Fair Work Act 2009

s.789FC - Application for an order to stop bullying

Application to dismiss application for an Order to stop bullying, binding settlement agreement reached before initial Member, Masters v Cameron, no reasonable prospects of success, Applicant no longer a "worker", no risk of bullying, application for an Order to stop bullying dismissed.

[1] This decision relates to an application made pursuant to ss.587(1)(b) and (c) of the Fair Work Act 2009 (the Act) by Flight Centre Travel Group T/A Flight Centre (the Employer) to dismiss an application made pursuant to s.789FC by Ms Emmelline Snow (the Applicant) for an Order to stop bullying.

[2] Sections 789FC and 789FD of the Act provide:

"789FC Application for an FWC order to stop bullying

(1) A worker who reasonably believes that he or she has been bullied at work may apply to the FWC for an order under section 789FF.

(2) For the purposes of this Part, worker has the same meaning as in the Work Health and Safety Act 2011, but does not include a member of the Defence Force.

(3) The application must be accompanied by any fee prescribed by the regulations.

(a) a fee for making an application to the FWC under this section; and

(c) the circumstances in which all or part of the fee may be waived or refunded.

(a) while the worker is at work in a constitutionally-covered business:

(ii) a group of individuals; repeatedly behaves unreasonably towards the worker, or a group of workers of which the worker is a member; and

(b) that behaviour creates a risk to health and safety.

(2) To avoid doubt, subsection (1) does not apply to reasonable management action carried out in a reasonable manner.

(3) If a person conducts a business or undertaking (within the meaning of the Work Health and Safety Act 2011) and either:

(iv) a body corporate incorporated in a Territory; or

(b) the business or undertaking is conducted principally in a Territory or Commonwealth place; then the business or undertaking is a constitutionally-covered business."

[3] Further, s.587 of the Act provides:

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

[4] The Applicant's s.789FC bullying application was initially dealt with in conciliation before another Member of the Commission. The file reflects, by way of email exchanges and an audio recording, that the application was finalised when the parties reached an agreement before that Member. The agreement resolved the bullying application and other claims being advanced by the Applicant in other jurisdictions. The settlement included the cessation of the Applicant's employment.

[5] The settlement was recorded in Chambers by the Member with the parties' consent. Each party was requested to, and did, affirm in the recording that they agreed with the terms of the settlement reached. The recording of that confirmation to the terms of settlement was subsequently released by that Member, to the parties.

[6] The draft deed produced by the Employer after that conference, included further provisions outside the settlement terms and the Applicant refused to sign such. The deed was revised by the Employer, to reflect the terms as agreed at the conference. The Applicant continued to refuse to sign the deed, arguing that the inclusion of the terms voided the agreement and that she had been put under duress during the conciliation. The recording did not reveal in the affirmation of the settlement terms, that any party had been subject to duress.

[7] The Applicant sought not to continue before the previous Member, and the file was allocated to the Commission, as currently constituted.

[8] Subsequent to a further conference in this matter to discuss the settlement, the Employer filed an application to dismiss the s.789FC application. That application is considered in this decision.

[9] Directions were set for the filing of material in response to the Employer's application to dismiss the Applicant's bullying application. The Employer filed material in support of the application to dismiss. The Applicant wrote to the Commission and indicated that she had just seen a psychologist and would require some sessions, and she was not able to respond.

[10] On the basis that the application sought to be dismissed is an application for an Order to stop bullying, and that the Applicant had been absent from the workplace for some time, an additional period was afforded to the Applicant to have these consultations. However, despite enquiries on this basis being made to the Applicant, no further medical evidence or responses to the Directions were received.

[11] The Applicant refused to sign the agreement or file any material, including material referencing her general health; supporting her contentions that an agreement was not reached and that she was still an employee.

[12] The Applicant had previously made the Commission aware that she was advancing claims in other jurisdictions. Further correspondence was sent to the Applicant seeking that she provides a response to the application to dismiss. The Applicant continued to advise (without providing evidence) that her health was preventing her from responding and that the Commission should cease contacting her.

[13] The Employer pressed their application for dismissal, which relied on s.587(1)(b), that the continuation of the application was frivolous and vexatious. It was also argued that, as a result of the settlement reached by consent on 23 January 2018, the Applicant's employment had been finalised, and that consequently pursuant to s.587(1)(c), the application has no reasonable prospects of success. Accordingly, it was submitted by the Employer that the jurisdictional criteria pursuant to s.789FC(1); that the Applicant be a "worker", could not be met. The Employer also submitted that the application had no reasonable prospects of success for this reason, as the parties had entered into a binding settlement agreement. The Employer argued this settlement operated as a bar to the Applicant pursuing the bullying application.

[14] The Commission's powers to dismiss an application pursuant to s.587, were considered in the case of Shaw v Australia and New Zealand Banking Group Limited,[1] in the following terms:

"[8] Section 587 of the Act provides a discretion to dismiss an application if, inter alia, the application has no reasonable prospect of success. Let me first deal with the meaning and application of the phrase, "has no reasonable prospect of success". Without traversing in any great detail the authorities that have considered the proper application and meaning of the phrase, "no reasonable prospect of success," it is sufficient for me for present purposes to make the following observations. A conclusion that an application has no reasonable prospect of success should only be reached with extreme caution and in circumstances, for example, where an application is manifestly untenable or is groundless or is so lacking in merit or substance as to be not reasonably arguable. But these examples do not provide an exhaustive description of when a particular application has no reasonable prospect of success.

[9] Secondly, I am mindful of that which the majority (Hayne, Crennan, Kiefel and Bell JJ) of the High Court of Australia in Spencer v The Commonwealth of Australia had to say when their Honours considered the meaning of the phrase, "no reasonable prospect," in the context of s. 31A of the Federal Court of Australia Act 1976. In that case their Honours said the following:

In many cases where a plaintiff has no reasonable prospect of prosecuting a proceeding, the proceeding could be described with or without the additional intensifying epitaphs like "clearly", "manifestly" or "obviously" as "frivolous"," untenable", "groundless" or "faulty" but none of these expressions alone or in combination should be understood as providing a sufficient chart of the metes and bounds of the powers given by section 31A nor can the content of the word "reasonable" in the phrase, "no reasonable prospect" be sufficiently, let alone completely illuminated by drawing some contrast with what would be a frivolous, untenable, groundless or faulty claim.

Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under section 31A if, and only if, satisfied that there is no reasonable prospect of success. Of course it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly but the elucidation of what amounts to no reasonable prospect can best proceed in the same way as content has been given through a succession of decided cases to other generally expressed statutory phrases such as "just and equitable" when it is used to identify the ground for winding up of a company. At this point in the development of the understanding of the expression and its application, it is sufficient but important to emphasise that the evident legislative power as revealed by the text of the provision would be defeated if its application is read as confined to cases of a kind which fell within the earlier different procedural regimes.

[10] In Spencer the High Court was saying that one should not make the mistake of only concluding that a proceeding has no reasonable prospect of success if it is frivolous, untenable, groundless or faulty and that full expression should be given to that phrase. It seems to me that the observations in Spencer are apt to apply to the construction and application of the phrase "has no reasonable prospect of success" as it appears in s. 587 of the Act.

[11] Thirdly, I would also observe that the answer to the question whether a particular application has no reasonable prospect of success in the context of s. 587 may differ depending on the time at which the question is asked. This, it seems to me, is evident from the word "has". So it is that an application at its inception may have some reasonable prospect of success but, as circumstances change during the course of dealing with an application, those changed circumstances might have the result that an application which once had some reasonable prospect of success no longer has a reasonable prospect of success."[2] [Footnotes omitted]

[15] In the Federal Court decision of Australian Postal Corporation v Gorman and Fair Work Australia,[3] Besanko J considered whether a settlement agreement reached in an unfair dismissal matter, enlivened the Commission's jurisdiction to dismiss matters under s.587(1). His Honour held:

"31 An accord and satisfaction extinguishes the existing cause of action and replaces it with a new cause of action based on the agreement. A valid accord and satisfaction is not a discretionary factor relevant to the subsequent litigation of the original claim; it is an answer to the claim.

32 It seems to me that the fact of an accord and satisfaction can either be raised under the Act at an 'interlocutory' stage and at the final hearing or it cannot be raised at all. As it is a complete answer to a claim there would be no reason why it could be raised at a final hearing but not at a preliminary stage under a section such as s 587.

33 There is nothing in the Act which suggests that an accord and satisfaction should not be recognised. At a general level the object of Chapter 3 Part 3-2 and the general statements of the manner in which FWA is to perform its functions and the matters to which it is to have regard are consistent with the recognition of an accord and satisfaction. Furthermore, the words of subsection 587(1) are wide enough to include the recognition of an accord and satisfaction. As I have said, a valid and effective accord and satisfaction extinguishes the pre-existing cause of action and continued pursuit of an application based on such cause of action is clearly capable of being considered to be frivolous or vexatious or without reasonable prospects of success."[4] [Emphasis added]

[16] In Kennedy v Australian Taxation Office, Deputy President Sams considered the standard to meet and the circumstances, in relation to the definition of "vexatious" in the following terms:

"[25] As to the meaning of vexatious, I refer to Attorney-General v Wentworth (1988) 14 NSWLR 481, where Roden J held:

'(1) For the purposes of restraining a vexatious litigant under the Supreme Court Act 1970 NSW, s 84(1), legal proceedings might properly be regarded as vexatious on either objective or subjective grounds.

(2) The relevant tests for determining whether proceedings were "vexatious" were:

(a) proceedings were vexatious if they were instituted with the intention of annoying or embarrassing the person against whom they were brought;

(b) they were vexatious if they were brought for collateral purposes, and not the purpose of having the court adjudicate on the issues to which they gave rise;

(c) they were also properly to be regarded as vexatious if, irrespective of the motive of the litigant, they were so obviously untenable or manifestly groundless as to be utterly hopeless; and

(d) in order to fall within the terms of s 84 , (i) proceedings in categories (a) and (b) must also be instituted without reasonable ground (proceedings in category (c) necessarily satisfied that requirement); and (ii) the proceedings must have been "habitually and persistently" instituted by the litigant.

(3) Other relevant considerations on an application under s 84(1) included

(a) whether, having regard to the substance of the matter and not to its form, the particular matter could properly be regarded as the institution of proceedings as distinguished from the taking of a step in proceedings that were already on foot;

(b) whether the proceedings were in fact vexatious - not whether they had been instituted vexatiously;

(c) whether, if proceedings were found to be vexatious, what the litigant had done in instituting, as distinct from pursuing, the proceedings had been done "habitually and persistently"; and

(d) institution of the particular proceedings under consideration - as to which the mere presence of scandalous, embarrassing, irrelevant or objectionable material need not be relevant.

(4) The power of the court to make an order under s 84(1) was an unfettered discretionary one as to which the prima facie right of access to the courts enjoyed by all citizens and the availability of other powers to deal with abuse of process would be relevant considerations.

(5) In circumstances where, out of a large number of interrelated proceedings including both substantial and incidental matters, three matters only could be regarded as vexatious proceedings instituted without reasonable grounds, it was not appropriate to conclude that the defendant had "habitually and persistently" and without reasonable ground instituted vexatious proceedings, and no order should be made under s 84'.[5]

[17] In reference to Shaw v Australia and New Zealand Banking Group Limited,[6] the timing of the assessment of the dismissal application occurred after the settlement was reached. Further correspondence had been forwarded to the Applicant on 12 June 2018, after a number of endeavours to contact her to seek a response to the Directions had failed. The Commission's stated:

It has been a number of weeks since the hearing date in your matter was adjourned and the directions suspended in deference to the consultations with your psychologist. There have recently been endeavours to contact you by phone and email during this period, with no reply from you.

Since adjourning the proceedings, the related general protections matter with the employer, Flight Centre has been heard and determined in the Federal Circuit Court.

The employer has written to the Fair Work Commission copying you in on a series of correspondence, aiming to finalise the matter before the Commission. The employer has now discharged all of the elements of the settlement that has been reached between the parties.

Judge Vasta, in determining the general protections matter, confirmed the settlement that was reached between the parties before the Commission. Judge Vasta in his Honour's Reasons for Judgment (dated 21 May 2018) noted that in accordance with Masters v Cameron, "any argument that the agreement is not valid because Ms Snow has not signed the deed of release has no validity at all."

I have similarly provided this confirmation of the settlement (reached between the parties), in the conferences before me, and in correspondence with the parties.

All of the facts and circumstances of your application have been taken into account; there is no risk of the alleged bullying conduct, as you have been away from the workplace for a lengthy period of time, and there is no continuing employment relationship.

The employer has formally finalised the employment relationship, in accordance with the settlement and discharged their final part of the settlement, by the [terms of settlement].

Ms Snow, you have been invited by telephone and email to contact the Commission and you have not done so.

Given the confirmation of the settlement that was reached, there is no continuing jurisdiction of the Commission to undertake any further work in relation to the application. I intend to close the file this Monday, 18 June 2018 on the basis as previously advised to you (and also affirmed by Judge Vasta) that a the settlement has been reached between the parties resolving this matter. If you wish to reply with any further information to the Commission, please do so prior to Monday, 18 June 2018.

We have continued to use the contact details that you provided on the application. If the circumstances are that we have not been informed of a change to your contact details, your psychologist has been copied in to this email (as per his previous correspondence provided by you)."

[18] The Applicant subsequently did not respond to these matters, but forwarded emails; not to contact her, that she did not recognise the settlement, and that she considered she was still an employee.

[19] It is again relevant to set out, in terms of the timing of the assessment, that the circumstances of the Applicant and the settlement before the Commission were considered in relation to the Applicant's related general protections proceedings in the Federal Circuit Court before Judge Vasta. The Applicant had made the Commission aware of these related proceedings. The Employer raised his Honour's Reasons for Judgment, in their dismissal application. Judge Vasta considered that a binding settlement had been made.

[20] In considering the nature of the settlement reached between the parties, in Masters v Cameron,[7] the High Court determined that when an agreement is reached, it may fall into one of three classifications:

"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 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.

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..."[8]

[21] It is clear from the recording of the affirmations of the settlement, before the prior Member, that the parties entered into a binding settlement agreement.

[22] Judge Vasta in his Reasons for Judgment, dismissing the general protections application, held:

10. It is clear, from that transcript, that the Applicant accepted the settlement sum and the associated terms in full and final settlement of all and any claims arising from her employment and the cessation of her employment, provided that nothing in the terms of settlement releases the Respondent from any liability to the Applicant arising under any law relating to workers compensation.

12. There were some matters that were in the deed of settlement that may, on some interpretation, have drifted somewhat from that what was agreed and, for this reason, the Applicant refused to sign the deed.

13. There was a further conciliation hearing, on 7 February 2018, to hammer out these differences. At the end of that conference, a new deed was drawn up. That deed, in my view, reflected exactly what the terms of that agreement are in accordance with what was agreed to at conciliation conference and in accordance with the terms to which the Applicant accepted that she was now bound.

14. The Applicant has refused to sign that deed and has pressed on with this application. It seems to me that this application before me cannot continue, because the Applicant has already bound herself to what she agreed to on 23 January 2018.

15. This was the state of the evidence when the matter was to come before me today. Yesterday, the Applicant wrote to my chambers, in terms of an email, that I will mark as Exhibit 1. In that email, she attached a letter from a psychologist, who has seen her on one occasion.

16. As I explained to the legal representative of the Respondent, the psychologist is able to talk about what symptomology the Applicant has and can also talk about what therapy is being undertaken to alleviate those symptoms.

17. However, the psychologist is not qualified to talk as to the capacities of the Applicant. That can only be done by a medical practitioner and, where the ailments are of a psychological nature, it is only a psychiatrist who can, in those matters, talk as to whether or not the Applicant has capacity.

18. Therefore, on a technical level, the Applicant has been in breach of my order and has not presented herself today.

19. It seems to me that, given the state of the evidence before me, that to prolong this matter would not be in the interests of justice. Notwithstanding that, according to the material before me, the applicant is not in a fit mental state to prosecute her application at this stage, it is not a matter of the Applicant being in a position to tell the Court when and where and how her claim will be handled."[9]

[23] Judge Vasta stated that he proceeded by way of default hearing, in considering the matters. His Honour's Reasons for Judgment set out:

25. The Applicant now seems that she is trying to use any excuse to escape the consequences of making such an agreement, even to the point of saying that because she has not signed the deed of release, the agreement is therefore not valid.

26. That attitude does not accord with what the Courts have said about such agreements in the past. I have been helpfully referred to the High Court authority of Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353. As the Respondent submitted, this authority established that there will be a binding agreement between parties in either of the two following scenarios:

a) where the parties have agreed upon all the terms of the contract 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

b) where the parties have agreed upon all the terms of their arrangement but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document.

27. Given what was said in Masters v Cameron (Supra), any argument that the agreement is not valid because Ms Snow has not signed the deed of release has no validity at all. It seems, then, that this application has no prospects of ever being successfully prosecuted, and should not take up any further time in the Court's schedule.

28. I therefore dismiss Ms Snow's application."[10]

[24] The reasoning of Judge Vasta is adopted in relation to the consideration of the settlement. That is, a binding agreement was reached between the parties (in accordance with Masters v Cameron)[11] and the Applicant's subsequent refusal to sign such does not derogate from the binding nature of that agreement.

[25] In support of their application to dismiss the s.789FC bullying matter, the Employer confirmed to the Commission that all their terms of the settlement had been discharged. It is not necessary to step through the terms of the settlement, however as a result of the settlement, there is no continuing employment relationship, between the parties. Accordingly, there is no future risk to the Applicant, of the alleged bullying conduct.

[26] The recording of the settlement agreement reached before the Member, and the further consideration of such settlement (in the Federal Circuit Court), in accordance with Masters v Cameron, provide confirmation that a binding settlement was made between the parties.

[27] In exercising the discretion to dismiss the application, it is relevant to note that s.789FC of the Act affords a "worker" the right to seek an Order under s.789FF, in circumstances where they considered they have been bullied at work by an individual or group of individuals, and there is a risk they will continue to be bullied at work.

[28] As stated, a binding settlement was reached on the Applicant's s.789FC bullying application. There is no power to make an Order to stop bullying where there is no continuing employment relationship, and therefore, no risk of bullying conduct. The employment relationship ended as a result of the agreement made between the parties.

[29] The material provided is not commensurate with the tests (as set out in Kennedy v Australian Taxation Office)[12] for an application that is deemed to be frivolous or vexatious.[13]

[30] I am satisfied that a binding agreement was reached between the parties, and that the Applicant is no longer in the workplace or a "worker", and there is no future risk of bullying_._ Accordingly, the application has no reasonable prospects of success, in accordance with s.587(1)(c). Therefore, the application will be dismissed.

[31] The Employer also referred to the issue of costs in accordance with s.611(2)(b) of the Act.

[32] Section 611 of the Act provides:

(1) A person must bear the person's own costs in relation to a matter before the FWC.

(2) However, the FWC may order a person (the first person) to bear some or all of the costs of another person in relation to an application to the FWC if:

(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or

(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person's application, or the first person's response to the application, had no reasonable prospect of success.

Note: The FWC can also order costs under sections 376, 400A, 401 and 780.

(3) A person to whom an order for costs applies must not contravene a term of the order.

Note: This subsection is a civil remedy provision (see Part 4 1)."

[33] With reference to costs, the conduct of the parties will be taken into account, including that of the Employer where the revision of the deed, they produced, was required. Further submissions would be required on this relevant matter.

[34] A separate Order is made pursuant to s.587(1)(c) to dismiss the s.789FC application [PR609140].

[35] If the Employer presses the application for costs, they should confirm such in writing to Chambers, within 14 days of this decision, taking into account the further required information as referred to above.

[1] [2014] FWC 3408.

[3] [2011] FCA 975.

[5] [2011] FWA 7469 at [25].

[6] [2014] FWC 3408.

[7] [1954] HCA 72; (1954) 91 CLR 353.

[9] Snow v Flight Centre Travel Group [2018] FCCA 1089 at [10] - [19].

[11] [1954] HCA 72; (1954) 91 CLR 353.

[12] [2011] FWA 7469.

[13] Fair Work Act 2009 (Cth) s.587(1)(b).

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