FWC explains terms of pay and tax in settlement between parties
The Fair Work Commission (FWC) recently dealt with an unfair dismissal case involving a worker who claimed they were unfairly dismissed from their employment. The worker applied for an unfair dismissal remedy under s.394 of the Fair Work Act 2009.
In this case, the FWC had to navigate through a series of events and communications between the worker and the employer.
However, the case took an unexpected turn when a settlement was reached during a conference, only for the worker to later express dissatisfaction with the agreed-upon terms.
During a case management conference on March 14, 2024, a resolution was reached between the parties. The FWC drafted a deed of settlement, which both parties signed and provided to the Commission on March 20, 2024. The employer also provided a statement of service for the worker, as required by the deed.
However, the situation became complicated when the worker approached the employer's payroll department directly, claiming that the payment received was incorrect.
The employer requested that the worker cease this interaction, confirming that the "full and agreed payment" had been made.
The worker, in an email to the FWC, stated:
"The money I received was wrong I thought I was going too get 7 weeks pay I only got 4 weeks pay off $5,849.00 in my bank I should have recieved [sic] 7 weeks pay of $8,598.45 in the bank because I got $1600.00 with out [sic] tax and and [sic] with tax I brought home in my hand was $1260.00 a week."
The FWC asked the worker to refrain from contacting the employer's payroll department and requested clarification from the employer regarding the amount paid and how the tax was calculated.
The employer provided an explanation, confirming that the worker had been paid a gross amount of $8,598.45, with $2,752.00 in ETP tax, resulting in a net payment of $5,846.45.
As the employer had apparently complied with the deed of settlement, the FWC asked the worker to confirm their intention to discontinue the matter in accordance with the deed. However, the worker maintained that they had not received the agreed-upon payment.
In a lengthy email to the FWC, the worker made various allegations about incidents that had occurred at their workplace, including being physically assaulted by a colleague and the employer's alleged mishandling of the situation.
The worker expressed dissatisfaction with the settlement and claimed they had been misled about the amount they would receive.
The FWC reviewed the recorded agreement and reminded the parties that the settlement sum to be paid to the worker was $8,598.45, which would be taxed according to the law. The worker had confirmed during the conference that this was correct.
The FWC stated: "As such, the deed as written captures the agreement of the parties (both signed copies attached)."
The FWC asked the worker to advise of their discontinuance in compliance with the deed, noting that if they failed to do so, the Commission might dismiss the application given that the matter had been resolved and the deed had been complied with.
As the worker did not comply with the deed, the FWC exercised its discretion under section 587 of the Fair Work Act 2009 to dismiss the worker's application.
The FWC was satisfied that a settlement had been reached between the parties during the conference and finalised through the fully executed deed of settlement.
It said that by signing the deed and the employer complying with its terms, the worker had released the employer from any liability connected to their employment and agreed to discontinue the application once payment was received.
Considering the settlement agreement, the FWC determined that the worker had no reasonable prospects of success and dismissed the application.
