Michael John Pym v Oracle Corporation and 2 ors [2003] NSWIRComm 127 | Case summary

1 Michael John Pym (the applicant) has applied for relief pursuant to s 106 of the Industrial Relations Act 1996 (the Act) against Oracle Corporation Asia Pacific Region (the first respondent/Oracle Asia Pacific), Oracle Corporation UK Limited (the second respondent/Oracle UK) and Oracle Systems Australia Pty Limited (the third respondent/Oracle Australia) in relation to a contract of employment and/or arrangement (the contract) between the applicant and the respondents. 2 As described in the course of evidence, Oracle Corporation is a global multi-national corporation with some 67 subsidiaries world wide, including all three respondents. In the hierarchy of the global corporation, in the Asian Pacific region, the second respondent, is higher than the third respondent (Oracle Asia Pacific has 6,100 employees). In orientation, the third respondent is more specific to Australia and New Zealand than the second respondent. 3 The applicant graduated with honours from Sheffield University, UK, in law in 1986. In 1987 he commenced employment with the Crown Prosecution Service, being promoted to acting Senior Crown Prosecutor before resigning from the Service in 1989. He then commenced employment as an assistant company lawyer with PHH Europe PLC. 4 In April 1990 the applicant commenced work in England with Oracle UK as legal counsel. Oracle UK is the United Kingdom subsidiary of Oracle Corporation. 5 Around March 1992, the applicant applied successfully for the position of Legal Counsel - Oracle Corporation - Asia/Pacific South. 6 That position formally commenced on 20 June 1992 and involved secondment to Sydney for two years. In that position he was responsible for all legal matters arising in Oracle Corporation's subsidiaries in the Asia/Pacific South region, principally Australia, Philippines, New Zealand and the Pacific Islands. The position involved giving legal and commercial advice to the boards of the operating companies. 7 In or about August 1994 the applicant moved from Oracle Asia Pacific and took up the position of Director of Operations and Legal Services, a position that had not previously existed, in Oracle Australia. In taking up that position the applicant moved from his professional role to a general managerial role. 8 In consultation with the applicant, Oracle Australia decided to make the role of Director of Operations and Legal Services redundant effective from no later than 18 March 1996. By letter dated 19 December 1995, Oracle proposed to place the applicant on leave of absence effective from 18 December 1995. Notice of three months was that provided for in his contract of employment. 9 The applicant was advised in that letter that: Based on the discussions to date Oracle offers the following redundancy package: 1 Lump sum payment of six (6) months of your total current OTE. This would be payable within 1 week of the redundancy date. 2 A lump sum payment of one (1) month of your total current OTE, if you leave Australia on a permanent basis to return to the UK, within four (4) months of the effective date of the redundancy. 3 A reimbursement of relocation and associated expenses of up to $40,000.00. The reimbursement would be made against receipts and would specifically include removalists, shipping, two one-way airfares to the UK, lease breakage costs for your Sydney house, lease breakage costs for your current vehicle. This reimbursement shall only be made if you leave Australia on a permanent basis to return to the UK, within 4 months of the effective date of the redundancy. 4 Medical expenses up to the date of redundancy, no later than 18 March 1996, of up to $3,000.00. 10 In relation to the notice period, Oracle said: During this period you would be paid in accordance with your current entitlements and you would remain an Oracle employee. It would be Oracle's strong desire to continue your participation in the substantial projects currently under way and it is proposed that the timing and amount of your involvement would be negotiated directly between you and Gavin Clarke. It is a requirement that at least six (6) such one hour handover sessions take place during the leave of absence period. 11 The applicant contended that the contract whereby the applicant performed work in an industry was unfair, harsh and unconscionable in terms of s 105 of the Act. Orders were sought that the contract be either avoided or varied in part or in whole, a number of alternatives being advanced as to the variations to be ordered. 12 Insofar as the applicant's claims for money have been particularized in the Amended Summons for Relief filed on 14 January 2000, the amount of $791,028 is claimed. However, a Summary of the Applicant's Claim (the Summary) put forward on the last day of the hearing added up to at least $363,379 with some items not costed. Included in the latter document were claims that further notice of 3 months and further redundancy pay for 6 months were sought. (It was not made clear as to whether that Summary was in addition to, or a modification of the claim in the Amended Summons as set out in the next paragraph. In view of my ultimate decision in this matter, it is not necessary for me to resolve that puzzle.) 13 Particulars of the manner in which the amount was calculated in the Amended Summons are as follows: 1 Twelve month's Notice in accordance with proposed order 3(b) $227,709.00 2 Twelve month's redundancy pay in accordance with proposed order 3(c) $227,709.00 3 Deduction of money for breaking applicant's car lease $ 1,344.00 4 Relocation payments for entire period $112,712.00 5 Loss of United Kingdom national insurance benefits $ 17,288.00 6 Appropriate bonus with respect to 1995/1996 financial year $ 59,304.00 7 Loss of remuneration for the applicant as a result of his remuneration not being equivalent to Finance Director of first respondent $144,962.00 8 Other amounts pursuant to proposed Order 4 to be provided prior to hearing and after interlocutory steps completed. 14 Costs and interest were also sought. 15 On termination the applicant was paid, based on a total package of $239,229, a redundancy payment of six months. 16 Mr S J Burchett of counsel appeared on behalf of the applicant, Mr G Hatcher SC on behalf of the respondents. 17 The applicant gave oral and affidavit evidence in his own case. 18 The following witnesses were called on behalf of the respondents: Greg Davies, currently Vice-President Finance, Asia Pacific but in mid-1994 finance director for Asia Pacific. Neil Weston, currently Vice-President and General Manager Vignette Corporation, Asia Pacific, but in 1994 the Managing Director of Oracle Australia. Derek Harold Williams, since 2000 Executive Vice-President of Asia Pacific and [Oracle] Japan; previously Senior Vice-President, Oracle Asia Pacific Division. Gavin Alexander Clarke, appointed CFO for Oracle Australia, on 16 October 1995, the title changing in 1997 to Regional Financial Officer; currently Vice-President of Operations for Support, based in England. Alison Sibree, Vice-President, Human Resources Oracle Asia Pacific region since June 1997, previously Director. Alexander Grinberg, living in Sydney and employed as Chief Executive Officer of eYISE Systems but in December 1995 he was employed by Oracle Systems Australia as Legal Counsel for Oracle Systems Australia and for Oracle NZ Limited. In February 1996 he was promoted to General Counsel and Company Secretary, Oracle Australia and General Counsel Oracle NZ. Submissions - Applicant 19 Unfairness of a contract may be manifested by any conduct of an employer, including breach of the contract (Reich v Client Server Professionals of Australia Pty Ltd (Administrator Appointed) (Reich) [(2000) 99 IR 69] ). 20 It is not appropriate to reduce any payment for redundancy as a result of the success of an employee in finding alternative employment (Westfield v Adams [2001] NSWIRComm 293 (FB) at para 141-4, 147). 21 Mitigation may be relevant to a payment for failure to provide reasonable notice, but under s 106(5) the Court is not limited to a strict application of that principle. 22 It is not unreasonable for an employee after the termination of employment on secondment to Australia to seek to remain in (or return to) Australia (Ross v GN Comtext (Aust) Pty Ltd (2000) 107 IR 1 at 19). 23 All severance payments should be calculated by reference to the full remuneration package of the employee, including bonus entitlements for the relevant period (Vincent v Merrill Lynch Aust Pty Ltd [2000] NSWIRComm 160 (Marks J) ). 24 In determining a fair severance package, regard should be had to: i) the whole period of employment with subsidiaries of a multi-national anywhere in the world ( Ross v GN Comtext (Aust) Pty Ltd (2000) 107 IR 1 at 10-11 & 15 ( Walton VP) ). ii) the treatment of other employees in similar situations and whether the employee is responsible for the termination or not ( Sheffield v Brambles Australia Ltd [2002] NSWIRComm 3 ( Peterson J) iii) the location of the employment, difficulties caused by visa restrictions ( Ross v GN Comtext (Aust) Pty Ltd (2000) 107 IR 1 at 3 ( Walton VP) ) and the need of an employee to relocate from the place of employment ( Sheffield v Brambles Australia Ltd [2002] NSWIRComm 3 ( Peterson J); John Bastion v Price Waterhouse [2001] NSWIRComm 316; Cummings v Crossocean Forwarding [2001] NSWIRComm 303 at para 172). iv) representations or misleading conduct of the employer as to what the employee can expect from his employment ( David Jones Ltd v Cukeric (1997) 78 IR 430), including 'encouragement and representations' of career progression ( John Bastian v Price Waterhouse para 90). v) the duration of any alternative employment found (as well as its comparison to the lost employment) ( John Bastian v Price Waterhouse para 151). 25 In determining a reasonable notice period regard should be had to 'all relevant circumstances of the particular employment' (Port Macquarie Golf Club v Stead (FB) (1996) 64 IR 53 at 65). 26 It is just to award interest on an award of compensation under s 106, although such interest may date from the making of the application (Abboud v State of New South Wales (no 2) (2000) 99 IR 299 and Ross v GN Comtext at 19). Submissions - Respondent 27 The respondent resisted the claim on the basis that the applicant had been more than handsomely remunerated in the Australian operations. The respondent had genuinely sought to retain the applicant's employment and to advance his interests in that employment. 28 If the Court accepts the common law principle of mitigation, it is difficult to see where the applicant suffered any loss. He went from Oracle UK to Oracle Asia Pacific on the basis that he would not be entitled to repatriation benefits. On termination from Oracle Australia he was given those benefits. After repatriation to UK, he was, within two weeks, back in employment at a salary higher than that which he received at Oracle. 29 The respondent, even on the applicant's own evidence, had tried to assist him to achieve his wish to move into general management. Nothing was put forward to support the suggestion that the respondent had mischievously suggested that the applicant make an MBA application on dates which had passed in order to avoid possible litigation. As the applicant quite candidly conceded in his evidence, this is an industry which changes rapidly. Mr Weston said in his evidence, the fact there is not a position at the moment for the applicant means nothing because "we are changing so rapidly. We have to keep changing. We have to have people prepared to move into other positions." 30 If one goes back to the traditional tests under s 88F as for instance in Davies v General Transport Development Pty Ltd (1967 AR 371), what is being talked about is not a particular calculation in the termination of employment, but about the arrangement under which the person performed work. The Court is asked to look at the overall contract and ask whether in the circumstances of this contract was it fair for what it provided for in this termination as it worked out. That is particularly important when one pauses for a minute to look at the applicant's case that this was an unfair contract and so unfair as to outrage the senses, the morals of the ordinary juryman. 31 The applicant commenced employment with Oracle Australia in 1992 on an expected on-target earnings of $152,454 Australian. In 1996 the applicant ceased employment, so four years later, based on the applicant's calculation of his claim, his income had increased by $80,000 Australian in this so-called unfair contract. Is the man who has had the benefit of a quarter of a million dollar contract in Australia entitled to have two cars provided at termination, one by his present employer and one by his previous employer? 32 Some touchstone to this notion of fairness of the ordinary man is needed. Section 106 as with its statutory precursors is not intended to simply be a vehicle for compensation. It is intended to set a standard of behaviour: that is, it is meant to be observed by employers providing fair conditions of employment, not to be observed as a means for granting compensation to dissatisfied employees. 33 So whilst one acknowledges that every s 106 case turns on its own facts one is entitled to have regard to the way the Court has itself approached the question of fairness in not dissimilar circumstances. There are a number of cases which include Bastian v Brent & Ors practising under the business name of PricewaterhouseCoopers [2001] NSWIRComm 316; Ross v G N Comtext (Aust) Pty Ltd (Ross) ( (2000) 107 IR 1) and Bates v Finance Australia Pty Limited and Ors [2002] NSWIRComm 42, (unreported, Peterson J, 13 March 2002). 34 So if it is legitimate, as the respondents say it is, for them to have regard to the standards that this Court has said are fair then the respondents have more than passed the test. If six months is fair in Ross how can 10 months be unfair to Mr Pym? How can it be said that it was unfair of the respondents to offer Mr Pym employment which in the space of four years took his earning capacity from $150,000 to $240,000 Australian and even if the respondents be wrong as to all that, the authorities have now firmed, as it were, on the question of mitigation (see Westfield Holdings v Adams (2002) 114 IR 241 at [145] to [148]). 35 In this case Mr Pym was out of employment for a period of two weeks. It is very difficult to see where the compensable hardship is in this case. 36 There are some unusual aspects of the evidence in this case. 37 First of all, a number of the witnesses called by the respondent are no longer employed by the respondents, and have no on-going commitment to them. To the extent that witnesses are still employed by the respondent, Mr Williams, Ms Sibree and Mr Davies have significantly advanced in the organisation. Mr Weston and Mr Grinberg are now employed outside the organisation. 38 None of their evidence was seriously challenged. There is no evidence in reply from the applicant, not even an affidavit in reply. All the evidence of the respondents was allowed to go through in terms of the affidavit evidence, and so it is only where it has been successfully challenged in the cross-examination that the Court could reject it, and the respondents say that there was no successful challenge. 39 There was a submission put on the MBA that the MBA offer by the respondent was an unrealistic ill-thought out proposal, it was a furphy. Counsel for the applicant put that it was a fillip to remove Mr Pym from the organisation and to avoid litigation. The ordinary man in the street, the man whose morals the Court is meant to apply this case might think that, if someone wants to do an MBA, if someone thinks it is going to assist their career and assist their capacity to earn money, they would put some effort into it. There are a number of ways for people to become qualified in courses. The applicant's evidence is that he sat there and waited until his employer made it available to him. It was his employer's responsibility to look after his earning capacity, to do otherwise was unfair. 40 The case that the respondents thought they were coming to court to meet did not seem to have any complaint about failure to pay bonus in the termination package and it is not expressed anywhere else in the particulars of the grounds. In (d), particulars of the manner in which any amount is calculated, an amount seeks appropriate bonus with respect to 95/96 financial year of $59,304. No particulars of that are provided and Mr Pym's evidence in support is contained in para 67 and para 68 of his first affidavit. 41 The evidence in relation to bonus is that the company does have a policy. Mr Grinberg's evidence was that the policy is that the employee must be there on the day on which bonus falls due. The applicant says the policy had not been advised to him and yet he gives evidence that managers had a discretion to waive policy. So he does not know about policy but he does know the policy has a provision which entitles the manager to waive it. The policy was applied by Mr Pym, and he was aware of the policy, so much is clear from his evidence, and it is not, in the circumstances of this contract, sufficient to make the arrangement unfair. 42 The appropriate order is an order dismissing the summons. It would be appropriate in this case for the Court to come to its conclusions in relation to the substantive relief sought and hear the parties separately on the question of costs. Consideration Legislation 105 Definitions In this Part: contract means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument. unfair contract means a contract: (a) that is unfair, harsh or unconscionable, or (b) that is against the public interest, or (c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or (d) that is designed to, or does, avoid the provisions of an industrial instrument. Note. The jurisdiction of the Commission under this Part is exercisable only by the Commission in Court Session. Division 2 Unfair contracts may be declared void or varied 106 Power of the Commission to declare contracts void or varied (1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract. (2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason. (3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time. (4) In considering whether a contract is unfair because it is against the public interest, the matters to which the Commission is to have regard must include the effect that the contract, or a series of such contracts, has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force. (5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case. Contract of Employment 43 Although the applicant's immediate employer in the Oracle organisation at the time of his redundancy was Oracle Australia, his total service of six full years was taken into account in the calculation of his redundancy pay. He was also paid accrued holiday entitlements, which were noted as including 15 days transferred from UK. 44 At the time of his termination, the applicant was working for Oracle Australia, the third respondent, under Australian terms and conditions of employment. Some of those conditions were different from Asia Pacific conditions, for example, in relation to the provision of cars, even though people employed by Asia Pacific were literally working in the office next door in the same Sydney building. On the other hand, some of the terms of his employment were carryovers from his previous employment with the first and second respondents. An example of that was the arrangement whereby payment of his UK National Insurance benefits were continued (either through Oracle Asia Pacific or Oracle Australia). Those terms were either incorporated into his contract of employment with the third respondent or were arrangements concurrently operating with his contract with Oracle Australia. 45 I find that the applicant's employer as at the time of his termination was the third respondent, Oracle Australia. Notice 46 In accordance with his original contract of employment with Oracle UK, the applicant was given three months notice, during which time it seems he was required to be present at work for some specified periods of handover. (The evidence is not clear on that point and he certainly left Australia prior to the expiry date of the notice.) 47 The applicant sought that his contract of employment be varied to provide for twelve months notice of termination or payment in lieu, though that claim in submissions appears to have been modified to payment for an additional three months. 48 The applicant relied upon a number of factors to support his submissions that the period of three months notice provided to the applicant had been unfair. One factor in particular was that the applicant's residency in Australia depended upon employment with Oracle. Once that employment ceased, the company had to advise the Immigration Department. 49 The applicant's termination was in December and his notice extended to March. Because that period took in the Christmas/New Year holiday season, it made it difficult for the applicant to find another employer who would take up Oracle's sponsorship of the applicant. He was unsuccessful in doing so. There was a further personal deadline involved in those efforts in that his wife was pregnant and unable to fly after February. 50 It is sometimes the case that a period of notice, agreed at the commencement of employment, and fair at that time, becomes unfair. That can occur simply because effluxion of time makes that period inadequate or because the employee moves up in seniority, to the extent that the original period of notice would be quite unfair in the changed circumstances. 51 In determining what would be a reasonable period of notice in the circumstances of a particular case, the Court, in its present and past manifestations, has taken various factors into account. Age is one factor. Other factors include: … the nature and status of the position, the degree of responsibility and authority involved, the qualifications and experience necessary, the availability of suitable alternative employment, the amount and form of the remuneration and the basis upon which it is expressed, any relevant trade custom or practice and the length of service of the employee. ( Lavings v Barclay Mowlem Construction (NSW) Ltd ( Lavings ) [(1994) 99 IR 247 at 253) 52 In Lavings (at 65), Hill J stated that: … Proper regard must be had to the fact that the matter is governed by agreement, to all the terms of the agreement and the circumstances surrounding its making and operation. 53 That latter statement of principle was expressly accepted by the Full Industrial Court (Fisher CJ, Hungerford and Cullen JJ) in Port Macquarie Golf Club Limited v Stead [(1995) 64 IR 53 at 65]. 54 In this case, the applicant had been employed within the Oracle organisation for almost seven years. He had improved his position in relation to salary and had achieved bonuses along the way. In his affidavit dated 3 June 2002, the applicant referred to his "desire to continue in a general managerial role which I had advanced to within the Oracle group prior to the termination" of his employment. When he moved from the position of Legal Counsel Asia Pacific to that of Director of Operations and Legal Services Oracle Australia, that move was described variously as a "promotion" and as a "sideways move". It was not a move, which of itself, would justify a finding that the three months notice previously negotiated was no longer fair. 55 The fact that the move to Oracle Australia might have been published to other staff as a "promotion" does not of itself indicate that that was an accurate description of what had occurred. Such a description may be used both to preserve the standing of an employee amongst his fellows and to boost the morale of the employee "promoted". It can also be a matter of perception as to the exact nature of a change in position. The situation would be different if the position had been touted by the employer as a device to move, to his/her detriment, an employee from one position to another. That was not the situation in this case. 56 The applicant had proven ability in the legal field. His marketability was proven by the fact that he was employed in England within four months of his redundancy being formally advised to him in December 1995, and within weeks of his return to the UK, at a salary higher than his Oracle salary, and with car provided. (On that point it was claimed that living costs being higher in the UK meant that he was really not so much better off.) 57 One further basis the applicant advanced in submissions to justify payment for an additional three months notice was that the applicant had a subsequent further period of unemployment when he came back to Australia in July 1999 to pick up the career path he had had with Oracle. That submission has absolutely no merit and is rejected. 58 I find that three months notice was not unfair in the circumstances of this case. Redundancy 59 The applicant was advised of the redundancy of his position in December 1995 and that that redundancy would be effective no later than 18 March 1996. He was paid six months redundancy pay, calculated on his total package remuneration of $239,229 per annum. (Counsel for the applicant referred to the calculation being made against "on target earnings" (OTE).) In addition he was paid one months pay (at total package rate) for "dislocation". The applicant complained that the amount against which the calculation had been made did not take into account bonus or incentive payments to which he was entitled. 60 In addition to the amounts set out in his termination pay document, Oracle either paid or offered other termination payments to the applicant: Bonus entitlements for the first half of the Oracle financial year (1/6/95 to 30/11/95); Reimbursement of medical expenses up to $3,000; Reimbursement of relocation and associated expenses up to $40,000. 61 The payment of one months salary at the applicant's full package rate for "dislocation" was separate from the amount of $40,000 available to him to be reimbursed for the expenses of relocation from Australia to the UK. 62 The applicant was advised that it was a requirement of the proposed redundancy package that he be involved in at least six (6) one hour handover sessions during his three months notice period, described as "the leave of absence period". (As already noted, it is not clear from the evidence whether that requirement was in fact pressed.) 63 The applicant received six months redundancy pay. According to the Summary, he sought a further six months, as against a further twelve months in the earlier Amended Summons. That further six months was to compensate for disruption to the applicant's career. 64 The respondents contended that the applicant had been paid in accordance with Oracle's policy in Oracle Asia Pacific and Oracle Australia of one month's pay for each full year of service. The applicant had been employed with Oracle for six full years and received six months pay. In addition he was paid one months "dislocation" pay. 65 According to counsel for the applicant there was really little evidence to support the existence of a redundancy policy, let alone the applicant's knowledge of it as alleged by the respondents. It would be grossly unfair for that policy to be applied to the applicant. Looking at comparable packages for other employees, the applicant seemed to be the only one who had this policy applied to him. 66 At one stage, counsel for the applicant referred to the mythical (not "mystical" as recorded in the transcript) redundancy policy. The evidence of Ms Sibree is quite clear that she had written that policy in early 1995, not long after she joined Oracle, and that it provided for one month's notice and one month's pay for each full year of service. The applicant, by virtue of his position as Legal Counsel in Oracle Asia Pacific, accepted that he was equally well aware of it, having had the responsibility to vet several payouts for both Oracle Asia Pacific and Oracle Australia as detailed in the evidence. 67 The applicant had the opportunity to discuss the redundancy package proposed by Oracle on 19 December 1995. He said that he had no difficulties, either at the time or post employment, dealing with Alex Grinberg on the redundancy issue. The applicant's concerns appeared to centre on the calculations put forward as his annual OTE, the amount on which his redundancy payments would be calculated. After discussions with Alex Grinberg, the OTE was recalculated, it being accepted that payments to the applicant's UK superannuation fund and to UK National insurance would be included in his OTE. Some other items advanced by the applicant as appropriate to be included were refused, being car parking, tax advice and the cost of shares in the company's stock purchase plan. (These items were pressed in the applicant's claim and are discussed later.) 68 Mr Grinberg said that in the discussion with Mr Pym at McDonalds and in all his discussions with Mr Pym in relation to finalising his settlement package Mr Pym did not raise any complaint in relation to his salary level as opposed to Greg Davies' salary level. 69 Examination of the payouts to other employees on termination, including terminations for reasons of redundancy, shows that the applicant, if anything, was treated more favourably than some others. That is so when details of status, salary, age, length of service and reason for termination are taken into account. Although the standard redundancy policy provided for one month's notice, the applicant received three months, he having negotiated that period when he moved from Oracle UK to Oracle Asia Pacific. (I do not intend to go to the details of other employees or of their payouts. They are not involved in these proceedings and they are entitled to their privacy. The details are available on the record, particularly in the evidence of Mr Davies.) Titles do not greatly assist in making comparisons. As an example, Mr Davies said that the managing director of Oracle Australia would not be higher in seniority than the Vice-President of Asia Pacific. 70 The applicant claimed that a particular point of unfairness was that the sum of $37,931.85 had been deducted from the amount of termination pay in relation to "superannuation contributions made by Oracle (per Alex Grinberg's email)". 71 The background to that deduction is that in June 1992, when the applicant took up his position with Oracle Asia Pacific, Oracle UK, who had originally employed him, agreed to continue to maintain his membership of the UK Company Pension scheme on his behalf, as well as National Insurance payments, during his assignment in Australia. These contributions were set at a percentage of his UK notional salary: Employer contributions to Company Pension Scheme 8% Employer contributions to National Insurance 10.4% 72 Contributions were also made by Oracle Australia to its superannuation fund, at the rate of 10% of his Australian base salary. 73 To correct the inequitable situation where Oracle was funding contributions to both the UK and the Australian plan on his behalf, the applicant had agreed that, on his permanent return to the UK, he would repay to Oracle Australia the accrued benefit arising from the contributions the Company had made into the Australian superannuation fund. (It would seem that that agreement was made on the initiative of the applicant himself.) 74 The applicant submitted that the deduction of the superannuation contributions was a matter which was very significant to consider in determining what is an appropriate termination package for the applicant. The redundancy payment and the notice provision was very much undercut in relation to the amount paid to the applicant by reason of the fact there was subsisting this agreement which the applicant had entered into to remove what at that time was perceived by the respondent to be an inequity in paying into two superannuation funds. As a result he was only to notionally receive a termination package which was substantially taken back from him. It defeated the termination package. 75 It was noted by senior counsel for the respondents that there had been no complaint in the summons for relief in relation to the deduction. 76 In cross-examination, Mr Weston who was involved in determining the redundancy package for the applicant, said that he did not take into account the fact that there would be a deduction from the applicant's eventual termination payment, of the total of superannuation contributions the applicant had undertaken to repay. 77 I do not see that that arrangement was unfair. The fact that the amount of $37,931.85 was deducted in accordance with the applicant's own agreement, does not provide any basis for a finding of unfairness that would lead to an order for additional redundancy pay to make up for that deduction. 78 Counsel for the applicant rejected the respondents' claim that Mr Grinberg had understood he had reached agreement with the applicant as to the final redundancy package. Counsel referred to Mr Grinberg's evidence as to his "last conversation" with Mr Pym about the package, the subject matter of the conversation being whether or not the applicant would be suing the respondents, which did not suggest there was any agreement between the parties. 79 In reply to that submission, senior counsel for the respondents contended that when one reviews the evidence it is reasonably clear and straightforward that Mr Pym's position was that the matter was mostly sorted out until he had a disagreement with Mr Williams after termination and decided he might do something about it some time later. 80 Examination of the evidence does not support the applicant's submission on that point. In the first place, the particular discussion referred to was not the "last conversation" in the course of negotiations and it related to the necessity for the applicant to sign a Deed of Release. The applicant's reply was: Pym: There is no need to sign a Deed of Release. I told you before that I don't want to sue Oracle. We are pretty close in the settlement proposal to what I want. I have raised a number of items in the proposed settlement. If these items are addressed reasonably then I won't need to sue Oracle. I am not interested in an adversarial outcome. I just want a reasonable settlement. 81 Mr Grinberg said that he and the applicant had "discussed minute details backwards and forwards and backwards and forwards … of pretty much every component in his package". He did not recall a specific discussion where he had told the applicant he had "to do more than 100%", a claim made by the applicant. 82 The discussions continued after the applicant returned to the UK and he continued to send in expense claims. A number of "questions" as to the applicant's final settlement were raised by him in a letter to A Grinberg dated 20 April 1996. 83 Those "questions" related to two contested deductions of $1,346.61 each for "packaging" (car allowance for car returned in February), the recrediting of three days annual leave ($625.56 per day totaling $1,876.68), the supply of certain documents and the payment by Oracle of some outstanding expenses. Mr Grinberg's evidence suggested that Oracle's stance did not change only as to the first two issues (packaging and recredited leave) but that all others were resolved. 84 If the first two questions were not concluded to the satisfaction of the applicant, that meant an amount of $4,569.90 stood between the parties as to total agreement. In the light of the absence of any further correspondence, it would seem that Oracle could reasonably believe that the applicant had accepted the position Oracle had adopted. 85 That letter seemed to be the last contact between the applicant and Oracle in relation to the final settlement. The tone of the letter of was amicable. Indeed there appeared to be some wry amusement expressed by the applicant at the turn of events with his new job. 86 However, according to the applicant, his discussions with Alex Grinberg as to the terms of the redundancy, had been focused on the smaller issues that he knew Mr Grinberg could influence, not on the policies given to him by Derek Williams, as to which Mr Grinberg had no authority to move outside. He had no disagreement with Mr Grinberg. However, the applicant "absolutely" did have a disagreement with Derek Williams. Relations between them had been cordial prior to the applicant's termination. That situation changed when, in a discussion with Mr Williams after he was terminated, the applicant was told the position Mr Williams was going to put forward was the applicant's. 87 That answer was not further explained and, indeed, it is not clear from the applicant's answers in cross-examination, just what issues as to redundancy still remained unresolved and at what time. 88 I set out in full the extract from the transcript of those questions and answers: Q Why was it that you commenced these proceedings in December '97, that is what was it in December '97 that made you determined to commence this case? A I was minded to resolve with Oracle UK the issue of superannuation and with the issues surrounding my superannuation so they had accepted on the basis of the documentation that has not been accepted by National Insurance, that certain payments had not been made to my UK pension fund and after discussion with Oracle UK, they then rectified that payment accordingly. Q So because they rectified the payment of your pension, you thought you had to commence proceedings? A No, I just dealt with as many matters as I could relating to the dispute amicably. Once this had been resolved amicably - if I was to pursue the things I think are rightly mine, I had no choice, the only option out of the dilemma was through the Court. 89 I note that although that evidence is that payments due to the applicant's UK pension fund had been rectified, the issue of the claimed loss of UK pension benefits was being pursued in these proceedings. 90 The applicant was not treated unfairly in relation to the redundancy payments made to him on his termination. 91 The claim for additional redundancy payments is rejected. Remuneration on move to Oracle Australia 92 One of the applicant's complaints against Mr Weston was that Mr Weston had cut the applicant's salary on his move to Oracle Australia. The applicant's salary did drop after he moved from Oracle Asia Pacific to Oracle Australia. Even with that drop, his salary was still well above those being paid to other members of management at Oracle Australia. 93 It was submitted by the applicant that his remuneration, on his move from Oracle UK to Oracle Asia Pacific, had been pegged to that of Mr Greg Davies. It was unfair that on his move to Oracle Australia that connection was broken. The applicant claimed the sum of $144,962 as being the loss of remuneration to him because of that broken connection. 94 Greg Davies is currently Vice-President Finance, Oracle Asia Pacific. In mid 1994, Mr Davies was finance director for Asia Pacific. 95 It was Mr Williams who originally set Mr Pym's remuneration in Asia Pacific. He decided at the start of Mr Pym's appointment that it would be fair to place Mr Pym's remuneration on a par with that of Greg Davies. That was just a start point, not a way of informing Mr Pym as to where he stood in Asia Pacific in terms of his level of seniority and remuneration. Mr Pym's salary was not pegged to that of Mr Davies, (nor according to the evidence of Mr Davies, had Mr Davies told the applicant it was). However, assuming performance, Mr Williams said that was a point of principle that would continue into the future, at least while Mr Pym remained with Asia Pacific. 96 The base points for remuneration for Asia Pacific and Oracle Australia were two different things, they being two separate entities. One role was an Asia Pacific role, the other an Oracle Australia role. Each of those two entities had its own wage structure and packaging. Oracle Australia's salary ranges for its management team would be the jurisdiction of Neil Weston. Mr Davies described employees of Oracle Australia in management as being "the so called management team, normally deemed to be directors with a director title". 97 According to the applicant, nobody had suggested to him that there could be any change, and certainly not a negative one, to his salary or benefits as a result of moving across to his new role, which, he said, had been described to him as a promotion. Neil Weston had not had any discussion with him as to his salary until after the applicant had taken up the role of Director of Operations. For the first time he found out that salary and conditions attached to the Oracle Australia position were not identical to those of his Oracle Asia/Pacific role. Mr Weston had told him that the applicant's salary was out of line with that of other senior management. On that point, Mr Williams was aware that when Mr Pym moved to Oracle Australia he had a significant salary advantage to the rest of the management team there. 98 Mr Weston said that he had spoken to Mr Pym many times prior to the latter's move to Australia, advising him that he would not retain his expatriate benefits and would have to move to local terms and conditions. 99 One of the differences in conditions between Oracle Asia/Pacific and Oracle Australia was that the former supplied cars to employees while the Australian policy provided a lease allowance as a salary trade off. To use the words of the applicant, he had no expectation that his other benefits were going to be cut "when I took on the promotion that was offered to me". 100 Mr Davies did not perceive that the applicant had been promoted to his position in Oracle Australia. Mr Davies expanded on that answer in re-examination: A I believe Mr Pym was acting as legal counsel for a part of the Asia Pacific division, and he chose to expand his management expertise by moving into a wider role that was deemed to be the operations role for Australia. And, so, he went from an area of expertise and experience to a wider role in which he wished to gain experience in Australia in a different role. It included much of the role that he already had in Asia Pacific in terms of legal responsibility for Australia, but took into account a wider role. I believe it was getting out of the narrow band of the legal responsibility in our operation in Australia into a wider management role. It is commonplace in Oracle to publicly announce moves as promotions when they might be a move into a different role because of long term career choice. 101 Counsel for the applicant contended that because of the risks involved when the applicant moved from his legal role in Oracle Pacific to a managerial role with Oracle Australia, the absence of proper safeguards for him in his contract of employment, was a significant unfairness in the arrangement. 102 What those safeguards may have been were not spelled out. If the Oracle Australia position did not work out the standard safeguards of notice and a redundancy policy were in place. There was an offer made to the applicant to take up another position with Oracle Asia Pacific, a position not acceptable to him. 103 If the "lack of safeguards" alleged was the drop in remuneration and the lapse in time before written terms of remuneration were received then, in my view, it was not unfair that the applicant did not receive written terms of remuneration until five months after he had moved to Oracle Australia. He had discussed the change. He had sought the move. He had every opportunity to put forward his understanding as to the effect of the move in his pay and conditions prior to making that move. He was very well versed in negotiating on his own behalf, his notice period of three months not one month being one example of his skills. 104 He accepted that he had had a discussion with Neil Weston about movement into the Australian organisation. From that discussion, the applicant understood he would no longer be a part of the very senior Asia Pacific management team. 105 If the "lack of safeguards" was the drop in remuneration, it must be taken into account that the applicant sought to move from a career path for which he was well qualified and in which he had considerable and successful experience to one in which he had neither specific qualifications nor experience. Despite that, it seems that his expectation was that he would continue to be remunerated at the same level as previously. It did not seem that he appreciated that that change of career path sought by him might necessitate some sacrifice on his part. 106 Mr Weston, in readjusting the targets for the applicant's bonus for the FY95 had taken account of the drop. In re-examination, Mr Weston said he had been told in an exchange of emails that the applicant's relocation allowance was to expire in 1994. The reason he had agreed to pay the applicant an additional $29,000 for the FY 1995 and $15,000 in the following financial year was reasonably straight forward. He was always endeavouring to help people achieve what they wanted to achieve. He felt, given the applicant's personal addresses to him on the subject, that Oracle should pay him in attempting to redress, but not completely eliminate, the situation, especially as the applicant had moved on to a lower package in general. 107 It was also submitted on behalf of the applicant that the employment agreement did not disclose the insecurity of his tenure. The change in the applicant's role in Oracle Australia came about from a 1995 restructure of a 1994 restructure. The evidence of all the witnesses is that this industry and this organisation are moving very fast. Mr Williams said that Oracle was growing at 100% per annum. Indeed, in answer to a question about various possibilities of continuing work with Cognos while pursuing permanent residency in Australia, the applicant said "Five years is a very long time to be in an IT company". 108 The evidence of Ms Sibree and Mr Weston was that the applicant was very conscious of remuneration issues as they affected him. According to Mr Weston "Mr Pym was always concerned about his pocket" and "Mr Pym is an excellent negotiator, he fights for his cause and corner as will any good employee". 109 In my view it would have been completely out of character for the applicant not to have clarified the terms and conditions involved in his taking up the position at Oracle Australia prior to his doing so. 110 I find that it was very unlikely that any discussions as to remuneration and conditions that occurred some months after the applicant took up his role presented the first time the applicant became aware of them. Bonus 111 The applicant complained that Oracle had underpaid him his bonus for 1 June 1995 to 30 November 1995, (Q1/Q2 FY96) which underpayment was not compensated for in his redundancy pay. The applicant claimed he should have been paid at the rate of 150% of bonus, not at the 120% which was applied. 112 That claim, as set out in the Summary of his claim, was described as "balance of relocation allowance/foregone bonus" and introduces other issues into the claim. That is because the "relocation allowance/foregone bonus" refers back to conditions in an earlier contract of employment between the applicant and Oracle Asia Pacific. Also tied in with that matter was the applicant's claim that his remuneration/bonus was to maintain parity with that of Mr Greg Davies. I shall deal with those matters before I turn to consider the claim that the bonus for 1Q/2Q of FY96 should have been paid at the rate of 150% not at 120% as was paid. 113 While the applicant was employed at Oracle Asia Pacific his salary package was structured in the most beneficial way in relation to a relocation allowance he received on his transfer from Oracle UK. When that particular arrangement would cease to be tax effective after two years, it was agreed that his bonus would be adjusted to take account of the then difference in salary. 114 That was an Oracle Asia Pacific arrangement. The applicant moved to a new position with Oracle Australia. 115 The applicant said that when he moved to Oracle Australia, there had not only been no upwards adjustment of his bonus to compensate for the loss of a tax effective measure in relation to an accommodation allowance, but at Oracle Australia the bonus entitlements had been dropped. 116 The evidence of Mr Williams was that the relocation allowance, negotiated by Mr Pym in relation to his two year secondment to Asia Pacific, was not available in Oracle Australia as part of its normal management scheme. Mr Pym's bonus, at his request, at Asia Pacific had been reduced to achieve the tax efficient status sought by Mr Pym. The Managing Director, Mr Weston, at Oracle Australia was not prepared to continue the relocation allowance, and Mr Williams, as Mr Weston's manager, supported that decision. Mr Williams was not prepared to overrule the corporate policy. He said it was open to negotiations between Mr Pym and Mr Weston to come up with what was right for the new role. 117 As was explained by Mr Davies, the terms of employment applying to employees of Oracle Australia and Oracle Asia Pacific, were the same because employees of Asia Pacific were actually employees of the company in Australia, but the Australian Management Compensation Plan was related to different financial targets. The overall approach of the two organizations was not the same in cases of bonuses and compensations. 118 Once the applicant was employed by Oracle Australia, those earlier arrangements with Oracle Asia Pacific as to bonus fell by the wayside. In adjusting the applicant's salary package by reducing the targets for FY95 for the applicant to make it easier for him, Mr Weston said that that adjustment had no relation to a replacement of the relocation allowance, but because it was fair to do so. 119 I find that the applicant cannot rely on the earlier relocation/bonus arrangement with Oracle Asia Pacific to support his claims of unfairness in the administration of the Oracle Australia bonus system insofar as he was concerned. 120 As I understand the applicant's submissions, his complaints as to the amount of bonus he received at Oracle Australia, are also tied back to what he described as "the principle of equivalence" and "the principle of parity" with the remuneration of Mr Greg Davies, that existed while the applicant was employed at Oracle Asia Pacific. 121 The applicant relied upon a series of emails involving Ms Sibree, Mr Williams, Mr Weston, and Ms Cavanaugh exchanged at the time he moved to Oracle Australia to support his claim that his bonus/remuneration should have continued to have parity with that of Mr Davies. 122 Ms Cavanaugh advised Neil Weston on 6 September 1994 of the relocation allowance issue, saying that the applicant saw its removal as a pay decrease, not as the expiry of a benefit that he was due for a period of time only. She further advised Mr Weston that he would need to consider that matter when he reviewed the applicant's tax package from 1 June 1994. She stressed that none of the relocation allowance was salary, but was all additional. 123 Mr Weston followed up on 13 September 1994 by asking (via email) Mr Davies to advise him if Mr Davies had made any promises or implications of continuation of foreign benefits, rewards, bonuses etc to the applicant. 124 In a further email sent 16 September 1994, Mr Davies set out the background to the negotiations as to the applicant's Asia Pacific package based on his UK package, particularly as to the "resettlement allowance", which was to be treated as part payment of bonus, Mr Davies concluded by stating: If Mike had stayed in Asia Pacific, it is reasonable to assume that his bonus would have been restructured, and increased by the rental amount. 125 In oral evidence Mr Davies said that that last sentence was not a comment on the appropriate remuneration of the applicant's new role in the Australia subsidiaries. He stressed that he made no contention as to what the applicant should have received in his Australian role. 126 There was no principle of equivalence between the remuneration of the applicant and that of Mr Davies, as was alleged by the counsel for the applicant, once the applicant moved from Oracle Asia Pacific to Oracle Australia in the position of Director of Operations and Legal Services. He had moved from his former legal role to a general managerial role. 127 The claim that is based on the alleged parity with Mr Davies is rejected. It is clear from all the evidence, and particularly that of Mr Williams and Mr Davies that such parity only had relevance while Mr Pym was employed at Asia Pacific. The emails between Mr Weston and Mr Davies and Mr Williams were directed at one issue only that relating to bonus/relocation allowance, not to the applicant's overall remuneration. 128 I now turn to consider the payment of bonus at the rate of 120% for Q1/Q2 of FY96. 129 It was claimed that the bonus should be corrected to the 150 per cent figure found in annexure Q to Mr Pym's first affidavit which corresponds to the company financial results. There would be an extra 30 per cent on that first year bonus and if one carries that through to the extra amount that the bonus should have been calculated on in the first place because of the removal of the accommodation allowance, there is another $3,500 that should be added to make that fair. That would produce a superannuation contribution of eight per cent as well. 130 The applicant submitted that the incentive plan provided for bonuses at the meeting point between the two factors of company financial results and personal performance. Certainly as Mr Weston sought to point out in justification of his actions, the strategic objectives were to be assessed through the performance appraisal process but the assessment criteria set out in that incentive plan were entirely objective criteria. There was no provision for subjective criteria. It was never suggested to Mr Pym there was going to be subjective criteria applied to these incentive programmes. It is not borne out in any of the records. 131 I note that in his first affidavit, the applicant expressed considerable antagonism to Mr Weston, making a number of accusations against Mr Weston, which I will not set out in detail but some of which I will briefly refer to later. 132 I cannot help thinking that that antagonistic attitude has coloured the applicant's views as to the rate of bonus of 120% set by Mr Weston. According to his counsel, Mr Weston had justified that 120% on subjective criteria, even though the objective criteria had been met 100%. It was claimed that the applicant had received continued assurance of payment of the bonus on satisfaction of objective criteria, without the entitlement to apply subjective criteria being disclosed. 133 The point of that submission appears to be that, activated by antagonism towards the applicant, Mr Weston took the opportunity to apply his allegedly adverse critical views of the applicant to the calculation of the bonus due to him on an entirely subjective basis ignoring the objective criteria usually to be applied. 134 Mr Weston was asked in cross-examination whether, because Mr Weston had seen it as an extraordinary circumstance that an employee left during the course of the year, it enabled him to make an exception to the normal requirements for assessment as to the incentive plan so that he could bring in, in the case of Mr Pym, subjective criteria. That was denied by Mr Weston, who said that subjective criteria, as well as the achievement of strategic objectives, had always been taken into account. 135 In cross-examination Mr Weston also denied that he had used the opportunity of the applicant's redundancy to rely solely on subjective criteria to decide the applicable rate for the applicant's bonus. In cases of termination, the whole process of performance review with its objective/subjective mix of criteria was accelerated. 136 The applicant had conducted performance appraisals of his staff. He would have been well aware of the mix of subjective and objective criteria. 137 Mr Weston said he had formed the view that Mr Pym was entitled to 120% of the bonus for the period 1 June 1995 to 30 November 1995 based on his assessment that Mr Pym's performance was less than 100% whilst at that point the company performance was ahead of plan. He did not recall the exact details of each item in the plan. The applicant's performance appraisal for the period 1 August 1994 - 31 May 1995 had showed him as below standard in people management. 138 The short answer to the applicant's submission on that point is that it is clear on examination of the various performance review/incentive plans that subjective factors, as well as objective factors, are involved in the assessment. Indeed, when it came to deciding the employee's overall performance rating, it was stated that "the reporting manager/supervisor needs to exercise judgement to arrive at the most appropriate rating". 139 In relation to bonus, the applicant submitted that it is unfair to set unclear or unachievable bonus targets (Mitchell-Calvert v Yahoo Inc [2001] NSWIRComm 136 (Kavanagh J) ), and similarly it is unfair to withhold entitlements accrued on the basis of unemployment at a 'trigger date' (Harper v Candle Aust Ltd [2001] NSWIRComm 77 at para 110-1] ). 140 Two of the targets advised to the applicant by Mr Weston on 4 November 1994 as being required to achieve bonus for FY95 that were labeled by the applicant as "unrealistic" were not in fact the targets the applicant was required to reach. After his protests as to the targets for year on year revenue growth, contribution margin and cash collection, Mr Weston advised him on 23 November 1994 that his targets for year on year revenue growth and contribution margin had been amended to reflect the Company plan. The cash collection target of 45 days remained, although the forecast was for 59 days. 141 Counsel for the applicant submitted that Mr Weston had resiled from his earlier evidence that he had amended the Senior Management Incentive Plan for the benefit of Mr Pym alone. Examination of annexures I and J to the applicant's first affidavit makes it clear that Mr Weston's recollection that he did amend those company targets was correct. 142 To support his claim that his bonus for the Q1/Q2 of FY96 should have been 150% not 120%, the applicant referred to his rate of "effective" (the third of five ratings) for the appraisal period 1 August 1994 to 31 May 1995. 143 The "effective" rating is below "commendable" and above "improvement required". An "effective" rating is stated to be "met the majority of objectives and competency requirements. The appraisee has performed in an able manner and, all things considered, achieved the performance requirements of the job". 144 To further support his claim that his bonus should have been calculated at the rate of 150%, the applicant also relied upon a "succession plan" in relation to his position in the management hierarchy. 145 Ms Sibree was taken to that document in cross-examination. She accepted that it would be reasonable for Mr Pym to assume that, all things being equal, if circumstances had not changed since the document was prepared, that if the position above him were to become vacant, that he would be acceptable to Oracle to take that role. She further explained that the "succession plan" was a contingency plan in the event of an emergency or something unexpected happening, indicating who could potentially fill certain roles in the short term. It was a constantly evolving document, that gave no direct entitlement to the positions listed there. 146 It does not assist the applicant. (In some cases, senior personnel are shown as potentially filling more junior roles.) 147 The incentive payment matrix set out in the Oracle incentive plan for Michael Pym for FY96, suggests that it would only be in the direst of circumstances that the applicant would not have achieved a bonus. Those circumstances would involve a combination of very poor achievement of his personal objectives and poor financial results for Oracle for the relevant financial year. 148 For the appraisal period 1 August 1994 to 31 May 1995, the applicant, on his own report dated 5 July 1995 as presented to his manager, Mr Weston, had not satisfied, to the extent they could be measured at that time, all his personal objectives, though in one of them he had exceeded his target. He did not achieve 100% personal performance, but that did not, on the evidence, prevent his receiving a bonus rating of 120%. 149 Mr Weston said that in American companies it is very common not to tell employees their targets or objectives until well into Q1. The applicant and Mr Weston had not agreed on his package for FY96 until 12 October 1995, four months after the commencement of the 1996 financial year, because of the applicant's concerns as to what his objectives were. The personal objectives, however, would have been communicated to the applicant earlier: "He wouldn't have been working for the first three months without knowing what it is we wanted him to do. It is unrealistic". 150 In relation to that point the following exchange occurred in the cross-examination of Mr Weston: BURCHETT: Q. Would you agree that, Mr Weston, the delivery to Mr Pym of the incentive plan containing a requirement to be met before its delivery was unfair? A It was the norm and I would certainly have done it with Mr Pym and would do it with everybody before setting their objectives, especially the personal objectives, to have a discussion with the employee prior to setting the objectives, and that would have been the case with Mr Pym. I am 100 per cent certain with that. 151 The applicant also complained that he received no bonus at all for the period 1 December 1995 to 18 March 1996 due to the "policy" (which managers had discretion to waive) that employees, in order to receive bonus, must be employed on the day bonuses are paid out. He stated that that "policy" had not been advised to him. On that last point, the applicant was aware of the discretion of managers to waive that policy, and he had been involved in the working out of a number of termination packages. The policy may not have been specifically "advised" to him, but I am quite certain he was familiar with the policy, including restrictions on its operation. 152 The applicant submitted the bonus scheme was unfair in that the applicant had to be still employed by Oracle at the trigger date for the payment of bonus. I do not see that such a requirement is inherently unfair. However, in circumstances where an employee leaves before that trigger date, other than by his own volition or for cause, that requirement can be the indicator of an unfair contract. That is particularly so in the present case where the services of the applicant were terminated because of redundancy. 153 I find that the contract of employment between the third respondent and the applicant was unfair in that it allowed for that situation to arise. 154 The method to remedy that unfairness is that proposed by the applicant which is for the bonus for Q3/Q4 to be paid on a pro-rata basis to the date of the applicant's termination. 155 Calculations as to that bonus shall be in accordance with the agreement of the parties reached in the course of the proceedings, that should there be a finding of entitlement to a bonus for the Q3/Q4 period of the 1996 financial year then the category under the incentive plan to be applied for company financial results would be the category of 110 per cent to 115 per cent; that is the second highest of the categories in the incentive plan which is Ex Q to Mr Pym's main affidavit. 156 It will be for the parties to calculate any flow on effects in relation to other elements of the salary package and moneys already paid. Conduct of the Respondents 157 I have dealt with some of the applicant's claims as to unfair conduct by the respondent when considering the specific issues of notice, redundancy, remuneration changes on his move to Oracle Australia, and bonus. 158 I now turn to consider other conduct of the respondent alleged by the applicant to manifest unfairness of the contract in accordance with Reich. 159 The applicant's complaints as to not being considered for the Chief Financial Officer role in June 1995 appear to be directed to his claims that Mr Weston had treated him unfairly. 160 The applicant asked Mr Weston in June 1995 that he be considered if the proposed new position of Chief Financial Officer (CFO) "is more Chief Operating Officer rather than a CFO". That job was later advertised with a salary package of $200,000, $34,000 less than the applicant was then on. I do not doubt that if the applicant had previously had any serious aspirations to the position of CFO, those aspirations would not have survived beyond that point. 161 Mr Weston's evidence was that Mr Weston considered the applicant "a serious applicant for the CFO role". However, Mr Weston did not accept the proposition put to him by counsel for the applicant that he (Mr Weston) had seriously considered the applicant as a possible CFO. He had not dissuaded the applicant from the view he could become the CFO, but did discuss with him some of the educational and experiential characteristics that would be needed of a CFO. The applicant was rejected because of his lack of experience and his lack of people management skills. He said that the applicant's people management skills were not sufficient for the role of National Operations Director which he occupied. There was nothing to prevent the applicant being appointed to that role but "there was plenty that prevented him from moving from that role". 162 I do not think the applicant has any legitimate complaint as to the events around the creation of the position of chief financial officer in Oracle Australia, a position, which, on different suggestions put in cross-examination was one to which the applicant either aspired or was one that the applicant saw as a threat to the continuance of his own position. As described by Mr Davies, the position was a senior financial position, requiring tertiary financial/accounting qualifications, which qualifications the applicant did not hold. 163 Prior to the termination of his employment, the applicant had intended to remain in Australia on a permanent basis and seek permanent residency. When his employment was terminated he was required to return to the United Kingdom because his right to stay in Australia, and work in Australia, was linked to working for Oracle. The directors of the company had to inform the Immigration Department immediately as to the change in the applicant's status. 164 Attempts by the applicant to obtain another employer to take over Oracle's sponsorship before the end of his three month's notice were hindered by the time of the year (Christmas/New Year) and limitations imposed by her pregnancy on his wife as to flying after mid-February. 165 The applicant's pursuit of permanent residency in Australia at that time was frustrated, not by any malign activity of Oracle, but because his position had become redundant and Oracle, under the terms of his visa conditions had to advise the Immigration Department of that fact. The initial cause of that redundancy, the applicant's move to a different career path was not something that could have been taken into account at the time of his initial move to Australia with Oracle Asia Pacific, or his later move to Oracle Australia. 166 The applicant contended that Mr Weston had unilaterally cancelled promises as to a directorship made by Mr Williams to the applicant. In submissions, it was stated on behalf of the applicant that he had already, before moving to Oracle Australia received assurances from Derek Williams of at least consideration (my emphasis) for board membership. 167 Mr Williams said he did not encourage Mr Pym to believe that in moving across to Oracle Australia, Mr Pym could find himself on the board of that entity. When asked by Mr Pym, on a number of occasions, Mr Williams said he would be considered, as would Alan Robinson. 168 Those "representations" or "promises" as variously described were made in the context of resolving a perceived problem with the approach of the then Managing Director of Oracle Australia, John Thompson in following company policy. They do not seem to have been linked to any inducements, for instance, for the applicant to remain with Oracle or to move to any particular position. 169 Mr Weston's evidence was that the applicant had first mentioned to him that "promise" by Mr Williams during a visit by the applicant to the UK. When Mr Weston had been involved in the decision as to what people would be asked to join the Australian board, he was aware of being told by Mr Pym that a promise had been made but he was not aware of the promise being made. 170 The decision not to appoint the applicant to the Board was not one made by Mr Weston alone, but one made in consultation with Derek Williams, then chairman of the Board and other members of the Board. 171 The applicant took up the question of appointment as a director with Neil Weston. In August 1994 Mr Weston told the applicant that he was not going to be made a director at that time because the applicant needed to show some other qualities as in facilities management, IT planning and structure, running the legal department, improving shipping and having good staff relations. The applicant's performance against those criteria would be reviewed on 6 December 1994. On the evidence before the Court that matter does not seem to have been progressed further. 172 Terminology used by his counsel to describe the applicant's movements within the Oracle organisation appeared to suggest that all those movements were directed by Oracle to an employee who had little say as to whether he would follow the courses of action so directed. 173 In the applicant's submissions, in relation to the applicant's move from Asia Pacific to Oracle Australia, it was put that "the offer is made to the applicant of coming across from Asia Pacific, giving up that [legal] career path that was laid out for him with Asia Pacific, moving into Oracle Australia" … "Mr Pym taken from his legal career, put into that managerial role, for a matter of a couple of years. Given, led to believe, that is where his career path lies and that he has a promising future with Oracle in that role. Taken from his home in the United Kingdom to Australia in the first place and led to believe he is able to indefinitely remain here. Oracle supports his permanent resident application." 174 The applicant was not "taken" from his home in England to come to Australia. The applicant's appointment as Legal Counsel Asia Pacific South followed his advice to his direct Manager in Oracle UK that he was willing to apply for the position. 175 The move from Oracle Asia Pacific to Oracle Australia was because the applicant wished to move from a legal professional role to a more general managerial role. The applicant in his affidavit (par 22) acknowledged that it was unusual for a person from a professional function to be taken and put in a general managerial role. That career path change was made at the instigation of the applicant himself, not of Oracle in any of its guises. 176 The applicant's submissions as to the failure of Oracle to appoint him as a director is another example of the gloss on terminology. A promise by Mr Williams "to consider" such an appointment, was translated by the applicant to Mr Weston as "a promise". 177 I have some trouble understanding the applicant's claim that Oracle Australia had unfairly deducted $10,000 from his relocation allowance to cover the cost of his breaking his car lease because of his termination. 178 In his first affidavit, the applicant deposed: Although the majority of my expenses associated with the move back to the UK were met by Oracle's $40,000 relocation allowance, there were a number of expenses I incurred which Oracle refused to pay. The main expense was a £5,000 car rental bill which Oracle only agreed to contribute $3,000 towards. Oracle also deducted approximately $10,000 from my relocation allowance for the cost of breaking the car lease which I was forced to do due to my termination. As a company car was an entitlement under my employment contract, Oracle should have paid for the cost of breaking the lease on the car separately. In total Oracle only paid for approximately $31,000 (including the car) worth of expenses even though I incurred significantly more. The company also deducted $1,342.61 as "packaging" from my March salary for use of the company car in March which I had had to return to them in February when we left the country. 179 On my reading of that paragraph, I assumed that the $10,000 claim related to the car lease the applicant had had to break in Sydney because of his return to the UK. However, the amount claimed in the Amended Summons for breaking the car lease was $1,344.00, not $10,000. 180 Also, the following item is contained in the Summary of the applicant's claim: 6 Car hire in UK for 6 months St.5,000, say $10,000 less $3,000 paid = $7,000 (gross up to $13,461.50) 181 In Australia the applicant had driven a Mazda 626, and he accepted that in 1995, $3,000 would have been the appropriate amount for the hire of a Mazda for two months. 182 In the UK the applicant in April 1996 hired a 5 Series BMW station wagon for six months for £5,000. He did know before going ahead with the hire of the car that Oracle would only pay $3,000 in relation to that cost, "but I hired the car anyway". 183 The applicant then sent an expense claim for £5,000 for car hire to Oracle. He was advised by A Grinberg on 9 April 1996: I have received your latest expense claim. The amount of GBP5,000 for car hire will not be paid by Oracle as part of your relocation expenses. As we have now discussed on a number of occasions the relocation reimbursement of up to AUS$40,000 is for specific items which does not include care hire. In good faith I agreed to a maximum reimbursement for car hire of AUS$3,000 as being a reasonable sum for the interim care [sic] hire for the first 2 months of your stay in the U.K. I now propose to pay the total of AUS$3,000 against the car hire receipts provided. The other items of your claim are being processed as per the company policy and the provisions of the redundancy package. 184 Counsel for the applicant put to Mr Grinberg that Oracle's offer for reimbursement for relocation costs had not set the requirement for such costs to be reasonable. Mr Grinberg said the concept of reasonableness was associated with their discussions as to what items would be covered. The payment of $3,000 for car hire was something that could not have been contemplated on 19 December 1995 because they did not know the applicant was going back to the UK. The amount for car hire was not an amount which had been specifically included in the $40,000. However, he made a calculation as to what he guessed were reasonable expenses associated with car hire in the UK for the period. 185 Mr Grinberg agreed that the cost of the applicant's having to break a car lease because the applicant had to return to the UK was an item that could come with the description "relocation expenses". The company's records as at March 1996 showed in relation to the applicant's relocation expenses, two question marks against the item "car lease payout". 186 If there in fact were costs of $10,000 involved in breaking the New South Wales car lease as the applicant's affidavit suggested, that sum appropriately came out of relocation expenses. If the claim was in some way actually related to the UK car hire, the total sum of £5,000 claimed by the applicant was not reasonable (even though it may have gone some way to cutting out the $40,000 relocation expenses). 187 In relation to the UK car hire, counsel for the applicant submitted that the real issue is whether Mr Pym should have obtained and sought reimbursement for a six month's lease in the UK or only a two month lease during a period of dislocation, which period formed the basis for the respondent agreeing to pay relocation expenses. Counsel went on to say that just in relation to the UK, the amount of $10,000 was all that was being submitted as an expense, although greater expenses may have been incurred. 188 It was the applicant's complaint that Oracle had only paid for approximately $31,000 worth of relocation expenses although he had incurred significantly more. On the evidence before me, if he had presented receipts for reasonable items of expenditure (and I not regard the £5,000 car rental bill reasonable), Oracle would have paid them. 189 Oracle did not refuse to pay the applicant's UK car lease expenses. The difference between them was the amount Oracle was willing to pay. 190 The applicant's attitude was expressed in his counsel's questions to Mr Grinberg in relation to the payment of $3,000: "How much more of the $40,000 did you avoid paying"? "You don't know how much you saved" [out of the $40,000]?" Because the applicant had only claimed relocation expenses of about $20,000 "you made quite a saving on your initial offer, didn't you"? 191 I find that there was no unfairness by Oracle in its handling of the relocation expenses. 192 I reject the claim by the applicant that the Court order he be paid the unexpended balance of the relocation allowance. MBA Study Offer 193 The suggestion that Oracle would fund the applicant for 12 months to undertake an MBA course, was first raised by management (Neil Weston, Derek Williams and Alison Sibree) at a management meeting in Vietnam in October 1995. Ms Sibree said that discussion at that meeting as to the MBA proposal arose because Mr Pym's role was being merged and changed and undertaking an MBA would provide further development for him to progress through the organisation. If Mr Pym wanted to develop his career, Oracle could release him for the period of 12 months to undertake full time study. It was their intention that he would come back and take on another role at the end of 12 months. 194 Once it became clear that Mr Pym could not get into a 12 month course, Phil Wilson, Senior Vice-President, Human Resources Globally, Neil Weston, Derek Williams and Alison Sibree decided that, because there was no role for Mr Pym, the alternative was retrenchment. 195 It was the applicant's contention that the MBA was not a bona fide offer because, as soon as the suggestion was made that the course would take 18 months to complete, the offer was withdrawn. That withdrawal showed quite clearly that what Oracle wanted was simply to get the applicant out of the organisation in some way. 196 Counsel also asserted that the MBA proposal was unrealistic and not thought out. It was a furphy because, although the applicant was wiling to take the proposal up with a consequent loss of remuneration, the company was not prepared to wait the length of time it would take to complete the course. On that point, counsel for the applicant later advised that he did not wish to push the point that neither Mr Weston nor Mr Williams was not prepared to wait the 18 months or alternatively for the applicant to undertake the course for 12 months of the requisite 18 months. 197 Counsel then went on to say that the applicant did not assert that the respondent had an obligation to wait 18 months or pay him for pursuing the MBA, so either way it did not effect either party's case in these proceedings. 198 At most, from the respondent's point of view it is to be put forward in that it shows some form of bona fides. From the applicant's point of view: either, yes, indeed the respondent did accept that he was someone who had the capacity to rise within the organisation as he was expecting he could rise, or that he did not do his job too well and perhaps found him redundant. So whether it is characterised as a generous offer made entirely bona fide by the respondents, or whether characterised as just something that was thought of as a Phillips [sic] to remove Mr Pym from the organisation long enough and in that way to avoid litigation, it does not matter. What the Court needs to determine is: Was the agreement unfair? The consequences of unfairness over an inability for the MBA offer to be taken up does not affect those matters at all. If he could have pursued the MBA programmes, and if he had taken up the MBA, and been able to thereby obtain the qualification, he might have avoided the interruption to his managerial aspirations that resulted from the redundancy. 199 In view of that submission, I do not intend to set out the considerable evidence on the subject. However, I have considered it in detail, and having done so, I reject the contention by the applicant that the offer by Oracle for him to undertake an MBA was not a bona fide offer. It was one that fitted in with the applicant's own aspirations, but, in the end, circumstances conspired to prevent it from being progressed as an alternative to redundancy. National Insurance Contributions 200 It was common ground that Oracle was to continue to pay the applicant's contributions to his National Insurance and UK pension scheme while in Australia. 201 The contributions were deducted from the applicant's salary, by way of salary sacrifice, but there were problems in transferring those payments to the correct accounts in the UK. The result was that there is still an outstanding amount to be transferred. 202 Oracle recognized the problem and has requested the applicant to get third party evidence from the UK Government setting out the amounts payable. The applicant had not yet been able to assemble the required information. He understood that Oracle had been faced with exactly the same difficulty, but did not understand why Oracle had not accepted the calculation of the amount made by its UK finance controller. 203 It is common ground that KPMG Legal have the sum of $25,000 in its trust account for the applicant's benefit in the event that independent verification is provided of the shortfall, if any, in the applicant's UK pension fund. 204 If there is an amount owed in relation to the applicant's UK National Insurance, that amount will be a specific figure. There is no reason to gross it up as claimed by the applicant. 205 I do not see that the respondent's conduct on this issue is such as to cause the applicant's contract of employment to become unfair in terms of s 105. On Target Earnings (OTE) 206 On target earnings (OTE), a term no longer used by Oracle, comprised the total of a combination of the employee's performance and the company's performance in coming to a bonus paid in addition to base salary. One reason for the change was that in the past employees expected their bonuses as an entitlement, whereas they had always been paid at the discretion of the company. 207 The importance to the applicant of having various items included in his total OTE was that that total was the package total on which he was paid out at termination. The higher the OTE the higher the eventual monetary amount that he would receive. 208 The Summary of the applicant's claim seeks the correction of the OTE calculation from $227,709 (FY96) to $263,729 by the inclusion of the following items: + 8% UK pension $11,520 + value of extra benefits per Exhibit 13 & Exhibit 20 (MFI A) of: a) Car parking $ 5,840 b) Tax advice $ 2,500 c) Stock Purchase Plan $ 2,160 + relocation allowance/forgone bonus for FY96 $14,000 209 (Exhibit 13 and Exhibit 20 (MFI A) referred to in the above claim, were the records of Mr Grinberg referred to by counsel for the applicant as not disputing that the appropriate percentage to apply to the bonus was 150%, not the 120% determined by Mr Weston. Actually they set out the applicant's demands in the redundancy negotiations for 150%, not any suggestion by Mr Grinberg that 150% should be the percentage.) 210 The first of the above items was accepted by Alex Grinberg for Oracle on 2 January 1996 as being appropriate to be included in the OTE calculations. Its acceptance was the item that lifted the OTE from $227,709 to $239,229 for the calculation of termination pay. The amount is therefore double counted in the Summary of claim. 211 Car parking expenses were refused as falling into the category of business expenses for reimbursement such as travel and not forming part of OTE. 212 Tax advice costs were dealt with by expense reimbursement because such expenses varied from employee to employee, and were targeted as a business expense for expatriate employees. Those expenses also did not form part of OTE. 213 I do not see that it was unfair that those expenses be treated in that way in accordance with company policy. 214 In relation to the Stock Purchase Plan, the cost of shares was by way of salary sacrifice and any benefit received from the Share Plan did not form part of the OTE calculations. Ms Sibree explained why the applicant's contribution to the company's stock purchase plan would not be included in his OTE: … it's a voluntary scheme that all employees have an opportunity to participate in but it is purely voluntary … … A. So you understand the answer. All employees are entitled to contribute 10 per cent of their salary towards purchasing stock. So that [amount of $2,160], I can only assume, was his contribution up until December, this is done twice a year in a six-monthly rest and it would have commenced his 10 per cent for that portion of the year would have commenced on 1 October so he could have been deducting 10 per cent on a monthly basis. What is accumulated at the end of that six months is used towards purchasing Oracle stock, but if someone levers [sic] in the middle of that period that amount is reimbursed. 215 If the applicant was reimbursed for that amount, to include it in the OTE would constitute a double payment to the applicant. 216 The item: "balance of relocation allowance/forgone bonus" as discussed earlier related back to his employment with Oracle Asia Pacific. After his move from Oracle UK to Oracle Asia Pacific, the applicant had a relocation allowance of £15,000 which for tax effective reasons was split up and paid over two years. His bonus was adjusted downwards to take account of that allowance, and had the applicant remained with Oracle Asia Pacific, it was understood that the bonus would be readjusted upwards when the relocation allowance ceased to be tax effective. 217 However, the applicant in 1994 moved from Oracle Asia Pacific to Oracle Australia and was then on a different salary/bonus regime. It was explained by Mr Weston to the applicant in relation to the latter's FY95 remuneration package: Previous rental allowance of $15,000 under expatriate conditions grossed up to $29,000 for PAYE tax, and paid as a taxable allowance (as it is no longer tax exempt). This is to be phased out over two years and will reduce to $15,000 in FY96, $0 in FY97. 218 That had the effect that the total OTE for FY96 were $227,709 as against $234,456 for FY95. 219 Putting aside the question of the inclusion of bonus for Q3 of FY96, I find that the applicant was correctly paid out on the basis of an OTE calculation of $239,229.00 (total package). Mitigation 220 The applicant commenced work with Cognos on 2 April 1996. His salary was about £110,000 and his package included a Lexus 400. Although the salary was ahead in Australia dollar equivalence with that earned in Australia, the applicant pointed out that it was expensive to live in the UK. 221 When the applicant's salary was converted from pounds sterling to Australian dollars at the then exchange rate of AUD$2.54 to £1, his salary at Cognos was equivalent to AUD$279,400. That figure contrasts with his total annual package remuneration of $239,229 at Oracle Australia, out of which he had to lease his own car. On my understanding, the Lexus 400 which formed part of his package with Cognos was a more expensive car than the Mazda he leased while he was employed by Oracle Australia. 222 The applicant was still working for Cognos in September 1998 when he applied for permanent residency in Australia, an application that was granted in June 1999. He had been retrenched from Cognos in March 1999. 223 The applicant's role was made redundant from 18 March 1996, and he had been placed on 3 month's leave of absence as from 18 December 1995. During that period, I accept that the applicant was diligent in his attempts to obtain another position, both in Australia and in the UK. He commenced with Cognos some 6 weeks or so after leaving Australia and some two weeks after the expiry of the applicant's three months notice with Oracle Australia. The applicant had been paid one month's pay to take account of "dislocation" on return from Australia to the UK. That additional one month's pay for "dislocation" recognized that the applicant would face a period of readjustment if he returned to the UK. 224 The applicant was not paid in lieu of notice. He did receive redundancy payments. The principle of mitigation will not ordinarily be applied to reduce any payment in the nature of redundancy or severance payments (Westfield Holdings v Adams [2001] NSWIRComm 293 at [201] [(2002) 114 IR 241]). There is no reason to apply it in this case. Consideration - General 225 Senior counsel for the respondent relied upon a number of authorities to support his submissions as to the proper principles to be applied in deciding this case: Port Macquarie Golf Club Limited v Stead (1996) 64 IR 53; Bell and Berg v Macquarie Bank Ltd [2002] NSWIRComm 235; Bates v Finance Australia Pty Limited [2002] NSWIRComm 42 (13 March 2002); Ross v GN Comtext (Australia) Pty Limited (2000) 107 IR 1 and Westfield Holdings v Adams (2002) 114 IR 241. 226 I accept the principles in the authorities set out above. To the extent that such authorities might go to remedies, each case, as was accepted by senior counsel, is to be decided in the light of its own circumstances. 227 Senior counsel for the respondents relied upon the fact that the applicant's income had increased by $80,000 in the four years he had been employed by Oracle to support his submission that the contract was not unfair. 228 The fact that an employee has increased his income by $80,000 over the period of his employment as did the applicant does not mean the contract of employment may not be unfair. That increase was the reward for the applicant's efforts and achievement of objectives. If the contract has other features that are found not to be fair, that increase in income cannot be used to set off or balance those other features. If a contract provides for remuneration of $X + $y and only $X (no matter how large an amount) is paid that does not mean that non-payment of $y is any less unfair. Interest 229 It was submitted on behalf of the applicant that, while interest is not an additional payment or a head of damage, it is a factor which ensures there is proper compensation. It simply is to ensure that the amount that is awarded today is an amount which is appropriately referable to loss at the time of it occurring. Even though in this case it was a couple of years before the application was filed, it is not proper to commence interest from the date of the application. To provide proper compensation, it should be from the day upon which the cause of action arose, when the loss was suffered and, particularly given a reasonable explanation of a two year delay, before the application was made. 230 The services of the applicant were terminated as from 18 March 1996, at the conclusion of three months notice. His summons for relief pursuant to s 106 was filed on 21 April 1998. 231 Examination of the Court file shows that, after conciliation on two occasions in November 1999 before Peterson J, the application was allocated to Maidment J for determination. It was first mentioned before him on 17 December 1999, again on 16 February 2000 and finally on 2 March 2000. On that occasion, it was noted that the respondent to file and serve its affidavits within 18 days and "App to relist upon request". There was no request made by the applicant and, other than a notation of a Return to Summons on 17 March 2000, at which time there were no appearances, the next action on the file was its return to his Honour the President on 13 December 2000 for reallocation because of the impending retirement of Maidment J. 232 The application was then reallocated to myself, and it was set down for mention on 9 February 2001. On that date, the third respondent foreshadowed an application that the matter be dismissed for want of prosecution, an application that was heard on 23 May 2001 and determined against the third respondent in an interlocutory judgment delivered on 8 June 2001. The Court refused to make orders sought by the respondents, that the application be permanently stayed, or, in the alternative, that evidence of overseas witnesses, in particular Mr Weston be taken on commission in the UK. On that same day, after consultation with the parties, the substantive application was stood over for hearing on 5 days in May/June 2002. 233 In the light of that history, interest will run at Supreme Court rates on the moneys to be paid in consequence of this decision as from 9 February 2001. Orders 234 In consequence of my finding that the non-payment of bonus pro rata for the period 1 December 1995 to 16 March 1996 was unfair in terms of s 105(a), I order: 1 The contract of employment between the applicant and the third respondent is varied to provide that, in the event of redundancy prior to a trigger date for assessment of that bonus, the applicant is to be paid bonus pro rata to the date of termination. 2 The parties are to consult and to come to an agreed figure as to the initial amount of that bonus and as to any consequential additional amounts in relation to moneys already paid. 3 Interest on the amount agreed to in relation to Order 2 is to be paid at Supreme Court rates as from 9 February 2001. 235 The parties are to advise the Court within 21 days if it is intended to file draft Minutes of Order embodying the agreed figures arrived at in relation to Order 2 and Order 3. Such orders will be dealt with by the Court administratively in Chambers. Costs 236 The parties are to confer in relation to costs. If agreement cannot be reached, the Court is to be advised within 21 days and the matter will be relisted for further short submissions.

Michael John Pym v Oracle Corporation and 2 ors

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Judgment (9 paragraphs)

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Cases Cited (17)

Cited By (2)