What follows is an extract from the Fair Work Commission’s unfair dismissal benchbook which deals with the conciliation process used by the Commission in its management of unfair dismissal cases.
“Overview
Conciliation is a voluntary process to help an employer and employee resolve an unfair dismissal dispute. It is an informal method of resolving the unfair dismissal claim that is generally conducted by telephone and can avoid the need for a formal conference or hearing.
Because conciliations are generally conducted by telephone parties do not need to attend a Fair Work Commission office.
In a conciliation, each party can negotiate in an informal manner and explore the possibility of reaching an agreed settlement. In a conciliation any outcome is possible provided both parties agree to it. But in a hearing the outcomes are limited and strictly controlled by law.
Parties are under no obligation to reach a settlement.
Unrepresented parties are usually offered a 3-day cooling off period following conciliation to decide if they wish to opt out of any agreed settlement.
Related information
Conciliators
Conciliations are generally conducted by Commission staff who are trained and experienced in conciliation, workplace relations and unfair dismissal law. In some situations, a Commission member will conduct a conciliation.
Conciliators are independent and impartial – they are not on the ‘side’ of employees or employers. The conciliator’s job is to:
- help the parties reach a resolution
- lead the discussion and provide guidance
- ensure conversations remain polite and on-topic, and
- explore the issues involved.
The conciliator does not:
- give either party legal advice
- argue on behalf of either party
- judge the facts of the case, or
- make any type of decision or recommendation.
Once a matter has been referred to a Commission Member it may be subject to further conciliation prior to a conference or hearing. Further conciliation can be requested by either party at any stage if the matter does not settle at the initial telephone conciliation.
Representation at conciliation
There is no requirement for a party to be represented by another person at conciliation, but a party may be represented if they prefer. A representative can be a lawyer, an advocate, a union official (for employees) or industry body official (for employers), or even a friend.
No formal permission from the Commission needs to be granted to be represented during conciliation by a conciliator who is a Commission staff member. However, if the conciliation is conducted by a member of the Commission and the representative is a lawyer or paid agent, then permission to appear must be sought.
A party may also consider having a family member or friend with them for support.
Related information
Outcomes at conciliation
If an agreed settlement has been reached, a written agreement will be prepared for both parties to sign. Unrepresented parties may be offered a 3-day cooling off period to decide if they wish to opt out of any agreed settlement.
If no agreement is reached the matter will automatically proceed to a formal conference or hearing, unless the employee chooses to discontinue their application.
Terms of settlement
In Masters v Cameron[1] the High Court determined that there are 3 classes of settlement agreement for when 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 deal with by a formal contract. The 3 classes are:
- 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.
- 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.
- 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. [2]
In each of the first 2 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.
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, any binding effect of their own. The expressions ‘subject to contract’, ‘subject to the preparation of a formal contract’ and others of similar import prima facie create an overriding condition so that what has been agreed upon must be regarded as the intended basis for a future contract and not as constituting a contract of itself.[3]
The question of whether or not there was a binding agreement reached between the parties is a matter of fact. Even though the applicant did not sign the agreement arising from conciliation this does not mean that a binding agreement was not reached.[4]