Pre-trial agreements are enforceable

Cases

Pre-trial agreements are enforceable

Employers should feel more confident that pre-trial unfair dismissal agreements will be upheld following two recent federal Industrial Relations Court decisions.

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Employers should feel more confident that pre-trial unfair dismissal agreements will be upheld following two recent federal Industrial Relations Court decisions.

In the past, pre-trial agreements have been considered in some quarters as akin to a gentlemen’s agreement. However, in both of the two recent cases mentioned above, the Court has upheld the two pre-trial agreements.

In Thiele v Trustech Building Systems Pty Limited (960309), the applicant’ agent (his stepfather) had negotiated an agreement with the employer. The employer believed that by paying $1300 to the applicant, in accordance with the agreement, that this represented a full and final settlement of the matter.

The applicant’s agent believed, on the other hand, that the applicant did not intend to drop the case in return for the money (the agent believed, in the words of the Court, that the applicant could "have his cake and eat it too"). The Court noted however that the applicant’s agent had failed to convey this belief to the employer. The Court held that, as a matter of law, a settlement agreement came into being when the applicant’s authorised agent accepted the employer’s cheque.

The Court further held that the applicant’s action in banking the cheque and waiting for it to clear before doing anything to proceed with the action meant that he had foregone any opportunity he may have had to rescind the agreement.

In Lucas v Public Transport Corporation (960253), the applicant had decided not to proceed with a post-conciliation pre-trial agreement. The applicant argued that the agreement between the parties was not concluded because the settlement was subject to, or conditional upon, a deed of release being executed. Millane JR held:

"Any failure of the solicitor to put into effect the advice given to the applicant is not sufficient for this Court to override the uncontradicted position of the respondent [employer] that the settlement arrived at was an unconditional one and at all times the respondent has been ready and willing to meet its obligation under the agreement but has been thwarted by the applicant’s belief that he could escape a binding compromise by not signing the document drawn up by his former solicitor to reflect the matters agreed to at settlement."

The Court reflected its view of the applicant’s action by ordering him to pay the employer’s costs.

 

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