A settlement has been paid. A release has been signed. Surely that means the dispute is over?
Not necessarily.
A recent Victorian decision provides an important reminder that a settlement only resolves the claims captured clearly by its terms. If the release is confined to one proceeding or one area of law, another existing claim arising from the same events may still continue.
The Case
The worker had two different legal proceedings arising from the circumstances of her employment.
One was a common law damages claim brought in the County Court under Victoria’s Workplace Injury Rehabilitation and Compensation Act, known as the WIRC Act.
The other was a proceeding in the Victorian Civil and Administrative Tribunal under Victoria’s Equal Opportunity Act. That proceeding included serious allegations of workplace misconduct and discrimination connected with pregnancy and the subsequent termination of the pregnancy. These remain allegations. The Tribunal’s decision was about whether the proceeding could continue, not whether the allegations were established.
Importantly, the Equal Opportunity Act proceeding had been filed in October 2021. It was therefore already underway before the workers’ compensation matter was settled and the release was signed in January 2026. The employee did not sign a release and then commence a new discrimination proceeding.
The County Court claim settled for $362,500. The employer and other respondents then argued that the release signed as part of that settlement also prevented the worker from continuing her Equal Opportunity Act proceeding.
VCAT did not accept that argument.
The Background
This case is easier to understand when the two proceedings are separated.
The County Court claim
The County Court proceeding was a workplace injury claim under the WIRC Act. It sought common law damages for injury, including damages for pain and suffering and economic loss.
The release referred specifically to that legislation and defined the relevant claim by reference to the application for common law damages under the WIRC Act.
The VCAT proceeding
The VCAT proceeding was brought under the Equal Opportunity Act. It concerned alleged breaches of statutory protections relating to workplace discrimination and other alleged unlawful conduct.
Pregnancy is a protected attribute under Victoria’s Equal Opportunity Act. The discrimination component of the proceeding concerned the worker’s allegation that she had been treated unlawfully because of her pregnancy and its subsequent termination. The available reporting does not provide enough detail to say precisely what treatment or employment decisions formed that part of her case, so it would not be appropriate to speculate.
The important legal distinction is that this was a statutory discrimination proceeding, not a common law damages claim under the workers’ compensation legislation.
Although the two cases arose from related workplace circumstances, they existed under different legislation, pursued different legal rights and could provide different remedies.
That distinction became decisive.
Why the Release Did Not Stop the Other Proceeding
The release said that the worker would not bring further claims or legal proceedings concerning the matters that were the subject of the defined claim.
The respondents argued that this wording was broad enough to end the Equal Opportunity Act proceeding as well.
VCAT Member Michael Bevan found that, read as a whole, the release was confined to the WIRC Act claim and its associated common law damages. The definition of “claim” did not include statutory claims arising from the events and did not expressly identify the Equal Opportunity Act proceeding.
The Tribunal also rejected the argument that the worker needed to have expressly carved out her right to continue the discrimination claim. On VCAT’s interpretation, the Equal Opportunity Act proceeding was never captured by the release in the first place. There was therefore no need to exclude it.
There was another practical problem. A director who was a respondent in the Equal Opportunity Act proceeding was not included in the release. The Tribunal considered this a further indication that the parties had not intended the release to bring the whole Equal Opportunity Act matter to an end.
The respondents therefore failed to establish that continuing the VCAT proceeding was an abuse of process. The underlying claims can now continue to be heard, but their merits are still to be determined.
How To Do It Better
The lesson is not that every release must contain one sweeping sentence releasing “all litigation”.
The lesson is that the parties must be absolutely clear about what is being settled, which claims are being released, which proceedings are being discontinued and who receives the benefit of the release.
Before finalising a settlement, employers should identify:
- every current legal proceeding;
- every actual or reasonably contemplated cause of action;
- the different jurisdictions involved;
- each individual and entity that needs to be protected;
- whether existing proceedings must be withdrawn or discontinued;
- whether the release covers common law, statutory and equitable claims;
- whether any claims are deliberately excluded; and
- whether the wording accurately reflects the settlement the parties have negotiated.
This matters because one workplace dispute may involve several independent legal pathways. A workers’ compensation damages claim, discrimination proceeding, general protections application or another statutory claim may arise from overlapping facts, but that does not automatically make them the same legal claim.
A release drafted around only one proceeding may settle only that proceeding.
The Bloom HR Take Away
A significant settlement payment does not, by itself, buy finality.
This employer had paid $362,500 to settle a common law workplace injury claim, but the release was interpreted by VCAT as being confined to that claim. It did not expressly dispose of the separate Equal Opportunity Act proceeding that was already on foot.
The decision does not determine whether the worker’s underlying allegations are true. What it determines is that the release did not prevent those allegations from proceeding to be heard.
For employers, the practical message is clear: never assume that settling one claim resolves every legal issue arising from the same workplace events.
If the commercial intention is to settle all litigation between the parties, the document needs to clearly identify:
the claims, the legislation, the proceedings, the parties and the intended scope of the release.
It should also deal expressly with the withdrawal or discontinuance of every existing proceeding intended to form part of the settlement.
Before signing, ask:
Does this document clearly end every proceeding we intend to settle, or does it only release the claim named in the document?
If the answer is not immediately clear, the release is not ready to be signed.
Bloom HR supports organisations to navigate complex workplace matters, strengthen their people practices and reduce uncertainty before disputes escalate. For a free and confidential 30 minute consultation use this link to schedule a time with our Founder and CEO Natalie Carrington.