said at [69]: “ It is clear that the settlement agreement drafted by the ATO’s solicitors contained mutual releases and those had not been specifically agreed in the discussions on 3 March. There were other terms included as well, such as a request for confidentiality. But the appellant’s focus on the settlement document seems to us to miss the point. The real question is what was agreed on 3 March between counsel. It is clear enough that a completed agreement was reached and that it was not conditional in any sense on an agreement being signed.” [23] I consider the circumstances here to be broadly analogous. [24] I am not persuaded that the in-principle agreement reached at the conciliation conference was so uncertain so as to prevent a conclusion that a contract was formed. Viewed objectively, a binding agreement between the parties was reached at the conciliation. [25] The email sent to the parties clearly stated that an agreement had been reached to settle the UFD Application. Consistent with the acknowledgement in the F1 Application form that an in-principle agreement had been reached, the Applicant did not upon receipt of the conciliator’s email, object and assert that no agreement had been reached. [26] Neither Mr Pick’s witness statement nor the partial transcript of the conciliation provided, establishes that there was a common understanding or agreement that differed from the substantive elements set out in the conciliator’s email.12 Indeed, Mr Pick’s evidence includes that “[in] the context of the negotiations that had just concluded, I interpreted the second dot point as referring to the clean slate … In hindsight, given the importance of this issue for my client, me and Ms Belot should have hammered out this specific item.”13 In essence, although Mr Pick may clearly have had in his mind and sought agreement to have all the material that led to the termination of the Applicant’s employment entirely expunged from her personnel file, there is no evidence that that was agreed. In short, Mr Pick thought it meant something much broader than the literal words and the Respondent did not. It does not establish that no agreement was reached. As to the partial transcript of the conciliation, it is largely of the conciliator’s private discussions with the Applicant and does not inform an assessment of what was agreed by both parties. Similarly, the post-contractual conduct does not establish that there was a common understanding or agreement as to what the controversial dot point meant or that it differed from the substantive elements set out in the conciliator’s email. [27] A contract that includes terms that are capable of more than one meaning is not void for uncertainty. As long as it is capable of a meaning, it is not void and a dispute about the terms is a matter of construction.14 Other than the controversial third dot point, the remaining 4 terms carry clear meanings. The phrase ‘removal of the dismissal from the Applicant’s personnel file’ may be capable of more than one meaning. However, it is far from devoid of any meaning, as the Applicant concedes. -- 5 of 7 -- [2024] FWC 3340 6 [28] That the parties have been unable to conclude the written agreement does not detract from the fact that an agreement was reached. Any dispute as to the correct interpretation of the agreement is not a matter for the Commission. [29] There is also nothing to indicate that the agreement reached falls within the third category identified in Masters v Cameron. It was not expressed to be ‘subject to contract’ or a case where the terms are not intended to have any binding effect because they have dealt only with major matters, or parties wish to reserve a right to withdraw from the agreement. I reject the Applicant’s submission that because the Clean Slate Term Ms Walsh and Mr Pick were seeking was a ‘bespoke non-monetary term’, or the difficult personal situation the Applicant was in, or that it was “drafted in an ambiguous way in contemplation of the parties sorting it out later,” points to such a conclusion. [30] In my view, a reasonable person would believe there was an immediately binding agreement reached at the conciliation that the parties intended to be immediately bound by and was not conditional unless and until a formal contract was finalised. [31] The Respondent contends that the agreement falls within the second category. That may be so, but is unnecessary for me to conclude other than that the agreement reached falls within either the first or second category in Masters v Cameron, and is therefore a binding agreement. [32] I find that a binding agreement was reached at the conciliation conference which constituted an accord and satisfaction, thus extinguishing the UFD Application. I am satisfied that it is appropriate to dismiss the UFD Application pursuant to s.587 of the FW Act. In these circumstances, I accept the Respondent’s submission that the Commission has no power pursuant to s.589 and/or s.595 of the FW Acts to make any order or exercise any power in relation to the F1 Application concerning the Clean Slate Term. In any event, even if I was seized of such power, my opinion would not be that the Clean Slate Term was part of the agreement reached by the parties. I am not satisfied that the evidence establishes that any such term was agreed. [33] The UFD Application and the F1 application are dismissed. An order to that effect will be issued separately. DEPUTY PRESIDENT Appearances: T. Pick, solicitor, with permission on behalf of the Applicant. J. Tracey of Special Counsel, with permission on behalf of the Respondent. -- 6 of 7 -- [2024] FWC 3340 7 Hearing details: 2024. 10 October (via Microsoft Teams) Printed by authority of the Commonwealth Government Printer <PR781898> 1 Exhibit A2, Digital Hearing Book (DHB) p.414-422. 2 DHB p.414 at [3]. 3 Exhibit A3, DHB p.446-600. 4 Ibid, DHB p.449 at [28]. 5 Ibid, DHB p.446-600. 6 [1954] HCA 72 (Masters v Cameron). 7 (1986) 40 NSWLR 622. 8 Australian Postal Corporation v Gorman [2011] FCA 975 at [37]. 9 Tra v Prodigy Holding Pty Ltd [2024] FWC 394. 10 F1 Application Form, Section 2.2 at [23], DHB p.365. 11 [2012] FWAFB 8021. 12 DHB p.602-606. 13 Exhibit A3, DHB p.449 at [28]. 14 Upper Hunter County District Council v Australian Chilling & Freezing Co. Ltd (1968) [1968] HCA 8; 118 CLR 429 at p.436 per Barwick CJ. -- 7 of 7 --