Hairman v FileNET Corporation Pty Limited - [2001] NSWIRComm 318 - NSWIRComm 1997 case summary — Zoe

NSWNSWIRComm

Hairman v FileNET Corporation Pty Limited

[2001] NSWIRComm 318

Industrial Relations Commission (NSW)|1997-03-23|Before: Schmidt J, Cahill VP, Schmidt JJ, Mr J

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At a glance

Source facts

Court

Industrial Relations Commission (NSW)

Decision date

1997-03-23

Before

Schmidt J, Cahill VP, Schmidt JJ, Mr J

Catchwords

10/30/2001
10/31/2001 DATE OF JUDGMENT: 12/07/2001

Source

Original judgment source is linked above.

Catchwords

10/30/200110/31/2001 DATE OF JUDGMENT: 12/07/2001

Judgment (163 paragraphs)

[1]

Industrial Relations Commission of New South Wales in Court Session

[2]

CITATION : Hairman v FileNET Corporation Pty Limited [2001] NSWIRComm 318 APPLICANT: David Hairman PARTIES : RESPONDENT: FileNET Corporation Pty Limited (ACN 056 639 500) FILE NUMBER: IRC 3065 of 2000 CORAM: Schmidt J CATCHWORDS : Unfair Contract - fairness of a commission scheme - loss of potential payments on resignation - purpose of scheme to include inducement to remain in employment - respective conduct of parties - contract not unfair - application dismissed LEGISLATION CITED : Industrial Relations Act 1996 Armory v Delamere (1722) 1 Stra 505 Davies & Anor v General Transport Development Pty Ltd & Ors [1967] AR (NSW) 371 Hodges & Ors v Streets Ice Cream Pty Limited (1985) 11 IR 60 CASES CITED : Houghton & Anor v Immer (No 155) Pty Limited (1997) 44 NSWLR 46 LJP Investments Pty Limited v Howard Chia Investments Pty Limited (No 2) (1990) 24 NSWLR 499 Stevenson v Barham (1977) 136 CLR 190 Westfield Limited & Anor v Helprin (unreported, Cahill VP, Hungerford and Schmidt JJ, 23 March 1997) HEARING DATES: 10/29/2001; 10/30/2001; 10/31/2001 DATE OF JUDGMENT: 12/07/2001

[18]

6 The relief claimed in the summons was: 1. A declaration that the Employment Contract made in or about July 1993 between the applicant as the Employee and the respondent as the employer, whereby the applicant performed work the computer software and hardware and sales and service industry in New South Wales ("the Contract") and any related condition or collateral arrangement, including the Filenet Account executive Compensation Plan 1993 ("the 1993 Plan") and the Account Executive Compensation Plan 1999 ("the 1999 Plan"), ("the Arrangement") is unfair pursuant to s. 106 of the Industrial Relations Act 1996. 2. An order declaring the Contract and/or the 1993 Plan and the 1999 Plan void in whole or in part either ab initio or from the some other time, except insofar as the Contract confers on the applicant, rights to remuneration. 3. Further, or in the alternative an order varying the 1993 Plan either from its commencement or from some other time, by deleting: (a) Clause I B 4; (b) Clause V E; and (c) Clause IX A, B and C 'Termination From the Plan'. 4. Further, an order varying the 1999 Plan either from its commencement or from some other time, by deleting: (a) Cause I B 4; (b) Clause IV E; (c ) Clause VIII A, B and C 'Termination From the Plan'. 5. In the alternative to 3(c) and 4(c) above, an order varying the Plan from its commencement by deleting Clause IX of the 1993 Plan and Clause VIII of the 1999 Plan and substituting the following in lieu thereof: "A In the event of termination as a Participant in the Plan resulting from leaving the Company, the former Participant will be paid by the company all commissions/bonuses in respect of all work performed by him/her up to the date of termination, provided that where, in respect of any sale by the former Participant to a customer of the company, payment from the customer has not been received by the company at the time of the termination, then the company will make the payment of the commission/bonus forthwith upon receipt by it of such payment. "B Upon termination the Company shall provide to the former Participant details of all commissions/bonuses to which he/she is entitled pursuant to A above including any payments to be made after the date of termination." 6. An order that the respondent pays to the applicant: a. All commission/bonuses to which he is entitled pursuant to the Plan as varied; b. interest on the amount referred to in paragraph 6 (a) herein from 14 January 2000, until payment. 7. Further, or in the alternative, an order that the respondent pays to the applicant such amount of money in connection with the Contact and/or the 1993 Plan and 1999 Plan, so avoided or varied as may appear to the Commission in Court Session to be just in the circumstances of the case. 8. An order that the respondent pays the applicant's costs of an incidental to these proceedings. 9. Such further or other orders as to the Commission in Court Session appears appropriate in the circumstances of the case.

[66]

41 Mr Hairman responded: 'There were a number of express purposes of the Sales Incentive Plan. The purpose to (a) " Make every Filenet customer a production success " was to ensure that customers were not sold any product that would no work for them. I was required to advise customers on how to successfully implement the system that I sold. This was done by me prior to an order being made by the customer. (b) " Realise the sales volume objectives as established by Filenet ." Each sales representative was required to achieve a certain level of sales volumes. I achieve my sales volumes and more during the time that I was employed by the respondent. Sales volumes were recorded in respect of orders obtained by the sales representative. (c) "Maximise profit margins to Filenet" This purpose was to ensure that sales representatives did not provide discounts to customers that would jeopardize or sabotage the profit margin to Filenet in respect of any particular sale. (d) " Establish a broad customer base " Within a particular territory given to a sales representative such as myself I was required to establish as many customers within that territory as possible. This was done by obtaining orders. (e) " Cultivate prospects that are financially sound and desirable to Filenet " Part of my job was to approach companies that I though may become potential customers of Filenet products. This was done prior to an order being placed. The companies that were approached as prospective customers were supposed to be financially sound. (f) " Ensure prompt customer payment " After an order was obtained by a sales representative the sales representative then had no further involvement with the customer in respect of that sale unless there was a particular problem with the customer. A sales representative such as myself however generally continued to communicate with the customer in an effort to obtain further sales. If there was a problem with payment by a customer I would contact the customer to enquire the reason for non-payment and then if there was a problem in the implementation or operation of the system that I sold I would contact the appropriate person within Filenet or the Filenet partner to rectify the problem for the customer. A customer may contact a sales representative about a problem well after payment is made by the customer. Colonial, to whom I made the sale of software in December 1999, had their own team of employees who were experts in the implementation and operation of Filenet software. In that case it was not necessary from me to have any further contact with Colonial in order to ensure that any glitches with the implementation or operation of the software were overcome. Colonial did this itself. In the Colonial contract payments were to be made on the dates specified in the contract. (See Annexure "L" to the affidavit of Mr Collins.) (g) " Utilize good business judgment in dealing with potential and/or established customers of Filenet ." This purpose was to encourage good business judgment in sales representatives such as myself so as to facilitate the successful implementation of Filenet software by customers.'

Hairman v FileNET Corporation Pty Limited

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Judgment (163 paragraphs)

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Cases Cited (4)

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