When does a later resignation supersede a dismissal?

A common solution when a dismissal is disputed is for the employer and an employee to reach a separation agreement. This will often see the dismissal rescinded by agreement and the employee allowed to resign with immediate effect. This agreement will usually preclude the employee's right to lodge an unfair dismissal claim, even if the employer later reneges on aspects of the separation agreement.

In Sheng Li v Ventura Bus Linse t/a Ventura [2017] FWC 4087, the parties had reached a separation agreement to settle a dispute about the employee's dismissal for misconduct and poor performance. The agreement came about after the employee's union subsequently approached the employer on behalf of the employee to have the dismissal converted to a resignation. Ultimately it was agreed between the parties that the employee's dismissal would be rescinded, the employee allowed to resign, and that the employer would give the employee a 'good reference' and actively support his