Sec 399A of the Fair Work Act allows the Fair Work Commission to dismiss a general protections’ application where the applicant fails to meet the requirements of the Commission or where he or she has “failed to discontinue the application after a settlement agreement has been concluded”.
At first glance this may seem to be a trifling point, but it is not. There have been countless occasions (well maybe a couple of dozen anyway) when I have been asked by an applicant in an unfair dismissal case (and now I think about it general protections’ applications as well) to set aside a settlement agreement reached in principle in a conciliation conference when the applicant subsequently has second thoughts or develops cold feet.
In Masters v Cameron (1954) 91 CLR 353 the High Court held that when parties reach agreement on terms of a contractual nature and agree that the negotiations will be dealt with by a formal contract, that the case may belong to any of three classes:
1) the 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 of their bargain restated in a form which will be fuller or more precise but not different in effect; or
2) the parties have agreed on all terms and intend no departure from or addition to that which there 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
3) the parties do not intend “to make a concluded bargain at all, unless and until they execute a formal contract.”
In the first two classes the High Court held that there was a binding contract.
Curtis v Darwin City Council (2012) FWAFB 8021 referred to the decision of the Federal Court in Australian Postal Corporation v Gorman (2012) FCA 975 which is an authority for the proposition that if there is a binding agreement between parties to an unfair dismissal application then the application has no reasonable prospects of success and may be dismissed.
In Australia Postal Corporation v Gorman, Besanko J said as follows:
“An accord and satisfaction extinguishes the existing cause of action and replaces it with a new cause of action based on the agreement. A valid accord and satisfaction is not a discretionary factor relevant to the subsequent litigation of the original claim; it is an answer to the claim.”4
His Honour went on to say:
“a valid accord 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.”
However all of this begs the question. What is meant by the words “has been concluded” in the section? Surely this must mean something more final than the situation where there has been an agreement in principle reached. That surely has not by that been concluded until the fat lady has sung, the deed has been executed and the money paid?