High-paid executive argues no deal exists while employer claims binding agreement made
The Fair Work Commission (FWC) recently dealt with a case involving a senior professional who claimed he was dismissed by his employer after raising workplace concerns, only to have the employer argue that a binding settlement agreement had already been reached between the parties.
The worker argued that no binding agreement existed because the formal documentation remained unsigned and he considered the terms unsatisfactory.
He maintained that his departure was actually a dismissal in contravention of general protections laws, particularly as he had been raising business risks and compliance issues as part of his role.
The worker's legal team argued that any settlement discussions were incomplete and uncertain, making them unenforceable.
The case centred on whether informal settlement negotiations conducted "without prejudice" could create legally binding obligations even when the formal deed of release was never executed.
The worker had been employed as chief legal and risk officer since December 2022, earning over $400,000 annually with a company providing rehabilitation services, allied health assessments, and disability support services.
The employer operated across Australia with around 600 employees, 120 offices and sites, and 170 vehicles.
His role involved supervising three direct reports, identifying legal issues and risks, providing legal advice, and taking charge of legal matters before courts and tribunals including the Fair Work Commission.
Throughout 2023 and 2024, the CEO observed concerning interactions between the worker and other employees.
The FWC found these interactions involved "the use by [the worker] of an abrasive and combative communication style, i.e. poor word or metaphor choice, yelling, swearing, being overbearing, and the use of harsh and aggressive tones."
The CEO initially addressed these concerns through informal feedback, hoping the worker's behaviour would improve.
During his annual performance review in June 2024, the CEO directly raised these issues.
The review showed the manager assessed the worker as "Partially meets expectations" on the company value of being "People Passionate," whilst the worker rated himself as "Fully meets expectations."
The CEO's notes stated that whilst the worker could be "friendly and professional," his "direct communication approach can come across abrasive and combative.
This has been shown on a few occasions with the Finance team and recently with the management of the WHS delineation of roles during our meetings."
In August 2024, while the worker was on annual leave, the employer received a detailed written complaint from a staff member titled "Concerns about workplace psychological wellbeing," alleging various forms of unprofessional behaviour with supporting documentary evidence.
When the worker returned from leave on 19 August 2024, the CEO arranged a meeting for 22 August 2024 to discuss a separation on mutually agreed terms.
The proposal was outlined in an email sent on a "without prejudice" basis, which included "a mutual separation; 2 weeks' pay in lieu of notice; in addition, 2 weeks' ex gratia payment; payment for all your accrued outstanding annual leave; we can work with you on messaging/communications; you signing a deed of release."
The FWC found this was not a notice of termination but rather "a request (or proposal) that [the worker] engage in negotiations with [the employer] to reach an agreement upon the terms of [the worker's] departure from [the employer's] employ."
The worker initially resisted, suggesting he might receive a warning or be placed on a performance improvement plan, expressing shock given his recent bonus payment and overall review rating. However, the employer rejected these alternatives.
After receiving legal advice, the worker made a counter-offer on 28 August 2024, stating: "In the circumstances, I am willing to agree to the terms of your initial proposal as outlined below but with a x12 week ex-gratia payment instead of x2 weeks." He also warned that he had received legal advice indicating "a very strong general protections claim" and stated:
"Should a resolution not be reached I will unfortunately instruct my friend and her firm to commence a Fair Work Claim to enforce my legal rights and seek damages."
The employer responded with a final offer on 29 August 2024, proposing an 8-week ex gratia payment and stating: "The above offer is final and I will not consider any further offers."
On 30 August 2024, the worker advised a colleague this would be his last day. At 11:09am, he emailed accepting the offer: "I am willing to accept your below offer subject to satisfactory terms within the Deed of Release. Please send a copy of the Deed for my review."
The employer immediately responded at 11:33am with a draft deed, explaining: "Once you review it and the terms are satisfactory, please sign (witness needed) and send back."
The FWC found the deed contained "very much standard terms" and was "wholly consistent with the terms of the Final Offer," including employment cessation, payment of entitlements, mutual releases, non-disparagement terms, and confidentiality provisions.
However, the worker became unresponsive despite multiple contact attempts throughout 30 August 2024.
The FWC determined the worker's employment ended on 30 August 2024, finding his "conduct (or silence) in making no objection is wholly consistent with the terms of the Final Offer, the Acceptance Email, and a binding agreement taking immediate effect."
Over following weeks, the worker remained largely unresponsive to the employer's attempts to finalise the deed and recover company equipment.
He occasionally sent brief messages about making "a few amendments" but never provided specific feedback on the deed terms.
The employer made multiple attempts through text messages, emails, and phone calls to obtain the signed deed or marked-up version, but the worker failed to engage meaningfully with the process.
The FWC applied established contract law principles, explaining: "the law is concerned, not with the real intentions of the parties, but with the outward manifestations of those intentions."
The test focuses on what each party's words or conduct would have led a reasonable person in the other party's position to believe. This means courts look at what people actually said and did, rather than what they claim they meant to say or do.
The FWC found a reasonable person would have understood that "the parties each had a crystal clear intention (as at 28 August 2024) to create legal (or contractual) relations concerning the reaching of a binding agreement about the 'agreed' departure of [the worker] from [the employer's] employ."
The only remaining issue was the ex gratia payment amount, which was resolved through the final offer and acceptance process.
The phrase "subject to satisfactory terms within the Deed of Release" was found not to prevent binding agreement formation.
The FWC determined this phrase "simply means what it says, being that the terms of the Binding Agreement are accepted subject to such terms being satisfactorily reflected in a deed of release."
It did not extend to demanding additional terms beyond the original agreement. The FWC also implied a cooperation term requiring parties to engage meaningfully in finalising the deed documentation.
The FWC found the worker breached his obligation to cooperate by failing to provide feedback despite the employer's multiple contact attempts.
His explanation that "mental health didn't allow [him] to" engage was unsupported by evidence and inconsistent with his ability to work and communicate effectively until 30 August 2024.
The FWC noted he had been able to send detailed emails and engage with lawyers during the negotiation period.
Because a binding settlement agreement existed with mutual releases, the FWC lacked jurisdiction to hear the worker's general protections claim.
The settlement agreement included terms that prevented either party from pursuing claims related to the employment relationship.
The FWC concluded: "a Binding Agreement was made between the parties on 30 August 2024, at 11:09am, per the Acceptance Email. It continues (to this day) to be enforceable."
The FWC also found no dismissal occurred under the Fair Work Act 2009, explaining: "An agreement between an employer and employee, for an employee to cease working for an employer, does not fall within the meaning of 'dismissal' under s.386(1) of the Act."
Since the worker had voluntarily agreed to the separation terms, this was considered a mutual agreement rather than a dismissal. The FWC ultimately dismissed the application, finding:
"Given the existence of the Binding Agreement, and my finding that [the worker] was not 'dismissed' by [the employer], [the employer's] Settlement Objection and its No Dismissal Objection are upheld. The Commission has no jurisdiction to deal with [the worker's] Application."
