No duress in signing deed of release on redundancy settlement

Cases

No duress in signing deed of release on redundancy settlement

The AIRC has found that even though an employee had economic reasons requiring him to continue receiving money in order to meet his mortgage and car repayment obligations, this did not amount to economic duress in signing a deed of release on receiving redundancy benefits.

WantToReadMore

Get unlimited access to all of our content.

 

The AIRC has found that even though an employee had economic reasons requiring him to continue receiving money in order to meet his mortgage and car repayment obligations, this did not amount to economic duress in signing a deed of release on receiving redundancy benefits. 

The fact that he had only three days to sign did not amount to unconscionable pressure.

Background

As a result of a major merger between two companies, the positions of some 33 employees were made redundant. 

Mr Thomas claimed that the procedure whereby he was selected was defective and deficient and thus rendered his termination of employment harsh, unjust or unreasonable.

A preliminary issue was whether Mr Thomas was precluded from maintaining this action because he executed a deed of release at the time of the termination of his employment on 17 January, 2003.

Findings

The issue for the Commission was to determine whether there was duress so as to make it unconscionable for the company to rely on the deed of release to prevent the employee pursuing his application for relief.

The Commission could discern no unconscionable conduct by the company in this matter. Accordingly, no duress has been applied. Any financial pressure under which the employee was placed was of his own making. It was not a result of anything done by the company.

In any event, Mr Thomas knew, or should have known, that he would get much of what was offered under the deed even if he didn't sign it and, on the evidence, it appeared that he would have received all but $3,054 of what he actually received under the deed.

There was no evidence that the three day period, even if the employee was given only three days to make a decision, was too short, or that it put him under undue pressure. 

There was no basis for any assertion that the employee would miss out on his statutory entitlements or have to fight for them if he hadn't signed the deed of release.

The employee had an opportunity to seek union advice and was advised that if he signed the deed of release the company would seek to prevent him bringing unfair dismissal proceedings.

The employee signed the deed to achieve the better financial result that was to be obtained by signing it. He got his extra four weeks severance pay. The signature on the deed of release was not obtained by duress.

The employee's termination of employment was because he was redundant, there having been fewer desktop support technician positions available after the merger than there had been before it.

Accordingly, the Commission found that it was not appropriate that the provisions of the deed should be departed from, and the employee's application for relief was dismissed.

See: Paul Thomas and Logica Pty Ltd - AIRC (Kaufman SDP) - PR933337 - 20 June 2003.

Post details