The Case

After she was dismissed from The West Australian newspaper (the West), Ms Lombardo commenced unfair dismissal proceedings. At conciliation, the West made an offer to settle the matter, which included the provision of a statement of service. Ms Lombardo did not accept this offer. Thereafter, Ms Lombardo’s lawyer ceased to represent her. After conciliation, Ms Lombardo reconsidered her position and requested further details of the settlement and proposed statement of service.

The West responded by email, providing details of the statement of service and stating, “I understand the deed of settlement will be prepared by the Fair Work Commission, as requested by you. I have seen the Fair Work Commission’s template deed of settlement previously and I understand it includes the following standard terms:

• both parties will release the other from all claims they may have against the other arising from your employment, to the extent permissible by law;
• both parties will keep the circumstances surrounding the ending of your employment, and the terms of the settlement reached, confidential; and
• both parties will agree not to make disparaging or negative comments about the other going forward”.

Ms Lombardo then emailed the West stating, “I accept the offer”.

The West sent the email exchange to the Fair Work Commission (FWC) to prepare the terms of settlement. The FWC then sent the terms of settlement to the parties for execution. Ms Lombardo engaged another lawyer who, after checking the terms, advised the FWC, “A successful settlement was not reached with the respondent, meaning that the matter remains unresolved. No terms of settlement have been agreed upon nor signed between the parties, nor was any remedial consideration exchanged between them.”

Ms Lombardo’s new lawyer requested that the matter be listed for hearing or telephone directions, i.e. a three-way conference call between the parties and the commissioner.

The West advised the FWC that a binding settlement had been reached and Ms Lombardo’s unfair dismissal claim was extinguished. The West then paid Ms Lombardo the settlement sum that was outlined in the unsigned settlement agreement.

Ms Lombardo’s lawyer claimed the payment was unsolicited and had not been paid in consideration of the draft terms of settlement, as these had not been signed by Ms Lombardo.

The matter was relisted before the FWC.

The Verdict

The FWC found that Ms Lombardo had unconditionally accepted the West’s offer, as she had not made her acceptance conditional upon reviewing the full terms of the agreement or on obtaining legal advice.

The FWC held that as long as the West provided Ms Lombardo with a statement of service within 7 days, it would reject her unfair dismissal claim.

The Lesson

It is important to remember that an exchange of emails can amount to an offer to settle a matter, and an acceptance of that offer, even if the full terms of settlement or deed of release have not been signed.

It is advisable not to agree to a settlement prior to reviewing the full terms of the deed of release or settlement agreement or, if you wish, obtaining legal advice about those terms.

As such, if you wish to accept an offer of settlement, always indicate that your acceptance is subject to the full final terms of the deed or agreement being acceptable to your business and (if required) subject to your business first obtaining legal advice about those terms.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.