Former worker claims she signed settlement with bank under duress
The Federal Court has declined leave to appeal sought by the Commonwealth Bank of Australia’s former employee, who alleged that she signed a settlement deed under duress, given her unfortunate personal and family circumstances at the time.
The respondent bank employed the applicant in Kaur v Commonwealth Bank of Australia [2026] FCA 749, then dismissed her in April 2024.
Within days of the dismissal, the applicant made an application asserting unfair termination under part 3-2 of the Fair Work Act 2009 (Cth) (FW Act) before the Fair Work Commission.
The applicant potentially also made an application alleging unlawful termination in breach of one or more of the “general protections” provisions in part 3-1 of the FW Act.
The Federal Court went over the following apparent facts concerning the proceedings. The unfair dismissal application was the subject of a conciliation conference.
The parties agreed that the bank would pay a sum equivalent to six weeks’ pay and drew settlement terms, which included the applicant’s releases in the bank’s favour, under which she agreed that no further litigation would ensue regarding her employment or its termination.
On 30 May 2024, the applicant signed the deed recording the agreed settlement terms. On or about 4 June 2024, the bank countersigned the deed. At some point during this period, the applicant was facing unfortunate personal or family circumstances.
On 20 March 2025, before the Federal Circuit and Family Court of Australia’s Division 2, the applicant initiated a proceeding contending that the termination contravened s 772 of the FW Act. The applicant argued that:
A few months later, the bank brought an interlocutory application. The bank sought to dismiss the proceeding summarily.
On 26 November 2025, the primary judge granted the bank’s interlocutory application. She determined that the applicant commenced the action inconsistently with prohibitions under the FW Act, specifically under:
The primary judge rejected the applicant’s claim that she executed the written settlement terms in circumstances depriving them of binding legal effect. On 16 December 2025, the applicant filed a notice of appeal before the Federal Court.
The Federal Court of Australia dismissed the application for an extension of time and leave to appeal because it did not see enough doubt in the primary judgment to justify an appeal.
First, the Federal Court rejected the applicant’s argument that the primary judge could not summarily dismiss her proceeding without first informing her about the need to obtain a Fair Work Commission certificate.
The Federal Court considered this assertion inarguably wrong. The Federal Court held that the applicant alone should ensure that her application was jurisdictionally sound.
Second, the Federal Court disagreed with the applicant’s contention that the primary judge should have disregarded the settlement because she was cognitively incapable of processing its importance at the time.
The Federal Court pointed out that the applicant raised this assertion before the primary judge, who addressed it at some length in her reasons for judgment.
The Federal Court added that the primary judge prudently addressed the bank’s other jurisdictional concerns in support of its application seeking the summary dismissal of the applicant’s substantive proceeding.
