s.365 - Application to deal with contraventions involving dismissal

General Protections- Application for the FWC to deal with a dismissal dispute - question of whether a binding settlement has been reached- no binding settlement reached- Certificate of unsuccessful conciliation issued.

• [1] Ms Canavan made an application to the Fair Work Commission on 3 January 2025 to deal with a General Protections dispute (Application) pursuant to s.365 of the Fair Work Act (the Act). Ms Canavan alleges that she was dismissed in December 2024 after making enquiries and complaints in relation to her parental leave entitlements and notice of upcoming parental leave.

• [2] On 4 February 2025, the Respondent filed their Form F8A response to the Application, with attachments. The Respondent alleges that Ms Canavan was made redundant due to a restructuring decision made by the Respondent which predated Ms Canavan's enquiries regarding leave entitlements and her upcoming parental leave.

• [3] On 12 March 2025 I convened a conference to deal with the Application in accordance with s. 368 of the Act. Both parties sought permission to be legally represented at that conference. Taking into account the complexity of the matter, I formed the view that it would enable the matter to be dealt with more efficiently if I granted permission for both parties to be represented, and I exercised my discretion to do so pursuant to s.596 of the Act.

• [4] At the conference, both parties made without prejudice offers of settlement to resolve the Application. It would appear, based on the evidence, that discussions and exchanges of correspondence continued between the representatives of the parties following the conference.

• [5] On 27 March 2025, Ms Canavan's legal representatives requested that the Commission issue the requisite certificate pursuant to s.368(3) of the Act, certifying that I was satisfied that all reasonable attempts to resolve the Application (other than by arbitration) had been, or were likely to be, unsuccessful (Certificate).

• [6] On 27 March 2025, the Respondent advised the Commission that it opposed the granting of the Certificate, on the basis that the parties had reached a binding agreement, with one outstanding factor to be determined. That factor was said by the Respondent to be 'whether the resolution could be reached in a legally compliant manner'. The question of whether a binding settlement was reached and whether a Certificate should be issued is the subject of this decision.

• [7] On 3 April 2025, I instructed my Associate to advise the parties that, in my preliminary view, a binding settlement had not been reached by the parties at the conference, and in those circumstances a Certificate pursuant to s.368 of the Act should be issued. My Associate advised the Respondent that if they continued to oppose the issuance of the Certificate, they should advise the Commission, and directions would be issued and a hearing listed to determine the question of what powers the Commission has and how those powers should be exercised in the circumstances. On 7 April 2025, the Respondent advised that it still opposed the granting of a Certificate.

• [8] On 22 April 2025 I issued the following directions:

1. 'The Respondent is to file an outline of submissions and supporting witness statement/s in support of its opposition to the issue of a s.368 Certificate by no later than 4:00 PM on Tuesday, 29 April 2025;

1. The Applicant is to file an outline of submissions and supporting witness statement/s in support of the issuance of a s.368 Certificate by no later than 4:00 PM on Tuesday, 6 May 2025.

1. The Respondent may file any outline of submissions and supporting witness statement/s in reply by no later than 4:00 PM on Tuesday, 13 May 2025.

1. The parties are to advise the Commission by no later than 4:00 PM on Thursday, 15 May 2025:

a) Whether they seek a hearing before the Deputy President or whether they consent to the matter being determined 'on the papers' and without the need for a hearing; and, > > b) In circumstances where a hearing is sought, a list of their mutually available dates for hearing.'

• [9] On 28 April 2025, the Respondent requested a short extension to the filing deadlines in the above directions, which was granted on 30 April 2025.

• [10] On 1 May 2025, the Respondent complied with the amended directions by filing evidence and submissions in support of its opposition to the issuance of the Certificate.

• [11] On 6 May 2025, Ms Canavan filed evidence and submissions in support of the granting of a Certificate. The Respondent did not elect to file evidence and submissions in reply. Neither party requested that the Commission hold a hearing in relation to the question of whether to grant the Certificate.

• [12] I have considered the evidence and submissions filed by both parties in this matter and have reaching the following conclusions. The evidence is described below at a high level given that it pertains to without prejudice exchanges.

• [13] The Respondent filed evidence[1] which dealt with negotiations conducted in the conference held before me on 12 March 2025 and correspondence and conversations held between the representatives of the parties following that conference. The Respondent submits that Ms Canavan made an offer to settle the matter, which the Respondent accepted, clearly demonstrating their intention to create legal relations. It was submitted that the core consideration had been agreed, however, the Respondent needed to necessitate a legally compliant manner for the terms of settlement to be completed. The terms were agreed as those commonly used in the Commission.

• [14] The Respondent claimed that the conference was attended in good faith by the parties, and that the agreement reached contained the required tenets of a binding agreement; offer, acceptance, consideration, intention to create a binding agreement, legal capacity and certainty of contract. The Respondent contended that the Conference, surrounding circumstances of contract law, negotiations in good faith, proposal of standardised terms was legally binding and satisfied the requirements of a category one agreement pursuant to Masters v Cameron.[2] The Respondent denied that the Applicant had 'agreed to agree' to the terms once deemed legally compliant, and instead submitted that there had been a finality in reaching a binding agreement.

• [15] Ms Canavan filed evidence in support of her contention that no binding settlement had been reached.[3] This included evidence of what had occurred at the conference on 12 March 2025 and what followed. It was submitted that the facts disclosed by the evidence filed on behalf of the Respondent, and also Ms Canavan's statement indicated, that the objectively ascertained intention of the parties was that there was not an immediately binding agreement made during the conference on 12 March 2025. Ms Canavan submitted that the evidence of the discussions between the parties indicated that the parties' intention was not to make a concluded agreement, unless and until they executed a deed, with this deed to be executed by no later than 21 March 2025.

• [16] It was submitted by Ms Canavan that this case fell into the third category in Masters v[ ]Cameron.44 Masters v Cameron (n 2). In support of this submission Ms Canavan relied on the express language used by the parties during the conference, that the terms of the bargain had not yet been fully defined, nor advice sought, and that the Respondent's representative's own contemporaneous note of the conference "throw light" on whether there was a binding agreement and negatives the existence of a binding and concluded agreement. In addition, Ms Canavan submitted that the subsequent conduct of the respondent's representative is indicative of the parties' earlier intentions, that the language used in their correspondence expressly negatives the earlier existence of a binding and concluded agreement, and that this language and conduct is consistent only with the proposed agreement still being under consideration and negotiation. Finally, Ms Canavan submits that if these submissions were not to be accepted by the Commission, then the position remains that an express term of the proposal to resolve the dispute was that there be a deed executed by 21 March 2025 and this did not occur.

• [17] The applicable legal principles to determine whether the parties have agreed to be immediately bound by an agreement they have reached are not disputed by the parties. The question of whether an agreement is reached which is intended to be immediately binding is determined objectively, having regard to the presumed or inferred intention of the parties. The objective intention of the parties is a factual inquiry determined having regard to all the surrounding circumstances, including by drawing inferences from the words and conduct of the parties,[5] and from the terms of the parties' correspondence, which is to be read in the light of the surrounding circumstances having regard to the commercial context in which the correspondence was exchanged.[6]

• [18] In Masters v Cameron,[7] the High Court said the following in relation to when a binding settlement agreement will exist:

"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 mad 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."[8]

• [19] Having had regard to the evidence filed by the parties, I have formed a view that the arrangements between the parties fell into the third category in Masters v Cameron.[9] I am not persuaded that a binding settlement agreement was reached. My reasons are as follows.

• [20] I do not intend to disclose the content of the various offers put by the parties in the conference held in this matter given their without prejudice nature. Suffice it to say that some of the offers put were complicated, unusual, potentially had tax implications and required due diligence as to whether they could be legally put into effect and, if so, how. These included payment of a settlement sum and proposals to re-characterise payments already made to Ms Canavan.

• [21] Firstly, in the circumstances I do not accept that there was an immediately binding agreement made at the conference. The language used at the conference, as set out in the statement of Ms Canavan, was express in its terms that any binding and concluded agreement depended on, and was subject to the preparation and execution of a deed by 21 March 2025. It was also dependent on the parties obtaining advice as to their taxation position and/or the ability to lawfully structure the payments made to Ms Canavan in the way that had been proposed, including re-characterising the nature of payments already made to Ms Canavan on her dismissal. This added a layer of complexity to negotiations.

• [22] The evidence discloses that neither Ms Canavan, nor the Respondent, expressly said during the conference that they intended to be bound immediately. I find that both parties expressed that they required further advice and needed time to obtain that advice. The Respondent properly accepts that the question of whether settlement could be completed "in a legally compliant manner" had not been resolved at the conference. It would be surprising if, given the various complexities in the offers put, that the parties, represented by lawyers, and needing to get further professional advice, would be content to make a binding settlement on oral terms discussed at a conference in circumstances where at least one party had not satisfied themselves that they could effect settlement in a legally compliant manner. To the contrary, the conduct of the parties, which was entirely proper in the circumstances, sent a clear signal - the settlement agreement was conditional on other matters happening. I do not consider that a reasonable person could have understood this as anything other than indicating that there was no agreement yet, but that there could be if the conditions were met.

• [23] Whilst I accept that the representative of the Respondent at the conference, Ms Jackson's subjective recollection of negotiations is not determinative of whether a binding agreement was reached at the conference, the file note of the conference prepared by her is informative. Ms Jackson, the representative of the Respondent at the conference, records her subjective understanding that no binding and conclusive agreement had been made. Those notes record (with emphasis added):

"Next steps....3. Update DP on 17 March regarding whether we have reached an agreement, still working towards an agreement or if negotiations fail."

• [24] As held in Farrell v Super Retail Group Limited (Specific Performance Claim) (Farrell) evidence of subsequent conduct can be accepted as indicative of the parties' earlier intention.[10] Subsequent communications from Ms Jackson to Ms Canavan's solicitors reinforce that an agreement had not been reached. These communications outline the Respondent's proposed approach to effecting payment to Ms Canavan. It states that "If the parties are in agreement" and refers to having to prepare a "fairly complex" deed of release before stating (again with emphasis added) "If this is agreeable, I will proceed with preparing the deed based on the other terms as previously agreed". This reflects Ms Jackson's understanding that this component had not been agreed (nor presumably intended to be agreed given the advice required to be obtained) at the conference. In any event, no deed was provided to Ms Canavan, nor agreed, nor signed by either party by 21 March 2025. To date Ms Canavan has not signed the deed proposed by the Respondent on 26 March 2025.

• [25] Ultimately, given my conclusions above, I am not satisfied that a binding settlement agreement has been reached between the parties in this matter. Accordingly, I have determined to issue a certificate pursuant to s.368(3)(a) of the Act. The certificate will be issued separately.

[1] Witness Statement of Ms K Jackson, 1 May 2025.

[2] Masters v Cameron (1954) 91 CLR 353; [1954] HCA 72 ('Masters v Cameron').

[3] Witness Statement of Ms C. Canavan, 6 May 2025. [ ]

[5] Sagacious Procurement Pty Ltd v Symbion Health Ltd (Formerly Mayne Group Ltd) [2008] NSWCA 149 at [99] quoting Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, 547-548.

[6] Queensland Phosphate Pty Ltd v Korda (As Joint and Several Liquidators of Legend International Holdings Inc (In Liq) [2017] VSCA 269, 37.

[10] Farrell v Super Retail Group Limited (Specific Performance Claim) [2024] FCA 1515, 17, citing Australian Broadcasting Corp v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, 547-548 and 550.

Printed by authority of the Commonwealth Government Printer