Unfair dismissal - whether parties entered into binding terms of settlement - Union representation - applicant did not accept settlement - conflict of evidence - whether application should be dismissed - binding settlement exists - application dismissed under s 587(1) of the Act.

[1] Mr Mark Howey had worked as a production associate for Mars Australia Pty Ltd t/a Mars Pet Care Australia (the respondent) from 21 October 1992 until he was dismissed on 24 May 2011, on the grounds of serious and wilful misconduct. The respondent is a producer and supplier of pet food. It employs over 1000 employees at its plant in Raglan, near Bathurst, New South Wales.

[2] The circumstances surrounding Mr Howey's dismissal are not materially relevant for the purposes of this decision. This is so because a preliminary issue has been pressed by the respondent, the outcome of which will determine whether Mr Howey's substantive claim for a remedy from alleged unfair dismissal can be considered by Fair Work Australia (FWA). In short, that issue is whether Mr Howey's claim had been settled and whether the terms of settlement, agreed to between the parties, was binding on them. The corollary of answering this contention in the affirmative, is that the matter is effectively concluded and no further proceedings can be entertained by FWA. In order to determine this issue, it is first necessary to set out a brief chronology of events.

[3] Mr Howey's application for an unfair dismissal remedy, pursuant to s 394 of the Fair Work Act, 2009 ('the Act') was filed on 6 June 2011 by his Union, the National Union of Workers, New South Wales Branch ('the Union'). The Union's contact person was disclosed as Mr Stefan Mueller, Senior Industrial Officer. The matter proceeded in the usual way to a telephone conciliation with an FWA Conciliator on 6 July, 2011. Mr Howey was represented by a different Union official that day, Mr Michael Valentin.

[4] The conciliation was unsuccessful with Mr Howey insisting that the only outcome he wanted was reinstatement. The matter was referred to me for arbitration and listed for hearing in Orange from 19-23 September 2011. Directions were issued on 25 July 2011 in preparation for the hearing. At Mr Mueller's request and by consent, the hearing dates were vacated and relisted for 6-7 October 2011.

[5] On 15 August 2011, Mr Mueller filed and served evidence in accordance with the directions, being an unsigned statement of Mr Howey and an outline of contentions. On 5 September 2011 the respondent filed and served its evidence and an outline of contentions in accordance with the directions.

[6] However, at 8:54am on 4 October 2011, Mr Joydeep Hor, solicitor for the respondent, emailed Mr Mueller as follows:

I have no instructions as to settlement in relation to this matter but am mindful that I have 1.5 days set aside today and tomorrow for case preparation and prior to commencing this I wanted to explore with you whether the Applicant had any interest in compensation as an alternative to reinstatement. I expect that Mars will be unlikely to settle "on the day" if all the prep work has been done.

Can you please let me know? I will be in FWA this morning until midday but should be free to discuss this afternoon.'

Please call me before 1pm if you get a chance. After that time I am on my mobile (........) but cannot always take the call.'

[7] Negotiations between Mr Mueller and Mr Hor continued that day and a settlement was reached. Mr Mueller also spoke to Mr Howey that day. I shall come back to the details of these discussions shortly.

[8] Relevantly, my Chambers received the following email from Mr Derrick Belan, State Secretary of the NUW, on 5 October 2011 as follows:

'This matter is listed for Arbitration Conference/Hearing before His Honour on 6 and 7 October 2011.

The parties have been able to resolve the matter. We therefore ask for the hearing to be cancelled.

We will file a notice of discontinuance once the settlement is finalized.

Please do not hesitate to contact Stefan Mueller on .......'

[9] Mr Mueller also phoned my Chambers on 5 October 2011 and confirmed the matter had been 'settled in principle' and the hearing dates could be vacated. Fair Work Australia cancelled the listing for 6-7 October 2011.

[10] However, on 19 October 2011, my Associate phoned Mr Howey and was advised that Mr Mueller had earlier told him to accept an offer of settlement of 13 weeks' pay or the Union would cease to represent him. Mr Howey said he wished to pursue his reinstatement claim through 'another lawyer, not the Union'. On 27 October 2011, he advised my Associate that he had engaged a solicitor and would contact Chambers again in respect to pursuing his claim.

[11] On 6 November, 2011, Mr Howey emailed my Chambers as follows:

'Dean, thanks for the opportunity to talk with you several times on this matter. At present I am just waiting instructions on whether I am able to continue with this. Are you able to leave it open for maybe a fortnight, so I can seek the correct information. Could you email myself in response please'

I agreed to leave the matter open until 21 November so that Mr Howey could obtain advice as to whether he intended to proceed with his claim.

[12] On 21 November 2011, Mr Howey confirmed that, on advice, he had decided to proceed with his matter and that his solicitor would be in contact with my Chambers shortly about further arrangements. On 23 November 2011, Mr Timothy Cain of Cain Kensit Messenger (Solicitors) filed a notice of representative commencing to act for Mr Howey. On 8 December 2011, Mr Cain requested the matter be relisted for a directions hearing.

[13] No contact was made with FWA until my associate phoned Mr Cain on 22 May 2012. He advised that the matter was still ongoing. A directions hearing was listed on 31 May 2012 and, at the parties request, relisted to 15 June 2012. On this occasion, Mr Hor sought to have the preliminary issue determined before any substantive hearing. Mr Mahendra of Counsel, for Mr Howey, agreed to that course. Further directions were issued and various summonses to produce and to attend the proceedings were later ordered. The preliminary hearing took place on 30 July 2012.

[14] Three persons - Mr Howey, Ms Tracey Chenhall, the respondent's Human Resources Manager and Mr Mueller provided witness statements and oral evidence in the proceedings (Mr Mueller gave his evidence under summons).

[15] Mr Howey said that while an offer to settle his claim had been made in the 6 July 2011 conciliation, he had rejected it, because he sought reinstatement. He later provided a list of names to Mr Mueller who he believed could be potential witnesses in his case. He believed one potential witness had a conversation with Mr Mueller for some 27 minutes. Mr Mueller advised him that three of the proposed witnesses would not speak, in any detail, about the matter.

[16] On 27 September 2011, Mr Howey sent an email to Mr Mueller inquiring about the witnesses and if anything else was required of him before the hearing on 6 October 2011. Mr Howey said he subsequently found out that his unsigned witness statement had been filed by Mr Mueller without his instructions to do so. He had not seen it, or signed it before its lodgement.

[17] Mr Howey deposed to the following telephone conversation with Mr Mueller on 4 October 2011:

Mueller: I have been speaking to the other side, his name is Joydeep and they are prepared to go an extra week and I think we will accept the offer and in actual fact we have accepted the offer.

Mueller: I got you an extra week, that is the good news. Take the offer.

Me: I don't want to settle. I told you that before, I want reinstatement. Are we still on for Court?

Mueller: No. It's no use going to court, we will accept the offer. You are in a new job now that you are happy with. Just accept the offer. You need to say yes.

Me: No. I need to go to court on this. I am prepared and ready to go to court, I have taken 2 days annual leave.

Mueller: No, the offer is on the table, we accepted it and you won't be going back to court and that's it. You need to say yes.

Mueller: I don't need to be spoken to like that. I'll send you the release.'

[18] Mr Howey believed that this conversation was being taped by Mr Mueller. He said that he was unaware Mr Mueller was engaged in settlement negotiations with Mr Hor without his instructions. He had not instructed Mr Mueller to do so and had not agreed or consented to any settlement or a discontinuance of his proceedings. Mr Howey then sought advice from Mr Patrick Reen, a friend and another employee of the respondent, and told him of the above conversation.

[19] On 7 October 2011, Mr Mueller was phoned by Mr Howey and the following conversation was said to have occurred:

'Mueller: I will be emailing you the deed of release in about 40 minutes.

Me: Listen, I've told you before I don't want the offer. You have let a lot of people down by your actions including myself. You got bought out you dog cunt.'

Mr Howey agreed that he received the email and the deed, but did not bother to read it until some weeks later, as he had not agreed to any settlement.

[20] On 7 October 2011, Mr Howey also had a conversation with the site delegate, Mr Trevor Dixon to the following effect:

Mr Howey: Nah, the Union's trying to get me to sign off, but I'm not going to do it, I want my job back.

Mr Dixon: Fair enough, you need to make a decision as to what you want to do'

[21] Mr Howey then contacted the Law Society of NSW which provided him the names of four local law firms who may be able to assist him. Mr Howey said that, at all times, he had only sought reinstatement and, at no time, had he agreed to settle his unfair dismissal claim.

[22] In cross-examination, Mr Howey reaffirmed that the only offer he made in the conciliation was reinstatement. He accepted his Union representative at the time was seeking a financial settlement, but he had not instructed him to do so. He denied having offered to settle for 22 weeks' pay.

[23] Mr Howey conceded that after the conciliation he had prepared a statement over the phone to be filed in FWA. He now accepted that it was not entirely true that this witness statement, prepared by Mr Mueller, was filed without his instructions. He now agreed he had read the statement and approved its filing (with FWA). Mr Howey said he had a number of conversations with Mr Mueller about other people giving evidence on his behalf. Mr Howey denied that Mr Mueller had told him he could only get one person (Trevor Dixon) to provide a statement of evidence. He had believed two other persons had agreed to do so. He agreed Mr Mueller sent him all of the respondent's witness statements and had asked him to respond, but he had not done so. Mr Howey said that by 27 September 2011, with the case getting close, he was concerned that he hadn't heard of any other witnesses.

[24] Mr Howey insisted that he had not considered any offer to settle the matter when Mr Mueller spoke to him on 4 October, he only wanted reinstatement. He denied asking Mr Mueller to find out what the respondent would be willing to offer. He agreed Mr Mueller told him that 13 weeks was the most they could get, but he rejected it. He had never agreed to Mr Mueller's proposed course of action. He said Mr Mueller was pressing him to accept the offer. Mr Mueller told him that he had accepted the offer and he needed to agree. Mr Howey would not do so. He actually assumed Mr Mueller may have been taping the conversation, because he kept saying he needed to say 'yes'.

[25] Mr Howey denied that Mr Mueller told him, in a second phone call on 4 October, that he had advised FWA that a deal had been done and that he would be sending him a deed of release. He said he told Mr Mueller he wouldn't accept the settlement and had asked if 'we are still going to court'. Mr Howey said he was alarmed about the situation and rang the (FWA) Hotline and had spoken to Mr Dixon on 7 October, 2011.

[26] Mr Howey insisted that he had not known about the incident in which a Manager was 'celebrating' the settlement of his case. He denied telling Mr Mueller on 7 October about the 'cheering' at the workplace, as he was not even aware of it. He denied that this incident had caused him to change his mind about settlement, as he was angry and had wanted to renege on the deal. He could not recall Mr Mueller telling him 'a deal is a deal.'

[27] Mr Howey agreed that he and Mr Mueller had had three conversations before Mr Mueller's email of 7 October. He accepted it was 'strange' that Mr Mueller would be seeking to finalise the matter, if he had known how strongly he had felt about it. Mr Howey conceded he had put nothing in writing to protest Mr Mueller's actions. However, he had spoken to another employee, Mr Pat Reen on 4 October and told him he had been 'sold out' by the Union and had sworn at Mr Mueller. He then contacted the Law Society about the matter. Mr Howey said he also rang the Hotline to get advice and he had received information from the Law Society on 20 October 2011.

[28] Mr Howey again denied that he had changed his mind about settlement because of the conduct of the Manager at the workplace. He could not recall Mr Mueller telling him he could not change his mind. Nor could he recall Mr Mueller saying that the NUW could no longer represent him. When Mr Mueller told him he was sending the deed, he told him not to bother, that he'd been 'sold out' and had sworn at him. He had no further contact with him.

[29] Mr Howey said he then contacted my Chambers and asked for two weeks to keep the matter open so he could obtain legal advice. He first made contact with Cain Kensit Messenger sometime in October 2011. From this time, until the request for two weeks (6 November) to keep the file open he had several phone and email contacts with my Chambers.

[30] Mr Mueller is an admitted solicitor and has worked for the Union as an Industrial Officer since August 2003. In this role, he provides advice and represents his Union's members, including in many unfair dismissal matters. Mr Mueller rejected any suggestion that he had not properly prepared Mr Howey's case and was not in a position to run it. He said that, at all times, he had acted on Mr Howey's express verbal instructions which had been given to him over the phone.

[31] Mr Mueller said that on 4 October 2011, around 8:54am he had received an email from Mr Hor, in which Mr Hor inquired about Mr Howey's willingness to reach a settlement. When Mr Mueller rang Mr Hor back, he told him that he had no instructions, but he would explore options. Mr Hor said that if settlement was an option, it would only be open before he started preparing the case. At that point, Mr Mueller had no instructions to settle the matter, and said he would speak to Mr Howey, as he had an obligation to do so.

[32] Mr Mueller said that he rang Mr Howey around 11am and spoke to him for around 2 minutes (confirmed by his phone records). He asked Mr Howey what he would settle for. Mr Mueller said that 'Mark told me that he would accept 13 weeks'. Mr Mueller suggested that he would make one final offer for 13 weeks' pay, and if the respondent offered anything less, they would go on with the hearing. Mr Howey agreed with this course of action. Mr Howey also asked about potential witnesses and Mr Mueller said he had spoken to Trevor Dixon and he had provided him with a statement. Two other persons, Pat Green (sic) and Bill Ward did not want to give evidence.

[33] Mr Mueller emailed Mr Hor shortly after and asked him to phone him before 1pm. Mr Hor did so. Mr Mueller recalled Mr Hor initially proposed 9 weeks, but after some negotiation and on Mr Hor receiving further instructions, he had agreed to 13 weeks. Mr Hor had said he would provide a deed that Mr Howey would need to sign before receiving the settlement monies. Mr Mueller relied on notes he made in his diary which record the various offers made until a note records '13 weeks - accept'.

[34] Mr Mueller told Mr Hor that he would contact my Chambers to cancel the hearing. (see: email at para 8) and that he would file a notice of discontinuance once the money was paid. Mr Mueller said he then spoke to Mr Howey at 12:05pm for 1 minute 26 seconds (confirmed by his phone records). Mr Mueller conveyed the acceptance of the offer, that he had advised FWA to cancel the hearing and that a deed would be sent to him for signing. Mr Mueller stressed that Mr Howey did not say anything to him about being unhappy with the settlement or that he did not want to proceed with the settlement.

[35] Mr Mueller next heard from Mr Howey on 7 October 2011. He told him that a manager had 'cheered' and told others on site he would not be coming back. Mr Mueller said Mr Howey was very angry and said that he would not sign the deed. Mr Mueller told him the leak from management was unfortunate, but it should not affect the settlement. Mr Howey also queried Mr Mueller about potential witnesses who would be prepared to give evidence. Mr Mueller reaffirmed his earlier conversations with Mr Dixon, Mr Green (sic) and Mr Ward. He said that Mr Howey was very aggressive and clearly angry. Mr Mueller asked if he was alleging being 'sold out' and Mr Howey said 'Did you?'. Mr Mueller replied 'No, I haven't.'

[36] Mr Mueller said that he told Mr Howey he would email the deed and to advise him by Monday 10 October, if he intended signing it. He also told him that it was the Union's view that 'a deal is a deal' and that he could no longer represent him (if he reneged). If he wanted his case to proceed to hearing, then he would have to seek other legal representation. Mr Howey told him he intended to seek other legal advice. Mr Mueller informed the Union Secretary, Mr Derrick Belan of the events and Mr Belan confirmed the advice given to Mr Howey by Mr Mueller.

[37] On 12 October 2011, Mr Mueller informed Mr Hor that Mr Howey did not want to sign the deed and that he was seeking other legal advice. He also told him that his client had not kept the settlement confidential and that when Mr Howey had heard about the incident involving a Manager, he had changed his mind about settlement.

[38] In oral evidence, Mr Mueller deposed that he had been informed that at the time of his dismissal, Mr Howey had been offered a 12 weeks settlement, which was then reduced to 4 weeks at the conciliation.

[39] Mr Mueller confirmed that the first time he had personally discussed settlement with Mr Howey was on 4 October 2011. Mr Mueller deciphered the notes he made on that day when he was talking with Mr Hor. One of these notes read '13 weeks offered - 13 weeks accepted'. Mr Mueller insisted that the deed of release reflected what Mr Howey had told him he would be happy to accept.

[40] In cross-examination, Mr Mueller said he could not recall a phone call he was alleged to have made to Mr Hor on 29 September 2011 in which he had asked if the offer made at the conciliation was still available and that Mr Hor had told him that he would need to obtain further instructions. Mr Mueller could not recall if it was he, or Mr Hor, who had initiated the negotiations for a settlement. However, Mr Mueller denied it was the respondent which made the offer of 13 weeks. At all times, he had acted on Mr Howey's instructions that he would accept 13 weeks and he made sure of these instructions prior to entering into negotiations with Mr Hor.

[41] Mr Mueller further deposed that the first offer of 9 weeks was made by Mr Hor on 4 October 2011. He had not contacted Mr Howey about this offer because they had agreed the Union would not put the first offer and would not accept anything less than 13 weeks. Mr Mueller said he had then put this as a final offer. Mr Mueller conceded his recollection of these conversations was different to that of Mr Hor.

[42] Mr Mueller said that in his email to Mr Howey of 7 October 2011, he put a deadline to Mr Howey because he had earlier told him that he had changed his mind. He had wanted to give him an opportunity to think about the offer till Monday 10 October 2011.

[43] Mr Mueller did not accept Mr Howey's version of their conversation on 4 October 2011; in particular, he said that Mr Howey did not say that he would not settle and only wanted reinstatement; he had not mentioned having taken 2 days off to go to FWA; he had not mentioned a personal vendetta against Bill and Brad Green; he had not said that he just wanted his job back; and he had not called him a 'dog cunt'.

[44] Ms Tracey Chenhall said that around early December 2011 she had been informed by the respondent's solicitors that a settlement had been reached with Mr Howey; that he had been provided with a deed of release; that he had requested his matter be left open until 21 November 2011 and FWA had agreed to do so; and that as there had been no contact from Mr Howey's legal representatives or FWA by 21 November, she had assumed the matter had been settled.

[45] Ms Chenhall believed there would be a significant impact on the respondent if Mr Howey's case was allowed to proceed. She said this was because:

a. the respondent's case is heavily reliant on witness evidence;

b. a substantial period of time has passed since Mr Howey's employment was terminated;

c. the respondent will be required to incur further legal costs; and

d. significant time will need to be invested by the People & Organisation team, the Management team and the witnesses that will be required to give evidence.

[46] Ms Chenhall said the respondent would call three witnesses in the case - Mr William Green, Mr Brad Green and Mr Dan Pope. Mr Pope had expressed reservations as to his, and the other witnesses' ability to recall specific details after such a long period had elapsed. In addition, the respondent had made operational and structural changes affecting Mr Howey's former position. As a result, there was currently no capacity to reappoint him to his former role.

[47] Ms Chenhall also said that the respondent had incurred considerable legal and other costs in preparing for the hearing and the settlement of the matter and would incur further costs and inconvenience if the hearing was to proceed in Sydney.

[48] In oral evidence, Ms Chenhall confirmed that the respondent was still willing to pay Mr Howey a 13 weeks settlement, providing he signed a deed of release.

[49] Mr Hor submitted that in light of the period of time between November 2011 and May 2012, where there was no contact from Mr Howey or his legal representatives, the respondent was entitled to consider the matter as concluded. It was further entitled to a 'fair go' and to have had this matter determined quickly, flexibly and informally; See: Scott v MAS Australasia Pty Ltd t/a An Ausgroup Company [2011] FWA 8853.

[50] Mr Hor put that in view of this excessively long delay, and the fact the parties had reached a settlement of the matter on 4 October 2011, the Tribunal should dismiss the application on the basis that it:

a. was not made in accordance with the objects of the Act;

c. has no reasonable prospects of success in that there is a binding settlement of the matter; and

[51] Mr Hor cited and relied on the following authorities in support of the above submissions: Toni Potter v Darwin City Council [2010] FWA 6129, Rebecca Tomas v Symbion Health [2011] FWA 5458, Townsend v Longwarry Food Park Pty Ltd [2011] FWA 1888, Banister v Queensland Rail Limited [2012] FWA 3973, Nathan Steadman v The South Australia Potato Company Pty Ltd t/a SA Potato Company [2011] FWA 1300, Gavin Bessant v Graham Burley t/a G J Burley Pty Ltd [2011] FWA 3002 and John Patrick Kennedy v Australian Taxation Office [2011] FWA 7469.

[52] Mr Hor added that the respondent would be prejudiced by defending a case in which witness recollections of events over 12 months ago would be required; See: Venn v The Salvation Army [2011] FWA 538. Mr Hor noted that a further hearing would be costly and unlikely to produce a more just solution than the settlement already reached between the parties. Further, it was unreasonable for an employer to be required to leave a position open in the off chance, that after many months, a dismissed employee would seek to re-agitate a claim for reinstatement. Employers would have no incentive to offer generous settlements of claims, if those agreements were not subsequently honoured.

[53] Mr Mahendra submitted that the issues in dispute are of relatively small compass; namely:

a) whether the applicant accepted the settlement that had been made by the respondent; and

b) if the applicant accepted the offer to settlement that had been made by the respondent (which is denied) what is the effect of the alleged agreement.

[54] Mr Mahendra put that the onus of proof rests with the respondent to satisfy FWA that the application should be dismissed on the basis that it is either frivolous, vexatious or lacking in substance. He said there was no evidence that Mr Howey had accepted the respondent's offer of settlement or what the actual terms of settlement were until the deed of release was sent to Mr Mueller. In his written submission (not knowing that Mr Mueller was to subsequently give evidence under summons) Mr Mahendra said that Mr Hor and Ms Chenhall's evidence as to a settlement of the matter was hearsay and should not be relied upon (Mr Hor's statement was later withdrawn).

[55] By contrast Mr Howey's evidence, which ought be accepted, was that:

a) at all material times he had sought reinstatement as his primary remedy;

b) at no stage did he consider resolving the matter on the basis of a monetary settlement;

c) on 4 October 2011, he emphatically refused to accept the respondent's offer of settlement and communicated the same to Mr Mueller;

d) on 19 October 2011, he informed Fair Work Australia that he had not accepted the respondent's offer of settlement and would be pursuing his claim;

e) at no stage did he sign, or indicated an acceptance of, the deed of release sent to Mr Mueller by the respondent's representatives;

g) in November 2011 the proceedings were stood over to enable him to obtain legal advice regarding his matter; and

h) having obtained advice regarding the prospects of his claim, he promptly (on 8 December 2011) sought to relist the matter to prosecute his claim.

[56] The Tribunal would have to find that Mr Howey was not being truthful if there was to be established a finding of a binding settlement. Such a finding was not open on the evidence.

[57] Mr Mahendra put that the next step was to examine the terms of the alleged settlement to establish whether it was a binding settlement. He distinguished each of the cases cited by Mr Hor as not relevant to the facts and circumstances of this case. The respondent had adduced no evidence to establish which of the three classes referred to by the High Court in Masters v Cameron [1954] HCA 72, applied to this case. There was no evidence of what was said to have been agreed between the parties.

[58] In any event, even if the deed of release reflected the terms of settlement, it was not a concluded bargain until payment was made, a notice of discontinuance filed, a mutual release was executed and a full and final settlement was acknowledged. Therefore, the purported agreement has no binding effect.

[59] Mr Mahendra dismissed any alleged prejudice to the respondent, as to delay, as being misconceived. The matter had not been finalised and the respondent was on notice that Mr Howey intended to pursue his claim. There had been no failure to comply with directions and the respondent is as much obliged to bringing the matter to finality as Mr Howey.

[60] In reply submissions, Mr Hor rejected the proposition that the respondent bore the onus of establishing that the application was frivolous, vexatious or without substance. Mr Hor denied that there was no evidence of what had been agreed between the parties. The evidence was the uncomplicated, simple deed that only required Mr Howey's signature. There was nothing uncertain or ambiguous about the settlement.

[61] Mr Hor said that notwithstanding Mr Howey's assertions that he would not accept a settlement, at no relevant time, was this view communicated to the respondent. Moreover, he did not advise the respondent, at any time, that he had withdrawn the Union's authority to represent him. The respondent was entitled to believe the Union had the authority to settle the matter. Mr Hor said that if Mr Howey had any complaint about Mr Mueller, the respondent should not bear the cost and inconvenience of the Union's actions.

[62] Further, Mr Hor put that Mr Howey should not be permitted to disguise his own delay in pursuing the matter by asserting representative error. Mr Hor noted that FWA has set a high threshold for a finding of representative error as a reason to defeat a settlement. See: Walton v Burrup Fertilisers Pty Ltd [2010] FWA 2652, Linsell v Cronulla Sutherland Leagues Club Limited t/as Sharkies [2011] FWA 3193 and Marinov v Department of Defence [2012] FWA 1261.

[63] In any event, Mr Howey was not 'blameless' in having not pursued his claim. He did not communicate directly with the respondent or pursue his claim with due diligence. The respondent was entitled to believe he had abandoned his application, particularly as he has appeared to have secured alternative employment.

[64] Mr Hor submitted that there was no statutory obligation on an employer to pursue its former employees to inquire into whether they intend to pursue an unfair dismissal claim.

[65] In oral submissions, Mr Hor noted the large number of unfair dismissal matters which are settled between conciliation and arbitration. The respondent has had over 15 years of dealing with the NUW on site and heavily relies on the trust and rapport it has with Union officials. Mr Hor said that there is no ambiguity with what the terms of settlement were and that the hearing dates were to be vacated. The deed was to be signed, settlement monies paid and a notice of discontinuance filed. There was no evidence that there was anything problematic with the deed.

[66] Mr Hor submitted that there was no motivation or reason why Mr Mueller would fabricate the version of events as to what had transpired. The reason why Mr Howey reneged on the deal is entirely consistent with his lack of action on the 5 and 6 October 2011. There was no communication from Mr Howey to FWA, the respondent or its legal representative.

[67] Mr Hor relied on the decision of Besanko J in Australian Postal Corporation v Gorman [2011] FCA 975 and His Honour's reliance on the principles in Masters v Cameron. Mr Hor said it did not matter if this case fell within the first or second class of cases in Masters v Cameron as there is a binding settlement in place.

[68] Mr Hor said that the terms of the binding settlement are still open and Mr Howey should be given a brief time to sign and return the deed to the respondent. Payment of 13 weeks' pay will then be made and a notice of discontinuance filed by him. In an inquiry from me, Mr Hor said that the respondent had made inquires about Mr Mueller's claim of a Manager breaching the confidentiality of the deed and had found that it had not occurred. If it had occurred, Mr Hor agreed it would be entirely inappropriate.

[69] In his oral submissions, Mr Mahendra put that even on the respondent's evidence alone, the respondent cannot succeed because there was insufficient evidence of what the actual terms of settlement were. Therefore, none of the identified classes in Masters v Cameron can apply. This was because the only evidence of what occurred is the conversation between Mr Mueller and Mr Hor about a 13 week settlement. There is nothing to indicate what the actual intent of the parties was as to full and final settlement. It is not even known who made the offer of 13 weeks - Mr Hor or Mr Mueller. Even if FWA found that the deed of release reflected the terms of settlement, it was not a concluded bargain until the signing of the deed. Mr Mahendra said that Mr Howey told Mr Mueller on 7 October 2011 that he did not accept the settlement offer. He had never understood there to be a binding agreement.

[70] Ms Chenhall had confirmed that there was no obligation on either party, unless Mr Howey signed the deed of release. Mr Mahendra noted that not even Mr Mueller had said the deed of release accurately reflects the terms of settlement. Mr Mahendra noted that in most of the cases relied on by Mr Hor, the applicant had signed a deed of release, including in one case, during the conciliation conference.

[71] Mr Mahendra submitted that the issue in this case cannot be decided on what most other settlements look like, but can only be determined on the evidence presented. The evidence is that Mr Howey, at all material times, indicated he only ever wanted to be reinstated. There was no need to consider any conflict of evidence between Mr Howey and Mr Mueller, because there was insufficient evidence to establish a binding agreement had even been made.

[72] In reply, Mr Hor said that the fact there might be 'toing and froing' in relation to the deed, which was commonplace, does not mean that a binding settlement had not been made.

[73] Neither party disputes the powers of Fair Work Australia to dismiss an application based on the existence of a binding settlement between the parties. The power to do so is found at s 587 of the Act in these terms:

'(1) Without limiting when FWA may dismiss an application, FWA may dismiss an application if:

(a) the application is not made in accordance with this Act; or

(c) the application has no reasonable prospects of success.

(2) Despite paragraphs (1)(b) and (c), FWA must not dismiss an application under section 365 or 773 on the ground that the application:

[74] In my opinion, the opening words of s 587(1) provide the Tribunal with a broad discretion to dismiss an application in a range of circumstances, not necessarily restricted to the examples in the non exhaustive list in subparagraphs (a)(b) and (c). Other circumstances readily spring to mind; for example, where there is a failure by an applicant to prosecute their claim with due diligence or where an applicant seeks to withdraw a notice of discontinuance filed in FWA.

[75] The authorities make plain that the existence of a binding settlement between parties, permits a conclusion that an application should be dismissed on a summary basis, or as Besanko J described in Australian Postal Corporation v Gorman as 'a valid and effective accord and satisfaction' which 'extinguishes the pre-existing cause of action'. In addition, I respectfully agree with Gooley C's comments in Tomas v Symbion Health at para 59:

'In this matter I find that section 587 employers Fair Work Australia to dismiss an application for relief in circumstances where the parties have reached a binding agreement settling a claim and one party reneges on that agreement and seeks to have their claim determined. It is not necessary to make a finding that the application is frivolous or vexatious or that the application has no reasonable prospects of success as section 587 provides Fair Work Australia with a broad discretion to dismiss an application.'

[76] Besanko J also referred to, and adopted the conclusions of a Full Bench of the Australian Industrial Relations Commission, made under s 111(1)(f) of the Workplace Relations Act 1996 in Zoiti-Licastro v Australian Taxation Office (2006) 154 IR 1 ('Zoiti-Licastro'), as having equal force under the Fair Work Act. In that case the Full Bench observed at para 18-20:

'[18] The correct position, in our view, was set out by the Full Bench in Micheletto v Korowa Anglican Girls' School. There the Commission referred to the relevant statutory powers and said:

"It is implicit in the statutory provisions which we have referred to that once an applicant has elected to have his or her application determined by arbitration he or she acquires a right to have the case heard. There is a corresponding duty in the Commission to hear the applicant's case. The nature of the applicant's right is, in the time-honoured phrase, a right to their day in court. The right to a hearing is not unqualified. Circumstances may render it just that something less than a full hearing is appropriate. For example, the Act specifically provides for summary dismissal of an application if there is clearly no jurisdiction (s.170CEA) or if the applicant fails to prosecute its case (s.170CIB). There may be other circumstances in which an application might be dismissed without a full hearing and without infringing the rules of procedural fairness. It is necessary to explore in some detail what those circumstances might be."

[19] The Full Bench went on to find that provided rules of procedural fairness were observed the Commission could uphold a no-case submission made by the respondent either at the conclusion of the applicant's case or even prior to the applicant putting its case provided the application is manifestly untenable or groundless.

[20] Where the Commission finds that there is a complete answer to the applicant's claim and dismisses the claim, there is no substance in any suggestion that the Commission has breached its duty to hear the application. And subject to the observance of the rules of natural justice, it is highly undesirable that the parties should be put to the expense of a full hearing when it is clear at the outset that the claim cannot succeed. Take a case in which there is a duly executed settlement agreement in evidence. Subject to the resolution of any argument about the binding nature of the agreement, the settlement would provide a complete answer to the claim and there would be no point in hearing the other evidence.'

[77] Of course the contest here is not the power of the Tribunal to dismiss an application where a binding settlement exists, but whether there was, in fact, a binding settlement in existence. It is to that matter which I now turn.

[78] Both parties referred me to the judgement of the High Court in Masters v Cameron and various decisions of members of FWA who have applied the relevant principles derived there from. The High Court judgement dealt with three classes of cases where parties reach agreement of a contractual nature and agree that the matter shall be finally dealt with by a formal contract. At para 9-10 the Court said:

'9. 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 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. 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. (at p360)

10. 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. Throughout the decisions on this branch of the law the proposition is insisted upon which Lord Blackburn expressed in Rossiter v. Miller (1878) 3 App Cas 1124 when he said that the mere fact that the parties have expressly stipulated that there shall afterwards be a formal agreement prepared, embodying the terms, which shall be signed by the parties does not, by itself, show that they continue merely in negotiation. His Lordship proceeded: " . . . as soon as the fact is established of the final mutual assent of the parties so that those who draw up the formal agreement have not the power to vary the terms already settled, I think the contract is completed" (1878) 3 App Cas, at p 1151 : see also Sinclair, Scott & Co. Ltd. v. Naughton [1929] HCA 34; (1929) 43 CLR 310, at p 317 . A case of the second class came before this Court in Niesmann v. Collingridge [1921] HCA 19; (1921) 29 CLR 177 where all the essential terms of a contract had been agreed upon, and the only reference to the execution of a further document was in the term as to price, which stipulated that payment should be made "on the signing of the contract". Rich and Starke JJ. observed (1921) 29 CLR, at pp 184, 185 that this did not make the signing of a contract a condition of agreement, but made it a condition of the obligation to pay, and carried a necessary implication that each party would sign a contract in accordance with the terms of agreement. Their Honours, agreeing with Knox C.J., held that there was no difficulty in decreeing specific performance of the agreement, "and so compelling the performance of a stipulation of the agreement necessary to its carrying out and due completion" (1921) 29 CLR, at p 185 : see also O'Brien v. Dawson [1942] HCA 8; (1942) 66 CLR 18, at p 31. (at p361)'

[79] Before leaving the relevant statutory context applying to the present matter, I refer to the objects of Chapter 3, Part 3-2 dealing with unfair dismissal matters. These are as follows:

(a) to establish a framework for dealing with unfair dismissal that balances:

(i) the needs of business (including small business); and

(b) to establish procedures for dealing with unfair dismissal that:

(ii) address the needs of employers and employees; and

(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a "fair go all round" is accorded to both the employer and employee concerned.

Note: The expression "fair go all round" was used by Sheldon J in in re Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95.'

[80] Sections 577 and 578, dealing with the performance of FWA's functions and the exercise of its powers, are also apposite to this case:

FWA must perform its functions and exercise its powers in a manner that:

(b) is quick, informal and avoids unnecessary technicalities; and

(d) promotes harmonious and cooperative workplace relations.

Note: The President also is responsible for ensuring that FWA performs its functions and exercises its powers efficiently etc. (see section 581).

578 Matters FWA must take into account in performing functions etc.

In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), FWA must take into account:

(a) the objects of this Act, and any objects of the part of this Act; and

(b) equity, good conscience and the merits of the matter; and

(c) the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

[81] Hampton C considered these sections in Toni Potter v Darwin City Council and said at paras 59-62:

'[59] In my view, these provisions provide further context in which Fair Work Australia should consider the potential dismissal of an application in the circumstances applying in this case.

[60] Where the matter has been settled, in most circumstances the continuation of the application becomes an abuse of process. This may or may not however flow should the party seeking the dismissal of the application not consider itself bound to meet the terms of the settlement. In any event, this is not the case in this matter.

[61] The respondent has argued this matter on the basis that it considers itself bound to meet the terms of settlement as agreed on 17 June 2010 and reflected in the deed.

[62] Given my findings as above, it is appropriate that I dismiss the substantive application in this matter. It is not appropriate that an application which has been settled now be heard and determined as if that settlement had not been reached. Such an approach would not be consistent with the statutory charter of Fair Work Australia in relation to this jurisdiction. 20

[82] During the course of submissions, Mr Hor raised a number of matters relating to the respondent's claims of prejudice in having to answer a substantive unfair dismissal case after a period of almost 12 months and in light of its belief that the matter had been settled. Mr Mahendra submitted that these matters were irrelevant to the preliminary issue to be determined by the Tribunal. While I am attracted to Mr Mahendra's objection as to relevance, in deference to Mr Hor's submissions, I would simply make the following observations.

[83] While there was a considerable period of inactivity of the matter, including in part, I must admit, to an inadvertent miscommunication in my Chambers and my extended period of sick leave in January / February this year, it does seem odd that Mr Howey's solicitors did not inquire as to the delay in listing the matter for some 6 months. On the other hand, it is also curious as to why no one from the respondent inquired as to why the deed of release had not been signed, or a notice of discontinuance had not been filed, or why no settlement monies had been paid. Surely it was something of at least passing interest to the respondent, considering Ms Chenhall's evidence of the significant amount of cost and time which had been expended by the respondent in preparing its defence and the deed of release.

[84] In any event, I consider that any prejudice to the respondent (assuming it is relevant) is somewhat overstated. All of the respondent's detailed and comprehensive evidence has been filed, including documents supporting the reasons for the applicant's dismissal, such as various letters and an investigation report. The case was always intended to be listed in Orange, NSW. The witnesses are still employed by the respondent and the case does not appear to hinge on resolving major conflicts in the evidence, as I understand the factual matrix is broadly, not in dispute. The issue (if it gets there) to be ultimately determined is what FWA draws from that factual matrix as to Mr Howey's claim that his conduct was not serious or wilful misconduct and that his dismissal was 'harsh, unjust or unreasonable', with the meaning of s 387 of the Act.

[85] Be that as it may, that is not the issue for determination at this time. The immediate issue is whether there was a binding settlement of the matter. It seems to me that this can only be determined by reference of the conduct of the parties and resolving the unfortunate evidentiary conflict between Mr Howey and Mr Mueller.

[86] During the course of argument, Mr Mahendra submitted that firstly, the alleged settlement of 4 October 2011 was not a total settlement of Mr Howey's claim; secondly, the facts and circumstances here disclosed do not fit within any of the three classes considered by the High Court in Masters v Cameron; and thirdly, it is unnecessary to resolve the evidentiary conflict between Mr Howey and Mr Mueller. I disagree with these submissions.

[87] As to the first point, the deed of release was an unremarkable standard deed seen in many unfair dismissal matters. Nor is it unusual that the only real issue for negotiation was the number of weeks' pay in settlement of the claim. Other tidying up matters, noted by O'Callaghan SDP in Gorman v Australia Post as the 'toing and froing' in finalising negotiations, does not mean a settlement of the matter had not been achieved. Plainly, from the evidence of Mr Mueller, this was really the only subject matter to be resolved. There was no evidence that any other terms of the deed were in dispute or subject to further negotiation. To my mind, the situation is entirely consistent with the Full Bench's decision in Zoiti-Licastro as to the settlement being a 'complete answer to the claim'. Nit picking around the edges does not qualify the essential ingredient of the settlement.

[88] Mr Hor submitted that the respondent should not bear any responsibility for assertions by Mr Howey of representative error and, in any event, there was a positive obligation on Mr Howey to immediately communicate directly with the respondent as to his rejection of the offer of settlement and to advise it of his withdrawal of the Union to act on his behalf. While I accept that there is some force to Mr Hor's second preposition, for the reasons I shall shortly outline, I do not consider that this is a case involving representative error. I need not take this matter any further.

[89] However, I agree with Mr Hor that the functions and the exercise of FWA's powers are to be performed in a manner which is quick, informal and avoids unnecessary technicalities. This is particularly pertinent in the unfair dismissal jurisdiction of the Tribunal where the emphasis is on conciliated outcomes with the minimum of fuss and legal niceties.

[90] Earlier I referred to the unfortunate conflict of evidence which will be necessary to resolve in determining this matter. I use the adjective 'unfortunate', because having observed both Mr Mueller and Mr Howey in the witness box, I found them both to be convincing witnesses who gave their evidence thoughtfully and forcefully. The troubling issue for me is that the conflict in the evidence was not simply at the margins or because of uncertainty in recollection. They both had clearly stated and diametrically opposed versions of the conversations between them.

[91] In resolving this conflict, and on the balance of probabilities, I am satisfied that Mr Mueller's versions of the conversations, particularly that of 4 October 2011, are to be preferred. I arrive at this conclusion for the following reasons:

i. it is inconceivable that an experienced, legally trained Union official would act directly contrary to the wishes of a member seeking reinstatement from an alleged unfair dismissal without any apparent reason;

ii. the reason Mr Mueller believed Mr Howey changed his mind (a manager having 'cheered' at the settlement of the matter), was a very unlikely scenario to have been 'invented' by Mr Mueller. Even Mr Howey said it would have been a 'strange' comment for Mr Mueller to have made;

iii. Mr Mueller's email with the deed of release sent on 7 October 2011 asked Mr Howey if he intended to sign the deed. This is entirely consistent with Mr Howey having angrily told Mr Mueller that he would not sign the deed and Mr Mueller giving him three days to reconsider his position;

iv. although Mr Howey had previously emailed Mr Mueller inquiring about preparations for his case, it is curious Mr Howey put nothing in writing in the period shortly after 4 October 2011 to Mr Mueller, the Union or anyone else to complain that his express instructions to settle his claim, for nothing less than reinstatement, had been ignored and expressly repudiated;

v. there is no substance to the suggestion that Mr Mueller may have not been sufficiently prepared to prosecute Mr Howey's claim before FWA or that he readily accepted settlement to avoid any embarrassment in this respect;

vi. it is possible that Mr Howey was upset and frustrated that only one of the five persons he named as being willing to give evidence on his behalf was prepared to do so;

vii. there was nothing unusual or remarkable in Mr Mueller negotiating directly with Mr Hor and not reporting back to Mr Howey, in circumstances where he had a figure which Mr Howey was prepared to accept, and which was ultimately accepted by the respondent; and

viii. Mr Howey had to admit that it was not entirely true that Mr Mueller had not prepared and filed a statement for his substantive case on his instructions.

[92] Given my preference for Mr Mueller's version of the conversation of 4 October 2011, I make the following findings on the evidence:

a. Mr Hor engaged in settlement discussions with Mr Mueller on the morning of 4 October 2011;

b. Mr Mueller spoke with Mr Howey for around 12 minutes shortly thereafter and Mr Howey agreed to a settlement of the matter for 13 weeks' pay - but only as a final offer. He instructed Mr Mueller to negotiate for this result, otherwise the case would proceed to hearing;

c. Mr Mueller and Mr Hor engaged in further negotiations that day resulting in the offer of 13 weeks' pay being accepted by the respondent and Mr Mueller agreeing to the settlement of the matter and the cancelling of the hearing dates;

d. despite Mr Mahendra's criticism as to doubts as to who first made the offer of 13 weeks, this is irrelevant to whether a binding settlement was reached;

e. Mr Mueller phoned Mr Howey and told him the respondent had agreed to the 13 weeks and he would be sending him a deed of release. I accept Mr Mueller's evidence that Mr Howey did not indicate any dissatisfaction with the settlement or that he did not want Mr Mueller to proceed with the necessary paperwork;

f. sometime between 4 October and 7 October 2011 Mr Howey learnt of a Manager 'cheering' about him not returning to the site. He was angry and upset by this incident; sufficiently so as to tell Mr Mueller that he would not sign the deed;

g. Mr Mueller told Mr Howey that a 'deal was a deal' and despite the Manager's inappropriate conduct, it should not affect the settlement. He also told him that if he did not accept the settlement and sign the deed, the Union could not continue to represent him; and

h. Mr Howey was dissatisfied with this outcome and sought to engage alternative legal representation to act on his behalf and to prosecute his claim in FWA.

[93] It seems to me to be entirely plausible that the reason why Mr Howey refused to sign the deed was the information he received that a Manager had publically 'cheered' his not coming back and told other employees at the workplace, possibly including friends of Mr Howey. On one view, Mr Howey's angry reaction was understandable; after all, one of the terms of the deed was as follows:

'Each party must keep the terms of this Deed confidential and covenants to take all reasonable steps to prevent disclosure either directly or indirectly, except:

b) as required by the Parties advisers, on receipt of an undertaking from such advisers to keep the terms confidential.'

[94] I wish to add something about this incident. This breach of confidentiality was not only regrettable and should never have happened, but if the person responsible can be identified, he or she should be disciplined. I note Mr Hor's submission that the respondent's inquiry of the allegation was unable to sustain it. That said, Mr Mueller was correct in observing that it should not affect the settlement. In my opinion, this was not a reason of itself, to invalidate the settlement Mr Mueller had agreed to, on Mr Howey's behalf.

[95] I consider that on 4 October 2011, an agreement was made between the parties of the kind described as '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'.

[96] It follows, that I am comfortably satisfied that the agreement was a binding settlement reached between the parties and was a complete answer to the claim. In addition, I conclude that the interests of justice and the principle of a 'fair go all round' would not be served by voiding the binding settlement.

[97] For the reasons earlier discussed, it is unnecessary to dismiss the substantive application as frivolous or vexatious or as having no reasonable prospects of success. The finding of a binding settlement between the parties constitutes a sufficient basis for FWA to dismiss this matter, pursuant to s 587(1) of the Act. An order to that effect will accompany the publication of this decision.

[98] Finally, I would add that I strongly recommend Mr Howey sign the deed of release he has received and forward it to the respondent in order for all its terms to be executed. These proceedings are dismissed and concluded.

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