s.394 - Application for unfair dismissal remedy

Application for an unfair dismissal remedy - settlement agreement - accord and satisfaction - whether application has no reasonable prospects of success - application dismissed

[1] On 14 September 2025 an application was made Mr. Gavin De Goede under Part 3-2 of the Fair Work Act 2009 (Cth) (Act) by which the applicant sought a remedy for what he claimed was his unfair dismissal by his former employer, Flogging Tin Pty Ltd (respondent).

[2] The respondent terminated the applicant's employment by written notice dated 2 September 2025. The termination followed from of a series of events involving the applicant that occurred in the respondent company's workplace on 28 August, 29 August, and 1 September 2025. The reasons for the termination as described in the written notice included alleged deliberate damage to and theft of company property, breach of workplace safety requirements, aggressive behaviour towards other employees and breach of contractual obligations and workplace policies. The applicant maintained that his dismissal was harsh, unjust, or unreasonable.

• [3] At the hearing of the matter on 26 February 2026 evidence was given about events which followed the termination of the applicant's employment. That evidence establishes that on 10 September 2025 the applicant sent the respondent an email[1] outlining a proposed settlement agreement between the parties. The proposal included that the termination be withdrawn and recharacterized as a resignation, that each of the parties refrain from disparaging the other and that certain monies be paid by the respondent to the applicant.

• [4] On 11 September 2025 an email[2] was sent from the respondent to the applicant setting out terms by which the respondent proposed that the applicant's separation from the respondent be formalised and finalised. The terms included the respondent agreeing to withdraw the notice of termination and allow the applicant to formally resign, a payment by the respondent to the applicant, including superannuation contributions and a further one-off payment on account of services rendered by the applicant's brother upon receipt of a valid invoice. The offer was stated as being strictly conditional upon certain terms, including that the payments were to be made without admissions on the part of the respondent, that both parties agree not to disparage the other and that the payments were to constitute full and final settlement of the applicant's claims against the respondent. Under the heading 'Release and Indemnity' the offer also provided that upon receipt of payment, the applicant agreed to 'release and discharge Flogging Tin Pty Ltd and its related entities...from all claims, liabilities or actions (excluding any rights which cannot be waived under applicable law).' The correspondence from the respondent to the applicant encouraged the applicant to seek independent legal or professional advice before confirming acceptance of the terms proposed.

[5] The applicant agreed to these terms by email on 12 September 2025. At 10.59 am on that day, the applicant sent an email saying "... I agree with all below requests made by rod (sic) and will follow them all once this amount has been accepted...". At 5.09 pm on the same day the applicant sent a further email saying, "... terms of resignation have been sent between myself and Rod Gregory and we are both aware of them and completely agree to follow through with all terms".

• [6] The respondent paid the applicant the agreed amounts on 17 September 2025.[3]

[7] At the conclusion of the hearing, the respondent submitted that the settlement agreement should prevent the applicant from proceeding with the application. I agree.

[8] Section 587 of the Act provides as follows:

(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

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

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), FWA must not dismiss an application under section 365 or 773 on the ground that the application:

• [9] In Australian Postal Corporation v Gorman,[4] the Federal Court of Australia considered the effect of a binding settlement agreement on the continued pursuit of an unfair dismissal application. Besanko J accepted that the wording of s.587(1) was sufficiently wide to include the recognition of an accord and satisfaction. The existence of a valid agreement between the parties has the effect of extinguishing a pre-existing cause of action and the continued pursuit of such an action is capable of being considered frivolous or vexatious or without reasonable prospect of success.[5]

• [10] The Court in Gorman said that question of whether there is a binding settlement is a question of fact informed by legal principles.[6] I am satisfied that there was an agreement reached between the applicant and the respondent as evidenced by the email correspondence of the parties of 11 and 12 September 2025. At the hearing, it was not disputed by the applicant that this agreement existed. However, the applicant alleged that the respondent had breached the non-disparagement terms of the settlement agreement and that the settlement agreement was therefore 'null and void' and did not preclude his pursuit of the application. The respondent denied that any such breach had been committed.[7] For present purposes it is unnecessary to determine whether it did or not. Even if a breach had occurred, such a breach does not enliven the extinguished cause of action.[8] An alleged breach may give rise to a separate cause of action capable of being pursued in another jurisdiction, but it does not mean that the Commission cannot recognise a binding settlement agreement and take account of such an agreement in determining whether or not the application has reasonable prospects of success.[9]

• [11] The Commission approaches applications to dismiss a matter summarily with caution and exercises the power sparingly. In Resta v Myer Pty Ltd[10] Deputy President Gostencnik said:

Relevantly, s.587(1)(c) directs attention to the substance of an application. A conclusion that a particular application 'has no reasonable prospect of success' is one that should only be reached with extreme caution in circumstances where the application is not reasonably arguable. In my view as the Applicant's cause of action, which is the foundation for her application for an unfair dismissal remedy, has been extinguished, her application is no longer reasonably arguable and is bound to fail.[11]

[12] I propose to dismiss the application on the basis that the applicant's cause of action has been extinguished by the existence of an agreement between the parties and that the application has no reasonable prospect of success.

[13] The application is dismissed pursuant to s.587(1)(c) of the Act. An order to that effect will accompany these reasons.

[4] [2011] FCA 975.

[8] Resta v Myer Pty Ltd [2013] FWC 7080 [43]

[10] [2013] FWC 7080

Printed by authority of the Commonwealth Government Printer