Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Application for an unfair dismissal remedy - Application pursuant to s399A to dismiss application for unfair dismissal remedy - s399A application granted - matter dismissed.

• [1] Ms Niomi Hebberd (the Applicant) lodged an application for a remedy for unfair dismissal on 18 November 2024, alleging she was unfairly dismissed from employment on 1 November 2024.

• [2] ESPC Services Pty Ltd (the Respondent) filed a Form F3 - Employer Response on 4 December 2024. The Respondent raised a number of jurisdictional objections, including that the dismissal was a case of genuine redundancy and that the employer was a small business that complied with the Small Business Fair Dismissal Code when dismissing the Applicant. The Respondent also objected to the application on the basis that "the applicant and the employer settled all claims arising from the applicant's employment with ESPC Services and her retrenchment, on terms provided by the applicant, on 7 November 2024."[1]

• [3] The matter was listed for a directions hearing on 18 December 2024. The matter was adjourned to allow the Applicant an opportunity to seek legal advice. A further directions hearing was listed for 21 January 2025.

• [4] On 19 January 2025, the Applicant emailed my Chambers seeking a further adjournment of the matter as she had not yet been able to obtain legal advice. The request for a further adjournment was refused.

• [5] On 21 January 2025, the directions hearing was held and there was no appearance by the Applicant. Directions were issued for the jurisdictional objections to proceed to a hearing. In the course of the directions hearing, the Respondent foreshadowed its intention to file an application for the matter to be dismissed under section 399A of the Fair Work Act (the Act) on the basis that the matter had been resolved on agreed terms.

• [6] The Applicant later provided an apology by email for her failure to attend the directions hearing and explained that she was unable to attend on account of ill health.

• [7] The Respondent filed and served on Ms Hebberd, later on 21 January 2025, a Form F1 - Application seeking that the matter be dismissed. The Respondent relied on section 399A(1)(c) of the Act in its application to dismiss, asserting that the Applicant had unreasonably failed to discontinue her unfair dismissal application after a settlement agreement had been concluded.

• [8] On 22 January 2025, I issued directions for the Applicant to file a response to the Respondent's application to dismiss by no later than 29 January 2025 and the matter was set down for a hearing on 7 February 2025.

• [9] No response to the application to dismiss was received from the Applicant by the date in the directions, prompting my Chambers to send the following email to the Applicant on 30 January 2025:

"As per the directions issued by Commissioner Thornton on 22 January 2025 (see attached email), Ms Hebberd was due to file her response to the Respondent's application under section 399A of the Fair Work Act 2009 by close of business on Wednesday, 29 January 2025.

The Commission has not received any response from the Applicant, nor has it received a request for an extension.

Please advise by 10am (ACDT) tomorrow, why no response has been filed in accordance with the Commissioner's directions."

• [10] The Commission did not receive any response from the Applicant until 7 February 2025, the morning of the hearing of the dismissal application. The Applicant's email included the following: "I am still actively seeking employment and due to financial hardship I am currently unable to continue financially at this time with this matter."

• [11] My Chambers sent follow up correspondence asking the Applicant to confirm whether it was her intention to discontinue the matter.

• [12] The Applicant responded to my Chambers by email stating: "Unfortunately yes I have to dismiss this situation at the current time due to financial hardship & not being able to obtain legal advice."[2]

• [13] I considered this email with reference to rule 10(2)(b) of the Fair Work Commission Rules 2024, which sets out the procedural requirements to discontinue a matter. Rule 10 provides that an applicant can discontinue their application by notifying the Commission by filing a notice of discontinuance or otherwise advising the Commission that they want to discontinue or withdraw the application or no longer need the Commission to deal with the application.

• [14] I also sought the views of the Respondent on the Applicant's email correspondence, as the hearing of the application to dismiss had been delayed by the Applicant's non-attendance and her communications with Chambers.

• [15] The Respondent submitted that I should not accept the email as a discontinuance because it was not an "unqualified discontinuance"[3] on account of the Applicant's use of the words: "at the current time". The Respondent expressed concerns that if the correspondence was accepted as a discontinuance, the Applicant may seek to re-agitate the matter at a later date as the "very subject matter of this strike out application is the fact that the Applicant has... already settled this matter and seeks to relitigate those matters."[4] The Respondent not only drew my attention to what it viewed as a qualifying limitation on the relevant statement but also "a history of conduct incongruous with a litigant who is genuinely pursuing a claim."[5]

• [16] I agree with the Respondent's submission that the Applicant indicated a view that she wished to 'dismiss the situation' but qualified that statement with words that expressed an intention not to pursue the application before the Commission 'at this time'. The words used by the Applicant did not make clear that she wished to discontinue or withdraw the application or no longer intended for the Commission to deal with the application on a final basis. As the Applicant did not attend the hearing, I was unable to clarify these matters with her.

• [17] I determined to proceed with the hearing of the Respondent's application to dismiss.

• [18] At the hearing, the Respondent was represented, with permission, by its solicitor Mr Tom Earls. Mr Geoffrey Kelly, the Respondent's sole Director, gave evidence on behalf of the Respondent. The Applicant did not take any further part in the proceedings after the correspondence sent around the time the hearing was scheduled to commence.

• [19] Relevant to the context of the matter and the nature of the settlement the Respondent says was reached between the parties, the Applicant, Ms Hebberd and the Respondent's Director, Mr Kelly were in the process of finalising their marriage after a matrimonial breakdown. This proceeding before the Commission was being conducted at the same time the parties were also involved in Family Court proceedings that the Respondent described as 'contentious'.[6]

• [20] For the reasons set out in this decision, I grant the order sought by the Respondent pursuant to section 399A(1)(c) of the Act and dismiss the application.

• [21] Ms Hebberd asserted in her Form F2 application that she was dismissed from her employment on account of redundancy on 1 November 2024.

• [22] The Respondent filed its Form F3 - Employer response on 4 December 2024. The Respondent set out in this document what it says was a history of Ms Hebberd foreshadowing her intent to file an unfair dismissal claim if her employment with the Respondent was brought to an end following Mr Kelly and Ms Hebberd's separation.[7]

• [23] The Respondent says Ms Hebberd did not perform substantive work in the business and had not been on the premises from which the business operated since approximately late May 2024.[8] In an effort to avoid further disputation between the parties after their separation, the Respondent continued to pay the Applicant wages until the decision was made in October 2024 that there was no requirement for Ms Hebberd to continue to be employed given there had been no need for her to perform any work and her role was made redundant, effective on 1 November 2024.

• [24] In its response, and as previously set out, the Respondent stated: "The applicant and the employer settled all claims arising from the applicant's employment with ESPC Services and her retrenchment, on terms proposed by the applicant, on 7 November 2024".[9]

• [25] Mr Kelly's evidence was that Ms Hebberd telephoned him on 6 November 2024 and "proposed that she would settle any and claims (sic) relating to or arising from her employment with ESPC Services Pty Ltd on consideration of the ownership of a Kia Sportage being transferred to her private ownership. She was invited to confirm the proposal by email and did so on the same day."[10]

• [26] Mr Kelly confirmed that the Kia Sportage vehicle was the property of the Respondent company and not of Mr Kelly personally.[11]

• [27] Also on 6 November 2024, Ms Hebberd sent an email to Mr Kelly that included the following:

"I am proposing the acceptance of the Kia Sportage registered to ESPC Service as a Redundancy Payment that was not fairly formalized in response in goodwill. I will not pursue the employment litigation procedures against you, and will accrue and return the BMW to you. I need access to sell the KIA sportage or BMW for equal fair access to legal representation. Which you know is crucial to any following legal proceeding towards our settlement. Can you please respond urgently as this situation is increasingly urgent."

• [28] Mr Kelly responded by email on 7 November 2024:

"In return for your delivery of the BMW motorbike ... and in full settlement of any issues or claims arising from your employment with ESPC Services including your retrenchment, I will transfer ownership of the Kia Sportage to you by signing the registration transfer papers."

• [29] The Respondent asserts that '[o]nline searches indicated that the market value of the car was between $18,000 and $21,000".[12]

• [30] On 9 November 2024, Mr Kelly sent the Registration Details Certificate to Ms Hebberd and Arrow Car Sales[13] on the request of the Applicant. The Respondent asserted that to its knowledge Ms Hebberd had sold the car with the assistance of Arrow Car Sales and retained the proceeds of the sale.[14]

• [31] Ms Hebberd filed her unfair dismissal claim on 18 November 2024.

• [32] On 30 November 2024, Ms Hebberd sent the following email to Mr Kelly:

"Geoffrey, Just an fyi I did not and do not accept your proposal of no further litigation against you or espc service, the are also unpaid wages, unfair dismissal anf (sic) unpaid entitlilments (sic) in relation to my employment with espc services, That I will be proceeding with formal employment litigation."[15]

• [33] The Respondent has asserted that after the sending of the above email, Ms Hebberd did not make any attempt to return the vehicle.[16]

• [34] Following the first directions hearing on 18 December 2024, the Respondent's representative wrote to the Applicant setting out a number of matters, including:

(a) The history of the correspondence between the parties;

(b) The Applicant had put an offer to resolve the matter and it had been accepted by the Respondent;

(c) The Respondent had taken steps to give effect to the agreement between the parties, including transferring the vehicle to the Applicant as valuable consideration for the finalisation of the Applicant's employment and matters arising from her employment;

(d) The nature of the agreement as legally binding;

(e) That the Applicant was not free to simply change her mind once the legally binding agreement had been reached;

(f) The application was "doomed to fail and should not be continued with"; and

(g) Even if the application were allowed to continue it would not succeed on its merits as the dismissal was a genuine redundancy or, alternatively, a finding would be made that the employment was unlikely to continue after the dissolution of the party's relationship and remedy will be resultingly limited.

• [35] The Respondent's correspondence of 19 December 2024 invited the Applicant to withdraw her application.

• [36] Ms Hebberd responded to the letter of 19 December 2024 on the same day, in the main rejecting the propositions set out by the Respondent.

(a) The correspondence between the parties and their surrounding conduct demonstrated a valid offer and acceptance of a settlement proposal that then formed a binding agreement.

(b) The applicant initiated the settlement of her employment matters and made the offer the Respondent accepted;

(c) The Applicant received the benefit of the settlement, being the Kia Sportage vehicle, and as such should be bound to the settlement;

• (d) The Applicant is not entitled to change her mind once a binding agreement had been reached;[17]

(e) The Applicant's conduct is inconsistent with any assertion, should she make it, that there is no binding settlement agreement; and

(f) Even if there were no binding settlement agreement, which is denied by the Respondent, the application is frivolous, vexatious and has no reasonable prospects of success because:

1. If the Applicant asserts there was no binding agreement then she obtained property of the Respondent under false or misleading pretences and disposed of the property for personal gain. The Respondent asserts this conduct is inconsistent with ongoing employment and would justify any termination of employment; and
2. Should there be any basis to the Applicant's unfair dismissal claim (which is denied) the value of the Kia Sportage vehicle exceeds the compensation to which the Applicant would be entitled if she were awarded the maximum compensation under the Act.

(1) The FWC may, subject to subsection (2), dismiss an application for an order under Division 4 if the FWC is satisfied that the applicant has unreasonably:

(a) failed to attend a conference conducted by the FWC, or a hearing held by the FWC, in relation to the application; or

(b) failed to comply with a direction or order of the FWC relating to the application; or

(c) failed to discontinue the application after a settlement agreement has been concluded.

Note 1: For another power of the FWC to dismiss applications for orders under Division 4, see section 587.

Note 2: The FWC may make an order for costs if the applicant's failure causes the other party to the matter to incur costs (see section 400A).

(2) The FWC may exercise its power under subsection (1) on application by the employer.

(3) This section does not limit when the FWC may dismiss an application.

• [39] A Full Bench of the Commission set out the procedural steps to be followed before the Commission dismisses an application under section 399A of the Act in Lockyear v Cox[18] (Lockyear). It is unnecessary to set out in full the relevant procedural steps, but note that in compliance with the process set out in Lockyear, the application was made by the Respondent employer in accordance with section 399A(2) by way of filing a Form F1 on 21 January 2025. The Applicant was included in the email filing the application in the Commission. My Chambers also separately served the application on the Applicant on the following day when communicating my direction for the Applicant to provide a response to the application 7 days later. Ms Hebberd did not file any material in response to the application.

• [40] The matter proceeded to hearing 9 days after the Applicant's response was directed to be filed. As previously set out, there was no appearance from the Applicant at the hearing and no substantive response to the section 399A application.

• [41] Section 399A of the Act gives the Commission a discretion to dismiss an application if it is satisfied that the applicant has unreasonably failed to: attend a conference or hearing in relation to the application (s399A(1)(a)), comply with a direction or order of the Commission (s399A(1)(b)) or discontinue the application after a settlement agreement has been concluded (399A(1)(c)). The Respondent is relying on section 399A(1)(c) in support of its application to dismiss the Applicant's unfair dismissal claim.

• [42] The words in section 399A(1)(c) make clear that the relevant omission to be considered when reaching a view about the unreasonableness is the applicant's failure to discontinue the matter, and the relevant time at which the conduct may be considered as unreasonable in the context of the matter, is after a settlement has been concluded.

• [43] The words of the Act do not require that the settlement must have been reached after the application has been filed. It may be a more usual course of events for an application to dismiss to be filed after an application for an unfair dismissal remedy has been filed and a settlement reached and concluded, with a notice of discontinuance then not subsequently filed. However, the words of section 399A(1)(c) do not require that any concluded settlement be reached after the application was filed.

• [44] If I grant the Respondent's application in this case, it is necessary for me to first be satisfied that there was a settlement agreement that was concluded and that it was then unreasonable for the Applicant not to discontinue her application.

• [45] I am satisfied, on the evidence of Mr Kelly, that there was a settlement agreement between the parties. Ms Hebberd made the first offer when she 'proposed' to accept the Kia Sportage as a redundancy payment. Whilst she did not offer to resolve any unfair dismissal claim (which had not yet been made at the time), Ms Hebberd's offer made clear that if she received the vehicle she would also "return the BMW" and "not pursue the employment litigation procedures against you". These words convey an intention to resolve current and potential future legal causes of action arising from the Applicant's employment with the Respondent in exchange for the transfer of ownership of the Kia Sportage vehicle.

• [46] Mr Kelly responded with his acceptance of the offer on 7 November 2024. He clarified aspects of the return of the BMW and noted that the agreement was in "full and (sic) settlement of any issues or claims arising from your employment with ESPC Services including your retrenchment". Mr Kelly confirmed that he would transfer ownership of the Kia Sportage by signing the registration transfer papers. There is no evidence that Ms Hebberd disagreed with Mr Kelly's clarifications or expression of the settlement being full and relating to any issues or claims arising from the employment.

• [47] The vehicle was then transferred from the Respondent to the Applicant. The Respondent described the vehicle as valuable consideration provided in exchange for finalising all matters arising from the Applicant's employment. The evidence of Mr Kelly is that the consideration was not returned when the Applicant purported to change her mind.

• [48] I am also satisfied, to the extent it is necessary, that the settlement agreement reached was a legally binding agreement. An offer was made by the Applicant to resolve matters arising from her employment with the Respondent that included a promise not to pursue further legal causes of action against it. That offer was accepted by the Respondent with some clarification of the terms. The clarifications were accepted by the conduct of the Applicant when she took possession of the vehicle transferred from the Respondent to her.

• [49] The nature of the agreement, relating to the cessation of the Applicant's employment, in addition to the Applicant's reference to 'employment litigation procedures' and the Respondent's response confirming the full and final settlement of claims arising from employment, support my view that the parties intended to create legal relations. There was no suggestion made that either party lacked legal capacity or did not consent to enter into a legally binding agreement. The essential elements to form a legally binding contract appear to exist in this matter.

• [50] It is evident that the settlement concluded when ownership of the Kia Sportage was transferred from the Respondent to the Applicant on 9 November 2024.

• [51] The Applicant filed her unfair dismissal claim 11 days after the terms of the agreement were reached and 9 days after the settlement was concluded.

• [52] If it was not evident to Ms Hebberd that the application should not have been filed or thereafter should have been discontinued because a binding settlement had been concluded on 9 November 2024, it ought to have been clear to the Applicant from the time the Respondent's solicitor wrote to her on 19 December 2024 setting out the reasons the claim should be discontinued. In that correspondence, the Respondent's solicitor expressly explained to the Applicant the basis upon which a binding settlement had been reached, that she was not simply free to change her mind and invited her to withdraw the application.

• [53] The above correspondence was sent during a period of time in which the Commission had adjourned the matter to allow the Applicant further time to seek legal advice about the matter and its prospects of success.

• [54] The Applicant replied to the Respondent's solicitor, also on 19 December 2024, disputing the substance of each point contained in the correspondence and noting that "[y]our opinion is irrelevant and I frankly find it grossly rude and unprofessional" and "I will not be withdrawing this matter".

• [55] From at least 19 December 2024, when the correspondence of the Respondent was sent to the Applicant, I am satisfied that the Applicant acted unreasonably in failing to discontinue her application.

• [56] In the circumstances, I consider it appropriate to exercise my discretion to dismiss the application. I do so with caution, acknowledging that dismissing the application brings a finality to the Applicant's claim. However, in this case, the Applicant sought out the resolution of the matter on terms proposed by her. Those terms were agreed by the Respondent. Of particular significance in exercising my discretion to dismiss the application is the evidence before me that the Applicant received a financial outcome flowing from the agreement reached between the parties.

• [57] Pursuant to section 399A(1)(c) of the Act, I order that the Applicant's application for an unfair dismissal remedy be dismissed.

T Earls of Fair Work Lawyers with permission, with G Kelly on behalf of ESPC Services Pty Ltd.

[2] Email from the Applicant on 7 February 2025 at 10:22am.

[3] Audio recording of hearing for s.399A application at 13:10.

[6] Form F3 - Employer response at 3.2 (1).

[11] Audio recording of hearing for s.399A application at 44:36.

[12] See Form F3 - Employer response at 3.2 (13).

[13] Attachment A3 to the Respondent's s.399A application.

[14] Form F1 - Application under s.399A at 2.2 (6).

[15] Attachment A4 to the Respondent's s.399A application.

[16] Form F1 - Application under s.399A at 2.2 (6).

[17] The Respondent referred to the matter of Baum v K&J Baker Cartage Pty Ltd [2020] FWC 5185 in this regard.

[18] [2021] FWCFB 875.

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