We have posted previously about the of Deeds vs Agreements in settling disputes. You may recall two of the key differences are that an agreement requires consideration to be valid. A deed does not require consideration, and that actions for breach of an agreement must be brought within six years of the agreement, while actions for breach of a deed may be brought within 12 years. A deed must be in writing, signed and witnessed, with some written indication that it is intended to be a deed, and needs only to be delivered to the other party.
In a small number of cases, the expectations of the person released (releasee) have been dashed, with claims being brought following the entering into of a deed of release. The outcome of a number of fairly recent decisions of the Federal Court and Federal Circuit Court in the employment setting. These cases are:
- Kowalski vs Trustee, Mitsubishi Motors Australia Ltd Staff Superannuation Pty Ltd and anor  FCAFC 18 (28 Feb 2003).
- Atkins Freight Services Pty Ltd vs Fair Work Ombudsman  FCA 1134 (22 September 2017).
- Doyle vs Oil Basins Ltd  FCCA 2758 (14 November 2017).
In summary, a Deed of Release cannot mean that statutory public rights be waived or compromised or require parties to contract out of award entitlements; and the FWO can enforce the Fair Work Act including in relation to underpayment of, for example, award entitlements notwithstanding the employer and employee have signed a deed of release (however parties can compromise bona fide current and contemplated litigation (however this it would seem does not affect the ability of the FWO to seek orders for compensation, though would be a factor).
When drafting a Deed of Release, it is advisable to:
- record the existence of a bona fide dispute which has resulted or may result in litigation
- identify and record the dispute
- note the context in which the dispute has arisen
- identify the entitlements (including referencing any applicable award or statutory provisions etc) said to be satisfied by the payment of money
- note the period of time to which the entitlements claimed, relate
- note that the employee was given the opportunity to obtain legal advice.
Further, acceptance by parties to a deed as to the deed’s effect, and performance of obligations under the deed may outweigh an argument that counterparts had not been exchanged.
Clearly, a complex matter, which should always be pursued with legal assistance.