Michael Diver v Object Consulting Pty Limited and Anor [2003] NSWIRComm 202

Michael Diver v Object Consulting Pty Limited and Anor [2003] NSWIRComm 202

The contract was unfair because Object recruited the applicant to a senior role after seeking a long-term commitment from him, made representations as to his future, then made him redundant summarily without warning, consultation or any contractual notice, and the contract contained only a standard one-month notice term and no provision for redundancy. Fairness required variation of the contract to provide five months notice and three months redundancy pay, with mitigation applied to the notice component. The bonus scheme was also unfair in its operation to the extent that redundancy deprived the applicant of any opportunity to earn the non-discretionary performance-based portion already...

Jurisdiction
Australia
Judgment Date
26 June 2003
Procedural Posture
Application Under Section 106 of the Industrial Relations Act 1996 Alleging an Unfair Contract of Employment / Judgment
Outcome
The applicant's contract of employment with Object was declared unfair and the application succeeded in part.
Legal Topics
['unfair Contract' 'redundancy' 'notice of Termination' 'performance Bonus' 'mitigation' 'interest' 'costs' 'joint and Several Liability']
['industrial Relations' 'employment Law' 'contract Law'] ['unfair Contract' 'redundancy' 'notice of Termination' 'performance Bonus' 'mitigation' 'interest' 'costs' 'joint and Several Liability']

Case Brief

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Procedural Posture

Application Under Section 106 of the Industrial Relations Act 1996 Alleging an Unfair Contract of Employment / Judgment

Legal Issues

  1. 1 ['Whether the contract of employment between the applicant and respondents was an unfair contract as defined in s.105 of the Industrial Relations Act.' 'Whether the contract of employment and/or the conduct of the respondent was unfair in terminating the contract of employment without the provision of notice.' 'If the termination without notice was unfair, what was fair notice.' "What elements of the applicant's remuneration package should be included in notice." 'Whether mitigation should apply in relation to any payment in lieu of notice and whether the applicant mitigated his loss in whole or in part.' "Whether the contract of employment and/or the conduct of the respondent was unfair in terminating the contract of employment for redundancy with the payment of one month's redundancy to the applicant." 'If the redundancy arrangements were unfair, what was a fair redundancy payment.' "What elements of the applicant's remuneration should be included in redundancy pay." 'Whether it was unfair that the applicant did not receive payment on termination in respect of a pro-rata bonus payment.' 'If a bonus payment should be made, what payment should be made.']

Ratio Decidendi

The contract was unfair because Object recruited the applicant to a senior role after seeking a long-term commitment from him, made representations as to his future, then made him redundant summarily without warning, consultation or any contractual notice, and the contract contained only a standard one-month notice term and no provision for redundancy. Fairness required variation of the contract to provide five months notice and three months redundancy pay, with mitigation applied to the notice component. The bonus scheme was also unfair in its operation to the extent that redundancy deprived the applicant of any opportunity to earn the non-discretionary performance-based portion already...

Court Disposition

The applicant's contract of employment with Object was declared unfair and the application succeeded in part.

Orders

  • ['The contract is varied ab initio to require the giving of 5 months notice of termination of employment and 3 months redundancy pay in the event of termination arising in circumstances of redundancy.' 'The respondents are to pay the applicant 4 months base salary and 5 months superannuation in respect of notice,...