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Can you force an employee to sign a deed following their termination?

Victoria Quayle, ||

You may find yourself on dangerous ground if you try to force an employee to sign a deed following their termination. In the recent case of John Salisbury v Sigmatek Pty Ltd [2020] FWC 2Mr Salisbury was made redundant and signed a Deed of Release when he was terminated but later claimed that he signed the Deed under duress. Read on to find out what the Fair Work Commission considers to be forced when it comes to employees signing Deeds.

The facts of the case

  • Mr Salisbury made an application to the FWC seeking relief from termination of his employment;
  • Mr Salisbury was employed for over 20 years;
  • Mr Salisbury was made redundant in September 2019 as part of a global restructure;
  • Mr Salisbury claimed the redundancy was unfair because others in the company were performing the duties he once did;
  • At the time of the redundancy Mr Salisbury signed a deed of release (in exchange for an additional 20 weeks pay on top of this statutory or legal entitlements);
  • Mr Salisbury’s employer relied on the deed to assert that Mr Salisbury was unable to pursue proceedings in relation to his employment (including the present application before the FWC for relief from unfair dismissal), and therefore applied to the FWC to have the application dismissed on grounds that it was frivolous and vexatious or that is had no reasonable prospects of success; and,
  • Mr Salisbury argued that he was forced to sign the deed, in other words, he claimed that he signed the deed under duress. More specifically, he said he formed the view that he had to sign the deed in order to get paid his statutory or legal entitlements – because those amounts were specified in the deed, together with the additional payment that was being offered.

The case to be decided

The Fair Work Commission held that “if duress or coercion cannot be identified in relation to the signing of the Deed by Mr Salisbury it is difficult to see how the deed could be set side or not considered binding by the Commission such that the unfair dismissal application should proceed”. Accordingly, the FWC considered whether the deed was signed under duress. In determining the matter, the FWC considered the following three essential elements of duress:

  1. Did the employer put physical, economic or psychological pressure on Mr Salisbury in order to have Mr Salisbury sign the deed?;
  2. Did that pressure cause Mr Salisbury to sign the deed?; and,
  3. Did Mr Salisbury have no reasonable alternative but to sign the deed?

The evidence

  • A meeting was held with Mr Salisbury on 20 September 2019, and prior to that meeting a draft deed had been emailed to Mr Salisbury to consider;
  • At that meeting the HR Manager offered to discuss the deed and notified Mr Salisbury that any questions he had could be discussed at a further meeting scheduled for the following week;
  • Immediately following the 20 September meeting, a meeting request was sent out for the further or follow up meeting to take place on 24 September;
  • Following the meeting request being sent, Mr Salisbury sent an email to the HR Manager requesting a written reference and indicated that he would sign the deed; and,
  • Ms Salisbury signed and returned the deed on 23 September 2019.

The outcome

The FWC concluded that Mr Salisbury was not placed under duress to sign the deed because:

  • there was no evidence to suggest that Mr Salisbury was told, or intimated, that a failure to sign the deed would result in him not receiving entitlements;
  • Mr Salisbury had at least nine or ten days in which to consider the Deed; and,
  • Mr Salisbury chose not to seek any advice on the deed prior to signing it.

Accordingly, it held that the application for unfair dismissal had no reasonable prospects of success and therefore dismissed Mr Salisbury’s application.

If you require any further assistance on how to deal with unfair dismissal cases, deeds or terminating employees’ contracts, please do not hesitate to get in touch with a lawyer in Coleman Greig’s Employment Law team.


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