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OFFER UP!

By Anica Cunanan, Solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Calderbank offers are based on the principles outlined in the English case of Calderbank v Calderbank [1975] 3 All ER 333. Whether you are the offeror or the offeree, it is important to understand the effect of these offers.

Calderbank Offer: What is it?

A Calderbank offer is designed to put the offeror in a position to apply to the court for an indemnity costs order, in circumstances when the offeror receives a better outcome than the amount that was offered. Should an indemnity costs order be granted, the unsuccessful party will pay a higher proportion of the successful party’s costs. Emphasis is placed on the word “higher”. In many civil jurisdictions (but by no means all), “costs follow the event,” and so the unsuccessful party might expect to have to pay some of the successful party’s costs. If ‘indemnity’ costs are awarded, the amount payable is higher. Somewhat  counterintuitively however, the amount is almost never “all” the successful party’s costs, for various reasons. However, in many cases the difference between recovering some costs, and recovering a much higher proportion of those costs, can make an enormous difference. And by making a Calderbank offer, a party will improve the chances of recovering a higher proportion of costs. [...]  READ MORE →

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Fair Work Commission – Settlement Prevents Dismissal Claim

The Fair Work Commission has thrown out an unfair dismissal application because the employee had previously agreed to a settlement with his employer.

Facts

In essence:

  • In November 2016, Mr Singh was dismissed from his team leader role at Sydney Trains after an investigation into two safety incidents in August 2015
  • Singh was dismissed for failure to follow safety policies, procedures and guidelines whilst working in a safety critical location, causing significant risk of harm to himself, his team and the public
  • He applied for unfair dismissal under s 394 of the Fair Work Act
  • On 13 February, Singh’s solicitor wrote to Sydney Trains solicitor proposing terms of settlement, including that Singh be re-employed in an administrative role
  • Sydney Trains replied adding various qualifications regarding medical assessments and the requirement that a deed of release be signed
  • The deed of release was given to Singh and he agreed to settle the application in principle based on the terms in the draft deed.
  • Minor alternations were made and the Fair Work Commission was notified that they could vacate the hearing dates
  • However, by March Singh’s solicitor had failed to act and there was confusion over whether a binding settlement was made

The Arguments

  • Sydney Trains claimed that a binding settlement had been reached, so the unfair dismissal claim should be dismissed. The essential terms of settlement were agreed, regardless of the amendments and qualifications.
  • Singh claimed that there was no binding settlement because the qualifications made by Sydney Trains were a counter-offer replacing his original offer. He didn’t accept the counter-offer, so therefore there was no binding agreement.

Fair Work Commission Decision

The Fair Work Commission:

  • determined that Sydney Trains demonstrated the intention to be bound by the essential terms of the offer. Their rewritten offer was merely in a more detailed form, which had no difference in effect
  • decided this on the basis that “the parties would have hardly agreed to vacate the four days of hearing and the associated and not insubstantial costs involved, if there was not a plain and obvious intention that the matter had been settled in principle” and there was no communication by Singh’s solicitor that the offer was rejected
  • therefore held that the settlement was legally binding
  • determined that as the settlement was in effect, Singh’s unfair dismissal application had no reasonable chance of success and was dismissed under s587(1)(c) of the Fair Work Act

The decision is available for you to read through the hyperlink:
Subeg Singh v Sydney Trains (U2016/12864)

Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • review this Fair Work Commission decision
  • seek the assistance of an employment lawyer to understand the impacts of this Fair Work Commission decision
  • ensure compliance with all employment laws including Fair Work Commission decisions, Awards and enterprise agreements
  • raise any questions with an employment lawyer

More Information

Please call the leading employment lawyers in Parramatta, the Matthews Folbigg Workplace Solutions employment law team on 9635-7966 to speak with one of our employment lawyers. [...]  READ MORE →