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  • Writer's pictureBrian AJ Newman LLB

Understanding the Impact of Coercion on Employment Settlement Agreements: Thorne v Kennedy

Introduction

In employment disputes within Australia and similar legal jurisdictions, the enforceability of deeds of settlement can be significantly influenced by factors such as coercion or the absence of competent advice. A pivotal case providing insights into these issues is Thorne v Kennedy [2017] HCA 49. Though it pertains to a prenuptial agreement, its legal principles are instructive for understanding similar contracts in employment contexts.


Thorne v Kennedy: An Overview

The case involves Ms. Thorne, an Eastern European woman, and Mr. Kennedy, a wealthy Australian property developer. Ms. Thorne was pressured to sign a prenuptial agreement shortly before their wedding and a similar agreement afterwards, despite adverse legal advice.

Understanding the Impact of Coercion on Employment Settlement Agreements: Thorne v Kennedy
Understanding the Impact of Coercion on Employment Settlement Agreements: Thorne v Kennedy

Key Legal Principles from Thorne v Kennedy [2017] HCA 49

1. Undue Influence and Unconscionable Conduct: The High Court of Australia found significant emotional pressure and an imbalance in bargaining power, which influenced Ms. Thorne's consent and rendered the agreements as products of undue influence and unconscionable conduct.


2. The Importance of Free Will and Informed Consent: Ms. Thorne’s isolated situation and dependence on Mr. Kennedy, compounded by the timing of the agreements, critically impacted her decision-making ability.


3. The Role of Competent Legal Advice: The case underscored the importance of having the opportunity to obtain competent legal advice, which was lacking in Ms Thorne's situation, affecting her understanding and consent.


Application to Employment Settlement Agreements

The principles from Thorne v Kennedy, while based on a matrimonial agreement, are relevant to employment law, particularly in relation to deeds of settlement. The case highlights the necessity of ensuring that employees have the chance to seek and understand competent advice before entering into any agreement. The lack of such an opportunity, especially under coercive conditions, can form a strong basis for challenging the validity of a contract or settlement deed.


Conclusion

Thorne v Kennedy [2017] HCA 49 illustrates how contracts signed under undue influence or without adequate opportunity for legal advice can be contested. Its principles, though arising in a different context, offer significant insights for employment law, emphasising the critical need for free will, informed consent, and the role of professional advice in contractual agreements.

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Footnote: For those interested in exploring the full details and legal reasoning of this landmark case, you are invited to view the complete case at [Thorne v Kennedy [2017] HCA 49](https://www8.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/2017/49.html).

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