Hairman v FileNET Corporation Pty Limited

APPLICANT: Mr J Fernon of counsel SOLICITORS: Lazarus Smith Lawyers LEGAL REPRESENTATIVES: RESPONDENT: Mr J Phillips of counsel SOLICITORS: Baker & McKenzie Solicitors

JUDGMENT: - 54 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

DAVID HAIRMAN v FILENET CORPORATION PTY LIMITED Application under section 106 of the Industrial Relations Act 1996

1 This application was brought under s106 of the Industrial Relations Act ('the Act') in June 2000. It concerns the payment made to the applicant, Mr David Hairman, in January 2000 when he resigned his employment from the respondent, FileNET Corporation Pty Limited. The disputed payment was that flowing from the commission scheme which applied to Mr Hairman in his employment as an account executive involved in the selling of document management computer software, which the respondent produced.

2 Mr Hairman gave evidence, as did Mr James Collins, the Asia Pacific Regional Finance Director of FileNET Corporation Asia Pacific Pty Ltd ('FileNET Asia').

3 Mr Hairman joined the respondent in July 1993, initially as a contractor and later as an employee. On termination his remuneration comprised a mix of salary and other benefits, as well as commission payments under the respondent's Sales Incentive Plan. That Plan was updated each year, with Mr Hairman having each year accepted the terms of the new Plan in writing and thereafter, having been paid in accordance with it.

4 The Plan which applied to Mr Hairman when he resigned was the 'Territory Manager 1999 Compensation Plan' ('the 1999 Plan'). It contained territory and goal assignments for Mr Hairman. Unlike many cases concerning the fairness of commission arrangements brought before the Court under the section, the terms of the 1999 Plan were both clear and known to the applicant, in relation to matters such as the amount of the commission payments; when payment was to be made and what was to occur in the event of termination of employment. The relevant provisions were: II. INCENTIVE CRITERIA

A. PURPOSE The 1999 Sales Incentive Plan rewards FileNET sales personnel in proportion to their individual contribution toward the achievement of the sale goals of FileNET Corporation. These goals are as follows:

· Make every FileNET Customer a production success.

· Realize the sales volume objectives as established by FileNET. · Maximize profit margin to FileNET. · Establish a broad Customer base. · Cultivate prospects that are financially sound and desirable to FileNET. · Ensure prompt Customer payment. · Utilize good business judgment in dealing with potential and/or established Customers of FileNET.

7. Earned Commissions - Commissions are earned upon specific Customer and/or transaction activity as defined in Participant's specific compensation exhibit. Any monies paid prior to commissions being earned shall be considered Commission Advances. D. Bookings and Collection For each transaction, Commissions are earned based upon a percentage of Bookings and Collections. Once the total value of the transaction is determined, 55% will be earned and paid to the Account Executive upon booking of the order. When payment by the customer is received the remaining 45% of the commission will be earned and paid.

VIII. TERMINATION FROM THE PLAN A. In the event of termination as a Participant under the Plan resulting from termination of employment with FileNET, the former Participant is eligible to receive Earned Commission and bonuses up to the effective date of termination, net of chargebacks.

B. FileNET reserves the right to recover any Commission Advances against all money due the employee from FileNET at the time of termination including but not limited to reserved commissions, car allowance, expense report reimbursements, vacation pay and any other salary/base pay due employee.

C. Upon termination a request shall be prepared by the former Participant and shall include all items not previously compensated and to which the Participant believes he/she is entitled. Verifying documentation should support each claim. The request should be forwarded to the immediate supervisor for review and approval, then forwarded to the Sr. Vice President, Worldwide Sales or his designate for final approval. All requests must be received within 30 days from the date of termination.

5 The contest between the parties concerned the fairness of the 1999 Plan, in circumstances where Mr Hairman resigned his employment, having been paid the 55% commission earned on the booking of a number of orders placed before his resignation. He was not paid a further 45% commission, when the respondent later received payment from its customers for the orders concerned, because he had in the meantime resigned from its employment. There was no contest that this approach was entirely in accordance with the terms of the 1999 Plan and was known to Mr Hairman when he resigned. What was challenged was the fairness of this aspect of the arrangement. In opening Mr Fernon of counsel, appearing for Mr Hairman, noted that the summons also challenged the commission arrangements in place in 1993, but confirmed that this was a secondary aspect of the case.

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.

7 It was agreed that the 45% commission claimed amounted to $70,023. The bulk of the claim, some $55,000, related to commission on one order placed two days prior to Mr Hairman's resignation from the respondent's employ in January 2000. Mr Hairman had negotiated extended payment terms for that order.

8 While there was common ground as to many matters, there was an evidentiary contest as to aspects of the applicant's conduct, argued by the respondent to be relevant to the claim advanced. It has been necessary to resolve these evidentiary difficulties, in order to consider the parties' respective cases. It must be immediately observed that explanations advanced by the applicant about various matters put to him in cross examination were difficult to accept, particularly in light of other evidence, including correspondence from the applicant's solicitors and affidavits he had sworn in other proceedings brought under s106 of the Act. I turn to deal with these matters.

9 Mr Hairman had plainly done valuable work in his employment, generating substantial sales for the respondent, for which he was rewarded by the payment of commission and the receipt of other, additional benefits, such as bonuses and overseas trips for he and his wife. On resignation his base salary was $108,000 plus a $10,000 travel component. His commission payments had ranged in recent years from about $78,000 to over $287,000. Mr Hairman's resigned from his employment in January 2000, having accepted an offer of employment from Sterling Software (Australia) Pty Limited ('Sterling') in November 1999.

10 This resulted from an initial approach by a head-hunter in August 1999, which he rejected and a later offer of employment made to him in September, after extensive negotiations in the meantime. That offer was described by Mr Hairman as an 'offer too good to refuse'. He accepted the offer on 3 November, agreeing to commence with Sterling on 10 January. In his case in chief he advanced no explanation for his delay in accepting the offer or the delayed start date.

11 The second approach from Sterling was by an acquaintance, Mr Masters, with whom Mr Hairman had worked in the past and who had been appointed as Sterling's general manager. Mr Masters made Mr Hairman a number of verbal offers, described by Mr Hairman as 'very attractive' but which did not induce him to leave the respondent, Mr Hairman's attitude being that they were not good enough. On his evidence Mr Hairman had told Mr Masters that Sterling's offer would have to be very attractive in order to induce him to leave the respondent because he was happy in his employment. The offer was improved in various telephone discussions and the final offer was developed in a face to face meeting in September, at which a written offer was discussed, on the basis of what Sterling had to change in order for Mr Hairman to accept it. The letter eventually accepted by Mr Hairman included written amendments made during this discussion, including as to the start date.

12 Mr Hairman's evidence in cross examination was that despite what he had told Mr Masters about his employment with the respondent, in more recent times he had been unhappy in his employment with the respondent. He had disagreed with the way in which Ms Robin Bradbury had been operating the respondent's sales team, since her appointment as general manager in about May 1999. This dissatisfaction had caused him to entertain Sterling's approach.

13 On 3 November, Mr Hairman accepted the offer in writing. Mr Hairman did not inform anyone at the respondent as to what he had done. His explanation in cross examination was that he was concerned that if he did, the respondent would require him to leave its employment immediately.

14 It was also revealed that at the time that Mr Hairman accepted the Sterling offer in November, he was working on the Colonial order, to which the bulk of the money claim advanced in this case relates. Mr Hairman said that he had expected that order to be placed earlier than November, but the negotiations had not been concluded at that point. Without the order being placed prior to his departure from the respondent's employ, Mr Hairman acknowledged that he would not have been entitled to any commission payments in relation to that order under the 1999 Plan. The Colonial order was finally placed on 23 December, but on a basis which, on Mr Hairman's evidence, would not have led to any commission payments being made to him. Proper confirmation of the order was not given by Colonial until 12 January, after Mr Hairman was due to commence his employment with Sterling on 10 January. His explanation for the delay in his commencement date was that it had been delayed by a week because of a request made to him by Mr Masters.

15 On the placement of the order Mr Hairman thereupon became entitled to 55% commission under the 1999 Plan, amounting to some $67,000, which he was paid on 19 January, after resigning his employment on 14 January and taking up his employment with Sterling on 17 January. Extended terms of payment of the order had been negotiated by Mr Hairman, half falling due on 31 March and the other half on 31 June.

16 In cross examination, Mr Hairman denied that the date of his resignation was related to the Colonial order, or that he had acted so as to maximise his earnings. He conceded that he was aware that had the order not been placed before he left, he would have been entitled to no commission payments in relation to it, under the Plan. His evidence was that this was of no concern to him then. His only motivation for his delayed departure was that he was in two minds as to whether to go or to stay.

17 When Mr Hairman advised Ms Bradbury of his resignation on 14 January, she asked him to reconsider his decision. When Mr Hairman informed her of the terms of Sterling's offer, she accepted that it could not be matched by the respondent. She told him, however, that if things did not work out, he was welcome to return. This amiable discussion was consistent with the terms of the email Mr Hairman had sent her, which provided: 'Hi Robyn, This morning I tendered my resignation to Jon van de Geest. During the break I met with a couple of people I used to work with at Wang. They are now running a company selling e-commerce solutions and development tools. The products include BPR tools, workflow, e-commerce application development and System Integration. I have accepted an offer (sic) them that is 'too good to refuse'. As soon (sic) the FileNET team returns from kick-off I will be happy to spend a few days handling over the remaining direct accounts. The majority of my pipeline is now indirect and the partners have a good handle on the status and any issues within these accounts. Again I will review the pipeline with the partners to ensure that there are no issues. I will remain available to assist with both direct and indirect accounts as required. I have enjoyed my time at FileNET and will look back fondly at my experiences here. I strongly believe that FileNET will continue to grow and prosper. You are building a strong team and I am sure that you will maintain the momentum and record growth you have achieved over the past year.'

18 Mr Hairman conceded in cross examination that his email to Ms Bradbury was not entirely candid in a number of respects, as was obviously the case, including in relation to when the opportunity with Sterling had arisen and had been accepted.

19 It was put to Mr Hairman that his advice that the Sterling opportunity had arisen during the Christmas break was wrong and that his motivation for concealing his departure had been his pursuit of the Colonial order. Mr Hairman's sought to deny that this advice to Ms Bradbury was really inaccurate. His explanation was that he was in doubt about his decision and was in two minds about leaving until he finally made his decision in December. He explained that he had made his decision after an incident in which there was a dispute between he and another account executive as to who should be entitled to commission in relation to a particular customer, which fell into his territory, but was related to a client of the other account executive. The commission was not assigned to him and it was this that convinced him that he should leave. He also suggested his final decision was made after a further meeting with Mr Masters in December. He was, however, forced to concede in cross examination that his acceptance of Sterling's offer in November had been unconditional and had in fact bound him, but he still denied that this explanation was a fabrication.

20 This evidence of hesitation in departing from the respondent's employ did not accord with the fact that Mr Hairman had accepted Sterling's offer in writing, without any reservations, in November. Nor did it accord with what he had sworn in his affidavit in the proceedings against Computer Associates Pty Limited ('Computer Associates'), in which he recounted his conversations with Mr Masters, which had eventually led him to accept Sterling's September offer. The suggestion that he was in two minds about leaving the respondent only emerged in explanation of his misleading email to Ms Bradbury upon resignation.

21 Mr Hairman's account as to these matters in the Computer Associates proceedings was that he had accepted from Sterling a 'highly favourable remuneration package for the long term and including in the first year' and that: 'On a number of occasions prior to signing the contract I repeatedly advised Geoff Masters of all the sacrifices I would be making by resigning from FileNET to join him at Sterling. During several conversations comprising our negotiations I said words to the effect: "You do realise you have to make this worth my while because I will be sacrificing my ability to participate in bonuses, commissions, international travel rewards and a substantial Pipeline of qualified prospects including a six day motivation trip to California at an estimated value of $12,000 after tax. The sales incentive trip to the Greek Isles for Rochelle and myself estimated at $50,000 after tax and a list of qualified customers with the potential to purchase products and services to a value in excess of $7,000.000." '

22 As I have already noted, on all of the evidence, it must be concluded that Mr Hairman's explanations about this and a number of other matters put to him in cross examination were rather implausible. Rather than the loss of commission earnings in the respondent's employ being of no concern to him, in the version of these events which Mr Hairman himself put forward in other proceedings before this Court against Computer Associates, the commission he would be giving up by his resignation, was of significant concern to him. It featured prominently in his negotiations with Sterling, as to terms of employment which he negotiated to the point that they became in his assessment, too good to refuse, thereby inducing him to leave the respondent's employment, even though he would thereby lose the opportunity to earn further commission. That was the decision he made in November, when he accepted Sterling's offer. All the relevant terms of Sterling's offer were negotiated prior written acceptance of the offer on 3 November, which importantly included the delayed 10 January start date. I do not accept that he was in two minds about that decision. That he was concerned to preserve the opportunity to earn a significant commission on placement of the Colonial order before his departure, was, however, entirely plausible.

23 It was Mr Hairman's evidence that the Colonial order which he was working on at the time he accepted the Sterling offer, would not have been placed at all, had he left the respondent earlier. This particular order had been the subject of discussion by him with Colonial employees since August 1999, seemingly around the time of Sterling's first approach. The order had arisen in a context where it had come to Mr Hairman's notice, as Colonial's account executive, that Colonial was in breach of its existing agreement with the respondent. He had raised that breach with Colonial employees and as a result, a letter of intent had been given to the respondent by Colonial, in which it proposed that its breach be forgiven, in return for Colonial's purchase of other of the respondent's products. The order here in issue was also outlined: 'A 12 month extension of the current SEA, provided that Colonial commits to the acquisition of at least a further 250 (Two Hundred and Fifty) IDM Services and Visual Workflow licenses by 30 December 1999 with delivery and payment to be made in agreed stages during the year 2000.'

24 On Mr Hairman's evidence, despite this letter of intent, the placing of this order was only ever a possibility, of which he remained unsure, until it was finally placed. In his view it would never have been placed at all, without his work.

25 Colonial's August letter envisaged that the order here in question would be placed no later than December 1999. When Mr Hairman accepted Sterling's employment in November, the order had not been placed and he negotiated a 10 January start. His evidence in the proceedings against Computer Associates was that he expected the order to be placed by January. The order was placed in December and so recorded in the respondent's accounts. As Mr Hairman explained in cross examination however, there was a problem and he would not have been entitled to any commission as a result, given the basis upon which Colonial placed the order. He then negotiated further with Colonial and on 12 January, the order was finally placed so that he thereby earned 55% commission under the 1999 Plan. On 14 January he resigned. His explanation for this further delay in the start of his employment, that it was at Mr Masters' request that he hold off for a week and that it was not connected with his pursuit of the Colonial order, was entirely unconvincing.

26 Mr Hairman was obliged to give the respondent one month's notice of his resignation under his contract. He did not expect the respondent to insist on this and when he could not be dissuaded from leaving, it agreed to his immediate departure, enabling him to take up his new position on the following Monday. The respondent even paid him a month's pay in lieu of notice. On Mr Hairman's evidence, this was in accordance with normal industry practice. Mr Collins was not cross examined about the matter.

27 Mr Hairman and Mr Collins also discussed his resignation on 14 January, when Mr Collins, located in Singapore, telephoned him after his discussion with Ms Bradbury. Mr Collins also asked him to reconsider his resignation, pointing out to him the fact that he would thereby not be entitled to payment of 45% commission on the Colonial order just placed, when payment was later received by the respondent. While there was common ground as to some paths of the discussion, there was a dispute as to others. Mr Hairman's affidavit evidence on this point was: 'Later that afternoon, Jim Collins telephoned me and we had a conversation to the following effect:

Him: "Do you realise you will be relinquishing the payment component of your commission?"

Me: "I realise what the Plan says but I don't agree with your interpretation of it."

Him: "I am surprised that you are willing to walk away from such a substantial amount of money, will you reconsider your decision?"

Me: "I realise what the plan says, have fully considered my decision and have no intention to stay on with FileNET.

28 Mr Collins' evidence was: 'I refer to paragraph 28 of the First Affidavit and deny that the Applicant said "I realise what the plan says but I don't agree with your interpretation of it." When I telephoned the Applicant we had a conversation in words to the following effect: JC: "I just wanted to telephone to wish you good luck in your new job. Do you realise that you are walking away from the collections portion of the commission on the Colonial deal and you will not earn and be entitled to receive payment of this commission." Applicant: "I know that and I have fully considered my decision. I have been offered a great package that is too good to refuse and worth more to me than the amount of the Colonial commission. I have thought about it and I am definitely going to join the new company."

29 In cross examination each was certain that words to the effect that they had recollected them were said. Mr Collins was sure that if Mr Hairman had challenged his interpretation of the commission arrangement, as asserted, that he would have pursued and resolved that issue with him, because the respondent's accounts were due to be audited and the issue would have had to be resolved for that purpose. Mr Collins had no recollection of such a comment having been made by Mr Hairman and had made no note of it, which he felt sure he would have, had it been said.

30 Mr Hairman, on the other hand, was certain that he had challenged Mr Collins' interpretation of the arrangement, but explained in cross examination that it was not really a matter of interpretation which he was raising with him, because the effect of the Plan was clear and he was aware of it. What he was intending to say, was that in his view the scheme was unfair.

31 Of the two competing versions of this conversation, I have concluded, for a number of reasons, that Mr Collins' version must be preferred. Mr Hairman did not raise any concern, whether about the interpretation or unfairness of the commission scheme in his email to Ms Bradbury, nor did he discuss it with her. Mr Collins' version of the conversation accords with the tenor of the discussion which Mr Hairman said he had with Ms Bradbury, as well as his email to her, including the description of Sterling's offer as 'too good to refuse'. Furthermore, Mr Hairman did not make any claim in pursuit of this commission when he was paid his entitlements under the 1999 Plan on 19 January. The 1999 Plan contemplated that on termination, claims should be made within 30 days. This also did not occur.

32 The claimed unfairness of the commission scheme did not arise until 21 March, when Mr Hairman's solicitors wrote to the respondent, raising the fairness of this aspect of the scheme and threatening these proceedings. At that point Mr Hairman was aware that his new position at Sterling had become insecure, since Sterling's takeover by Computer Associates in February. Redundancies were to occur, although he had reason to think that he would obtain another job at Computer Associates. At that time, the first payment due to be made to the respondent by Colonial on 31 March had not been paid, although some other payments in relation to other orders involved in this claim had been received by the respondent. The respondent rejected the demand.

33 It seems that there was no further communication between the parties about the matter until this summons was filed in June 2000. On the same day as these proceedings were commenced, Mr Hairman also commenced proceedings under s106 of the Act against Computer Associates, which had made him redundant on 26 April. That claim was recently settled during the course of its hearing before the Court. The terms of the settlement were not revealed in these proceedings.

34 The summons advanced against Computer Associates was however in evidence, albeit over objection. It made reference to the circumstances in which Mr Hairman had come to be employed with Sterling and had attached to it relevant correspondence. Part of the claim there advanced was that Mr Hairman had been enticed away from his employment with the respondent by Sterling, it being aware of what he was giving up in his employment with the respondent, including relevantly for this claim, that he had given up his ability to participate in 'bonuses, commissions, international travel rewards and a substantial pipeline of qualified prospects.' Attached to the summons was a letter sent by Mr Hairman to Computer Associates in May, in which he pursued it too, for the same commission payments here in question. The letter relevantly provided: 'The matters I wish to raise with you are the following: 1. My three previous positions before joining Sterling Software in January 2000 were with Wang, Dawn Technologies and FileNet, where I was employed for 11 years, 2 1/2 years and 6 1/2 years respectively. In each of those positions I as a significant over-achiever, recording sales which typically, were between 200% and 600% over quota. With FileNet, my gross earnings were as high as $500,000 per annum and, in calendar 1999, exceeded $300,000. I was also well regarded by my colleagues and seen by them as a team player.

2. Although I was happy and very successful with FileNet, I was induced to leave by representations made to me by Geoff Masters, in good faith and as he had the authority to do by reason of his position. These representations were that I was required for a long-term role to help develop the Strategic Accounts Group, on the basis that I was pivotal to the building of the sales team as a stable, proven high-performer.

3. I decided to leave FileNet and join Sterling Software on the faith of these representations and on the basis that I would enjoy with Sterling Software a very favourable package which I could expect to enjoy for the long term. Those benefits (for the first year) included 1,000 Sterling Software stock options, a reduced sales quota to maximise earnings, quarterly bonuses, a pipeline of over $5,000,000 worth of qualified prospects and other benefits. On the basis of my expected sales, my On Target Earnings with Sterling Software amounted to in excess of $390,000 for the current year. In addition, on leaving FileNet, I forwent $71,000 of commission, a California "kick-off" trip, a quota club trip to the Greek Isles and a pipeline of over $7,000,000 worth of qualified prospects. Sterling Software was aware of this at the time of the negotiations with me. … As you would understand, I prefer not to involve Computer Associates and myself in potentially lengthy and expensive litigation and I am willing to explore a negotiated settlement of my entitlements. Accordingly, I propose, on a "Without Prejudice" basis, that we settle my claim on the basis of mid-range (nine months) estimate of my On Target Earnings (including benefits) together with forgone commission, in the total sum of $338,500. This amount comprises the forgone commissions of $71,000, forgone Kick-off and Quota Club Benefits of $65,000 together with 75% of the following items: Base Salary (current year) $130,000 Projected 'minimum' OTE Commission (current year) $140,000 $270,000 75% of $270,000 is $202,500 to which is added the forgone commission of $71,000, and $65,000 for kick-off and quota club benefits making a total of $338,500.'

35 Mr Hairman was cross examined about this claim. It was put to him at various points that the consequence of his approach was that he negotiated terms with Sterling which enabled him to continue in the respondent's employ until he had secured the Colonial order, thereby receiving a payment of 55% commission, of $67,000, which he would otherwise have foregone; that he was aware that his resignation would involve him in giving up the prospect of the commission here claimed, including the 45% commission on the Colonial order; that he had used that factor as a lever in his negotiations with Sterling in order to improve the offers it made to him to the point where they were too good to refuse and could not be matched by the respondent; he had not told Sterling of his view that the loss of this commission was, in his view, an unfair aspect of his contract with the respondent; that he had used the 45% commission here claimed, in order to advance his claims against Computer Associates, firstly in his letter of demand and then in the proceedings brought against that company under s106 and that in addition, he was in these proceedings pursuing the same amount from the respondent. Mr Hairman resisted what was being put to him. In my view, however, the evidence allowed of no other conclusion, than that Mr Hairman did so conduct himself and deliberately so, in his own interests. He pursued the same claim against both the respondent and Computer Associates unbeknown to the two of them. If there was truly nothing wrong with such conduct, it is difficult to understand Mr Hairman's denials of what was plainly the fact on the evidence.

36 There was also a further contest between the parties on the evidence as to the purpose of the two part payment of commission under the 1999 Plan.

37 Mr Hairman's evidence was: '24. Once I had closed a deal with a customer to supply the Respondent's products or services, my role was effectively over. Apart from maintaining customer relationships, I played no role in the implementation and/or roll out of the products or services the subject of my sale. In fact, I was expected by the Respondent to move on to the next transaction.'

38 Mr Collins disagreed. His evidence included: 24. I refer to paragraph 24 of the First Affidavit in which Applicant states: "Once I had closed a deal with a customer to supply the Respondent's products or services, my role was effectively over. Apart from maintaining customer relationships I played no role in the implementation and/or roll out of the products or services in the subject of my sale. In fact I was expected to move on to the next transaction." 39 As set out above, it was, in my view, essential to the Respondent that the Applicant continued to play a significant role in collecting the payment from the customer. Indeed, as the Applicant accepts in paragraph 24 of the First Affidavit, he was responsible for maintaining customer relationships and this, in itself, is essential to ensure that the customers paid for the goods and services which they had received. Although he was not expected to be part of the implementation or the servicing of the products, he was expected to continue the relationship and to ensure that payment was received.'

'17. The Plan therefore expressly states that one of its purposes is to " ensure prompt customer payment " The account executives are responsible for managing and monitoring the customer relationship to ensure that payment is made promptly. The terms of the Plan are intended to give a further incentive to account executives to continue the relationship with the customer since the sale is completed and to reward them for ensuring prompt payment.

18 I believe it is essential to the business of the Respondent that payments are collected promptly from the customer and the Plan is structured to reflect the importance which the Respondent places on this element of the account executive's duties. The Respondent, in my experience, places great importance on the collection of all payments due for the following principal reasons: (a) payment collection is a very important aspect of business, but particularly so in the software industry. One of the key indicators of the performance and reliability of a software company is the number of days sales outstanding ("DSO"). The standard recognised accounting formula by which to calculate DSO is to divide the total outstanding receivables by the average daily sales for the current financial quarter. The average daily sales are calculated by dividing the total sales of the financial quarter by 90 days. The DSO is used as an indicator of the quality of the software delivered or supplied as the greater the DSO, the more obvious it is that a company has not actually delivered to the customer the functions and features of the software which it committed to deliver. Therefore, it is essential to the Respondent that all invoices for software licenses are collected in a timely manner, otherwise its marketplace reputation will suffer.

(b) Many software implementations go through a crisis period before a successful implementation is achieved. Customers tend to withhold payments for any software license once a crisis arises. Therefore, it is essential that all payments are collected as quickly as possible after the sale is made.

(c) Account executives are the primary contact between the respondent and the customers assigned to them and therefore the account executives are given the responsibility for managing and resolving any difficulties encountered in collecting payments from those customers in accordance with agreed payment terms.

(d) The Plan is also intended as an incentive to account executives who build up a strong relationship with customers to remain in employment with the Respondent. The departure of employees from the Respondent has an immediate negative impact upon the business of the Respondent and, potentially, its ongoing relationship with its customers.

19. If the account executive's employment terminates before the payment is made, a different account executive will normally be assigned by the management of the Respondent to the client as soon as possible. The new account executive will assume responsibility for: (a) continuing the Respondent's relationship with that particular customer;

(b) ensuring that payment for previous sales is received;

(c) working with the customer to identify and develop new opportunities for the Respondent's software within the customer's business; and

(d) coordinating with the Respondent's operations in dealing with any issues that the customer may have in regard to the Respondent's software. 20. A newly appointed account executive will therefore be carrying out the duties which the former account executive had been intended to carry out. It is the Respondent's policy to allocate the 45% commission that the original account executive would have earned had he or she remained in employment until payment had been made, to the new account executive who assumed those duties base on the commission rate applicable to the new account executive.'

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.'

42 In cross examination, Mr Hairman explained that in his assessment, 90 to 95% of the work required to be performed in relation to any order was done by him before the order was placed. His later involvement in pursuing any payments was minimal and was only required if problems arose. The respondent also employed others to collect outstanding payments and to deal with technical problems. They were not matters for him.

43 Mr Hairman, however, acknowledged the existence of the other aspects of the Plan about which Mr Collins had given evidence. He disputed their fairness, in circumstances of termination of employment, because in his view he had done the work necessary to secure these orders for the respondent. In the case of the orders here pursued, the respondent had received payment for the orders from its customers, but 45% commission was not paid to him, only because of the termination of his employment, not because further work was required to secure the orders or payment for them. The 45% commission was paid to other account executives at lower rates who, in reality, had no work to perform in connection with the order and in some cases, no further commission payments were made at all.

44 Mr Hairman explained the competitive nature of this industry, where salesmen particularly tended to know each other. He also described his career as having been characterised by movements after approaches to him by head-hunters. He described himself as having been 'plagued' by them over the years. He agreed that as an experienced and successful salesman he would have been difficult to replace by the respondent and that the respondent's relationship with its customers such as Colonial would have been damaged by his departure. The evidence was that in a practical sense, the respondent's relationship with a customer depended upon the personal relationships which account executives like Mr Hairman had forged with employees of such customers. This was confirmed by Mr Collins, whose evidence was that in the case of Colonial, for example, the respondent had been unable to secure any further orders from it after Mr Hairman's departure.

45 Mr Hairman also confirmed, consistently with Mr Collins' evidence as to how the commission scheme operated, that during the course of his employment he had benefited from the challenged aspect of the scheme, having been assigned accounts from other account executives who had left the respondent's employment, prior to 45% commission being earned by them in respect of their outstanding orders. In those circumstances he had then taken over the accounts and worked on them, himself being paid 45% commission, when payment was made by the customer to the respondent for those outstanding orders. Mr Hairman said that such re-allocations seemed to be in the respondent's discretion and not all such accounts had been reallocated. The details of such circumstances were not explored with either him or Mr Collins.

46 This explanation, however, accorded with Mr Collins' evidence, as to what had occurred with Mr Hairman's outstanding orders after his resignation. After Mr Hairman left, the respondent recruited a replacement. Some of the orders here in question were paid before the accounts were reassigned to another account executive. Some of the accounts were reallocated to Mr Browne, upon his recruitment, including the Colonial account and he was later paid the 45% commission in respect of that order, but at the commission rates applicable to him (then 4%). Other accounts were assigned to Mr van der Geest, who was also paid commission when outstanding orders were paid according to the commission rates applicable to him. Both were then entitled to commission rates lower than Mr Hairman. On Mr Collins' evidence, when accounts were reallocated to account executives they were paid commission on outstanding orders at the rates applicable to them, not at the rates applicable to the departing executive, when the orders were paid. Executives who were on higher commission rates than the departing executive received, were nevertheless paid at the higher rate applicable to them under the Plan and vice versa.

47 The practical result of the 1999 Plan in this case, was that for some of the 45% commission in question, other of the respondent's employees were paid commission at the lower rates applicable to them, Mr Hairman being at the highest 10% rate. In the case of some $138,000 orders, no 45% commission was paid by the respondent, because the accounts were not reallocated before payment for those orders was received. This was the nub of the case advanced by Mr Hairman. The claim that this aspect of the commission scheme operated unfairly for him and on his termination gave rise to a windfall for the respondent.

48 The case put by Mr Fernon of counsel for the applicant was that the claim advanced was a simple one. The 1999 Plan was unfair in its terms and its operation, because it had the effect of depriving Mr Hairman of 45% of commission which he had earned for the work which he had performed before his resignation, in circumstances where the respondent had received the benefit of that work, namely payment from the customers for the orders concerned. All that was sought was an order for payment of remuneration due for work performed. There was no suggestion of poor performance or anything other than that the respondent had had the benefit of Mr Hairman's work. It followed that he should be paid for it.

49 It was submitted that the case for the respondent demonstrated that the commission scheme was intended to have the effect of restraining employees such as Mr Hairman from leaving the respondent's employment, because they would be deprived of significant remuneration which they had already earned, if they did. Its case was that there was something improper in an employee seeking to pursue employment elsewhere. This was both unconscionable and contrary to the public interest.

50 Much of the submission advanced concerned the Colonial order. It was argued that the evidence was that Mr Hairman had to use all of his experience, guile, skill, flexibility and powers of persuasion and perseverance to secure this order. This was a substantial order and so specific payment terms were also negotiated. The rate of commission depended upon revenue obtained. Mr Hairman was at the upper echelons of payment because of his success. Complaint was not here made about retention of 45% commission until the respondent received payment, rather the complaint was in relation to retention because the employment terminated.

51 Mr Hairman's evidence was that he was unhappy in his employment. The commission scheme, nevertheless, required him to stay in order to get payment. The scheme also operated without regard to whether, in a particular case, there was a need for intervention by an account executive to secure payment from the customer, or what that work involved. The respondent had led no evidence that such intervention had here been required or that there had been any problems encountered as to payments. It followed that the plan thus ignored the significant work performed to secure an order and operated for the benefit of the respondent, at the applicant's expense. It was also the size of the commission withheld which acted to make the scheme unfair in circumstances of termination. The respondent got its payment from the customers, but Mr Hairman was left high and dry, as to 45% of his commission.

52 It was argued to be relevant that it was not a part of the Plan that other employees would get that commission. In any event, the Plan was operated so that this remained a matter of discretion for the respondent. Mr Hairman got none of the commission when all he had done was to resign, a result which paid no regard to the work he had performed. Here that was of great significance to him, with a retention of some $70,000 commission.

53 That retention occurred in circumstances where the employer had received payment of some $135,000 in respect of which it had paid no 45% commission at all. 45% commission on the balance had been paid at rates lower than those due to Mr Hairman. Thus the Plan retained from him almost half of the commission, when there was no evidence that any work had to be performed to collect payment, in circumstances where the work was performed for base salary, plus commission based on revenue, fixed at 4% for $1million, ranging up to 10% for $2.5million. Mr Hairman was at the upper level of commission, thus a substantial contributor to the respondent's business.

54 It followed that the Plan in its design and operation was unfair. Payment here depended upon the coincidental event of whether employment continued, not the work performed, an oppressively penal way to keep an employee in employment. Even worse, looked at from a theoretical perspective, Mr Hairman could have worked all year, left just before the sale was achieved and received nothing at all by way of commission, even if the end result was that the respondent was in due course paid.

55 It was further submitted that significant weight would be given to the fact that the plan operated as an impediment to an employee seeking other employment. This was to be distinguished from other conditions of employment specifically designed to achieve such a purpose. Mr Hairman was like an employee told he was to be paid $100 a week, but when he resigned $45 was retained by the employer. There was simply no consideration for such an unfair handcuff to be imposed upon employees.

56 The case for the respondent put by Mr Phillips of counsel, was that neither the 1999 Plan nor that operating in 1993 was unfair, unconscionable or contrary to the public interest. The applicant's case sought to keep the claim in a narrow focus, requiring a consideration of the Plan, without consideration being given and the circumstances in which the claim arose, or how it came to be advanced. The respondent's defence was twofold. Firstly, that the commission scheme had no element of unfairness and nor had there been unfair conduct on the respondent's part, in its operation. To the contrary, even if the view were taken that the scheme was unfair, it was the applicant's conduct which had been unfair, thus making problematic any assessment of damages in his favour. This problem plainly resulted from the applicant's own actions. Indeed, the applicant's conduct was such, so it was argued, that no discretion could be exercised in his favour in the proceedings.

57 It was also submitted that the applicant maintained that approach in the evidence which he gave in the witness box, his evidence being characterised by a desire to craft his answers to meet questions as to his conduct, with which he was confronted in cross examination.

58 It was argued to be relevant that here it was the applicant, not the respondent, who had brought the contract to an end at a time of his choice and without notice, the converse of the situation which usually confronted the Court in cases brought under the section. It was also relevant that the applicant was aware of the terms of the commission scheme about which complaint was here made, at the time of his resignation but that during his employment and even at termination, he had made no complaints about it.

59 It was also relevant that his evidence was that he had engaged in clandestine negotiations with Sterling long before his resignation, had even entered a contract with it, and when asked why he concealed this, he initially responded because he was going to a competitor, but quickly retracted that description of Sterling. He also explained that he was fearful that he would be asked to go when he revealed his acceptance of the offer. The respondent, however, did not react in that fashion. To the contrary, it asked him to stay and even invited him to return, if the new job did not work out.

60 Having decided to go at a time of his choosing, in cross examination he asserted contrary to what he had told Mr Masters and Ms Bradbury, that he was leaving because he was not happy in his employment and that his motivation for going to Sterling was not more money. He also asserted the booking of a substantial order from Colonial as to the commission earned therein, that was not a reason for delaying his departure from the respondent's employ. It was submitted that all of this evidence was recent invention, having not been raised in the pleadings or affidavits in these proceedings or those brought against Computer Associates. It would be unaccepted that all of the contemporaneous material was to the contrary effect to the explanations given in cross examination and that evidence would be rejected.

61 It was further argued that this approach to his evidence in cross examination, was consistent with Mr Hairman's misleading Ms Bradbury as to when it was that he had accepted Sterling's offer. In cross examination he came up with an explanation, which it was submitted was but a smokescreen. His explanation that even though he had accepted the offer in early November, he was in two minds until December, when he finally made his decision was not true, he having been forced to concede that his acceptance of the offer was binding and had not been made on any conditional basis.

62 Account would also be taken of the evidence that Mr Hairman expected to place the Colonial order in January, which he had told Mr Masters about and which was included in his forecast projections for the respondent. He then used that position to extract improvements in Sterling's offer from Mr Masters and a start date which preserved his access to commission for the Colonial order. This was confirmed by the letter of demand he later sent to Computer Associates. It followed that it was abundantly plain that he knew what he would be walking away from in the respondent's employment, utilised that understanding to negotiate terms with Sterling too good to refuse, while at the same time ensuring the order with Colonial was placed, so as to achieve a commission payment in respect of it, a matter then very much in his mind.

63 Once the order was placed, Mr Hairman left, having secured payment of $67,000 which he would have missed out on, had he left the respondent in November 1999, making no complaint about the commission payment which he then received. His evidence that the agreed start date was put back by Sterling, by a week, would also not be accepted. The fact was on Mr Hairman's own evidence, had he left any earlier than 12 January, the order would not have been placed at all and he would not have been entitled to any commission payment in respect of it.

64 The question of motive arose, why did Mr Hairman so conduct himself? It was submitted that the evidence plainly pointed to the motive being the achievement of the sale to Colonial. Having achieved it, he then moved to recover the 45% commission which he had not earned from the respondent, both from it and Sterling.

65 It was accepted that the respondent thereby got the benefit of the Colonial sale, but submitted that the applicant thereby obtained a significant benefit too - 55% of commission, some $67,000, long before the respondent received any payment and in circumstances where Mr Hairman terminated the contract without notice, having known for months of his departure and having given the respondent no opportunity to prepare for it.

66 In those circumstances the claim of unfairness in relation to the 45% commission was raised. It was argued to have acted as a restraint, but the reverse was demonstrated on the evidence. It provided the means by which a better package was negotiated elsewhere. It was further submitted that there was nothing wrong per se, with restraints in employment agreements designed to protect a business, unless they unreasonably fettered someone from pursuing their trade and earning a living, or acted as an unreasonable protection in favour of the business. Neither could be here established. Mr Hairman had not been put out of the market place for any period at all.

67 All that this aspect of the commission scheme did was to act as a disincentive upon an executive leaving for a certain period. There was nothing unusual about conditions of employment designed to encourage employees to so remain in employment. Even, for example, the provisions of the Long Service Leave Act 1955 provided for such an incentive. Any problem with this particular disincentive was in any event resolved by Mr Hairman's ability to negotiate more lucrative employment elsewhere.

68 In this case there was nothing in any event unreasonable about this incentive, or how it operated. The respondent had its business to protect, including the sale of products, which also benefited its employees. Having decided to leave without notice, Mr Hairman was even offered the opportunity to return, if the new employment did not work out, but that was not taken up. On the evidence, Mr Hairman's departure caused the very damage the respondent was in part seeking to prevent, by the conditions of employment it offered. Its relationship with Colonial was thereby damaged.

69 It was also relevant that here the fact was that when other sales executives had left, Mr Hairman had himself been treated in the way he here complained about. He himself had the benefit of 45% commission, at the rates applicable to him under the scheme, in respect of orders which they had booked. He had accepted those payments and had not sought to protest about them, or pass them on to the departing executives in question. It followed that having accepted the benefit of the arrangement, he should also accept the burden, particularly having been paid 55% of the commission, in relation to the orders in question, long before the respondent itself had received any payment.

70 It was also submitted that inherent in the applicant's submission was the idea that the respondent had unjustly enriched itself at his expense, an untenable notion, given that he had used the very loss of this sum as the springboard for his successful negotiation of an even more lucrative remuneration package with Sterling and then pursued another claim against Computer Associates, based upon the same commission payments which had been settled.

71 As to the claim in relation to the 1993 scheme, it was simply advanced too late. Mr Hairman had known how the scheme operated since then, without complaint, having not even become an employee until 1997 and having profited from the scheme throughout that period.

72 As to the claim in relation to the 1999 Plan, it could not be overlooked that the same claim was made against Computer Associates and then used to pursue the s106 proceedings later brought against that company. The settlement in that matter had not been put before the Court by the applicant. It followed that as the result of that failure, any assessment of a money order in his favour was problematic. It followed that the proper inference was that to be made against the applicant. See Armory v Delamere (1722) 1 Stra 505; LJP Investments Pty Limited v Howard Chia Investments Pty Limited (No 2) (1990) 24 NSWLR 499 at 508 and Houghton & Anor v Immer (No 155) Pty Limited (1997) 44 NSWLR 46 at 59

73 It was also submitted that while the case advanced for the applicant sought to ignore the circumstances in which the applicant had left the respondent's employment, the evidence demonstrated that the respondent had always acted fairly towards Mr Hairman, but the same could not be said of him. In the circumstances no discretion would, in any event, be exercised in his favour - Hodges & Ors v Streets Ice Cream Pty Limited (1985) 11 IR 60 at 64.

74 It was submitted that at its highest, the applicant's claim amounted to one of hypothetical, not actual unfairness, by a skilful endeavour to quarantine the circumstances in which the claim arose, from the claim itself. It was particularly relevant that there had been no attempt to deal with Mr Hairman's concession that the commission scheme was designed to ensure sales and prompt payment together with a number of other purposes. The Plan was also designed to ensure good sales work by the account executive, as well as good account work, designed to achieve 'deep and wide' relationships with customers. Any hurdles or disincentives built into this scheme to deter executives from leaving at a particular time, on the evidence was entirely overcome by Mr Hairman's negotiations with Sterling, with consequential damage to the respondent's relationship with its customers.

75 In reply, it was argued by Mr Fernon, to be relevant that it had not been the respondent's case that the applicant had not performed his work well, that he did not achieve the objectives of the Plan or that the respondent did not achieve substantial benefits as a result of the orders he achieved. The aim of the Plan to achieve prompt payment, was also achieved. All that the applicant sought in return was the payment he had been promised.

76 It followed that the case properly had a narrow focus. In the absence of evidence that further work was required to be performed after Mr Hairman's departure, in order to achieve payment, it was simply unfair that the commission was withheld from him. The respondent's case failed to address this fundamental aspect of the claim.

77 As to the idea of double counting, there was nothing wrong in Mr Hairman negotiating the best terms he could with Sterling. Had there truly been a component of compensation for lost commission in the new employment, Mr Masters could have been called by the respondent to demonstrate that. On the evidence there could be no understanding of how the new package was structured. The double counting claim had simply not been made out as to that, or in relation to the settlement of the Computer Associates' claim. The applicant was there bound by a confidentiality clause. The respondent was not, but had not put on any evidence which would demonstrate the alleged double counting. It had raised that argument and thus it was a matter for it to make out, but had not done so. The proper inference was that the settlement did not comprehend the commission claim here advanced and the Armory decision did not assist the respondent.

78 As to allegations of clandestine negotiations with Sterling, there was nothing wrong nor unfair with an employee not informing the employer of such negotiations. When Mr Hairman resigned, he was asked to stay, but when he would not, consistent with his expectation, he went the same day, being paid a month in lieu of notice. There was no expectation or desire that he stay in those circumstances. The offer of re-employment would not, in any event, assist the respondent. It had not been put again, for example, when the applicant made his demand for payment of commission in March.

79 As to the email to Ms Bradbury, it was not entirely frank it was conceded, but Mr Hairman had no obligation so to be. It was not part of the applicant's case that he left because of his unhappiness with Ms Bradbury, so it was unsurprising that this information had emerged in cross examination, rather than the applicant's case in chief.

80 The evidence demonstrated that Mr Hairman had a particular relationship with various people at Colonial, there were opportunities coming up all of the time, he maintained the relationship in order to pursue such opportunities, some were successful and others not, some would be easily achieved, others would take years. Mr Hairman was paid for all of that work, plus commission when sales were achieved, when booked and paid for. Here Mr Hairman achieved both, but had not been paid the 45% commission due to him.

81 However Mr Hairman's role was described, it was he who achieved the placement of orders. The orders here were paid, seemingly without intervention, by anyone. It followed that the scheme was unfair because it recognised no proportionality between the work performed and the payment made. If the respondent chose to pay another employee in respect of such commission, no account should be taken of that fact in these proceedings. Even if it were, a sum of some $50,000 was still outstanding to Mr Hairman.

82 As to any analogy with long service leave, it was submitted that such an approach would be rejected. This was not a question of achieving additional payment, it was rather a withholding of payment due. In the normal course, there would in this employment always be something in the pipeline to be lost on termination.

83 The applicant's primary submission was that Mr Hairman should be paid the full 45% commission sought, but it was accepted that an approach of some proportionality might be adopted, given his evidence that some 90 to 95% of the work was performed prior to the sale.

84 What here arises is a claim about the fairness of the respondent's commission arrangements, particularly the 1999 Plan. That Plan was clear on its face and well known to the applicant, who yearly accepted its terms in writing, without demur, over the course of his relationship with the respondent, including before and after he became an employee and even at the point of resignation.

85 The applicant described that employment to Mr Masters as: "I am happy at Filenet. I am well remunerated, I understand the company, the products and the Business Model. I have a significant pipeline of prospects. I expect to close substantial business in the early part of next year. This should be enough to achieve my annual target in the March/April timeframe. This will mean that I will have the rest of the year to boost my earnings potential. In addition I have already achieved my sales quota for the current year which means Rochelle and I have won an incentive trip to the Greek Isles."

86 The inescapable conclusion from the evidence was that the applicant appreciated the consequences of his resignation, when he decided upon that course. He plainly used those consequences, including the loss of the opportunity to earn the 45% commission here in question, to assist him in negotiating an improved offer from Sterling in a series of negotiations conducted over some time, to the point where it was one as he described it, 'too good to refuse' and which the respondent could not match. In these proceedings the applicant, nevertheless, seeks to challenge the fairness of the commission arrangement, after his resignation to take up that other, more lucrative employment with Sterling, having plainly made that decision in circumstances where he well understood that the result would be that he was not entitled to any further commission payments from the respondent, after his resignation.

87 The claim here advanced was not pursued in accordance with the provision made in the 1999 Plan for claims to be brought within 30 days of termination. It was seemingly made after no complaint at all was advanced during the applicant's relationship with the respondent, about this aspect of the Plan. That conclusion of necessity involves a rejection of the applicant's evidence that in his discussion with Mr Collins on 14 January 2000 he raised with him his disagreement with Mr Collins' interpretation of the Plan. I have already dealt with why I have reached that conclusion. It was not, in any event, any disagreement as to interpretation of the Plan which Mr Hairman had in mind. On his evidence it was a question of fairness which concerned him. I do not accept that this was then his view or that he then raised that view with Mr Collins.

88 On the evidence that is not a view which emerged until after Mr Hairman had obtained legal advice, after he realised that the secure employment he thought he had taken up with Sterling, was in some jeopardy after its takeover by Computer Associates in February. It was not until 21 March 2000 that any claim of unfairness as to the Plan was advanced, in a letter from the applicant's solicitor. It was promptly rejected by the respondent's solicitor, on the basis that the applicant had no entitlement to any further payment under the Plan and that even if he had remained in employment, he would at that point have had no entitlement to commission in respect of the vast majority of the orders in question.

89 The claim made in relation to the 1993 commission scheme was described as a secondary aspect of the case and it is convenient to deal with it here. No claim was made in relation to the alleged unfairness of the 1993 commission plan until these proceedings were initiated. It is relevant to take account of the fact that the applicant has sat on his hands since 1993, as to any such complaint and that it was one which was never raised with his employer before the initiation of these proceedings.

90 Despite Mr Hairman's evidence that he would never have taken up employment with the respondent, but for the promise of 8% commission, it was, after all, not until March 2000, after his resignation, that the applicant made any complaint at all about the commission scheme. On his own evidence the applicant benefited in the meantime from the operation of the aspect of the Plan that he here complains about, and in circumstances where he was receiving commission at the rate of 10% on termination, rather than the 8% which he says induced him to accept the respondent's offer in 1993. In the meantime he also accepted employment with the respondent, without complaining about the commission scheme. In those circumstances, it seems that this aspect of the claim is properly regarded as having simply been raised too late and having little merit in any event. I can see no basis in the material upon which any findings could be made in favour of the applicant as to this aspect of his claim.

91 As to the conflict in relation to the fairness of the 1999 Plan, despite the narrow basis of the case here advanced by the applicant, I am satisfied that it cannot be ignored that in May 2000, after the applicant's employment with Computer Associates was terminated, a claim for the same commission sum here claimed, was pursued by Mr Hairman against Computer Associates, in a letter settled by his solicitor. It was argued that it was the respondent who had raised the suggestion that there had thus effectively been double counting in respect of this commission claim and hence it had the onus of demonstrating such double counting, which it had failed to do, because the terms of the settlement of the Computer Associates claim had not been put before the Court.

92 While the submission as to such onus may have some force, nevertheless the unarguable fact remains that the same claim was advanced by the applicant against both the respondent and Computer Associates. That fact cannot here be overlooked. Section 106, after all, requires the Court to have regard to the parties' respective conduct, amongst other matters. The applicant's correspondence and the documents he filed in those other proceedings, confirmed that he had used the 45% commission payment here in question, in his negotiations with Sterling, in order to improve the remuneration package he finally accepted. He was aware of the loss of the opportunity to earn such commission at that point and was prepared to accept it, like the loss of other benefits such as overseas travel for he and his wife, because he regarded the package he had negotiated with Sterling as too good to refuse.

93 He then further relied upon that 45% commission in the claims advanced against Computer Associates. It must be noted, that loss was not directly relied upon in the money orders finally pursued against Computer Associates in the summons brought against it under s106. Those claims were confined to matters such as notice and redundancy payments in respect of that employment. Nevertheless, the loss of that commission was relied upon in order to advance the claim made in the summons, and the orders there sought. The claim has been settled on terms not in evidence. It follows that any allegation of double counting has not been made out. Nevertheless, I am of the view that were I to conclude that the contract in question was unfair, so as to lead me to a consideration of the making of appropriate orders in favour of the applicant in relation to such unfairness, these matters would require consideration.

94 After all, as Sheldon J observed long ago in Davies & Anor v General Transport Development Pty Ltd & Ors [1967] AR (NSW) 371 at pp374-5: 'On the other hand, the fact that the Commission has been given such massive power makes it imperative that it should be exercised with proper restraint. In particular, when issues arise under (a) or (b), it should not permit itself to become a refuge for those who are merely disgruntled with a bargain entered into on even terms. In my opinion, the discretion should be exercised to protect victims of wrong dealing not to prescribe anodynes. Of course, under (d) or (e), action may be required even when there is no moral distinction between the parties because there the Commission is enforcing more directly an explicit public policy.'

95 I turn then to the claim of unfairness. Mr Hairman's evidence was that 8% commission was an important part of what had induced him to start work for the applicant in 1993, at a time when he was in the process of leaving the business in which he was then a shareholder, given his unhappiness with his position and work there. Prior to the commencement of the relationship he was told that 8% commission was payable, but not about the two part nature of the payment. He conceded, in cross examination, that the whole of the commission system was, however, made known to him soon after he joined the respondent and that during the entire time of the relationship, over some 7 years, he made no complaints about the system, either as to its stated purpose, the two part commission payments, or how the scheme was operated by the respondent when sales executives left their employ. That was entirely understandable given the substantial payments which the scheme generated for him. On resignation, Mr Hairman was in receipt of commission of 10% in some cases, rather than the 8% initially promised.

96 Over that time the applicant was successful in generating very considerable commission payments, as well as other substantial rewards. In his letter of demand to Computer Associates, he suggested that his earnings with the respondent in the 1999 year amounted to over $300,000, plus other benefits and in other years, that they had been over $500,000. The evidence in this case did not support those claims. Nevertheless, very substantial commission payments of over $100,000 in 1999 and in earlier years, payments ranging between about $102,000 and $313,000 were paid to Mr Hairman, in addition to his base salary of $118,000.

97 The nature of the two part commission payment system here in question plainly only became a problem for Mr Hairman, as the result of his resignation, a matter, as he accepted in cross examination, entirely within his own control. Otherwise the commission system seems to have been entirely generous, although undoubtedly an even more generous scheme could have been devised. 55% of the commission was earned on booking of an order, in advance of receipt of any payment from the customer concerned. A further 45% was earned after payment by the customer. While at one point in his evidence Mr Hairman suggested that this split payment had to do with the respondent's cash flow, he later resiled from that position, which was plainly incorrect.

98 On the evidence, the respondent's usual terms required payment by customers within 31 days of order. The commission scheme was structured to encourage business being written on such a basis. In the case of very large orders however, such as that which Colonial placed in January 2000, extended payments could be negotiated. On his evidence, it was Mr Hairman who negotiated the payment terms with Colonial, which required payment of 50% on or before 31 March and 50% on or before 31 July.

99 The design of the commission scheme was intended to achieve not only remuneration of employees for orders obtained, but also a number of other purposes, including ensuring prompt payment and the retention of employees in the period during which an order was placed and payment was made. These features of the scheme were known and understood by Mr Hairman, but the fairness of those aspects of the scheme upon his resignation were the subject of challenge here.

100 Mr Collins explained the business reasoning behind the scheme. Consistently with Mr Hairman's evidence, on Mr Collins' evidence negotiations preceding the placing of orders could be a protracted business, taking from 6 months up to 3 years. Once an order had been placed and software was installed, problems of various kinds could arise. The respondent expected its account executives, such as Mr Hairman, to participate in resolving such issues, because they could impact upon the customer complying with its payment obligations, as well as on the respondent's continuing relationship with the customer. On the evidence it was obvious that it was in the interests of both the respondent and the sales executives themselves, that such problems be managed and minimised.

101 The account executive had an interest in resolving such issues, because earning a further payment of 45% commission depended upon the customer making payment. Maintenance of the customer relationship was also in the executive's interests, because as Mr Hairman explained in cross examination, the respondent's relationship with its customers in reality depended upon the relationship which the executive had forged with employees of the customer. This industry is a very competitive one and as Mr Hairman explained, once such a relationship has been established and sales made, the possibility of further sales to the customer or other parts of the customer's business increases, in the interests of both the respondent and the sales executive.

102 All of those interests disappeared, so far as Mr Hairman was concerned, when his resignation took effect. That was not the case for the respondent. It had to reassign the accounts to other executives to attend to ongoing account work and its business interests. This undoubtedly explains why account executives to whom such accounts were reassigned, earned the 45% commission when payment was made by a customer on outstanding orders. It could well be imagined that such work was more difficult for a new account executive, rather than the outgoing executive. Indeed, in this case, the evidence was that while Colonial made the payments due at the time negotiated by Mr Hairman, since his departure the respondent has not made any further sales at all to Colonial, in circumstances where Mr Hairman had made sales to it over the course of his relationship with the respondent, since 1993.

103 It followed that the delay of payment of 45% commission, until the respondent had received payment from the customer, thus encouraged executives like Mr Hairman to remain in the respondent's employ, at least until the payment was made. This, it must be said, was not much of a restraint. In most cases it appears that it involved a period of some 30 days, in accordance with normal payment terms. In this case, given the terms Mr Hairman had negotiated with Colonial, it encouraged him to remain in the respondent's employ until final payment on 31 July and had he done so, he would have received his salary together with a further payment of some $70,000 commission in addition. That employment, on the case Mr Hairman advanced against Computer Associates, was of a particularly rewarding and satisfying nature, which Sterling had difficulty in luring him away from.

104 On the evidence, Mr Hairman was able to be headhunted away in January, because Sterling had made him an offer 'too good to refuse', even having in mind the $70,000 commission he would be giving up. While Mr Hairman denied this to have been the position in cross examination, the inescapable conclusion from all of the evidence was that this was the position. His letter of demand to Computer Associates put this matter beyond doubt. He then asked it to pay him the $71,000 commission foregone, which he here pursues.

105 In the affidavit sworn by Mr Hairman in the proceedings against Computer Associates, Mr Hairman recounted the course of his negotiations with Mr Masters, including him saying to Mr Masters on a number of occasions that: 'You do realise you have to make this worth my while because I will be sacrificing my ability to participate in bonuses, commissions, international travel rewards and a substantial Pipeline of qualified prospects including a six day motivation trip to California at an estimated value of $12,000 after tax. The sales incentive trip to the Greek isles for Rochelle and myself estimated at $50,000 after tax and a list of qualified customers with the potential to purchase product and services to a value in excess of $7,000.000.'

106 It is in those circumstances that a claim first made after Mr Hairman's resignation, that the respondent's commission scheme was unfair, arises for consideration. In January 2000, Mr Hairman was content to leave the respondent's employ and to give up the opportunity to earn the 45% commission here in question, which was his for the taking, simply by delaying his departure until payment was made on his outstanding orders. Having made the decision to leave in the circumstances of his negotiations with Sterling, could a complaint of unfairness later legitimately arise, given the terms of the 1999 Plan and how it operated?

107 As I have already noted, the conduct of Mr Hairman in relation to his negotiations with Sterling, the circumstances of his departure from the respondent's employ and what transpired thereafter, assisted in a resolution of the conflict as to whether he had raised with Mr Collins the interpretation of the commission scheme on the day of his departure. Mr Collins' evidence has to be preferred.

108 Mr Hairman was not frank with the respondent, as to his acceptance of employment with Sterling the preceding November, when he resigned. The proper inference from the evidence was that he was thereby able to control the time of his commencement with Sterling and his departure from the respondent, a result he set out to achieve. This ensured that his departure occurred at a time of his choosing, after the Colonial order had been booked, on 12 January, a point in time even after the delayed commencement date he had agreed with Sterling in November, 10 January. Mr Hairman was thereby able to ensure that he received a considerable commission payment in respect of that order, in the sum of $67,000, thereby minimising his loss of commission earnings which he had been discussing with Mr Masters.

109 On Mr Hairman's evidence, had he earlier revealed his acceptance of employment with Sterling, he believed that he would have been required to leave immediately, a result he wished to avoid. Mr Hairman had this view because it was common practice in the computer industry, especially for salesmen, to be asked to leave immediately upon notice of resignation being given. It was for this reason that he concealed the employment he had accepted with Sterling and himself saw no difficulty in giving the respondent no notice of his departure. The only plausible explanation, on the evidence, for Mr Hairman having such a concern, was to ensure that he was in the respondent's employ when the Colonial order was placed. Sterling, after all, had been wanting him to join it since August and he had finally agreed to do so in November, but with a January start date. The idea that Mr Hairman was in two minds about leaving the respondent after he had accepted Sterling's offer, was simply untenable, unless it was a concern motivated by the impending loss of even the first 55% commission on the Colonial order - worth $67,000 to him.

110 In Mr Hairman's view his earlier departure would have resulted in the Colonial deal not coming off at all, even though, having in mind the letter of intent agreed by Colonial in the preceding August, there was some reason to doubt this. Nevertheless, the letter of intent throws some light on the role which Mr Hairman played in his employment with the respondent. Just as the commission scheme was not merely concerned with reward for sales achieved, Mr Hairman's job was not just that of a salesman, although the achievement of sales was his ultimate purpose. The title, account executive, was a good reflection of what was required of him, as was his evidence in relation to how he obtained orders, sometimes after years of negotiation and maintenance of a relationship with a customer. He was paid a considerable salary for that work.

111 The Colonial order here in question, itself demonstrated the nature of this employment. Mr Hairman had become aware that Colonial had not complied with the terms of an earlier agreement it had reached with the respondent. In August 1999, he raised this breach with Colonial, seeking its rectification. His ensuing discussions with Colonial employees gave him the opportunity to secure considerable further orders from Colonial. In the discussions Colonial accepted its breach and in order to rectify it, agreed to acquire further products from the respondent, in respect of which Mr Hairman was paid various commission. Colonial also agreed to pursue the order here in question, eventually involving a further payment of over $1.4 million. These negotiations involved Mr Hairman in conducting a sales campaign, comprising meetings and presentations to various Colonial employees, including software demonstrations. He travelled to Dublin with Colonial employees to investigate use of software there developed by a FileNET related organisation and to organise a trial of that software at Colonial, concluding in December 1999.

112 Colonial's letter of intent indicated a fairly firm commitment on Colonial's part to the placing of these orders. Nevertheless, Mr Hairman doubted that the order here in question would have been placed in his absence, the order was, in his mind, never more than a possibility. The fact that the respondent has, since Mr Hairman's departure, secured no other orders at all from Colonial, perhaps suggests that his assessment was correct. It follows, however, that if Mr Hairman's assessment had been wrong and the Colonial booking had later emerged after his departure, he would not have been entitled to any commission payment from the respondent under the 1999 Plan. Some other employee would have received the commission payment, which may, of course, also have been challenged as unfair, depending presumably upon when and in what circumstances such an order was placed.

113 Nevertheless, the fact was that Mr Hairman was able to negotiate with Sterling, so as to ensure that he remained in the respondent's employ, able to secure the order placed by Colonial on 12 January, before his resignation. As I have already said, despite his denials, I am inclined to the view that Mr Hairman's conduct was designed to achieve that end.

114 Undoubtedly, the respondent had the benefit of the order which was finally booked on 12 January, as well as the other orders here in question. For his part, Mr Hairman was paid his usual salary for his work up to the time of his resignation and the 55% commission he earned under the 1999 Plan upon placement of these orders. In the case of the Colonial order alone this was worth some $67,000.

115 That Mr Hairman concealed his impending departure from the respondent, may well be consistent with how many employees who are contemplating leaving their employment act, as was argued. Setting out to mislead an employer as to how and when an offer from another employer has arisen and been accepted, cannot be regarded as commonplace. Here, Mr Hairman went out of his way to inform Ms Bradbury that the opportunity had arisen and been accepted over the Christmas break. That was plainly wrong and not just a matter of Mr Hairman trying to avoid hurting Ms Bradbury's feelings, Mr Hairman's explanation of what he suggested were other inaccuracies in his email to her. The circumstances in which the Colonial order was finally placed on 12 January and his immediate resignation on 14 January, suggests an obvious explanation for this deception.

116 Despite Mr Hairman's expectations of how the respondent would treat him when he announced his departure, its approach proved to be rather different. He was asked to remain by both Ms Bradbury and Mr Collins. When it was accepted that the offer Sterling had made him was too good for him to refuse and could not be matched, he was paid a month's pay in lieu of notice, to which he was plainly not entitled from the respondent, to whom he in fact gave no notice at all of his departure. He was also told that he would be welcome to return, if the job did not work out. While it was submitted that the obvious inference was that this payment merely reflected the normal practice that salesmen were immediately asked to depart their employment in this industry on resignation, I am not satisfied that this necessarily follows here. On his evidence, Mr Hairman was intent on leaving on the day of his resignation and did so. He commenced employment on the following Monday with Sterling, and two days later was also paid his outstanding commission by the respondent, a payment about which he made no complaint at the time, or in accordance with the mechanism provided by the commission scheme.

117 The events which followed were that Sterling was taken over by Computer Associates in February. He was advised that the merger would result in redundancies, but believed that he would be offered another position. A claim for payment of the 45% commission was then made by his solicitor on 21 March against the respondent, a step which seemingly would have made taking up Ms Bradbury's offer to return to the respondent's employ a little difficult. It was rejected on 24 March.

118 On 26 April, without warning or notice, Mr Hairman's employment was terminated by Computer Associates and he was required by it to accept the terms of the payment proposed, (some 8.6 weeks ) and given 15 minutes to clear his desk and leave. When he declined, he was paid nothing at all. On 12 May he made a claim against Computer Associates, including in relation to the commission here disputed. That was rejected on 22 May. These proceedings and those commenced against Computer Associates were later instituted on the very same day in June. The latter claim was settled on a confidential basis after the hearing commenced. As I have already noted, it cannot, without more, in those circumstances be concluded against the applicant that the settlement included payment for the disputed commission, although it may properly be concluded that the circumstances relied upon assisted the applicant in settling that claim.

119 Despite these circumstances, it was Mr Hairman's case that this was a simple case, merely requiring that he be paid for the work which he had performed in obtaining the sales in question, the respondent having received payment from the customers concerned. While there is obvious attraction to a case so advanced in respect of a commission claim, I, nevertheless, have difficulty in seeing this claim in that light.

120 It would seem to me to be a claim difficult to resist, if the commission arrangement was structured only to reward employees for obtaining sales and had the parties here not conducted themselves, as the evidence demonstrated that they respectively did. It might also be difficult to resist, had the respondent set out to terminate the applicant's employment, in order to avoid payment to him of 45% commission when it later received payment from its customers. Nothing of that kind was here present.

121 This scheme was structured having in mind the work the account executives performed and the business needs of the respondent. It was never a scheme designed merely to provide additional remuneration to account executives when they achieved sales, as Mr Hairman well knew, accepted throughout this relationship, and himself benefited from. The commission scheme was directed, structured and operated, not just to pay participants such as Mr Hairman for sales which they achieved, but also in order to achieve other objectives, well known and understood by Mr Hairman.

122 Those objectives were described by Mr Collins in his evidence, which in reality, was little disputed by Mr Hairman. While Mr Hairman's evidence was that 90 to 95% of the work connected with achieving sales was done before the order was placed, nevertheless his evidence, particularly in cross examination, demonstrated his understanding of the other aspects of the scheme, in the context of his employment. Mr Hairman's concentration upon the work required to achieve sales, was at the expense of paying no regard at all to what was required to be done during the period before payment was made, both in relation to ensuring collection of the payment and maintenance of the customer relationship. Nor did it pay any regard to the design of the scheme, which included an inducement for employees to remain in employment, at least until payment was achieved.

123 In reality the case raised for consideration the fairness of a commission scheme devised by an employer for a number of purposes, only one of which was to provide additional remuneration when sales were achieved. The fact that 55% commission became payable even before the respondent received payment itself, demonstrated this unescapable fact.

124 Conceptually, I cannot see how a commission scheme, designed to achieve a number of business purposes, can by that fact alone be found unfair, as that term is to be understood, having regard to the relevant definition in s105 of the Act. I also cannot see how this scheme, so structured in the circumstances of the parties' relationship and the industry in which they were together engaged, was unfair.

125 This was a scheme which operated in respect of the respondent's account executives, employed to establish and maintain particular kinds of relationships with customers, in order that the respondent could continue making sales to them while the relationship was maintained. As one of such employees, Mr Hairman was paid, what was on any view, a generous salary. In addition he participated in the commission scheme, the various purposes of which were well known by him and which entitled him to earn commission at up to 10% of gross revenue, in two stages, together with other attractive benefits, such as overseas travel to the value of $50,000 for he and his wife. 55% of the commission was earned when the order was placed and 45% was earned later, when the payment was made, so long as the employee remained in the respondent's employ at the time of payment.

126 The two part scheme was designed, in part, to ensure that an account executive worked at the particular maintenance of a customer's relationship, at a time when the relationship was vulnerable, given the nature of the product sold and the sale process required for selling it. That process could take up to 3 years, during which negotiations took place and sales executives made representations, due to be met by the respondent when the software was installed. The course such negotiations had taken was information largely only known to the account executive. An aim of the scheme was thus to keep the executives in employment when the respondent had to make good their representations and when problems could arise, either as to functionality or the software living up to expectations of its capabilities as represented. Such difficulties could impact on the customer's continuing preparedness to pay for the software installed and to do business in future with the respondent. In those circumstances, a desire to encourage the account executives to be available to assist in managing any problems, maintaining the relationship and collecting payment when due, is not difficult to understand, especially having regard to the lengthy lead time for the achievement of sales, a period during which the executive was paid in the ordinary way.

127 On all of the evidence in this case, I am not satisfied that the 1999 plan, so understood as providing an incentive to account executives to remain in their employment until payment of orders was achieved, having themselves already received 55% commission before the respondent recovered any payment, and having themselves negotiated extended terms, if payment was to be made by a customer later than the standard 31 days, was relevantly unfair. I have formed that conclusion notwithstanding that as a result of his resignation, Mr Hairman did not have the opportunity to earn 45% commission on his outstanding orders following his resignation.

128 While it was complained that the result was that the scheme acted as a restraint on employees leaving the respondent's employ, the fact is that restraints are commonplace in employment and other kinds of relationships. Remuneration itself is often structured so as to include attraction and retention payments, as well as payment for the actual work performed. Other conditions also often contain such elements. The decision of the Full Court in Westfield Limited & Anor v Helprin (unreported; Cahill VP, Hungerford and Schmidt JJ; 23 March 1997) was an example of such an approach, in that case adopted in connection with an option scheme. Another common and even more direct approach to achieving similar ends, is those agreements which provide for a fixed term contract of employment.

129 Designing a remuneration package with retention of employees as one aim is not inherently unfair, indeed it is commonplace and to the advantage of many employees, who thereby gain access to advantageous conditions, otherwise not available to them. An inducement provided by an employment contract to remain in employment for a time, does not preclude an employee resigning, if he or she wishes. As in this case, the loss of such an inducement can even enable an employee headhunted by another employer, to negotiate more favourable terms in the new employment.

130 Fairness of any contract which comes before the Court under the section, must be assessed from the point of view of all of the parties to the contract, and having regard to all of its features, not just from the point of view of an employee, seeking after the termination of the employment to improve his entitlements on a basis not agreed by his employer. As the High Court observed in Stevenson v Barham (1977) 136 CLR 190 at 192: 'The legislature has apparently left it to the good sense of the Industrial Commission not to use its extensive discretion to interfere with bargains freely made by a person who was under no constraint or inequality, or whose labour was not being oppressively exploited.'

131 Here, I have been confirmed in my conclusion as to the case advanced by the applicant, by the evidence as to how the scheme was operated in practice and how Mr Hairman had himself benefited from the very aspect of the scheme that he here seeks to challenge.

132 The respondent's account executives were employed in a small, highly competitive industry. In Mr Hairman's case, he had throughout his career been 'plagued' by head-hunters. That the idea of an inducement to remain in employment could arise as a feature of an employment package in such circumstances, is not surprising. Mr Hairman accepted the commission scheme without complaint throughout the relationship. On any view of the evidence, he was not an employee in a vulnerable position, being exploited by his employer. Indeed, it was his evidence that over the years the respondent had sought to alter this commission scheme to one whereby commission was to be calculated as a percentage of its gross margins, rather than revenue. That was abandoned on Mr Hairman's own evidence, as the result of disputes with the employees concerned. There was no evidence as to any disputes in relation to the part of the scheme here challenged.

133 That there would be no such complaints seems entirely understandable, given the aim of the scheme, to encourage these employees to remain in employment, for what was usually a relatively short period. This was reinforced when consideration is given to what occurred with the 45% commission when account executives left. If payment for an order was received before the account was reallocated, no commission payment was made and if after reallocation, the new account executive assigned the account was paid the 45% commission at the commission rate applicable to him when payment was received. While in the respondent's employ, Mr Hairman had himself benefited from this aspect of the operation of the scheme. Mr Hairman was plainly happily to take this 'upside' when it worked to his advantage.

134 If Mr Hairman's evidence was truly correct, that 90 to 95% of the necessary work was done by the account executive before an order was placed, this aspect of the scheme must have operated as a considerable windfall from his point of view, when accounts were reallocated to him. He, however, agreed that upon reallocation, the new account executive had to do all of the work and perform all of the functions expected of the old executive, had he or she not departed and in cross examination agreed he was content to accept such a payment. Even if such a payment truly were a windfall for such an account executive, that circumstance is one which has to be weighed against any windfalls achieved by the respondent. That can only have been in those cases where it received payment on an order before the account was re-allocated, or when the new executive was receiving commission at lower rates than the departing executive. Again, this latter aspect of the operation of the scheme would have worked to Mr Hairman's advantage, given that he was at the highest end of available commission payments and was paid at his rate, even if the departing executive was on a lower commission rate.

135 Whether it was Mr Hairman or the respondent who was 'ahead' in this aspect of the operation of the scheme cannot be determined on the evidence. Mr Hairman did not seek to address this in his case. These circumstances, nevertheless, confirm the conclusion which I have otherwise reached on the evidence, that this commission scheme was not unfair, either in its terms or operation.

136 In all of these circumstances, I am well satisfied that neither the contract nor the commission scheme, in either 1993 or on termination, were relevantly unfair or that justice would be served if any orders were made in favour of the applicant, having in mind the parties' respective conduct and the other matters to which I have earlier referred.

137 For all of these reasons, the application must be dismissed. The usual order as to costs would be that the applicant bear the respondent's costs, as agreed or assessed. If the parties are unable to agree on that matter, they have liberty to have the matter restored to the list on approach to my Associate, within 21 days of the date of this judgment. ------------------------

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.