CONTRACTUAL BENEFIT CLAIM

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2024 WAIRC 00153

DELIVERED : THURSday, 11 April 2024

FILE NO. : B 32 OF 2023

Applicant

AND

My Foodie Box Limited

Respondent

CatchWords : Industrial Law (WA) - Interpretation of Contract - Alleged denial of contractual benefits - Whether applicant's contract of employment was varied - Whether applicant's quarterly payments were subject to Key Performance Indicators - Relevance of post contractual conduct - Application upheld

Legislation : Industrial Relations Act 1979 (WA)

Result : Application upheld

Representation:

Applicant : Mr A Trabelsi

Respondent : Mrs M Hughes and Mr B Hughes

Case(s) referred to in reasons:

Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570

Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation (Cth) [1983] NSWLR 1

Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385

Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219

Brett Arthur King v Griffin Coal Mining Company Pty Ltd [2017] WAIRC 00102, 97 WAIG 527

Browne v Dunn (1893) 6 R 67

Cavill Power Products Pty Ltd v Royle (1991) 42 IR 229

Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337

Electricity Generation Corp v Woodside Energy Ltd (2014) 251 CLR 640; 306 ALR 25

Fazio v Fazio [2012] WASCA 72

Franklins Pty Ltd v Metcash Ltd (2009) 76 NSWLR 603

Jones v Dunkel [1959] HCA 8

Kestell v Davey (No 2) [2022] WASC 383

Mak Industrial Water Solutions Pty Ltd v Doherty (No 2) [2023] WASC 279

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, 325 ALR 188

Narich Pty Ltd v Commissioner of Pay-roll Tax (NSW) [1983] 2 NSWLR 153

Decision

1         On 26 June 2023, Mr Alain Trabelsi (applicant) filed a denied contractual benefit claim (claim) in which he alleged that he did not receive additional payments that he was entitled to be paid under a contract with his employer My Foodie Box Limited (respondent).

2         The applicant, who was employed as an Advertising Manager, claims the respondent agreed it would pay him an extra $10,000 per quarter for taking on additional responsibilities.

3         The applicant says he should have been paid the sum of $17,692.30 which is in two parts. The first is the payment of $10,000 for the April – June 2022 quarter. The second is for a pro-rata payment of $7,692.30 for the July – September 2022 quarter.

4         The applicant sought a declaration that he had been denied these contractual benefits and an order that he be paid the entire amount.

5         The respondent denies that it breached the applicant’s contract of employment or that he is entitled to an order for the amount sought. It says that even if there was a contractual entitlement to pay the applicant a quarterly amount, the payment of this entitlement was subject to him meeting Key Performance Indicators (KPIs).

6         The respondent argued that because KPIs were not met, the applicant was not entitled to the payments claimed and for this reason, his application should be dismissed.

7         For the reasons set out, I have concluded that although the respondent did not pay the applicant a contractual benefit that he should have received, he was not entitled to be paid the entire amount sought.

Background

8         The respondent is an online meal kit supply business. Customers select from a list of meals. There are a range of meal options. Customers can choose meals with meat or fish or just vegetables. Vegans are catered for too. The recipes and ingredients for the meals selected are put into a box which My Foodie Box delivers to their customers’ home addresses. 

9         The respondent operates as a subscription service and derives its income from customers maintaining their subscriptions. So long as customers keep paying their subscriptions, the respondent is required to deliver them boxes.

10      The applicant, who is from France, commenced employment with the respondent on 16 August 2019. As the applicant’s skills were in an area of high demand, the respondent was permitted to recruit staff from overseas. As a result, the respondent was able to employ the applicant on a Temporary Skill Shortage 482 Visa (TSS 482 Visa).

11      The applicant and the respondent used a migration agent to deal with the applicant’s visa applications. It is not in dispute the respondent covered a proportion of the costs that were incurred to obtain visas for the applicant and to engage an immigration agency. The respondent also sponsored the applicant’s application for permanent residency.

12      On 7 January 2022 the respondent was listed on the Australian Stock Exchange (ASX). At the time, the respondent’s business was expected to be a ‘growth story.’ The respondent successfully raised $6 Million in capital funding and at one point employed as many as 250 staff.

13      Over the course of his employment with the respondent, the applicant’s remuneration was increased. In November 2021 the applicant's duties and responsibilities were varied. The applicant’s immigration status also changed. By November 2021 the applicant was on a Temporary Residence Transition Subclass 186 Visa, which is a bridging visa that precedes the granting of permanent residency (TRTS 186 Visa).

14      In August 2022, the applicant was ultimately successful in securing permanent residency. By this stage, however, the capital and economic environment in which the respondent had listed on the ASX had deteriorated, which resulted in a restructuring of and a downsizing of the respondent’s business.

15      In September 2022, the respondent re-assigned some of the work the applicant had agreed to perform to another employee. By November 2022, the applicant had decided to resign from his position with the respondent. Following his resignation, the applicant filed the claim.

Mr & Mrs Hughes

16      In this matter, the respondent has at various times been represented by two different people; Mai Hughes who is the respondent’s Chief Executive Officer (CEO) (Mrs Hughes) and her husband Brian Hughes (Mr Hughes). Mr Hughes is the respondent’s co-founder. He is the respondent’s Acting Chief Financial Officer.

17      In her capacity as the respondent’s CEO, Mrs Hughes appeared as both a witness and an advocate. When this matter was first listed before the Commission for conciliation, Mrs Hughes was pregnant with twins.

18      Mr Hughes was the author of some of the correspondence from the respondent to the Commission. He also appeared as an advocate.

Programming Orders

19      On 8 September 2023, I convened a conciliation conference in relation to the claim (first conciliation conference). The parties appeared at this conference in person.

20      The claim was not resolved at the first conciliation conference. As a result, the claim had to be programmed for hearing and determination.

21      In relation to this and under s 22B of the Industrial Relations Act 1979 (WA) (IR Act) the Commission, in the performance of its functions, is required to act with as much speed as the requirements of the IR Act and a proper consideration of the matter before it permits.  

22      Consistent with this obligation, I issued programming orders that required the parties to exchange documents and to provide evidence by way of witness statements on the matters raised by the claim [2023] WAIRC 000739 (programming orders).

23      The orders that issued were in the following terms;

1. THAT the parties are to provide informal discovery by 22 September 2023;

2. THAT the evidence in chief in this matter is to be adduced by way of signed witness statements which will stand as the evidence in chief of their maker. Evidence in chief other than that contained in the witness statements may only be adduced by leave of the Commission;

3. THAT the applicant file his evidence in chief in the form of witness statements in the manner required by practice note 9 of 2021 together with any documents upon which he intends to rely by 13 October 2023;

4. THAT the respondent file its evidence in chief in the form of witness statements in the manner required by practice note 9 of 2021, together with any documents upon which it intends to rely on by 3 November 2023;

5. THAT the matter be listed for a further conciliation conference not before 3 November 2023;

 6. THAT there be liberty to apply on short notice.

24      A ‘liberty to apply’ provision was included at Order 6 so either party could apply to adjust the timetable to comply with the programming directions. That said, both parties were entitled to object to and be heard on the other’s requests for any extensions of time to comply with the programming orders.

Compliance with the programming orders

25      In this matter, while there were issues with both parties’ compliance with the programming directions, the respondent’s non-compliance was more pronounced.

26      The first instance of non-compliance was in the respondent’s failure to comply with the order to provide discovery by 22 September 2023. The respondent’s compliance with this direction did not occur until 2 October 2023.

27      Additionally, the respondent did not disclose to the applicant copies of any documents relating to KPIs.

28      The next was in relation to the filing of the applicant’s witness statements, which were due on 13 October 2023. Although the applicant attempted to comply with the programming directions on the due date, he experienced technical difficulties in filing and serving his witness statements.

29      This meant the applicant’s personal witness statement had to be resubmitted. Despite this delay, the applicant’s evidence was served on the respondent in full by 17 October 2023, a delay of some 4 days.

30      On 19 October 2023, my Associate contacted Mr Hughes to advise that the respondent would be within its rights to seek a commensurate extension of time due to the delay in the serving of the applicant’s evidence. My Associate advised that if the respondent wanted to request an equivalent extension of time, it should do so prior to 3 November 2023, the date on which the respondent’s evidence was due.

31      On Monday 6 November 2023, Mr Hughes emailed my Associate and requested a three (3) week extension of time for the respondent to file its evidence. While the reason for the respondent’s request for an extension of time was based upon Mrs Hughes’ pregnancy, it was at that time not supported with any medical evidence.

32      Noting the additional time the applicant took to file and serve his evidence, I granted the respondent an equivalent extension of time to file its evidence, to the close of business Friday 10 November 2023.

33      On Friday 10 November the respondent in a further email renewed its request for an extension of time to file its evidence by 24 November 2023. Attached to this email was a medical certificate from Mrs Hughes’ obstetrician. The applicant objected to this request.

34      I reviewed the respondent’s request and the applicant’s objection. My Associate emailed the parties to convey my observations as follows:

At the time Direction [2023] WAIRC 000739 was issued, the parties were aware of Mrs Mai Hughes’ advance pregnancy and that it could have an impact on her capacity to meet deadlines contained within the programming directions;

The respondent’s financial position was also considered in the timing and manner of the programming directions;

The respondent has advised that it has completed ‘a substantial amount of work towards’ preparing its evidence;

In relation to Direction 1, the provision of discovery is a mutual obligation which the parties were directed to be complete by 22 September 2023. Both parties were within their rights to make a discovery request at any time during that period. Whilst the respondent’s delay in providing discovery may not have been intentional, it did affect the applicant’s capacity to and prepare his witness statement and is a relevant consideration;

From the attachments referred to in the applicant’s email, it is apparent the respondent has been able to actively meet its obligations to the ASX under the Corporations Act 2001 (Cth) in the period the directions applied; and

It is apparent that Mrs Hughes has a valid medical reason for an extension and medical evidence has since been provided.

On this basis I made the following changes to the programming orders:

1. Mrs Mai Hughes is granted an extension of time to file and serve her witness statement by COB 20 November 2023;

2. All other witness statements and documents on which the respondent seeks to rely must be filed by COB 13 November 2023; and

3. The respondent is to provide its unavailable dates between 27 November 2023 and 1 December 2023 by COB 13 November 2023.

Parties’ Witness Statements

35      In addition to his own statement, the applicant filed three witness statements in this matter. On 13 November 2023 the respondent filed three witness statements, one of which was from Mrs Hughes.

36      For the reasons I will return to below, the only statements I ultimately relied upon to decide this matter were those the applicant and Mrs Hughes filed. The other statements the parties filed were not admitted into evidence.

Second Conciliation Conference

37      On 20 November 2023, after the parties had filed their witness statements, I convened a further conciliation conference in relation to the claim (second conciliation conference). The parties appeared at this conciliation conference via video link.

38      Mr Hughes appeared for the respondent at the second conciliation conference. Mrs Hughes did not appear although I do note that on 6 November 2023, prior to the second conciliation conference, she gave birth to twins.

39      When the parties were not able to resolve the claim by conciliation and noting the number of witnesses to be called, I asked the parties to provide their unavailable dates so the matter could be listed for a two-day hearing. The second conciliation conference was concluded on the basis the matter would be listed for a two-day hearing commencing on 17 January 2024.

Request to adjourn the hearing

40      On 12 January 2024 Mr Hughes, on the respondent’s behalf, sent an email asking for the hearing to be adjourned. He attached a medical certificate from Dr Love, Mrs Hughes’ obstetrician. Mr Hughes also asked for the hearing to be adjourned because two of the respondent’s witnesses were either overseas or interstate.

41      The applicant opposed the respondent’s request for an adjournment. He also advised that his witnesses would not be available to give evidence either.

42      On the same date, my Associate in an email to Mr Hughes (a copy of which was provided to the applicant) advised as follows:

Dear Mr Hughes,

I refer to your email dated 12 January 2024 in relation to the above matter, a copy of which should have been provided to the applicant. Please ensure you copy the applicant into any future correspondence you send to the Commissioner about this matter.

In relation to the hearing next week, the Commissioner advises that both parties’ witnesses will be required to appear at the Commission so they can be cross examined. If a party does not wish to cross examine the other party’s witness, then as a matter of courtesy you should advise that party and the Commission so it can be determined whether their witness statement is to be tendered into evidence by agreement.

Any party who has a witness who they want to appear by video link will need to make a Form 1A application setting out the reasons why that witness is not able to be cross examined in person and why the witnesses may only appear by video link. Such an application would need to be filed ahead of the hearing and will need to be served upon the other party who will be given an opportunity to object to or consent to the application.

Commissioner Kucera has reviewed the letter from Dr Love. In relation to your foreshadowed request for an adjournment, the Commissioner does not consider Dr Love’s letter provides sufficient grounds to excuse Ms Hughes from attending the hearing to be cross examined. Furthermore, any request for an adjournment will need to be made ahead of the hearing by way of a Form 1A application setting out the basis upon which the request is being made and be served upon the other party.

43      Neither party filed a Form 1A application, whether for an adjournment or any other purpose. As a result, the scheduled hearing went ahead as planned.

17 January hearing

44      Although listed for two days; the hearing only lasted a day. Both parties were unrepresented. The applicant appeared and gave evidence. He was cross examined by Mrs Hughes. The applicant did not call any other witnesses.

45      Mrs Hughes appeared for the respondent. She appeared together with Mr Hughes. They also brought their twins with them. Mrs Hughes gave evidence and was cross-examined by the applicant. There were no other witnesses called to give evidence for the respondent.

46      The transcript of the proceedings will show the Commission made accommodations for Mr and Mrs Hughes and their care of the twins during the hearing. For their part, the twins were very well-behaved.

47      The parties accepted that as both parties’ witnesses were not available to appear at the hearing to be cross-examined and they were both unprepared to tender the others’ witness statements by consent, I would not be relying upon the material in those statements to determine this matter.

Principles to be applied when interpreting contracts

48      Broadly speaking, there are two ways to interpret the terms of a contract. One is the subjective approach – what did the parties mean to say? The other is the objective approach – what would a reasonable person have understood the terms to mean? See The Contract of Employment - 2nd Edition – Mark Irving (Irving) at 7.6 p 374.

49      Under Australian law, the objective, rather than the subjective approach is to be taken, which means the rights and liabilities of the parties to a contract are to be determined objectively; Irving at 7.6 referring to Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 350. 

50      By this, the terms of a contract are taken to mean what they would convey to a reasonable person, not what the parties understood or intended the terms to mean; see Irving at 7.6 referring to Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, 325 ALR 188 at [51] and [108] and  Electricity Generation Corp v Woodside Energy Ltd (2014) 251 CLR 640; 306 ALR 25 at [35].

51      When construing a written contract, the rights and liabilities of the parties are always construed by reference to the text of the contract, its context and purpose. Ascertaining the common intention of the parties is paramount; Irving at 7.6 referring to Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, 325 ALR 188 at [46], [47] see also at [113] per Kiefel and Keane JJ.

52      The relevant principles to be applied when utilising the objective approach to interpreting a contract of employment were described in Brett Arthur King v Griffin Coal Mining Company Pty Ltd [2017] WAIRC 00102, 97 WAIG 527, where Senior Commissioner Kenner (as he then was) at [10] noted that the interpretation of a contract, like any other instrument is a ‘text-based activity.’

53      At [11] the Senior Commissioner set out the relevant principles which the Court of Appeal summarised in Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219 at [42].

54      These principles were recently restated by Quinlan CJ in Mak Industrial Water Solutions Pty Ltd v Doherty (No 2) [2023] WASC 279 at [53]. They relevantly include by way of summary:

(a)       The construction of a contract involves a determination of the meaning of the words of the contract by reference to its text, context and purpose. The starting point for the proper construction of a clause is the language used in the clause. In particular, one starts by identifying the possible meanings that the words chosen by the parties can bear.

(b)     Ascertaining the meaning of terms in an instrument requires a determination of what a reasonable person would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract, and the commercial purpose or objects to be secured by the contract. The instrument must be read as a whole.

55      It is well established that evidence of the conduct of the parties after a contract is formed is not admissible to prove the meaning of the written terms; see Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; Fazio v Fazio [2012] WASCA 72 [192] (Murphy JA), cited with approval in Kestell v Davey (No 2) [2022] WASC 383 [46] (Smith J).

56      This is because the parties’ conduct after a contract is reached better explains what the parties think the terms mean rather than what a reasonable person would understand the terms to mean; Franklins Pty Ltd v Metcash Ltd (2009) 76 NSWLR 603 at [4], [322].

57      There are however some very limited exceptions to this exclusion. Evidence of post contractual conduct is admissible on the question of whether a contract has been varied; Irving at 7.9 referring to Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 392-3; Narich Pty Ltd v Commissioner of Pay-roll Tax (NSW) [1983] 2 NSWLR 153 at 601; Cavill Power Products Pty Ltd v Royle (1991) 42 IR 229 at 231.

The applicant’s evidence

58      In his witness statement, which was admitted into evidence as Exhibit A1, the applicant said that when he commenced employment as an Advertising Manager, his remuneration package was comprised of a base salary of $70,000 per annum, exclusive of superannuation. The applicant attached a copy of a letter of engagement he signed which was dated 4 July 2019 and attached to Exhibit A1 as Annexure 1: (first contract).

59      The applicant stated that on 19 April 2021, he received a salary increase from $70,000 to $100,000 per annum, exclusive of superannuation. The increase to the applicant’s salary was confirmed in a letter Mrs Hughes issued to the applicant dated Tuesday 20 April 2021 that was attached to Mrs Hughes’ Witness Statement (Exhibit R1) and marked as “ALAIN 6” (April 2021 variation). 

60      The applicant said that in October 2021, Mrs Hughes asked him to take on increased responsibilities changing his title to Director, Business Development. The applicant stated the additional responsibilities included: managing the marketing team; managing the direct sales function composed of a Head of Sales and sales representatives; be responsible for the performance of the marketing and sales functions; increase the customer base and the top line revenue. The applicant stated that as compensation for these added responsibilities, Mrs Hughes offered to increase his base annual salary to $140,000 exclusive of superannuation.

61      The applicant who at the time, had made an application for permanent residency said that before accepting Mrs Hughes’ offer, he consulted his migration agent to ensure that these additional responsibilities and the salary increase would not jeopardise his application. He said his migration agent confirmed the conditions of the bridging visa he was on while he was waiting for his application for permanent residency to be assessed allowed him to change roles and remuneration.

62      The applicant said that changing his job title would have involved submitting a new visa nomination for the company, costing time and money. The applicant stated that after he had received advice that confirmed his migration status was not at risk, he accepted the new responsibilities and salary package. The applicant said the new duties were officially added to his role on 1 November 2022.

63      The applicant stated that Mrs Hughes had agreed not to roll the salary increase into his base salary during his probation period in the new position. He said he had agreed with Mrs Hughes that a payment of $10,000 would be made every three months.

64      The applicant said the new remuneration was proposed to compensate him for the additional workload and ‘for the accountability of the entire marketing and sales department's performance.’ The applicant said on-target earnings, KPI targets, achievement incentives or any sort of bonus were not included in this agreement.

65      On 31 May 2022, the applicant received a quarterly payment of $10,000 for the January to March 2022 quarter. The applicant said this payment was made in addition to his base salary. On this date, the applicant also received a letter from Mrs Hughes dated 31 May 2022, which was attached to Exhibit A1 as Annexure 3 (May 2022 Letter).

66      Extracted below, the May 2022 letter states as follows:

Dear Alain,

Congradulations (sic) on completing 3 months of the Advertising Manager role.

While the role remains probationary you are entitled to a payment equivalent of AUD $10,000 every three months served as discussed with Mai & Bryan Hughes.

Please accept this letter as formal notice the payment for the period 1st Jan 2022 to 31st March 2022 will be paid into your nominated account on the 31st May 2022.

67      The applicant stated that on 19 August 2022 his permanent residency was granted. The applicant said he sent an email to Mrs Hughes to confirm this. The applicant also said that he went on annual leave at or around this time.

68      The applicant stated that upon his return from annual leave on 12 September 2022, he told Mrs Hughes during a telephone call that he had been granted permanent residency. He also said that during this same phone call, Mrs Hughes said that a number his duties including his management responsibilities had been passed on to his colleague Samuel David.

69      The applicant said Mrs Hughes did not provide him with an explanation as to why this change was made. The applicant also said Mrs Hughes did not say anything about his performance, not reaching expectations or that his probation period had come to an end.

70      In his statement, the applicant stated that on 16 November 2022, he resigned from his role by giving eight weeks’ notice. The applicant stated Mr and Mrs Hughes accepted his resignation. The parties agreed that his last working day would be on 30 December 2022.

The applicant’s cross-examination

71      Mrs Hughes asked the applicant if he had signed a New Job Guideline for the role of Director of Business Development on 1 November 2021, which was attached to the Hughes Statement and marked as “ALAIN 5” (New Job Role).

72      The applicant initially denied signing the New Job Role, following which Mrs Hughes provided the applicant with a copy. The applicant then said he could not recall signing the document. He said the New Job Role contained a digital signature and that he did not usually sign official documents in this way.

73      Mrs Hughes then provided a copy of an email exchange between herself and the applicant which was admitted into evidence and marked as Exhibit R2. The applicant was not able to recall the email exchange in which Mrs Hughes had sent the applicant a signed copy of the New Job Role.

74      Mrs Hughes asked the applicant whether he had a contract that provided for a base annual salary of $140,000 exclusive of superannuation. The applicant responded by saying “not as one document.” Mrs Hughes questioned the applicant about whether he had received a letter stating that his salary had increased from $100,000 to $140,000. The applicant responded by saying that he had received a letter, but it did not say his salary had increased from $100,000 to $140,000. He said, ''not in these words.''

75      Mrs Hughes asked the applicant some questions about the respondent sponsoring him for immigration purposes. The applicant agreed that he was sponsored by the business, and that his application was based on his employment as an Advertising Manager.

76      Mrs Hughes asked the applicant if he would have had to lodge a new application for a visa, as his role had been changed to Director of Business. The applicant disagreed that this would have been necessary.

77      When asked about whether the respondent had covered the costs for his visa application, the applicant responded by saying, "the business covered the costs that was required to be covered by the business and I covered the costs that were required to be covered by myself."

78      Mrs Hughes questioned the applicant about the May 2022 letter. She asked the applicant where it stated that his base salary was $140,000 exclusive of superannuation. The applicant accepted the May 2022 letter was not in these terms.

79      Mrs Hughes asked the applicant if he could recall a discussion with Mai and Bryan Hughes that Mrs Hughes said was referred to in the May 2022 letter. The applicant responded by saying that Mr Hughes was not involved in his discussions with Mrs Hughes.

80      The applicant said, as a part of a restructure within the sales and marketing team, he took on additional capacity and responsibilities. He then said, as compensation for these changed responsibilities, Mrs Hughes agreed to increase his total annual remuneration package to $140,000 per annum.

81      Mrs Hughes then asked him, ''and why was that not documented?" The applicant responded by saying that it was a question he could not answer. He said that as far as he was concerned, he believed it was documented in the May 2022 letter. The applicant accepted the May 2022 letter did not say that his new base salary would be $140,000 exclusive of superannuation.

82      Mrs Hughes asked the applicant if his new package was based on KPIs. The applicant responded by saying, "no, that was never discussed”.

83      Mrs Hughes asked the applicant if he was placed in charge of the whole sales and marketing team during his time with the respondent. The applicant said he was from the point it was agreed his annual remuneration package would be raised.

84      Mrs Hughes asked the applicant when Samuel David took over his position. The applicant responded by saying, ''during my leave in August 2022.''

Evidence from Mai Hughes

85      In her witness statement (Exhibit R1) Mrs Hughes gave further evidence about the applicant’s contract of employment. Mrs Hughes said that following the increase in the applicant’s salary (which was confirmed in the April 2021 variation) the applicant asked for a new contract to be issued. This document was attached to Exhibit R1 and marked as “ALAIN 7” (second contract).

86      Mrs Hughes said the applicant asked for a new contract to be issued to support his application for a TRTS 186 Visa. The second contract was dated 9 August 2021 and was signed by both parties. Like the first contract, it stated the applicant was employed as an Advertising Manager.

87      Mrs Hughes said the respondent covered the costs of the TRTS 186 Visa application as well as the costs of the migration agent. Mrs Hughes attached a copy of an email the applicant sent to the respondent in which he asked the respondent to pay the associated fees. She also attached a copy of the invoice from the migration agent. These documents were attached to Exhibit R1 and marked as "ALAIN 8" and "ALAIN 9."

88      Mrs Hughes described the process of applying for a TRTS 186 Visa as a time-consuming exercise that required the respondent to submit several documents. Mrs Hughes attached a copy of an email she received from the migration agent setting out a list of required documents the applicant had to submit in support of his TRTS 186 Visa application. This email was attached to Exhibit R1 and marked "ALAIN 10."

89      Mrs Hughes stated that on 1 November 2021, the applicant's role was changed to Director of Business Development. She said his main duties were changed in line with the New Job Role, which she said the applicant had signed with an electronic signature.

90      Mrs Hughes said that despite the change in duties, the applicant's base salary remained the same as his previous position of Advertising Manger, which was $100,000 per annum plus superannuation.

91      Mrs Hughes stated the applicant had insisted no new contract be issued because he did not want to compromise his visa. Mrs Hughes said she had no objections to this request as the conditions of employment were the same. Despite this, Mrs Hughes said she issued the New Job Role because his duties had changed.

92      Mrs Hughes said, the applicant emailed the company's Chief Financial Officer, Luke Gundry (Mr Gundry) on 18 July 2022 requesting additional documents as the applicant was now eligible to apply for Permanent Residency. She stated, the applicant was extremely nervous about the process, the deadlines, and the outcome of his application for Permanent Residency.

93      Mrs Hughes said that on 7 August 2022, the applicant sent another email to Mr Gundry in which the applicant said he urgently needed to upload the documents otherwise his ''visa application will be declined.'' Mrs Hughes attached a copy of this email exchange to Exhibit R1. Mrs Hughes said this process was extremely time-consuming and required her input, as well as assistance from Mr Gundry, the respondent’s company secretary and its accounting firm.

94      Mrs Hughes stated that on 15 November 2022, the applicant resigned from the company and requested that his last day of employment be 20 January 2023. Mrs Hughes confirmed the parties agreed that the applicant’s last day of employment would be on 31 December 2022.

95      In her statement Mrs Hughes denied that she had made an offer to increase the applicant’s annual base salary to $140,000 per annum plus superannuation. She also said that money was not an issue for the business at that point in time. Mrs Hughes said that money was also not a problem for the whole period of the applicant's claim and if an amount was owed, it would have been paid.

96      Mrs Hughes said the only reason the respondent did not issue a new contract when the applicant was given the New Job Role is because the applicant made this request. She said she was prepared to agree to this because the applicant’s base salary was not being changed and it would have made no difference to the business by agreeing to this.

97      Mrs Hughes denied the May 2022 letter was an extension of the applicant's contract. She stated that Mr Gundry drafted this letter as part of an audit process for bookkeeping purposes. Mrs Hughes acknowledged the letter was poorly worded, but said it was not issued for HR purposes. Mrs Hughes said it was only issued to satisfy the auditors.

98      Mrs Hughes said the discussions referred to in the second sentence of the May 2022 letter were all about the payment being performance-based. She said she had a vigorous debate with Mr Hughes about whether the applicant had earned the first bonus payment. Mrs Hughes said that Mr Hughes was of the opinion the applicant’s performance did not justify the payment. Mrs Hughes said that she was of the view that if the company did not pay it, the applicant would not rise to the level the business needed him to.

Mai Hughes cross-examined

99      The applicant cross-examined Mrs Hughes. He asked Mrs Hughes about KPIs and whether there was a document that outlined the quarterly targets that he was required to meet to receive a quarterly payment. Mrs Hughes said there was a document that contained this information.

100   The applicant then asked Mrs Hughes whether the document had been provided to the Commission, to which Mrs Hughes responded that it had not been provided because the applicant had not requested the document.

101   The applicant questioned Mrs Hughes about the May 2022 letter. Mrs Hughes admitted that she had instructed Mr Gundry to write the letter and that she did not pay much attention to the contents of it. When the applicant asked Mrs Hughes about why details of the discussion between herself and Mr Hughes which is referred to in the letter were not provided, Mrs Hughes said:

“We didn’t think it would be used as a legal matter at the time.”

102   Mrs Hughes maintained the May 2022 letter was drafted for bookkeeping and not for HR purposes and that she trusted Mr Gundry to have all the information that he required in the document.

Observations about the evidence

103   This is not a matter where I was able to neatly prefer the evidence of one witness over the other. This was also not a case where pursuant to the rule in Browne v Dunn (1893) 6 R 67, the parties directly challenged critical parts of the other’s evidence that was in conflict.

104   The rule in Browne v Dunn requires parties in cross-examination to put to their opponent’s witnesses, the nature of the case upon which they rely to contradict that witness’s evidence: Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation (Cth) [1983] NSWLR 1 at [16]. This was absent from Mrs Hughes’ cross-examination of the applicant and his cross‑examination of Mrs Hughes.

105   On some matters, I opted to prefer the evidence Mrs Hughes gave instead of the applicant’s because it was more plausible and because the applicant had no recollection of the matter that was being asserted. An example of this was in the applicant’s acceptance of the New Job Role which I will deal with the findings below. I also accepted the applicant held concerns about his immigration status which affected the way in which the parties agreed to vary the applicant’s contract of employment.

106   There were instances where I opted to prefer the applicant’s testimony ahead of the respondent’s evidence, particularly where the applicant’s evidence was supported by documentary evidence. From my assessment of the witnesses and the evidence they gave, this case was very much a matter where it was reasonable to conclude the truth of what the witnesses said fell somewhere in the middle.

107   It is worth noting the respondent was given ample opportunity to provide evidence in support of its case, including by way of documents that established the payment of the quarterly amounts in issue, were either subject to or conditional upon, the applicant meeting particular KPIs. Despite the programming directions that I referred to earlier, the respondent did not discover any documents of this type. Such material could have also been included as attachments to Mrs Hughes’ witness statement but were not.

108   If as the respondent submitted, there was documentary evidence available that supported its case, the documents should have been disclosed. In the absence of this material, I am permitted to deal with this matter on the documents that were filed.

Mr Hughes

109   Although there was evidence that Mr Hughes was involved in decisions that ultimately affected the applicant’s employment with the respondent, including decisions regarding payment, Mr Hughes declined to submit a witness statement in the proceedings before the Commission.

110   As a result, it was open to me to draw inferences against the respondent in line with the principle in Jones v Dunkel [1959] HCA 8, because of the respondent’s failure to call Mr Hughes to corroborate the evidence Mrs Hughes gave on matters where there was a conflict in the parties’ evidence.

111   The most significant conclusion I have reached in this regard is that Mr Hughes was not a party to the discussion between the applicant and Mrs Hughes in October 2021 that resulted in a variation to the applicant’s contract of employment.  Although there was no evidence as to the exact date or where this discussion occurred, I have been able to make findings on what the applicant and Mrs Hughes agreed to during this discussion.

Consideration – the terms of the applicant’s contract

112   From the evidence, which includes the documents I refer to, as well as witness testimony from the applicant and Mrs Hughes, I have been able to reach a series of findings that are set out chronologically in the paragraphs that follow.

113   When the applicant commenced his employment with the respondent, it was in the position of Advertising Manager. The terms of his employment were contained in the first contract.

114   In addition to the first contract, the applicant was given a Job Guideline for the position of Advertising Manager. This document was attached to the Hughes Statement and marked as “ALAIN 2” (AM Job Role).

115   Clause 1.2 of the first contract states the applicant’s employment was conditional upon him securing a TSS 482 Visa. While Mr and Mrs Hughes both submitted the respondent had agreed to sponsor the applicant so he could secure a visa to live and work in Australia, thereby doing him a favour, the relationship was not entirely one way.

116   It is reasonable to conclude that by sponsoring the applicant’s visa application, the respondent was able to secure an employee with a skill set it required, that was in short supply.

117   Initially, the applicant was paid a salary of $70,000 per annum plus superannuation. Although the contract does not contain any specific terms on KPIs, at cl 5.2 it does state the following:

5.2. Your base salary will be reviewed annually and any increase in your base salary is at the discretion of My Foodie Box. Reviews are based upon individual performance, My Foodie Box's financial performance and economic indicators.

Varying the contract

118   The applicant’s contract contained a provision dealing with a process to be followed when varying the contract. Clause 24 of the first contract (Variation) relevantly states as follows:

24. Variation

24.1 This letter of appointment may only be varied by written agreement between parties except as otherwise provided for in this letter.

119   On 19 April 2021 the applicant’s salary was increased from $70,000 p/a to $100,000 per annum. I accept a change was made to the first contract in accordance with cl 24, with the April 2021 variation.

Second contract

120   On 19 August 2021 the applicant signed the second contract. It was prepared so the applicant could apply for a TRTS 186 Visa. This much is clear from the amendment that was made to cl 1.2 which changed the visa type the applicant had to have as a condition of his employment.

121   The second contract incorporated the salary increase from the April 2021 variation. Except for amendments to include applicant’s increased salary and the change in visa, the second contract is in the same terms as the first contract.

October 2021 Discussions

122   In or around October 2021, the applicant and Mrs Hughes held a discussion in which they agreed to change the applicant’s duties and his job title from Advertising Manager to Director of Business Development (October 2021 discussions). They also agreed to increase the applicant’s remuneration in terms which I will outline.

123   While the terms of the second contract continued to apply, it is reasonable to conclude that during the October 2021 discussions the parties agreed to amend the applicant’s contract of employment a third time. This is despite cl 24 of the second contract, which required that any variations to the letter of appointment be made in writing. There were two changes the parties agreed to.

Change in job role and title

124   The first was a change to the applicant’s duties and job title. By signing the New Job Role, it is reasonable to conclude the applicant and Mrs Hughes had pursuant to cl 24 of the second contract, agreed in writing to vary the second contract in much the same way the parties had agreed to increase the applicant’s salary with the April 2021 variation.

125   I accept the applicant agreed to the change in duties and position even though in cross-examination he said he could not recall signing the New Job Role with an electronic signature or being a party to the email exchange with Mrs Hughes that I have referred to at paragraph [73] as Exhibit R2.

126   From my analysis of both the AM Job Role and the New Job Role including the ordinary words used to describe the two different job titles, it is reasonable to conclude, the applicant had not only accepted an increase in responsibilities, but he had agreed to work in a role that was different to the position of Advertising Manager.

Change in remuneration

127   The second change was to the applicant’s remuneration. It is open to find a reasonable person in the position of the parties, at the time they agreed the applicant would take on the New Job Role, would have also agreed to a corresponding increase the applicant’s remuneration.

128   From the evidence, it is reasonable to conclude, the applicant and Mrs Hughes agreed to a change in the applicant’s remuneration during the October 2021 discussions but it was as simple as an agreement the applicant would, in exchange for a payment of $10,000 per quarter, take on the New Job Role.

129   In her evidence Mrs Hughes did not dispute she agreed to increase the applicant’s remuneration. She however said the payment of the $10,000 per quarter amounts would be conditional upon the applicant meeting KPIs or other performance targets.

130   While the effect of this arrangement had the potential to increase the applicant’s annual earnings to $140,000 per annum (which was to the level the applicant described), I do not accept the parties made an agreement to increase the applicant’s base annual salary as the applicant claimed in his evidence. Clause 24 of the second contract required this part of the applicant’s second contract (cl 5.1) to be amended, which it was not. However, the failure of the parties to follow the process under cl 24 to make this change is not the end of the matter.

131   Noting Mrs Hughes’ concession that she had agreed to pay the applicant the further sums of $10,000 per quarter it does not matter the parties did not strictly comply with cl 24 of the second contract. That said and as the parties had on two prior occasions diligently complied with this provision, there must be a plausible explanation as to why they departed from this practice. This is also relevant to the findings I have made on the terms of the change in remuneration they agreed to.

Why Clause 24 was not followed

132   As to why the applicant’s second contract was not amended in accordance with cl 24, there are two matters that are relevant to the context in which the applicant agreed with Mrs Hughes to take on the New Job Role.

133   First, the capacity of the business to pay the quarterly payments to the applicant was not in issue at the time the parties agreed to vary the applicant’s contract of employment. Mrs Hughes gave evidence to this effect. It is therefore reasonable to conclude that per quarter performance targets in the context of a contract that already provided for annual salary reviews were not specifically discussed.

134   Second, it is clear from the evidence that neither party at the time the variation was made, was eager to formally change the applicant’s contract, out of a concern that it may have affected the applicant’s immigration status, thereby resulting in further costs and delays.

135   While the applicant said he had obtained advice from his migration agent that a change in roles and remuneration would not have affected his immigration status, he was honest in stating that changing his job title would have implied submitting a new visa nomination for the company, costing time and money. Mrs Hughes described the process of applying for the applicant’s TRTS 186 Visa as “time consuming.”

136   It is reasonable in the circumstances to conclude the potential for both parties to incur further costs and delays associated with the migration process is what prompted the parties to depart from the usual practice the parties had previously followed, as contemplated in cl 24 of the second contract. I accept the parties instead opted for a less formal arrangement. Unfortunately for the parties, this departure from process carried with it, potential consequences for both that have since eventuated.

Were the quarterly payments subject to KPIs?

137   The first of these consequences was in relation to whether the payment of the quarterly amounts was subject to the applicant meeting particular KPIs. This consequence was borne by the respondent.

138   As indicated, it is reasonable to find the change in remuneration the applicant agreed to with Mrs Hughes was as simple as an agreement the applicant would, in exchange for a payment of $10,000 per quarter, take on the New Job Role.

139   Proof of this variation to the applicant’s contract of employment was in part established with the May 2022 letter. It is reasonable to conclude the May 2022 letter is post contractual conduct of a type that established the applicant’s contract of employment was varied. However, the extent to which this letter may be relied upon is limited because it was drafted after the applicant had agreed to take on the New Job Role and would have been influenced by the subjective views that Mr and Mrs Hughes held on what they thought they had agreed to.

140   While I accept the May 2022 letter may have been prepared for auditing purposes, a reasonable person would expect that an explanation for expenditure a CEO provides to an auditor, will be good for all purposes, meaning that any payments to the applicant would have to be justified by reference to agreed contractual terms. The evidence is that Mr Gundry prepared the May 2022 letter on the information and instructions Mrs Hughes gave him. She also signed the letter.

141   There was no evidence before the Commission, whether documentary or otherwise that supported the respondent’s claim the payment of the quarterly amounts would be conditional upon the applicant meeting KPIs or other performance targets.

142   Although the May 2022 letter is badly worded and it incorrectly describes the applicant’s job title (which was changed when the applicant accepted the New Job Role) the May 2022 letter does state the applicant is entitled to a $10,000 payment, every three months served, as discussed with Mai and Bryan Hughes.

143   It is reasonable to conclude that what was intended by the words ‘as discussed with Mai and Bryan Hughes’ is what Mr Gundry had confirmed with Mr and Mrs Hughes; the applicant would be paid $10,000 every three months served. If the respondent had intended the quarterly amounts would be conditional upon the applicant meeting KPIs, Mrs Hughes would have told Mr Gundry to include this information in the May 2023 letter which she signed.

144   I do not consider the words ‘as discussed with Mai and Bryan Hughes’ in the May 2022 letter as referring to what happened during the October 2021 discussions. That is because Mr Hughes was not involved in these discussions which resulted in these changes to the applicant’s contract of employment.

145   I also find Mrs Hughes’ evidence that I set out at paragraph [98] about her discussions with Mr Hughes on whether the applicant should have received the payment for the January to March 2022 quarter is not relevant. That is because this conversation is inadmissible evidence of the respondent’s post contractual conduct and represents Mr and Mrs Hughes’ subjective views on how the applicant’s contract of employment should have been interpreted.

146   Noting these findings I have concluded the applicant was entitled to receive payment for the April to June 2022 quarter. As the applicant completed this quarter, the respondent should have paid him $10,000 to which he was entitled under his contract of employment.

Part performance

147   In August 2021 and while the applicant was away on leave, the respondent decided to remove the applicant from the New Job Role and to reassign the duties associated with the role of Director of Business Development to another employee.

148   While there was some argument during the hearing as to whether the applicant was demoted, I accept the applicant was in effect returned to his previous position as an Advertising Manager when the duties associated with the role of Director of Business Development were re-assigned. This also happened before the applicant could complete the July-September 2022 quarter.

149   The difficulty this presented for the applicant is that the change to his contract of employment that he agreed to with Mrs Hughes during the October 2021 discussions, made no provision for a partial payment for an incomplete quarter. This is the second consequence of the parties not adhering to cl 24 of the second contract, which is borne by the applicant.

150   To be entitled to partial payment for the July – September 2022 quarter, the applicant and Mrs Hughes would have had to have either:

i.  Agreed in writing under cl 24 of the contract to increase the applicant’s base annual salary to $140,000 p/a thereby allowing him to receive partial payments per week in consideration for the change in duties; or

ii.  Agreed during the October 2021 discussions the applicant would be paid $10,000 per quarter or pro-rata for a part of a quarter served.

151   There is no evidence the applicant and Mrs Hughes in their discussion considered what would happen if, the applicant for some reason, did not complete a quarter. From the evidence, the agreement between the applicant and Mrs Hughes was as simple as he would take on the New Job Role in exchange for an extra $10,000 per quarter.

152   Without evidence the applicant and Mrs Hughes had agreed he would receive a proportion of the $10,000, where he only completed part of the quarter, I am unable to conclude the applicant is entitled to the proportional amount he has sought.

153   In addition, the text of the May 2022 letter (which the applicant relies upon) does not support this part of the applicant’s claim either. The May 2022 letter specifies the payment will be $10,000 every three months served.

154   As the applicant was removed from role of Director of Business Development before the July ‑ September 2022 quarter was completed and his tenure in the New Job Role ceased, the applicant’s entitlement to a part payment for the quarter does not arise.

Conclusion

155   For all the reasons set out in the preceding paragraphs I have determined the applicant was denied a contractual entitlement that he was entitled to receive when the respondent declined to pay him $10,000 for the April – June 2022 quarter.

156   Accordingly, I will make an order the respondent pay the applicant the sum of $10,000. The balance of the claim will otherwise be dismissed.