Fair Work dispute settlements; what are they?

This post is an extract from an unfair dismissal case on appeal and is probably only for professional employment law advocates. It is forensic analysis of the nature of a settlement agreement reached before arbitration.

“Dismissal of the application pursuant to s.587 of the Act

[42] While we do not consider that any of the grounds raised by the Appellant identify any

error or otherwise form a ground where public interest should be granted for appeal, we note

that the Respondent has raised one matter where it foreshadowed there might be potential error.

While it was not strictly necessary for the Respondent to have done so, it reflects well upon it

for having drawn the matter to our attention.

[43] The issue concerns the power to dismiss, under s.587(1) of the Act, where s.587(2)

provides that an application made under s.365 must not be dismissed on the basis that the

application has no reasonable prospects of success.

[44] Section 587 of the Act provides:

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

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

[2023] FWCFB 56

(b) on application.

[45] The words ‘[w]ithout limiting when FWC may dismiss an application’ at the

commencement of s.587(1) of the Act establish that the jurisdiction of the Commission to

dismiss an application is not limited to the circumstances set out in s.587(1)(a), (b) and (c).

However, in the context of s.365 applications, the Commission must not dismiss the application

for reasons as prescribed in s.587(2) of the Act. As is quite clear from the Act, s.365 applications

may be dismissed pursuant to s.587 except for reasons that the application is frivolous,

vexatious, or has no reasonable prospect of success.

[46] The Deputy President in his decision observed that the Appellant’s application has no

reasonable prospect of success. Dismissal of an application made under s.365 on the ground of

having no reasonable prospects of success is contrary to s.587(2), although we note that the

actual order made by the Deputy President referred simply to s.587.

[47] Having found that the parties reached a binding settlement agreement, the question

arises how the Deputy President might have dealt with the application. The Appellant’s

application was made subject to Part 3-1 – General Protections where the objects provide

protections, but also effective relief for persons adversely affected as a result of a general

protections contravention.17

[48] Section 365 of the Act applies to applications where a person had been dismissed, and

the person has an entitlement to a protection, and they allege that they were dismissed in

contravention to part 3-1 of the Act. Section 366 provides the timeframe for applications. The

Appellant’s application was made within the required timeframe, however, the matter whether

the Appellant was dismissed was subject to jurisdictional objection. This jurisdictional

objection was not resolved as the hearing was vacated due to the parties reaching a binding

settlement agreement.

[49] Had the Deputy President not found on the evidence and facts that a binding settlement

agreement had been reached, a certificate could not be issued without determining whether the

Appellant was in fact dismissed.18

[50] There is nothing in the Act that suggests a binding settlement agreement cannot be

reached in s.365 disputes. Section 368 provides that such disputes must be dealt with other than

by arbitration.19 The note of s.368(1) recognises that the Commission may deal with a dispute

by mediation or conciliation or by making a recommendation or expressing an opinion.

[51] It is not uncommon for disputes to be resolved either at private conference20 or outside

of the conference process. A settlement of the dispute is consistent with the objects of the Part.

It also follows that should the parties settle the dispute by agreement, then the application may

be extinguished, depending upon the terms and nature of the settlement agreement.

[52] As already indicated, we agree that there was a binding settlement agreement. Initially,

that agreement was constituted by the email exchange of the parties on 6 September 2022.

Those terms were immediately binding but were intended to be restated in a fuller and more

precise form, but to the same effect.21 A deed of release was produced. That document was

[2023] FWCFB 56

signed by the Appellant on 15 September 2022 and returned to the Respondent. On 23

September 2022, the Respondent signed the deed and, on 27 September 2022 it made payment

in accordance with it.

[53] Where, as here, the settlement agreement (as later restated in the deed) was made and

performed, there is “accord and satisfaction”. Simply put, the effect of accord and satisfaction

was that the Appellant’s original claim was extinguished and replaced with a new cause of

action (i.e. initially under the email settlement agreement and then under the deed).22

[54] On the basis that a binding settlement agreement had been reached for an application

made under s.365, an Applicant may file a Notice of Discontinuance (NOD), or in absence of

a NOD, there may be circumstances where the Commission may dismiss the application on its

own initiative pursuant to s.587 except for reasons that the application is frivolous or has no

reasonable prospect of success: s.587(2). Reasons for relying on s.587 need not be limited and

recognised examples for relying on s.587 of the Act include inexcusable and unreasonable

delays in the application by the Applicant or for want of prosecution by the Applicant.

[55] We consider that it is open for an application under s.365 to be dismissed under s.587(1)

because the cause of action underlying the dispute has been extinguished by a settlement

agreement after the application was made. While we note that a cause of action extinguished

by reason of a settlement agreement would also have no reasonable prospects of success, the

bases of dismissal are not identical (although there is practical overlap between the two). Simply

because an application under s.365 might not have no reasonable prospects of success, or is

frivolous or vexatious, within the meaning of s.587(2) does not preclude dismissal on other

grounds supported by s.587(1) that are available.

[56] Where there has been accord and satisfaction as a result of a settlement agreement

occurring before an application is made, we note by analogy the Full Court’s decision Coles

Supply Chain Pty Ltd v Milford and anor (2020) 279 FCR 591 at [69] that the “better view is

that it is not necessary to identify an express power in the FWC to decline to act upon an

application on the basis that it fails for want of jurisdiction”. This suggests such an application

might not be dismissed under s.587 but this is question for another day.

[57] The Deputy President’s order dismissing Mr Lewer’s application was expressed to be

made in accordance with s.587 of the Act, without recourse to subsections 587(1)(b) or (c). We

are satisfied that the order made in those terms was correct (and would have also been correct

were an order issued reflecting the implied power for the Commission to decline to act on an

application where it failed for want of jurisdiction). It appears manifestly clear that Mr Lewer’s

application under s.365 had been wholly subsumed by the settlement agreement.

[58] While the reference in the Deputy President’s decision to there being no “reasonable

prospects of success” may have introduced a source of confusion, even if that was an error (and

it is unnecessary for us to decide), the fact a Member at first instance made an error is not

necessarily a sufficient basis for the grant of permission to appeal.

Conclusion and Orders

[2023] FWCFB 56

[59] We have considered whether this appeal attracts the public interest, and we are not

satisfied, for the purposes of s.604(2) that:

there is a diversity of decisions at first instance so that guidance from an appellate

body is required;

the appeal raises issues of importance and/or general application;
the Decision at first instance manifests an injustice, or the result is counter intuitive;