Western Australian Industrial Relations Commission

Benefits were not denied as there was a unilateral mistake

The Commission has dismissed a denied contractual benefits claim made by a Procurement Specialist who alleged that the labour hire company that employed her owed her monies under her contract of employment. The parties had a written contract of employment that also contained an arrangement for the applicant to be assigned to work for a third party (Assignment Agreement).

Senior Commissioner Kenner considered the respondent's claim that the daily rates included in the applicant's original Assignment Agreement were incorrect and had been included in error. The Senior Commissioner noted that after the respondent had recognised and corrected the error on 23 June 2014, the applicant did not sign the amended Assignment Agreement. The applicant requested to receive her pay earlier because she said she had budgeted according to the higher daily rate in the original Assignment Agreement, however she did not raise any objection then or in the future in relation to her daily pay rate. The applicant continued to work under a second Assignment Agreement for another 12 months, at the same daily rate as the first Assignment Agreement.

Furthermore, the Senior Commissioner considered that the correspondence between the parties, prior to signing the contract of employment and Assignment Agreement, constituted an agreement about the applicant's rate of pay. This agreed rate of pay made commercial sense, however the rate specified in the original Assignment Agreement did not. The Senior Commissioner was satisfied that the respondent was not involved in the negotiation of the applicant's daily rates of pay and would simply add to the final rate their margin for services. For these reasons, the Senior Commissioner concluded that the doctrine of unilateral mistake applied because the respondent had mistakenly believed that the Assignment Agreement was accurate, and the applicant had been made aware of this mistake.

In the alternative, the Senior Commissioner found that section 26(1)(a) of the Industrial Relations Act would apply as it would be unfair and plainly inequitable to hold the respondent to a document that was clearly executed in error and did not truly reflect what pay rates had been agreed by the parties.

The decision can be read here.

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