CATCHWORDS: Contract of employment - whether insubordinate conduct justified summary dismissal

The appellant was employed by the respondents, the trustees of a unincorporated sporting organisation, under a 2 year written contract. The respondents summarily dismissed the appellant after 6 months. The appellant's claim for unfair dismissal was dismissed by the trial judge.

The appellant argued she had not breached her contract of employment, or that any breach did not amount to repudiation of the contract justifying summary dismissal.

The appellant's conduct, including her refusal to recognise and obey the Executive Director, to whom she was responsible, amounts to insubordination inconsistent with her employment. The breaches were sufficiently serious to justify summary dismissal.

Loughridge v Lavery [1969] VicRp 112; [1969] VR 912

Blyth Chemicals Ltd v Bushnell [1933] HCA 8; [1953] 49 CLR 66

Adami v Maison de Luxe [1924] HCA 45; [1924] 35 CLR 143 applied.

GLEESON CJ: I have had the benefit of reading in draft form the reasons for judgment of Stein JA. I agree with the orders proposed by his Honour and with his reasons for those orders.

STEIN JA: The appellant, Jacqueline Byrnes, appeals against the decision of Bell DCJ dismissing her claim for wrongful dismissal from her employment with an unincorporated body known as Athletics New South Wales. Messrs Treloar, Atterton and New are sued in their capacity as trustees of the association. His Honour found that the defendant was entitled to terminate the appellant's contract of employment.

Ms Byrnes became employed by Athletics NSW in December 1984 as State Coaching Director, although without any written contract. She had been a prominent athlete in the 1960's attaining fourth world ranking in the women's 400m in 1967. Her subsequent employment, as NSW Development Co-ordinator, was reduced to writing on 12 June 1992. As to the circumstances surrounding this his Honour said:

It appears that she had for years had her own ideas about the way in which the Association should be run and about her role in running it - ideas that did not always coincide with those of the members of the governing board. There was lengthy negotiation between the parties before the written agreement was arrived at. It was signed on behalf of the defendant by three trustees, one of whom is named as a defendant and I have been informed in evidence that at the head of the governing board was a President followed down the chain of command by a salaried Executive Director, a Treasurer, a Secretary and two other board members. The plaintiff was not a member of the board. The trustee who is named as a defendant was in fact the President. It seems that the board had been anxious to reduce the plaintiff's functions to some written and ascertainable form in order to establish a degree of control over her. [my emphasis]

It is apparent from the evidence and his Honour's findings that over the years prior to the written contract of employment, there had been a series of incidents between the appellant and her employer. His Honour described these as background to the events which led to her summary dismissal on 8 December 1992.

The employment contract, made on 12 June 1992, was for a period of 2 years from 1 July 1992. Clause 5 provides:

The Development Co-ordinator is responsible to the Executive Director, who will monitor the Co-ordinator's performance on behalf of the Board of Athletics New South Wales.

The obligations and duties of the position are included in clause 6. Subparagraph (v) provides that the development co-ordinator is:

To represent Athletics New South Wales in a manner which is in accordance with its common vision, objectives, constitution and general rules.

Three of the other subparagraphs of cl 6 include the words `as directed by the Executive Director'.

The catalyst for the dismissal of the appellant was a memorandum she sent on 19 October 1992 to John Atterton, then the acting Executive Director of the Association, as well as the President. Ms Byrnes sent copies of the document to the incoming Executive Director, Stephen Thompson, a board member, Betty Moore and the office manager.

I work at being a lateral thinker and I am always looking for new ideas, agree that team work is essential and ANSW will and does have my full support. However John, [Mr Atterton] it needs to be said that your unwarranted, unfounded and personal attacks on me have had an effect on our working and personal relationship which I thought, over the years, was a good one. You certainly had my support in your charge for the Presidency. It has been disappointing and at times difficult for me. Your attitude has left me with a very different outlook and perspective of the team leader and I will deal with that on a day to day basis.

Not surprisingly, this provocative assertion led to a response by Mr Atterton. By a memorandum of 18 November 1992 to the appellant he said:

However, there is one serious item that requires urgent attention. That is your statement that, "I have made unwarranted, unfounded and personal attacks on you".

As I do not recall having made such "attacks" I require you to furnish the appropriate evidence by Friday 20 November to support your allegations, or publicly apologies (sic) as you have chosen to `broadcast' your allegations to other members of ANSW.

No response was received from the appellant and Mr Atterton extended the time for compliance with his demand to 27 November 1992 - `to either Dr Thompson or myself'. Dr Thompson commenced duties as Executive Director on 24 November 1992. He met with the appellant on the next day. They met again on 30 November. During their conversation the appellant referred to `some run-ins with the President' (Mr Atterton). Dr Thompson said to her:

As John was acting Executive Director you are required to complete outstanding matters - especially his request for you to clarify your earlier written comments.

I have difficulties working with John. I don't want to even be in the same room as him.

John [Atterton] has reported to me that you have been negative about us to Streets. [a sponsor of Athletics NSW]

I have mentioned to them the problems he is causing. If there are any further problems Streets will certainly go with me. I have worked with them closely for a long time and they believe everything I say because of our relationship.

In a telephone conversation with Dr Thompson that same day (30 November) he said to the appellant `Do you have approval from Streets for these extra monies?' She replied `I do'. On 4 December Dr Thompson ascertained from Streets that it had not committed itself to extra funding. Indeed, it knew absolutely nothing about it.

Later on 30 November the Executive Director sent a facsimile to the appellant requiring a reply to the earlier demand of the acting Executive Director (Mr Atterton). A new time was specified - by noon 2 December 1992. The appellant acknowledged receipt. Dr Thompson's direction to the appellant to respond to Mr Atterton's requirement was re-affirmed on 2 December. He also told her to meet with him at 6.30 pm that day. When they met Dr Thompson extended the deadline to reply to noon on the following Friday. The conversation then returned to Streets. Dr Thompson said:

Is it true that you have spoken to Streets about problems with Athletics NSW?

I will not tolerate such unprofessional behaviour and I must reiterate

that all communication with Athletics New South Wales' Sponsors must be

On 4 December the appellant responded directly to Dr Thompson. His Honour noted that the communication did not in terms deal with Mr Atterton's demand for particulars or an apology.

On Sunday, 6 December 1992 a meeting of the board took place. Dr Thompson attended. His notes of the meeting were tendered in evidence. The minutes of the meeting are brief but record that `after lengthy discussion and review of file, it was agreed that the holder of the position [of Development Co-ordinator] be dismissed under the conditions of her contract'.

His Honour found that at the board meeting the members considered:

... her lack of support for themselves, her conduct regarding the sponsor referred to, and her inaccurate applications to the Department of Sport, Racing and Recreation. They considered what the Executive Director described as her use of her position for personal gain, and they considered her "reluctance to carry out reasonable instructions".

On 8 December 1992 Dr Thompson met with the appellant. He said to her:

There are a couple of points I need to discuss. Right now, I am unhappy with your performance. In particular you have not demonstrated a commitment to the Directors of ANSW. You have misled me in regard to a sponsor and you have submitted misleading and inaccurate documents to DSRR.

The appellant did not respond but telephoned her solicitor. Dr Thompson made some further comments about sponsors which was again met with the response from the appellant that she was going to ring her solicitor. Dr Thompson then informed her that Athletics NSW had decided to end her contract and she was offered the opportunity to resign. She said she would not resign but would sue. Shortly thereafter she was handed a letter of dismissal.

While his Honour had some doubts as to whether the Executive Director was entitled to seek particulars of the appellant's allegations against him, he said:

I am nevertheless satisfied that the plaintiff's entire course of action beginning with her letter of the 19 October 1992, and ending with the interview of the 8 December was inconsistent with her continued employment by the defendant. And that view is reinforced when her conduct is set against the background of the earlier history. [emphasis added]

On behalf of the appellant it is submitted that the respondent was not entitled to summarily dismiss the appellant because there was no breach of the contract of employment. Alternatively, any breach did not amount to a repudiation of the contract. It was not wilful or of sufficient seriousness so as to warrant dismissal.

As I have referred to above, the trial judge was satisfied that the entire course of conduct by the appellant from her letter at 19 October 1992 up to 8 December 1992 was inconsistent with her continued employment with the respondent. The test of repudiation is not a subjective one. As was stated by Adam J in Loughridge v Lavery [1969] VicRp 112; [1969] VR 912 at 923, intention is to be judged from what the other party would reasonably infer from the acts or words of the renouncing party, see also Carr v Berriman Pty Ltd [1953] HCA 31; (1953) 89 CLR 327.

Evidence was given at the trial by Mr Batchelor, a former Executive Director of the association, as well as Mr Atterton and Dr Thompson. Their evidence was accepted, in particular that of Mr Batchelor whom his Honour regarded as genuine and very perceptive. Mr Batchelor had a high regard for the appellant's coaching and administrative ability, but this was outweighed by his `professional assessment of (her) as a subordinate'. He referred to her `attitudinal problems', `tendency to lose control', `inability to accept changes in the organisation' and to her intransigence. These factors made her dismissal inevitable.

It is clear that an employee may be summarily dismissed if she or he has acted in a manner which is incompatible with the employees' duty, inconsistent with her or his duty to the employer or in a manner which is destructive of the confidence between the parties, Blyth Chemicals Ltd v Bushnell [1933] HCA 8; [1953] 49 CLR 66 at 72 and 81.

It is apparent that the appellant refused to recognise the authority of the acting Executive Director (Mr Atterton) as well as his authority as President of the association. Bearing in mind the provocative content of the allegations the appellant made against him on 19 October 1992 (and its dissemination by the appellant) he was giving her a lawful direction to respond. In effect, she refused to obey any directions given by Mr Atterton in his capacity as President or in his capacity as acting Executive Director. Her refusal was deliberate and intentional and her failure to obey a lawful instruction went to the root or foundation of the contract of employment, (Adami v Maison de Luxe Ltd [1924] HCA 45; [1924] 35 CLR 143).

Her conduct cannot be regarded as a merely trivial or mild form of insubordination or as a purely personal dispute. It was a direct challenge to the management of the association. Under the contract of employment the appellant was responsible to the Executive Director.

The appellant also had a duty and obligation to represent Athletics NSW in a manner consistent with its common vision and objectives. Her admitted contact with the respondent's sponsor, Streets, is relevant. First, she had been disloyal to the association by keeping Streets informed of her `problems' with the President, including `his aggression towards me'. She stated in evidence that she thought Streets `needed to know' (AB 130). It was important (she said) for Streets to know the restraints that Atterton was attempting to place on her.

Second, the appellant agreed on 2 December 1992 that not only had she spoken to Streets about her problems with Athletics NSW, but that they believed everything she said. Further, that she would take the sponsorship away from the association if she left.

Third, on 30 November the appellant told Dr Thompson that she had approval from Streets for extra funding for coaching grants. However, on 4 December Dr Thompson ascertained directly from Streets that this was incorrect and that Streets had no knowledge of it. In this regard, the appellant misled the Executive Director.

In my opinion, these three matters also constitute a breach of the contract of employment. They are matters which are grossly disloyal to the association and the antithesis of protecting the interests of the association and its `common vision' required by clause 5 of the contract. Moreover, they are acts of insubordination which go to the heart of the contract of employment, which together with her refusal to obey the lawful directions of the Executive Director, amount to its repudiation. It is impossible to reconcile these actions with her obligations towards her employer.

His Honour had the benefit of observing the demeanor of the appellant and the association's witnesses and to judge their respective credibility. His conclusions were well and truly open on the evidence. In particular, his Honour was entitled to conclude that the appellant's `entire course of action' between 19 October and 8 December 1992 was inconsistent with her continuing to be bound by the contract. She displayed intransigence, insubordination and disloyalty. These matters (individually or collectively) are sufficiently serious to justify summary dismissal.