Worker claims employer forced him to sign
The Fair Work Commission (FWC) recently addressed a worker's challenge to a deed of settlement signed with their employer, alleging coercion and pressure to accept the terms.
The worker lodged a complaint with the commission seeking redress for their employment situation.
He started working on March 16, 2020, and claimed to have been terminated on the same date three years later, asserting that his dismissal was effective immediately.
Submitting his application on August 23, the worker missed the 21-day statutory time limit by 139 days.
Alongside the application, he included a deed of release signed by both parties. A specific provision within the deed outlined several key points:
“The Company and the Employee agree and acknowledge:
• That this Deed is intended to be legally binding;
• In consideration of the Settlement Sum, the Employee agrees to release the Company from all or any liability in respect of all or any Claims made against it by any person or body on the basis that the payment was reduced by tax at the correct rate and the Employee will fully indemnify the Company in respect of all or any claims for unpaid tax, interest and penalties;
• That with effect from the date of execution of this Deed that they will not disparage each other;
• They have freely entered into this Deed after having the opportunity to carefully consider its contents and to obtain legal advice on the matters in this deed.”
Release signed ‘under duress’
The worker said that he had removed certain standard release and indemnity clauses because “he did not intend to be bound by the release.”
Additionally, the worker said that “he was under duress in signing the contract as he had only 4 business hours to sign the document.”
Around September, the FWC informed the worker that the unfair dismissal application would not be able to proceed as there was a deed of settlement that bound the parties.
Despite this, he still wished to be heard on this, and the matter was listed for hearing the following month.
HRD previously reported about a worker’s claim that his unfair dismissal application should be accepted, alleging that his prior settlement agreement with his employer was ineffective.
Bound by settlement agreement?
In its decision, the Commission dismissed the worker's unfair dismissal application, adding "that a binding settlement agreement extinguishes the pre-existing cause of action."
"The continued pursuit of the application based on such cause of action is clearly capable of being considered to be frivolous or vexatious, or without reasonable prospects of success," it added.
Moreover, it said the worker "received consideration for signing the deed of settlement" and, therefore, "it is a binding contract."
"The question of whether the deed was executed correctly, including the limited time the [worker] had to consider the deed and his subsequent alleged duress, is a question for the courts."
"Until there is evidence to establish that the deed has been set aside, the Commission has no jurisdiction to determine this matter," it said.
Thus, it said that between the parties, "the deed of settlement remains binding."
