Ballard v Incoll Management

Ballard v Incoll Management - [2001] NSWIRComm 181 - NSWIRComm 1997 case summary — Zoe

[7]

Further, or in the alternative, an order varying the Contract from its commencement or from some other time so as to include the following terms: (a) The Respondent shall not be permitted to deny to the Applicant access to skilled tasks promised by the Respondent to the Applicant and necessary to maintain the Applicant's high level of skills and market presence; (b) Termination of the Contract shall not be harsh, unjust or unreasonable. For the purpose of this clause termination of employment shall include termination with or without notice; (c) Upon termination of the Contract for any reason the Respondent shall give to the Applicant 12 months notice of termination or payment in lieu of such notice of termination; (d) For the purposes of (c) above, payment in lieu of notice shall be calculated by reference to the total of all benefits that the Applicant would have received during the notice period including, without limiting the generality of the foregoing: (i) Payment of annual leave and long service leave amounts which would have accrued during the notice period; (ii) Payment of superannuation entitlements which would have accrued during the notice period; and (iii) Payment of an account equivalent to the value of commissions and benefits associated with the Applicant's employment. For the purposes of clauses (c) and (d) above, the amounts payable shall be calculated on the basis of annual remuneration of $100,000 per annum plus benefits. 4. An order that the Respondent pay to the Applicant an amount of $11,100 representing the value of work performed by the Applicant for the Respondent, less the amount received by the Applicant. 5. Further, or in the alternate, an order that the Respondent pay to the Applicant such amount of moneys in connection with the Contract so voided or varied as may appear to the Commission to be just in the circumstances. 6. An order that the Respondent pay the Applicant's costs of and incidental to these proceedings. 7. An order that the Respondent pay to the Applicant interest on such amount of moneys as is ordered to be paid to the Applicant in connection with the contract at the rates set out from time to time by the Supreme Court. 8. Such further or other relief and such further and other orders as this Honourable Commission may deem just in the circumstances. 2 The matter had been scheduled for hearing on 26 and 27 June 2000. However, on 26 June due to difficulties that arose regarding the admissibility of the applicant's affidavit, the hearing dates of 26 and 27 June were vacated by consent. The question of costs in respect of the vacation of the hearing dates was reserved. The matter was consequently relisted for hearing on 4,5 December 2000 and 30 March 2001. Written submissions were filed and served, the last of those being received by the Court on 9 May 2001.

[22]

· The applicant told him that he was awaiting another job offer, that he would have to accept it at reasonably short notice and that he probably would accept it. 10 On 9 July 1997 the applicant wrote to the respondent. The letter: · Proposed that the applicant be employed on a temporary basis for six weeks at a salary of $45,000 and subject to a two-week notice period. · Proposed that if no notice of termination had been served by either party by the end of the fourth week of the applicant's employment, employment would "continue after the sixth week on a permanent basis and at a salary of $60K p.a. for a probation period of six months, and that my salary thereafter be increased to an amount to be agreed at that point. I anticipate the amount to lie between $70 and $80K p.a. A notice period of one month would apply to the permanent employment…" · Advised the respondent that the applicant expected an offer from another employer. · Indicated a belief that the applicant would be engaged initially "for the assessment to be undertaken for the banking syndicate which you discussed, but although I have strong analytical and report writing skills which would be valuable to this exercise my true value would become visible only in a situation where I am directly accountable for results. I would therefore consider it important that I be engaged in such a suitable capacity should I become employed on a permanent basis." · Stated: "I hope that the above proposal eliminates any significant financial risk with which you may otherwise have been faced and I look forward to discussing this matter with you further." 11 On 10 July 1997 the applicant said that Mr Incoll phoned him and said "Your proposal is acceptable. You can start right away", and the applicant replied "OK, I'll start next Monday." Mr Incoll denied he accepted the applicant's proposal. His recollection was that he said words to the effect "We will put a letter of offer to you and if you agree you can start on Monday".

[24]

· The position of Project Manager. · A salary of $45,000 per annum for an initial period of six weeks and thereafter an annual salary of $60,000. · Information relating to superannuation, leave, travel, training, hours of work and salary reviews. Salary was to be reviewed at the end of January 1998. · Termination: "As stated in your 9 July 1997 letter. Thereafter one month's notice shall be given by either party. The Company reserves the right to pay one month's salary in lieu of notice." 13 The applicant expressed some misgivings about the letter, including the reference to "contract engagement" and the absence of any clear commitment to pay between $70-$80,000 per annum as proposed in the applicant's letter of 9 July 1997. Nevertheless, the applicant said he "did not want to sour relations in my new job" and after considering the matter "for a number days", signed and returned the letter to the respondent with a handwritten notation that acceptance of the offer was "subject to my letter dated 3 August 1997." 14 During late July and early August 1997 the applicant became concerned that he "may have been employed simply to resource the Citibank/Park Plaza Report." This was, he said, based on a number of developments including that he had been introduced to staff by Mr Incoll as someone who would be "with [them] for a few weeks"; he had not been allocated a desk of his own; his payslips stated "Contract period: 14/7/97 to 24/8/97". The applicant also became concerned following a discussion with the respondent's line manager, that the manager knew nothing about the applicant's work experience, something he would have expected if he was to assume the position of a project manager. In response, Mr Incoll's evidence was that he had not introduced the applicant to other staff as a person who would be with them for a few weeks; he understood the applicant may wish to leave if he was offered other employment; as the applicant's position had been "created"' there was no existing space for him in the office; the wording on applicant's payslips reflected Mr Incoll's understanding that "the engagement of the applicant's services was by way of a contract for services and this was reflected in the offer of employment."

[29]

20 The applicant then asserted that he commenced permanent employment with the respondent on 25 August 1997, that is six weeks after commencing and in accordance with the applicant's proposals in his letter of 9 July 1997. The applicant claimed that at this time he was given exclusively "management consultancy tasks" and not the work for which he had contracted, namely, project management. Mr Incoll denied that the applicant commenced permanent employment on 25 August. Mr Incoll said: It was my clear understanding of the agreement with the applicant that he was on a 6 month probation which was continuing at that time. At that time the only change that occurred was a salary adjustment from $45,000.00 per annum to $60,000.00 per annum and a change in the notice period from 2 weeks to 1 month. The applicant was not engaged on management consultancy tasks. He was using the experience I understood him to have, having regard to his resume and what he had told me previously, to carry out various types of tasks that I felt was consistent with his contract of services. 21 During the period 26 August 1997 to 6 October 1997 the applicant said that he forwarded three letters to Mr Incoll challenging the respondent's right to employ him as a consultant. Further, that in the letters the applicant "notified the respondent as to the negative impact that severance of continuity of my project management employment would have on my career." The applicant was unable to produce the letters. Mr Incoll said in his evidence that the only letter he received in the period referred to by the applicant was one dated 3 October. That letter referred to "the significant deviation" from the employment agreement between the applicant and the respondent given the report writing work that the applicant was required to perform as opposed to project management. The letter indicated that if the respondent wanted to employ the applicant in a report writing role, the applicant considered that an appropriate salary would be in excess of "$100K p.a." 22 On 7 October 1997 the applicant wrote a further letter to Mr Incoll that was received by him on 10 October. The letter complained that certain responsibilities had been allocated to the applicant and under protest he had no alternative but to accept the work. The letter went on to say: I appreciate that you may be having difficulty deploying me as you had intended and in light of our recent discussion I will continue being patient for another month or so. I am committed to making a success of our employment arrangement as the salary discounts will present a loss to me in excess of $15K if our arrangement is not continued into the medium term. My commitment cannot be expected however to extend to the execution of all and sundry responsibilities that others step back from. Therefore, given any circumstance where I am required to action a QA audit which I objected to weeks ago, I must now serve notice that if in around one month's time it becomes necessary either to; · Renegotiate my salary for a change in job description, or · Accept that there is no future for me in this organisation, …then my salary must at that time be deemed to have with immediate effect today, been raised to the level discussed in my previous correspondence, payable in arrears. 23 The applicant did not take the action described in his letter of 7 October. The applicant said at the time he wrote the letter he did not believe that Mr Incoll had any difficulty in providing project management work and that suitable opportunities were available, which of course, was inconsistent with the statement in the letter that "you may be having difficulty deploying me". The applicant said in his evidence that whilst he did not believe there was any difficulty in providing suitable work he indicated in the letter a contrary belief because he hoped it would help in resolving matters. 24 In relation to the letter of 7 October Mr Incoll stated in his evidence that he met with the applicant on 10 October and said to the applicant words to the effect "What is going on, you know that project management work is not currently available. You are required to do what you are given." Mr Incoll said that the applicant responded by saying "I just wanted to put on the record that I wanted project management work." 25 On 21 October 1997 Mr Incoll wrote to the applicant for the purpose of eliminating any "misunderstanding". In the letter, Mr Incoll made four points: 1. Your employment conditions are not changed nor can be "deemed" to be changed. There are no "arrears" payments. 2. There is no "loss" to you, and should you willingly wish to go elsewhere, please advise. Otherwise, salary increases will be based, as they are for all staff, on performance. 3. We are attempting to place you into a suitable long-term project as you desire, but short-term assignments must be undertaken in the interim. 4. Your working relationship with other staff members is poor, and has been the subject of considerable complaint to me. This will need to improve, irrespective of other issues. 26 The applicant replied in writing the same day. In his letter the applicant: · Indicated that he took the job with the respondent to manage projects and in order to gain that opportunity agreed to work on the Citibank report. Further he agreed to "a two-tier salary discount which will constitute a loss for me if my employment is for whatever reason ended prematurely." · Complained that he had been employed as a "Management Consultant" rather than a "Project Manager" and in the former position his salary was well below the market rate. · Said that he resolved to bear the situation and to keep the respondent advised that the situation was contrary to the employment agreement and untenable in the long term and that "I understand that it will now come to a head one month from the date of my previous letter. If it becomes necessary to renegotiate the terms of my employment I would seek to have the new terms made effective from the date of my previous letter. If it does not become necessary then the terms of the original agreement would continue to apply." · Indicated that he may proceed to make employment enquiries elsewhere. · Denied that relationships with other staff were poor. · Stated that "Notwithstanding any of the above please advise me within the next few days in the event that you do not intend to agree an end-salary which is at the top of the band detailed within my initial offer. This has now become a further complication as I had expected to have approximately six months within which to demonstrate a Project Manger ability which would place me in a position to negotiate at the top of the said band."

[31]

28 Mr Incoll said that as soon as receiving the applicant's letter of 21 October he went to discuss it with him and said words to the effect of "What is this?" Mr Incoll said that he indicated to the applicant that he would not suffer any loss. Mr Incoll also said to the applicant at the time "Other employees (Susan, Bill, Brad and others) are not prepared to work with you." 29 In late October or early November 1997 the applicant said that he had a conversation with Mr Incoll where the applicant was told that he had been "put forward for the Citibank [Park Plaza] project". The applicant inquired whether this involved a full project management role and was told that the respondent would be appointed to certify the works and some other company would manage the project. The applicant said at the time he indicated neither acceptance nor rejection of the appointment but that despite being told by Mr Incoll it was a full time appointment, the applicant did not believe Mr Incoll. The applicant also said that about the same time as the conversation regarding the Citibank project, Mr Incoll brought him the Citibank contract to proof check on the afternoon it was about to be signed. The applicant said he found a serious flaw in the document that "rendered the Respondent a de-facto guarantor of timely completion of the project." The flaw was shown to Mr Incoll who said to the applicant words to the effect "I don't know what we would have done had you not noticed that" and later, "I am not sure what we would have done without you." 30 Mr Incoll's evidence in relation to the appointment to the Citibank project was that the applicant said words to the effect "I do not want to be considered for that project because it is only certification work and not project work as such." Mr Incoll said he then arranged alternative resources for the role. As to the flaw in the contract document, it was Mr Incoll's evidence that he had no recollection of the applicant identifying any serious flaw although he did from time to time ask the applicant to comment on contract documents. 31 On about 14 November 1997 the applicant gave evidence that he was summoned to Mr Incoll's office and was told that he should not be using business time to apply for other jobs and that he would not be paid for taking time off to attend job interviews. The applicant said he was told that he should go away and think very carefully about whether he wanted to continue working for the respondent. It was Mr Incoll's evidence that he confronted the applicant about failing to turn up for work until lunchtime and the applicant said he had been to a job interview with "Bovis". Mr Incoll said he advised the applicant that what he had done was okay but that next time he should let him know beforehand. The applicant denied that he had taken time off to attend job interviews and denied the substance of Mr Incoll's evidence as to what occurred. 32 On 16 November 1997 the applicant wrote another letter to Mr Incoll and gave it to him the following day. The main points in the letter were that: · The applicant agreed that the Citibank project "was a full-time job for myself as assisted part-time by Brad, Marcus and Rebecca. Consequently it is no longer necessary to negotiate any changes of terms of employment." · It was only speculation on Mr Incoll's part that the applicant had re-entered the job market. · It was not the applicant's intention to terminate his employment.

[34]

35 On 18 November Mr Incoll had a conversation with the applicant where Mr Incoll was alleged to have said that he had no further work for the applicant but that he would do what he could to find something for the applicant and that he would introduce him to another client. The applicant said he responded by saying: This is not acceptable. I might have seen it coming. Do what you can, but I'll start looking for another job immediately anyway. I will discuss it further with you in the next few days. 36 Mr Incoll denied he said to the applicant he would introduce him to another client. In his affidavit Mr Incoll said: At that time I did not talk to him about the deficiencies in his work performance generally and his inability to get on with other staff (having previously raised them) as I did not want to make the ending of the employment relationship acrimonious and I did not want to particularly interfere with his ability to obtain work elsewhere. I did however point out to him that he was free to use the office or the facilities within the office in obtaining employment over the notice period. On the 19 November, 1997 I gave the applicant a letter confirming the termination of his employment and giving notice. 37 The termination letter gave one month's notice and stated the reason for the termination was "primarily related to insufficient workload." On 20 November the applicant replied with a further letter rejecting "the effective date of your notice of termination of employment." The letter went on to say: I have agreed only to seek alternative employment elsewhere and as soon as the same has been secured, though obviously within a reasonable period of time, I will terminate my employment here. 38 In the letter, the applicant repeated his allegations regarding the subterfuge perpetrated by the respondent that he engaged the applicant on the pretext of placing him as a project manager when the position became available and paying him as such, and instead using him to "address the backlog and current demand for claim preparation and general consultancy". The applicant's letter also rejected the idea that his termination was redundancy and the letter implied that the applicant might take "court" action. The applicant said he left the letter in Mr Incoll's in-tray and shortly after doing so Mr Incoll came into the applicant's office and allegedly said to him: You go ahead with this and I'll ensure that you never get another job in this city. What you say about redundancy is irrelevant. You are not being made redundant. You are being dismissed for poor performance. 39 The applicant said that he then packed up his personal belongings and prepared to leave.

[82]

The applicant would be employed in the position of project manager. 2) The commencing salary would be $45,000 per annum. After six weeks the salary would increase to $60,000. 3) In January 1998 the respondent would review the applicant's salary. There was no agreement or undertaking to the effect that at the time of the salary review the applicant's salary would increase to between $70,000 and $80,000 per annum although the applicant may have expected such an increase. 4) Termination of employment during the first six-week period of employment could be effected by two weeks' notice. After the initial six-week period and for a further period of six months during which the applicant would be employed on probation, the notice period for termination of employment of employment would be one month. After the six months period of probation termination of employment could be effected by one month's notice by either party with the respondent reserving the right to pay one month's pay in lieu of notice. 54 It is clear that Mr Incoll saw as the priority in employing the applicant that the applicant would undertake the task of writing the Citibank report. As I have said, the applicant accepted this. Mr Incoll also had the impression that as the applicant was keen to find work he, therefore, would have no objection to doing tasks other than the Citibank report. However, it was submitted for the respondent that at the time of the applicant's employment there was no discussion about the kind of work or duties that the applicant would be required to perform after writing the Citibank report. It was also submitted that "The letter of 9 July 1997 failed to identify any specific position which Mr Ballard would occupy or any specific capacity in which he would be employed". I am not sure where such a submission takes the respondent but it appears that what I am being asked to accept is that because there was no discussion about specific duties, other than the Citibank report, it is to be implied that report writing and claims preparation work, which the applicant was required to undertake after the Citibank report was completed, should be regarded as part of a project manager's work within the context of the respondent's business.

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