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Settlement agreement stymies unfair dismissal bid

Excerpts from this article first published in ‘Human Resources’ Magazine, Issue 99, 7 March 2006

The Australian Industrial Relations Commission (AIRC) has confirmed that a settlement reached between barristers for the respective parties prevented the dismissed employee from proceeding with her unfair dismissal claim. (Australian Taxation Office and Annunziata Zoiti-Licastro).
The AIRC made an important finding that it has power to dismiss an unfair dismissal application before arbitration commences when it is satisfied that the parties have reached a settlement agreement in conciliation. This aspect of the judgment was also upheld on appeal.
This decision was recently upheld by a Full Bench of the AIRC.

Background

Ms Zoiti-Licastro was terminated by the Australian Taxation Office (ATO) in March 2004. Following failed conciliation in the AIRC, she elected to have her claim arbitrated.
Negotiations regarding the settlement of her claim occurred between the barristers for the parties throughout February 2005. The ATO contended that those negotiations resulted in a settlement being reached between the barristers on 3 March 2005. Ms Zoiti-Licastro contended that there had only been an agreement reached in principle.

On 4 March 2005, solicitors for the ATO sent a facsimile to Ms Zoiti-Licastro’s solicitors confirming the settlement. On 31 March 2005, the solicitors for Ms Zoiti-Licastro advised the ATO’s solicitors and the AIRC that the matter had failed to settle. The ATO applied to the AIRC to dismiss Ms Zoiti-Licastro’s claim on the basis that the matter had settled when agreement was reached between the barristers on 3 March 2005.

Both barristers gave evidence in the AIRC that each considered that a settlement agreement had been reached on 3 March 2005. The ATO’s solicitor prepared a final settlement agreement on 7 March 2005. Ms Zoiti-Licastro contended that she had never agreed to a mutual release as a term of the settlement. The AIRC at first instance observed that the ATO would hardly agree to pay Ms Zoiti-Licastro money in settlement of her claim without obtaining such a release.

The first decision of the AIRC of 20 July 2005 held that an agreement had been reached between the respective barristers on 3 March 2005 even though “not all the i’s had been dotted or the t’s crossed”. This was confirmed in the facsimile sent by the solicitors for the ATO the next day to Ms Zoiti-Licastro’s solicitors who did not dispute the facsimile’s contents. The agreement reached between the parties on 3 March 2005 was not subject to any conditions the AIRC held.

HR Tip

It is important in settling any dispute or litigation that the terms of settlement are clear and understood by the parties. If a verbal settlement is reached, the terms of that settlement should be recorded in writing, ideally, before the parties leave the room.

Gordon Jervis
Senior Associate
Australian Business Lawyers