Dispute between employers and employees can be arise because of disagreement or difference of opinions. It is important to resolve the conflict as early as possible to prevent business operations breakdown. Settlement agreement will be prepared upon reaching the final decision, this agreement protects both the parties going for future claims against each other. This can be executing through a deed of release or a fair work settlement facilitated by the Fair Work Commission (FWC)?
Below, we learn about the differences under Australian employment law, First understand the meaning of both these terms
What Is a Deed of Release?
A Deed of Release is a legally binding agreement between parties that settles a dispute. In employment matters, it arises after termination or during negotiations over workplace claims such as:
- Unfair dismissal
- Bullying or harassment complaints
- Underpayment disputes
- Discrimination allegations
In exchange for a payment, the employee agrees to release the employer from further claims relating to their employment or termination.
What Is a Fair Work Settlement?
A Fair Work settlement arises during formal proceedings before the Fair Work Commission.
The FWC encourages conciliation (a structured negotiation facilitated by a conciliator). If the parties reach agreement, the terms may be recorded in:
- A simple settlement agreement
- A Form F50 Notice of Discontinuance
- A Deed of Release (yes, sometimes both overlap)
- In other words, a “Fair Work settlement” is not a separate legal instrument—it refers to a settlement achieved within the FWC framework.
Differences
The main differences lie in scope control, and enforceability.
1. Scope of Claims
A Deed of Release can settle a broad range of claims including:
- Common law breach of contract
- Federal Court claims
- Workers compensation disputes
- Discrimination claims under state or federal legislation
By contrast, an FWC settlement is limited to the jurisdiction of the Commission. It generally does not prevent an employee from later bringing unrelated claims unless a broader Deed is signed. If an employer wants full protection against future litigation, a carefully drafted Deed of Release is usually safer.
2. Formal Oversight
Fair Work settlements occur under the supervision of the FWC. This structure can help balance power dynamics and reduce the risk of unfair pressure.
A Deed of Release negotiated privately does not have Commission oversight. However, it remains legally binding if properly executed. If a Deed is signed under duress, misrepresentation or without proper advice, it may later be challenged.
3. Finality and Certainty
Employers typically prefer Deeds of Release because they provide greater finality. A well-drafted deed can include:
- A release of all claims (known and unknown)
- A warranty that the employee has obtained legal advice
- Confidentiality obligations
- Tax indemnities
In Perth and across WA, courts generally uphold Deeds of Release where the terms are clear and consideration (payment) is provided.
FWC settlements that do not include a deed may offer less comprehensive protection.
4. Enforcement
If a party breaches a Deed of Release, enforcement occurs through the courts as a contractual dispute.
If a Fair Work settlement is breached, enforcement may involve the Federal Circuit and Family Court of Australia, particularly if it relates to Commission orders.
In practice, both are enforceable but the drafting quality determines how easily rights can be enforced.
So, What’s Safer in Perth?
The answer depends on perspective.
For Employers
A Deed of Release is usually safer because:
- It provides broader protection
- It reduces the risk of follow-up claims
- It can cover multiple legal jurisdictions
- It includes confidentiality safeguards
However, it must be carefully drafted to comply with Australian Consumer Law and employment law principles. Poorly drafted deeds may leave gaps or be unenforceable.
For Employees
A Fair Work settlement negotiated during conciliation may feel safer because:
- The process is structured
- There is oversight from a Commission conciliator
- Timeframes are clear
- Power imbalances may be reduced
That said, employees should always seek independent legal advice from deed of release lawyers in Perth before signing a Deed of Release, especially where the document contains broad waivers of rights.
Common Mistakes to Avoid
In Perth employment disputes, we often see issues such as:
- Signing a deed without understanding tax implications
- Accepting settlement without assessing potential general protections claims
- Failing to account for accrued entitlements
- Not addressing superannuation properly
- Using a generic template that does not reflect WA-specific considerations
- Even a settlement sum that appears generous can be inadequate if it extinguishes valuable legal rights.
Final Thoughts
Both a Deed of Release and a Fair Work settlement can safely resolve workplace disputes but they serve different strategic purposes.
Both the deed of release and fair work settlement serves different strategic purposes. A Carefully drafted deed of release is considered as safe, If the goal is maximum legal protection else If the goal is structured dispute resolution within a regulated environment, the Fair Work Commission process may provide reassurance and procedural fairness.