Deed of release signed 'under duress'

Cases

Deed of release signed 'under duress'

An employee has claimed a deed of release was not valid because she signed it under duress and while suffering from anxiety and stress.

A deed of release that stated an employee had resigned and could not make any further claims against the employer has been found to be validly executed.

This was despite the employee’s claim that she signed it under duress and was unwell at the time.

The employee’s union acted on her behalf in negotiating the terms of the deed.

Facts of case


Jacquie Blackburn was employed as a fund development manager for about 13 months. The employer claimed it had raised concerns about her job performance with her, in particular her alleged failure to complete training modules within 12 months. Ms Blackburn claimed she had completed the course.

The terms of the deed were as follows:
  • She had resigned from her job.
  • She would receive six weeks’ termination pay plus annual leave.
  • The employer was released from any other existing or future claims by her. These included unfair or unlawful dismissal, adverse action, discrimination, harassment, sexual harassment, bullying, victimisation and vilification.
  • The deed was an absolute bar in any subsequent claims or proceedings.
Despite these terms, she lodged a claim of unfair dismissal. The employer claimed the deed was validly executed, and therefore any claim against it had no prospects of success and should be dismissed as frivolous or vexatious.

Ms Blackburn claimed she had signed the deed under duress, and while she was under a medical certificate for anxiety and stress that (the certificate claimed) was caused by her work situation.

Her contract required her to complete training modules within 12 months of commencing employment. After nine months and eleven months, there were meetings with her that raised concerns about job performance and alleged non-completion of the modules. After 13 months, the employer notified her that she had not completed the modules (which she disputed). The following day, she commenced sick leave and did not return to work. The deed of release was dated five days later.

The evidence was that the Financial Services Union proposed and negotiated it on her behalf.

Was employee forced to resign?


Ms Blackburn claimed she had completed the modules but did not provide further evidence. She disputed claims that she had misused her employer-provided car and credit card, and claimed she had been required to work at home and use her own car for work at her own cost. She added that the meetings with her employer had been called catch-up meetings, not performance review meetings.

She claimed that she had been forced to resign by the bullying behaviour of a manager, and she had approached the union because the employer had no internal grievance resolution processes. She had supplied both a medical certificate and a workers compensation certificate, the latter claiming that she was suffering from “anxiety exacerbated by stress at work”. Therefore, the decision about the deed was made while she was unfit for work, and she was intimidated during its negotiation.

The employer claimed as follows:
  • She may have “completed” the training modules but failed in one of them (written evidence not supplied).
  • It had unsuccessfully tried to contact her during her absence from work for five days before termination. At one stage she advised the employer to deal with her union representative instead.
  • The deed was validly made and its terms were unambiguous.
  • It was the employee and her union that suggested a deed of release in the first place, after the employer asked the union when she was returning to work.
  • There was no evidence that she was incapable of understanding and executing the deed, even if unwell, especially given that the union was involved. It was entered into in good faith.
  • She had resigned of her own accord, not because of any actions by the employer.

Decision


The Fair Work Commission rejected the employee’s claim, finding that she had validly and voluntarily entered into the deed of release. It rejected her claim of duress, finding that once she ceased attending the workplace she directed that the employer contact the union, not herself.

She did not provide a medical certificate or lodge a workers compensation claim until after she had signed the deed. There was no evidence that any impairment would have been serious enough to affect her capacity to understand and sign the deed. Having sought advice from her union was also relevant to the latter finding.

The bottom line: Deeds of release are a complex area of employment law. Courts and tribunals will assess whether the terms of a deed are reasonable in the circumstances – for example, that they do not unreasonably favour the employer, or do not place unrealistic restrictions on an employee’s ability to find other employment.

In this case, the employee’s position was weakened by the fact that she did not provide medical evidence that she was unwell until after the relevant date, and because she sought advice from her union before signing the deed. However, a “no further claims” clause in a deed of release may not be a guarantee of no further claims by an employee. Such a clause can be found to be unfair or unreasonable in the circumstances.

Read the judgment


Blackburn v ESI Financial Services t/a Energy Super, [2018] FWC 6025, 22 November 2018 http://www.fwc.gov.au/documents/decisionssigned/html/2018fwc6025.htm
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