What happens to a settlement if there’s a ‘misunderstanding’ during conciliation?

The Fair Work Commission (FWC) recently dealt with a settlement between an employer and its worker that had gaps in the communication process.

The worker, Ju Zhang filed a claim with the Fair Work Commission (FWC), alleging that her employer, Terryabilly Nominees Pty Ltd, unjustly terminated her employment.

The case was forwarded to a conciliation conference on 18 July 2023, and on the same day, the conciliator sent emails to the involved parties.

In the initial email, the content stated that the worker was contemplating her course of action and would provide an update by email before 20 July, regarding her intentions in this matter.

Subsequently, the Commission received an emailed letter from the conciliator to the parties. The letter commenced with an expression of gratitude for their participation in the conciliation, confirming that a settlement agreement had been reached.

Attached to the letter were the terms of settlement, which included a provision wherein the worker agreed to release the employer from all claims associated with her employment and its termination (excluding work-related injury, illness, disease, or death, and unpaid superannuation).

However, Zhang had not signed the terms of settlement, and the employer has reached out to the Commission requesting guidance on the next steps should Zhang choose not to sign the terms.

Worker hesitated to sign the agreement

In their correspondence with the Commission and the worker, the employee has expressed their desire to resolve the matter in accordance with the terms they agreed upon during the conciliation.

Subsequently, on 14 October, the worker contacted the Commission via email, expressing her desire to reopen her case, citing that the matter had not been resolved.

On 23 October, a hearing was conducted with the involved parties.  Zhang was present and had the assistance of an interpreter while the employer sent its representative.

According to records, the employer argued that all claims were resolved during the conciliation and emphasized that Zhang had not raised any concerns regarding unpaid wages at that time.

However, the correspondence sent by the conciliator to the parties following the conciliation suggested a different outcome.

The conciliator's communication indicated that Zhang was "considering her position" and would provide her feedback on 20 July.

The Commission noted that there was no documented email from Zhang to the Commission regarding her intentions on that date. Nevertheless, the conciliator corresponded with the parties "to confirm" that a settlement agreement had been reached.

Worker possibly misunderstood the process

During the hearing, Zhang clarified that only the matter of unfair dismissal had been resolved during the conciliation. She said that the conciliator had informed her that the issue of unpaid wages was outside the scope of the conciliation process.

However, in her email dated 14 October, Zhang mentioned that she had verbally agreed to "sign the settlement." She provided this information in the context of her communication, where she said, "the conciliator told me this unpaid wage matter isn't in her area of responsibility, but it is a fact that during the conciliation [the conciliator] told me after a brief browsing of appropriate awards, that I am not entitled to any paid breaks, also that I cannot come back at [the employer] for any more payments after this conciliation once I signed the agreement."

"That's why I verbally agreed to sign the settlement. After the conciliation, I phoned the Fair Work Ombudsman and their senior consultant said that I am entitled, and they will investigate this matter and come back to me within 2 to 4 weeks," she said.

‘English is not her first language’

The Commission considered that Zhang participated in the conciliation without legal representation. It also said English is not her first language.

Due to these findings, it said that “it appears that she may have interpreted verbally agreeing to ‘sign a settlement’ differently from actually signing a settlement agreement.”

The Commission also noted that from the worker’s actions, “it is evident that her claims related to underpayment were of significant concern to her and not issues she had agreed to abandon during the conciliation.”

Thus, it said that Zhang's application for unfair dismissal was [not] settled during the conciliation on 18 July. It ordered for her case to be forwarded to the Commission's relevant regional coordinator. Subsequently, it said the parties will be informed of the further case management process.