2019 WAIRC 00210
WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT


CITATION : 2019 WAIRC 00210

CORAM
: INDUSTRIAL MAGISTRATE M. FLYNN

HEARD
:
WEDNESDAY, 12 DECEMBER 2018, WEDNESDAY, 17 OCTOBER 2018

DELIVERED : WEDNESDAY, 8 MAY 2019

FILE NO. : M 89 OF 2017

BETWEEN
:
DEBORAH AMBROSINI
CLAIMANT

AND

GRANDBRIDGE LIMITED
FIRST RESPONDENT

DAVID BREEZE
SECOND RESPONDENT

CatchWords : INDUSTRIAL LAW – Alleged contravention of section 323 of the Fair Work Act 2009 (Cth) – Whether a termination payment that is payable under a contract of employment is 'an amount payable in relation to the performance of work' per section 323 of the Fair Work Act 2009 (Cth) - Alleged non application of section 323 of the Fair Work Act 2009 (Cth) to contract created before the Act commenced - Whether variation of written contract of employment – Relevant to long service leave, whether any interruption of 'continuous employment' is proved – Re-employment after a termination of employment ‘on the ground of slackness of trade’ and whether 'continuous employment' under the Long Service Leave Act 1948 (WA) – Whether term of contract of employment providing for 'statutory entitlement' to long service leave subject to 'serious misconduct' provisions of Long Service Leave Act 1948 (WA) - Whether grounds at common law for summary dismissal of company accountant who does not disclose a conflict between duty to employer and duty as a director to a third party - Whether express terms of contract of employment displace the common law right to summarily dismiss the employee – Alleged non application of section 90(2) of the Fair Work Act 2009 (Cth) when employment summarily terminated for cause
Legislation : Fair Work Act 2009 (Cth)
Long Service Leave Act 1958 (WA)
Corporations Act 2001 (Cth)
Evidence Act 1906 (WA)
Case(s) referred to
in reasons : Heugh v Central Petroleum Ltd [No 5] [2014] WASC 311
Habitat 1 Pty Ltd v Formby [No 2] [2017] WASC 33
Concut Pty Ltd v Worrell [2000] HCA 64
Re Harrison; Ex parte Hames [2015] WASC 247
Sharrock v Downer EDI Mining Pty Ltd [2018] WAIRC 377
Wright v Bechtel Construction (Australia) Pty Ltd [2018] WAIRC 00887
Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Limited [2014] FCA 878
Gayle Balding, Workplace Ombudsman v Liquid Engineering 2003 Pty Ltd [2008] WAIRComm 350
Cuzzin Pty Ltd v Grnja [2014] SAIRC 36
Qube Ports Pty Ltd v Maritime Union of Australia [2018] FCAFC 72
Stagnitta v Bechtel Construction (Australia) Pty Ltd [2018] WAIRC 886
GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50
Elvidge Pty Ltd v BGC Constructions Pty Ltd [2006] WASCA 264
Commissioner of Taxation (Cth) v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35
Bruce v A W B Ltd [2000] FCA 594
Commonwealth Bank of Australia v Barker [2014] HCA 32
Blyth Chemicals Ltd v Bushnell [1933] HCA 8
Blackmagic Design Pty Ltd v Overliese [2011] FCAFC 24
Maguire v Makaronis [1997] HCA 23
Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17
R v Byrnes & Hopwood [1995] HCA 1
North v Television Corp Ltd (1976) 11 ALR 599
Sent v Primelife Corporation Ltd [2006] VSC 445
Carter v Dennis Family Corporation Pty Ltd [2010] VSC 406
Mair v Rhodes & Beckett [2018] VSC 132
Heugh v Central Petroleum Ltd [No 5] [2014] WASC 311
Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Limited [2014] FCA 878
Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908
Coote v Mainline Access Pty Ltd & Anor (No.3) [2019] FCCA 383
Hughes v Mainrange Corporation Pty Ltd (No.2) [2009] FMCA 1044
Robertson v City of Nunawading [1973] VicRp 81
Mendonca v Chan & Naylor (Parramatta) Pty Ltd & Anor [2014] FCCA 1042
Athanassopoulos v Enviro Systems Renewable Resources Ltd and Chambers [2012] SAIRC 56
Result : Claim proven in part
REPRESENTATION:

CLAIMANT : MR S. HEATHCOTE (OF COUNSEL)
RESPONDENT : MR D. HOWLETT (OF COUNSEL) AS INSTRUCTED BY ENSIGN LEGAL

REASONS FOR DECISION
1 Grandbridge Limited (the Company) is in the business of setting up and investing in other companies, including MEC Resources Ltd (MEC). David Breeze (Mr Breeze) is the managing director of the Company and, as a result of his substantial shareholding, effectively controls the Company. On 22 November 2016, Debora Ambrosini (Ms Ambrosini) ceased working as the chief financial officer for the Company. On that day, Mr Breeze handed Ms Ambrosini a letter stating that her employment with the Company ‘was terminated for cause, effective immediately’ (the Termination Letter). The Termination Letter alleged many and various instances of discreditable conduct of Ms Ambrosini. One of the allegations is admitted; Ms Ambrosini had engaged in conduct whose effect was to minimise the chance of Mr Breeze becoming aware of the manner in which the Company would vote by proxy in a forthcoming meeting of MEC (Ms Ambrosini’s Secret Conduct).
2 Ms Ambrosini’s Secret Conduct was the product of Ms Ambrosini and Mr Breeze each being involved in the management of the Company and MEC. Mr Breeze and Ms Ambrosini were directors of both the Company and MEC. Mr Breeze also benefitted personally from a contract with MEC (Mr Breeze’s MEC Contract)1. Ms Ambrosini (and others involved with MEC) believed that it was in the interest of MEC that Mr Breeze’s MEC Contract be terminated. The Company’s shareholding in MEC was a potential impediment to their proposed termination of Mr Breeze’s MEC Contract, given Mr Breeze’s control of the Company. Ms Ambrosini’s Secret Conduct had the objective of removing this impediment by arranging for the Company, without the knowledge of Mr Breeze, to vote by proxy in a forthcoming meeting of MEC on resolutions that would ultimately secure the termination of Mr Breeze’s MEC Contract. Upon Mr Breeze becoming aware of Ms Ambrosini’s Secret Conduct, he immediately delivered the Termination Letter.
3 Ms Ambrosini commenced work for the Company in January 2008, over eight years before she was handed the Termination Letter. Before she commenced work for the Company, Ms Ambrosini and Mr Breeze (on behalf of the Company) each signed a document entitled, ‘Employment Agreement’ (the Employment Document).
4 Clause 12 of the Employment Document sets out the grounds for termination of the agreement and the procedure to be followed if a party proposes to terminate the agreement. The Company may terminate the agreement ‘because of any serious or persistent breach of any provision of the Employment Document or because of ‘grave misconduct or wilful neglect of duties’ (the Clause 12.1 Termination Grounds), if ‘the breach is not remedied within 14 days of the receipt of written notice from the Company to the Employee to do so’ (the Clause 12.1 Notice Requirement). The Clause 12.1 Termination Grounds and the Clause 12.1 Notice Requirement will, together, be referred to as ‘the Clause 12.1 Process’. Clause 13 of the Employment Document provides for employee entitlements upon termination ‘pursuant to clause 12’. Those entitlements (the Clause 13 Entitlements) are stated to be: termination pay of one month pay for each of service; ‘long service leave entitlements on a pro rata basis’ and accrued annual leave.
5 Ms Ambrosini argues that the effect of clauses 12 and 13 of the Employment Document is that the Clause 13 Entitlements are payable to her notwithstanding Ms Ambrosini’s Secret Conduct (or any other proven allegations of the Company) may have constituted a serious or persistent breach of any provision of the Employment Document or because of grave misconduct or wilful neglect of her duties. Ms Ambrosini calculates her Clause 13 Entitlements as follows: termination pay of $93,840 (Alleged Termination Pay Entitlement); accrued long service leave of $19,531 (Alleged LSL Entitlement); and accrued annual leave of $4,015 (Alleged Annual Leave Entitlement).
6 Ms Ambrosini relies upon the Employment Document, in conjunction with the Fair Work Act 2009 (Cth) (FW Act), to seek the following remedies:
a. In respect of each of the Clause 13 Entitlements, Ms Ambrosini seeks a pecuniary penalty order against the Company under s 546 of the FW Act, on the grounds of a contravention of s 323(1) of the FW Act, a civil remedy provision stating that an employer must pay to an employee ‘amounts payable in relation to the performance of work’;
b. In respect of the Alleged Annual Leave Entitlement, Ms Ambrosini also seeks a pecuniary penalty order against the Company under s 546 of the FW Act, on the grounds of a contravention of s 90(2) of the FW Act, a civil remedy provision stating that a sum equivalent to untaken paid annual leave must be paid to an employee ‘when the employment ends’;
c. Ms Ambrosini also seeks pecuniary penalty orders against Mr Breeze under s 550 of the FW Act, alleging that he was involved in each of the above contraventions of the FW Act of the Company;
d. In respect of the Alleged LSL Entitlement, Ms Ambrosini also seeks an order under s 545(3) of the FW Act that the Company pay to Ms Ambrosini $19,531, being her accrued long service leave entitlements that remain unpaid.
7 The Company has not made any payments to Ms Ambrosini on account of the Alleged Termination Pay Entitlement or the Alleged LSL Entitlement. The Company has made two payments to Ms Ambrosini on account of the Alleged Annual Leave Entitlement, being $871 on 24 January 2017 and $2,924 on 21 June 2017.
8 The Company response to Ms Ambrosini’s claim to remedies against the Company arising from the Alleged Termination Pay Entitlement is as follows:
a. The contract of employment created by the Employment Document was varied by an oral agreement made in June 2008 to remove a right to termination pay and replace it with a right to income protection insurance (Employment Document Variation Argument);
b. The contract of employment created by the Employment Document terminated upon Ms Ambrosini taking up employment at the end of September 2014 with the accountancy firm, Nexia (the Nexia Employment). The terms of the contract of employment that arose upon Ms Ambrosini recommencing employment with the Company in November 2014 did not include the right to termination pay contained in the Employment Document (Nexia Employment Argument);
c. By the Termination Letter, the Company exercised the right at common law to terminate the contract of employment with Ms Ambrosini for conduct that is destructive of the mutual trust between employer and employee and such right was not subject to express contractual terms found in the Employment Document (Common Law Termination Argument);
d. Section 323(1) of the FW Act creates an obligation with respect to an ‘amount payable in relation to the performance of work’ and is not contravened by the failure to make a payment to Ms Ambrosini of ‘termination pay’ as provided in the Employment Document because ‘termination pay’ is not concerned with the performance of work (Section 323 FW Act Performance of Work Argument);
e. Section 323(1) of the FW Act does not apply to an obligation created by the term of a contract of employment created before the FW Act commenced on 7 April 2009. The parties signed the Employment Document, containing the Alleged Termination Pay Entitlement, in November 2007 (Section 323 FW Act Commencement Argument).
9 The Company’s response to Ms Ambrosini’s claim for remedies against the Company arising from the Alleged LSL Entitlement is as follows:
a. Ms Ambrosini has no entitlement because clauses 13.1(c) and 7(d)(ii) of the Employment Document have the effect of linking the Alleged LSL Entitlement to the Long Service Leave Act 1958 (WA) (LSL Act) and the LSL Act precludes a long service entitlement where employment is terminated for ‘serious misconduct’.2 Ms Ambrosini takes issue with the Company’s interpretation of the effect of the Employment Document, arguing that the document has the effect of linking the Alleged LSL Entitlement to so much of the LSL Act as proscribes the minimum period of continuous employment before an entitlement to a long service entitlement arises3 and does not incorporate the disentitling provisions of the LSL Act on ‘serious misconduct’. The conflicting views on the effect of the Employment Document will be referred to as the ‘Long Service Leave Construction Issue’;
b. To rely upon the Nexia Employment Argument, with the result that Ms Ambrosini had not completed ‘at least 7 years of continuous employment’ by the Company and, accordingly, has no ‘statutory entitlement’ to long service leave as required by the Employment Document;
c. To rely upon the Section 323 FW Act Commencement Argument.
10 The Company response to Ms Ambrosini’s claim for remedies against the Company arising from the Alleged Annual Leave Entitlement is as follows:
a. The payments made to Ms Ambrosini on account of the Alleged Annual Leave Entitlement (noted above as $871 on 24 January 2017 and $2,924 on 21 June 2017) discharged any obligation upon the Company arising from the Employment Document (the ‘Accrued Annual Leave Obligation has been Discharged Argument’);
b. Insofar as Ms Ambrosini’s claim is for a pecuniary penalty order founded upon s 90(2) of the FW Act, the statutory obligation to pay an employee untaken paid annual leave ‘when the employment ends’ does not arise where employment is summarily terminated (the Section 90(2) FW Act Construction Argument).
11 Mr Breeze has not lead any evidence (or made any submission) to dispute Ms Ambrosini’s allegation that, insofar as her allegations of contraventions of the civil remedy provisions of the FW Act by the Company are proven, Mr Breeze was ‘involved’ in those contraventions such that, as a result of s 550 of the FW Act, he is also liable for those same contraventions.
12 This claim will be determined according to the law governing the jurisdiction, practice and procedure of this court. The relevant legal principles are identified and summarised in an endnote.4
Employment Document Variation Argument
13 Ms Ambrosini’s claim for pecuniary penalty orders for non-payment of the Alleged Termination Entitlement is based upon clause 13 of the Employment Document providing for ‘termination pay equal to one month’s base salary for each year of completed service’. She alleges that clause 13 was a term of her contract of employment and that the Company is in breach of the clause by failing to make a payment of $93,840 required by the clause (calculated by reference to her eight years of completed service between January 2008 and November 2016).
14 The Company takes issue with Ms Ambrosini’s claim that clause 13 of the Employment Document was a term of her contract of employment as at November 2016. The Company accepts that the contents of the Employment Document, including clause 13, were the terms of Ms Ambrosini’s contract of employment when she commenced work in January 2008. However, Mr Breeze gave evidence of a (later) variation to that contract, initiated by Ms Ambrosini and concluded in writing around June 2008 (the Alleged Contract of Variation). It was said that the effect of the Alleged Contract of Variation was to remove Mr Breeze’s entitlement to ‘termination pay equal to one month’s base salary for each completed year of service’ as stated in clause 13.1(d) of the Employment Document and to substitute an entitlement to salary continuity insurance. Mr Breeze stated that, although ‘the written variation is missing’, he had a conversation with Ms Ambrosini in June 2015 (and other dealings) from which he drew the inference that Ms Ambrosini had, in June 2008, executed a written form of the Alleged Contract of Variation.
15 Ms Ambrosini denied the existence of any agreement to vary the terms the contract of employment found in the Employment Document. She gave evidence of her unsuccessful attempts, at the initiative of Mr Breeze, to persuade three other employees of the Company to remove their entitlement to termination pay and to substitute income protection insurance.
16 The express terms of the contract of employment between Ms Ambrosini and the Company, as at January 2008, are found in the Employment Document. Notwithstanding clause 16 of the Employment Document providing that alteration of those terms must be in writing and signed by the parties, it was open to the parties to agree upon a variation to the contract of employment (and consideration) without compliance with the formal requirements of clause 16.5 The onus is on the Company, propounding the existence a subsequent contract varying the terms of the original contract of employment, to prove the existence of the Alleged Contract of Variation.6 The Company has failed to discharge this onus.
17 The direct evidence of the making of the Alleged Contract of Variation is the conflicting evidence of Mr Breeze and Ms Ambrosini of conversations between themselves in the first half of 2008. Mr Breeze’s evidence is cogent and plausible. It is also lacking in detail as to the particulars of the conversation. Ms Ambrosini’s evidence is also cogent and plausible. She offers some details in support of her account, including the names and reactions of Company employees with whom she negotiated on the issue. There is no reason to prefer to the evidence of Mr Breeze over Ms Ambrosini on conversations held over 10 years ago and nothing said below about the creditability and reliability of each of them on other issues effects my conclusion in this regard.
18 The circumstantial evidence relied upon by the Company to support an inference of the making of the Alleged Contract of Variation in June of 2008 is not persuasive. The daybook note of Ms Ambrosini in March 2008, the communications from Ms Ambrosini to Mr Breeze in March and April 2008 and the communications from AMP in June 2008 on the subject of income protection insurance are consistent with the evidence of both Mr Breeze (on Ms Ambrosini benefitting from proposed income protection insurance) and Ms Ambrosini (on her role in arranging income protection insurance for other employees of the Company). The evidence of the dispute concerning Melodie Tyrer’s entitlement to termination pay and the evidence of the terms of the contract of employment of other employees of the Company is similarly equivocal. I am unable to infer from the conduct of the parties, the creation of the Alleged Contract of Variation.7
19 The Company asserts that the Alleged Contract of Variation was done in writing. However, it has not produced a single document that evidences any term of the variation or makes reference to the existence of the Alleged Contract of Variation.
20 The Company has failed to satisfy me that clause 13 of the Employment Document providing for ‘termination pay equal to one month’s base salary for each year of completed service’ is not a term of Ms Ambrosini’s contract of employment.
Nexia Employment Argument
21 The remedies sought by Ms Ambrosini arising from the Alleged Termination Entitlement and the Alleged LSL entitlement assume that Ms Ambrosini was continuously employed by the Company between January 2008 and November 2016, i.e. for eight years and 10 months. For example, the Alleged LSL Entitlement is derived, via clause 7 of the Employment Document, from the ‘statutory entitlement’ found in the LSL Act. The LSL Act provides for a (proportionate) entitlement to long service leave where an employee ‘has completed at least 7 years of continuous employment’.8
22 The Company takes issue with the assumption that Ms Ambrosini was continuously employed between January 2008 and November 2014, alleging that, by oral agreement, the contract of employment was terminated at the end of September 2014. The Company asserts that Ms Ambrosini was re-employed at the start of November 2014 on terms that did not include clauses 12 and 13 of the Employment Document on, respectively, ‘Termination’ and ‘Payment on Termination’. Ms Ambrosini denies the existence an agreement to terminate her contract of employment.
23 Some facts are not in dispute (or the evidence is uncontradicted and, in my view, reliable). At the end of September 2014, Ms Ambrosini ceased being paid by the Company and was paid her accumulated annual leave. She recommenced being paid by the Company at the start of November 2014. During the month of October 2014, Ms Ambrosini was engaged by an accountancy firm and auditors to the Company, Nexia. Her duties at Nexia included supplying to the Company, upon request, similar services that she had supplied to the Company as an employee, prior to October 2014.
24 There is a dispute about the effect of Ms Ambrosini’s engagement by Nexia upon her contract of employment with the Company.
25 Ms Ambrosini gave evidence of a conversation with Mr Breeze in late September 2014, initiated by her, at a time when the Company was in ‘a dire financial position.’ She stated that she proposed to Mr Breeze that the cost to the Company of her employment be reduced by an arrangement that included the following elements: the Company cease payment of her salary; the auditor of the Company, Nexia, providing the same services to the Company at a reduced cost; Nexia engage Ms Ambrosini to supply those services; Ms Ambrosini’s long service leave entitlements be preserved pending the Company re-commencing payment of her salary; the arrangement be for a temporary period until the Company was financially stable. Ms Ambrosini claimed that Mr Breeze agreed to her proposal and it commenced immediately. It is not in dispute that Ms Ambrosini arranged for payment to herself of her accumulated annual leave. She stated that she was concerned that otherwise she might not receive her accrued annual leave entitlement because of the ‘dire financial position’ of the Company and that she also wanted to cover the ‘gap’ between her last salary payment by the Company and the first payment by Nexia. Ms Ambrosini stated that her work for the Company continued without material change as to where (at the Company premises), when (most days) and how she worked (use of Company property such as telephone, computers, et cetera). She stated that, on the initiative of Mr Breeze, the arrangement ended within one month of it commencing.
26 Mr Breeze disputed Ms Ambrosini’s version of events. He gave evidence that Ms Ambrosini resigned on 30 September 2014. Mr Breeze also disputed that Ms Ambrosini regularly attended the Company premises or that he initiated the end of the arrangement.
27 The express terms of the contract of employment between Ms Ambrosini and the Company, as at September 2014, are found in the Employment Document. Notwithstanding clause 12 of the Employment Document providing a mechanism for termination of the contract of employment, including for resignation by Ms Ambrosini to be by written notice, it was open to the parties to agree upon a termination of the contract of employment without compliance with the formal requirements of clause 12. The onus is on the Company, propounding the termination of the contract by a method other than that provided for in the contract, to prove existence of the agreement to terminate the contract of employment. The Company has failed to discharge this onus.
28 There are some facts that tend to support the Company argument that Ms Ambrosini resigned: Ms Ambrosini ceased to be paid by the Company; Ms Ambrosini commenced work for Nexia; and Ms Ambrosini was paid her accrued annual leave entitlement. However, more significant to me are the following facts which are consistent with Ms Ambrosini’s evidence of an agreement to unpaid leave for an indefinite period: Ms Ambrosini gave detailed and uncontradicted evidence of the financially precarious situation of the Company; Ms Ambrosini gave detailed evidence of the content of her conversation with Mr Breeze on how she proposed that the costs of her employment ‘to come off the books’; Mr Breeze did not give details of circumstances of the alleged agreement to terminate the contract of employment other than to state that Ms Ambrosini ‘resigned’; and it is likely that, in anticipation of a recovery in the fortunes of the Company, Ms Ambrosini would propose an agreement by which she would retain her not insubstantial accrued entitlements to long service leave and to termination pay.
29 The payout of Ms Ambrosini’s accrued annual leave entitlement was, plausibly, stated by Ms Ambrosini to arise from a stated concern of the future capacity of the Company to pay her entitlements. The making of the payment did not, of itself, terminate her contract of employment. It was open to the Company to agree to make a payment of accrued annual leave notwithstanding that Ms Ambrosini was not entitled to the payment. If the Company did not agree to make the payment, and Ms Ambrosini arranged for the payment, she may have breached her contract of employment by arranging for the making of a payment to which she was not entitled. Given the circumstances in which the payment was made, such a breach would not have justified termination of the contract of employment by the Company. It was a breach of an intermediate term and the consequences were insubstantial.
30 The Company has failed to satisfy me that the contract of employment was terminated by an oral agreement made in September 2014.
31 In any event, for the purposes of the Alleged LSL entitlement, the period of ‘continuous employment’ is to be calculated by reference to the relevant provisions of the LSL Act: see clause 7 of the Employment Document on ‘statutory entitlement’. The LSL Act states that ‘continuous employment’ is taken to include ‘any termination of the employer on the ground of slackness of trade if the employee is re-employed by the same employer within a period’ of six months from the date of termination: LSL Act, s 6(2) (f),(g). If I am wrong in my conclusion above that the contract of employment was not terminated, I would hold that Ms Ambrosini’s employment was terminated by the Company at the end of September 2014 on the ground of slackness of trade and that she was re-employed within six months of termination, at the start of November 2014. It is not in dispute that it was Ms Ambrosini who initiated a change in her employment arrangements that would involve Nexia. However, where Ms Ambrosini’s evidence of the ‘dire financial position’ of the Company is uncontradicted, the proper characterisation of Mr Breeze agreeing to any initiative that Ms Ambrosini would permanently cease to work for the Company is a termination by the Company on the ground of slackness of trade.
Common Law Termination Argument
Overview
32 The Termination Letter handed to Ms Ambrosini stated that, ‘Your employment with [the Company] is terminated for cause, effective immediately’. The Company’s claim to a right to summarily dismiss Ms Ambrosini on 22 November 2016 is to be assessed by application of the ordinary principles of contract law on the right of a party to terminate a contract.9 The Company must identify the right to summarily dismiss Ms Ambrosini by reference to statute or the common law, including the common law on contract on the primacy of contractual terms that regulate termination of the contract.
33 The Employment Document does not contain an express term conferring upon the Company the right to terminate the contract in the summary manner that it purported to do on 22 November 2016. In support of the common law right to terminate the contract, the Company argues two propositions. Firstly, it is said that, in addition to the express terms of the contract, the Company enjoyed the right, implied by the common law into all contracts of employment, to summarily dismiss an employee. Secondly, that the conduct of Ms Ambrosini identified in the Termination Letter was a sufficient basis to exercise the right to summarily dismiss Ms Ambrosini on 22 November 2016 in that her conduct constituted: a breach of an obligation imposed on Ms Ambrosini by the Corporations Act 2001 (Cth) (Corporations Act) (sections 181, 182 and 183);10 a breach of her obligation as a fiduciary arising from her position as a ‘Director and senior employee’; and a breach of an implied duty of loyalty, honesty, confidentiality and mutual trust.11 As summarised by me, the two propositions present a muddled summary of the law. The following three paragraphs, and particularly the italicised proposition in the opening sentence of each paragraph, clarifies the position.
34 First, Ms Ambrosini was subject to duties. In this paragraph I identify the source and the content of the duties upon Ms Ambrosini. Duties were imposed by the Corporations Act. The content of those duties is specified by sections 181 (good faith), 182 (use of position) and 183 (use of information) of the Corporations Act (Statutory Duties).12 Duties were implied by law into the contract of employment between the parties. The duties implied by law upon Ms Ambrosini included overlapping duties of fidelity and co-operation. ‘An employee has an implied duty of fidelity to the employer not to engage in conduct which impedes the faithful performance of the employee’s obligations, or is destructive of the necessary confidence between employer and employee’ (the Fidelity Duty).13 An employee has ‘an obligation to co-operate in the doing of acts necessary to performance, or to enable the employer to secure a benefit provided by the contract’ (the Duty to Co-operate).14 The Fidelity Duty and the Duty to Co-operate will, together, be referred to as the ‘Implied Common Law Duties’. In addition, duties were cast upon Ms Ambrosini as a result of the fiduciary relationship created by Ms Ambrosini’s role as a senior executive in the Company.15 She was required to act in the interests of the Company ‘whenever exercising a power or a discretion that affected the interests of the Company in any legal or practical sense’ (the Fiduciary Duty).16 So described, it is apparent that a breach of the Fiduciary Duty is likely to also constitute a breach of the Implied Common Law Duties. The content of the Fiduciary Duty has been characterised as proscriptive and not prescriptive. The obligation upon Ms Ambrosini was not to place herself in a position of conflict between duties she owed to the Company and duties she owed to MEC.17 Informed consent of the Company following full disclosure by Ms Ambrosini was a means of Ms Ambrosini avoiding a breach of the Fiduciary Duty.
35 Secondly, the consequences a breach of a duty upon Ms Ambrosini, depended upon the source of the duty. The Corporations Act provides for civil remedies and criminal sanctions for a breach of the Statutory Duties18 This court has no jurisdiction to make those orders. However, if the same conduct that would be a breach of the Statutory Duties is also a breach of the Fiduciary Duty or the Implied Common Law Duties, the Company may rely upon any rights arising from a breach of the two last-mentioned duties.19 Subject to the terms of the contract itself (discussed in the next paragraph), the Company was entitled to immediately terminate the contract of employment if there had been a sufficiently serious breach of the Implied Common Law Duties or if Ms Ambrosini had repudiated the contract, i.e. indicated a clear absence of a willingness to perform her obligations under the contract including obligations upon her because of the Implied Common Law Duties.20 The Termination Letter would be sufficient to satisfy the common law requirements of, respectively, ‘communication’ to effect termination for breach and ‘acceptance’ to effect termination for Ms Ambrosini’s repudiation. Equitable remedies are available for any breach of a fiduciary duty.21 An appropriate equitable remedy will be fashioned according to the circumstances of the case. In circumstances where the Company has not adduced evidence of any financial loss to itself or any profit gain to Ms Ambrosini arising from an alleged breach of Fiduciary Duty, none of the available equitable remedies is relevant to the circumstances of this case excepting the equitable right to rescind a contract tainted by a breach of a fiduciary duty.
36 Thirdly, the terms of the contract of employment may qualify the right of the Company to terminate the contract and the procedure by which the Company may terminate the contract.22 The common law right to terminate a contract and the common law procedural requirements for exercise of the right to terminate, may be qualified by the terms of the contract itself: Heugh v Central Petroleum Ltd [No 5] [2014] WASC 311 [87]23; Habitat 1 Pty Ltd v Formby [No 2] [2017] WASC 33 [392]24. Ms Ambrosini argues that the terms of the contract of employment, in providing the Clause 12.1 Process, rebut the presumption in favour of the common law right of the Company to immediately terminate the contract for a sufficiently serious breach of the Implied Common Law Duties or for repudiation by Ms Ambrosini. If Ms Ambrosini is correct, the Company was required to follow the Clause 12.1 Process, giving 14 days written notice before termination. At issue is the construction of the Employment Document to determine whether the Company was required to comply with the Clause 12.1 Process before purporting to terminate the contract of employment.25 The terms of the contract of the employment on termination of the contract of employment will also be relevant to determining the appropriateness of an equitable remedy of rescission for conduct.26 Equitable rescission of the contact of employment will not be appropriate if Ms Ambrosini’s Secret Conduct is a breach of both the Implied Common Law Duties and a breach of the Fiduciary Duty and, properly construed, the contract of employment requires the Company to comply with the Clause 12.1 Process.27
37 The result of this overview of the Common Law Termination Argument is that I must now consider two issues. First, I must consider whether Ms Ambrosini’s Secret Conduct was a breach of the Implied Common Law Duties or a repudiation of the contract of employment that justified termination of the contract of employment. Secondly, I must consider whether such termination was subject to the Clause 12.1 Process and, if so, what are the consequences of the Company failing to follow that process.
Subject to the application of the Clause 12.1 Process, was summary dismissal justified?
38 The Company makes many allegations of conduct by Ms Ambrosini that is said to breach the Implied Common Law duties. For present purposes, it is sufficient to consider only the allegations concerning Ms Ambrosini’s Secret Conduct. This is because, for reasons discussed below at paragraphs 68-69, I conclude that the allegations made by the Company other than Ms Ambrosini’s Secret Conduct are either not proven or, if proven, would not justify termination of the contract of employment without following the Clause 12.1 Process.
39 Mr Breeze gave uncontradicted evidence of Ms Ambrosini’s conduct whose effect was to minimise the chance of Mr Breeze becoming aware of the manner in which the Company would vote by proxy in a forthcoming meeting of MEC. I am satisfied that Ms Ambrosini’s Secret Conduct included Ms Ambrosini failing to follow the usual process by which Mr Breeze was informed of the proposed manner of the proxy voting by the Company at a forthcoming meeting of MEC. Ms Ambrosini’s Secret Conduct also included failing to disclose to Mr Breeze that she was working on a strategy that would result in MEC terminating Mr Breeze’s MEC Contract.28 This strategy involved Ms Ambrosini being in contact with Mr Hollingsworth (a director of the Company), Mr Goh (a director of MEC), Mr Yap (a director of MEC), Ms Wiburd (an employee of the Company) and Ms Ellies (a solicitor at a law firm that was engaged by the Company).
40 The significance of Ms Ambrosini’s Secret Conduct (as particularised in the previous paragraph) is that a conflict had arisen between Ms Ambrosini’s duty to the Company and Ms Ambrosini’s duty to MEC. Ms Ambrosini, as a director of MEC, adjudged that it was in the interests of MEC that Mr Breeze’s MEC Contract be terminated. Ms Ambrosini, as a director and the chief financial officer of the Company, may also have adjudged that it was in the interests of the Company that Mr Breeze’s MEC Contract be terminated. Ms Ambrosini may or may not have been correct in respect of each of these assessments. Ms Ambrosini’s difficulty was that, on any view, the proposed termination of Mr Breeze’s MEC Contract loomed as a significant commercial event for MEC with the real prospect of a consequential impact upon the value of the Company’s investment in MEC. The Company was ‘entitled to the unbiased and independent judgment’ of the directors and senior management, including Ms Ambrosini and Mr Breeze, on decisions to be made by the Company that affected the value of its investment in MEC.29
41 As a senior employee of the Company, Ms Ambrosini was required to manage her conflicting duties to the Company and to MEC. Ms Ambrosini’s Secret Conduct had the result that her contribution, as a director and as the chief financial officer, to the decision of the Company to support the termination of Mr Breeze’s MEC Contract (via proxy voting at the MEC meeting) was not ‘unbiased and independent’. Further, it had the result that the Company was wholly deprived of Mr Breeze’s judgment on the same decision. The failure to manage those conflicting duties resulted in a breach of the Implied Common Law Duties and a breach of the Fiduciary Duty.
42 To be sure, disclosure by Ms Ambrosini to the Company of her view that the interests of the Company would be served by MEC terminating Mr Breeze’s MEC Contract would have crystallised the occasion for Mr Breeze to manage an obvious conflict between the duties that he owed the Company and his personal interest as a beneficiary under Mr Breeze’s MEC Contract. However, it was not for Ms Ambrosini to assume that Mr Breeze would not lawfully manage a conflict of duty (to the Company) and personal interest (as a beneficiary under Mr Breeze’s MEC Contract).
43 Subject to the effect of the Clause 12 Process (discussed below), it is necessary to consider whether the breach of the Implied Common Law duties was sufficient justification for the Company to immediately terminate the contract of employment.
44 A sufficiently serious breach of the Implied Common Law Duties is sufficient to immediately terminate the contract. Put another way, any conduct of an employee that is so seriously in breach of the contract that by standards of fairness and justice the employer should not be bound to continue the employment is a ground for summary dismissal of an employee.30 For example, employee misconduct by an act of dishonesty or similar conduct destructive of the mutual trust between the employer and employee is a ground for summary dismissal of an employee.
45 Repudiation of the contract by Ms Ambrosini is also sufficient justification for the Company to immediately terminate the contract. Employee conduct that is ‘incompatible with or repugnant to the essential obligations of an employee or is destructive of the relationship of good faith and confidence between employer and employee’ is repudiation of the Implied Common Law duties.31 However, mere misconduct or isolated acts of negligence, incompetence or unsuitability is not repudiation.
46 The Company bears the onus of establishing the grounds for termination of the contract, i.e. for summary dismissal.32 Findings of misconduct should not be made lightly.33 The dismissal of an employee may be justified upon grounds on which the employer did not act and of which the employer was unaware when the contract was terminated.34
47 My view is that the breach of the Implied Common Law duties by reason of Ms Ambrosini’s Secret Conduct was sufficient justification for the Company to terminate the contract of employment. (Again, this conclusion is subject the effect of the Clause 12 Process which is discussed below.) This not a case, like Concut Pty Ltd v Worrell [2000] HCA 64, of an employee dishonestly obtaining a personal benefit at the expense of an employer. Indeed, there is no credible evidence to support the assertions of Mr Breeze that Ms Ambrosini’s Secret Conduct caused a detriment to the Company or was done with the intention causing a detriment to the Company. There is also no credible evidence that Ms Ambrosini planned to obtain a personal pecuniary benefit from her conduct. Indeed, insofar as there is evidence of the state of mind of Ms Ambrosini, that evidence suggests that Ms Ambrosini believed that her conduct was in the interests of the Company. However, the state of mind of Ms Ambrosini and the absence of evidence of detriment to the Company are no answer to the objective obligation upon Ms Ambrosini to manage her conflicting duties in a manner that ensured that the Company was apprised of all information that was relevant to decisions affecting its investment in MEC. The significance of Ms Ambrosini’s Secret Conduct was fivefold.
48 First, it involved co-operation by the chief financial officer (Ms Ambrosini) and another employee of the Company (Ms Wiburd) in deception of the managing director (Mr Breeze).
49 Secondly, the deception of Mr Breeze involved subterfuge by Ms Ambrosini when communicating with Ms Wiburd and with third parties such as Mr Goh and Ms Ellies.
50 Thirdly, the subject matter of the deception was the future day-to-day management of MEC and this was a matter of significance to the business of the Company as an investor in entities that included MEC.
51 Fourthly, one by-product of the deception was that the proxy voting intentions communicated by the Company to MEC were, to the knowledge of Ms Ambrosini, the result of a process that was not approved by the managing director. The result was likely to be irreversible, as proved to be the case.
52 Fifthly, Ms Ambrosini had not availed herself of one means available to her to obviate the conflicting of duties upon her: to disclose the nature of her conflicting duties to the Company. The obligation upon Ms Ambrosini to manage her conflicting duties was a continuing obligation. It is of significance that there is evidence of Ms Ambrosini considering disclosure and choosing not to do so.35 This is evidence of an absence of a future willingness of Ms Ambrosini to perform Implied Common Law Duties.
53 Ms Ambrosini’s breach of the Implied Common Law Duties, viewed in light of the five observations above, was a sufficiently serious breach to justify Ms Ambrosini’s summary dismissal. The business of the employer involved investing in other entities. Deception by a senior employee on an issue that may impact the value of one of those investments was destructive of the relationship of good faith and confidence that was necessary for the employment relationship to continue. The same conduct (and for the same reasons,) was also evidence of a clear absence of a willingness by Ms Ambrosini to perform her obligations under the contract of employment and constituted repudiation of the contract.
54 The repudiation arose by reason of the breach, before 22 November 2016, of the ongoing obligation upon Ms Ambrosini arising from the Implied Common Law Duties and because of Ms Ambrosini’s conduct revealing a future unwillingness to perform the same obligations. The Termination Letter constituted both communication of the termination of contract for breach and acceptance of the repudiation by Ms Ambrosini. Again, these conclusions are subject the effect of the Clause 12 Process which is discussed immediately below.
Was the Company required to follow the Clause 12.1 Process when summarily dismissing Ms Ambrosini?
55 I have noted above that Ms Ambrosini argues that the terms of the contract of employment in the form of the Clause 12.1 Process rebut the presumption in favour of the common law right of the Company to immediately terminate the contract for a sufficiently serious breach of the Implied Common Law Duties or for repudiation by Ms Ambrosini. The presumption in favour of the retention of common law remedies for breach of contract is well known. In Concut Pty Ltd [23] the principle is expressed by Gleeson CJ, Gaudron and Gummow JJ as follows:
…[C]ontracts between master and servant [are] a typical class of contract in which terms will be implied by law. Such terms apply in the absence of an expression of contrary intention by the parties[. In discerning that intention, regard should be had to "the familiar principle of construction that clear words are needed to rebut the presumption that a contracting party does not intend to abandon any remedies for breach of the contract arising by operation of law". Thus, an express provision for termination for breach in certain circumstances may be regarded as designed to augment rather than to restrict or remove the rights at common law which a party otherwise would have had on breach.
56 The presumption may be rebutted by an express provision of a contract of employment that, properly construed, exhaustively identifies the grounds when the employer’s right to terminate the contract arises.36 I have noted that the Clause 12.1 Termination Grounds comprise any ‘serious or persistent breach of any of the provisions contained in’ the Employment Document and ‘grave misconduct or wilful neglect in the discharge of duties’. At issue is whether Ms Ambrosini’s Secret Conduct falls within the Clause 12.1 Termination Grounds and, if so, whether this fact precludes termination on additional grounds discussed above, i.e. breach of Implied Common Law Duties and repudiation.
57 The presumption may also be rebutted by an express provision of a contract that, properly construed, identifies the procedure that must be followed by an employer who proposes to exercise a right to terminate a contract.37 I have noted that the Clause 12.1 Notice Requirement comprises written notice to Ms Ambrosini of the alleged breach which is not remedied within 14 days. At issue is whether, on the assumption that the right to terminate the contract for breach of the Implied Common Law Duties and for repudiation has not been excluded and that Ms Ambrosini’s Secret Conduct falls within the Clause 12.1 Termination Grounds, the Company is nevertheless required to comply with the Clause 12.1 Notice Requirement.
58 Whether the Company was required to follow the Clause 12.1 Process when terminating the contract of employment by reason of Ms Ambrosini’s Secret Conduct depends upon the proper construction of the terms of the Employment Document. The general principles that apply to the construction of legal instruments, including instruments such as the Employment Document were identified in Re Harrison; Ex parte Hames [2015] WASC 247, where Beech J said at [50] – [51]:
(1) the primary duty of the court in construing an instrument is to endeavour to discover the intention of the parties as embodied in the words they have used in the instrument;
(2) it is the objectively ascertained intention of the parties, as it is expressed in the instrument, that matters; not the parties' subjective intentions. The meaning of the terms of an instrument is to be determined by what a reasonable person would have understood the terms to mean;
(3) the objectively ascertained purpose and objective of the transaction that is the subject of a commercial instrument may be taken into account in construing that instrument. This may invite attention to the genesis of the transaction, its background and context;
(4) the apparent purpose or object of the relevant transaction can be inferred from the express and implied terms of the instrument, and from any admissible evidence of surrounding circumstances;
(5) an instrument should be construed so as to avoid it making commercial nonsense or giving rise to commercial inconvenience. However, it must be borne in mind that business common sense may be a topic on which minds may differ; and
(6) an instrument should be construed as a whole. A construction that makes the various parts of an instrument harmonious is preferable.
59 The effect of the Clause 12.1 Process will be determined by words of clause 12, viewed in the context of the text of the document as a whole and taking account of the purpose of the transaction.
60 In an endnote I have undertaken a ‘clause by clause’ summary of the terms of the document.38 The Clause 12.1 Termination Grounds arise from a ‘serious or persistent breach of any of the provisions of (the) Agreement or from ‘any grave misconduct or wilful neglect of duties’. The reference to ‘provisions of the Agreement’ may be taken to as a reference to so much of the Employment Document as casts an obligation upon Ms Ambrosini, namely, clause 4 on duties of Ms Ambrosini, clause 9 on confidentiality obligations of Ms Ambrosini, clause 10 on the obligations of Ms Ambrosini with respect to discoveries and clause 11 on non-competition. The reference to ‘any grave misconduct or wilful neglect of duties’ may be taken as a reference to the duties identified in clause 4, namely, clause 4.1(a) requiring Ms Ambrosini to undertake ‘such duties as the Company assign to her’, clause 4.1(b) requiring Ms Ambrosini to comply with ‘directions given by the Company’, clause 4.1(c) requiring Ms Ambrosini to devote ‘substantially the whole of her time to the discharge of her duties’, clause 4.1(d) requiring Ms Ambrosini to conform to work hours as reasonably required, and clause 4.1(e) requiring Ms Ambrosini to carry out her duties with and not to cause any actual or potential damage to the business or reputation of the Company. The Clause 12.1 Notice Requirement has the result that the Company may not terminate the contract of employment relying upon the Clause 12.1 Termination Grounds without first giving 14 days written notice to Ms Ambrosini and Ms Ambrosini failing to remedy the breach.
61 The inclusion of ‘grave misconduct’, without qualification, as one of the alternative Clause 12.1 Termination Grounds replicates, admittedly in two words, the content of the Implied Common Law Duties, suggesting an (objective) intention by the parties that the Clause 12.1 Process apply to conduct of Ms Ambrosini that is a breach of the Implied Common Law Duties. However, nothing in the text of the Clause 12.1 Termination Grounds (or elsewhere in the Employment Document) compels a conclusion that the Clause 12.1 Process is to apply to conduct of Ms Ambrosini that constitutes repudiation of the contract of employment.
62 Conduct of Ms Ambrosini that falls within the Clause 12.1 Termination Grounds (‘serious or persistent breach of the Agreement’) may or may not, depending on the nature of the breach, constitute repudiation. However, there are four textual indications in the Employment Document suggesting an (objective) intention by the parties that the Clause 12.1 Process does not apply to conduct of Ms Ambrosini that is repudiation. The Clause 12.1 Notice Requirement reveals that the Clause 12.1 Process is predicated upon the assumption that: there has been a breach by Ms Ambrosini; the breach is capable of being remedied; and a fixed period of time (14 days) is required to remedy the breach.
63 First, the Clause 12.1 Process is inapposite where repudiation occurs in the absence of a breach of the contract of employment. I have found that Ms Ambrosini’s repudiation arose by reason of the breach, before 22 November 2016, of the ongoing obligation upon Ms Ambrosini arising from the Implied Common Law Duties and because Ms Ambrosini’s Secret Conduct revealed an unwillingness to perform, in the future, the same obligations. The Clause 12.1 Process, predicated upon the Company capable of being satisfied that Ms Ambrosini has remedied an alleged breach, is an inapposite means of addressing a Company allegation of Ms Ambrosini’s unwillingness to perform an ongoing obligation over an indefinite time period in the future.
64 Secondly, the Clause 12.1 Process is inapposite where there is repudiation by breach of the contract of employment and the breach is incapable of being remedied or, is only capable of being remedied in a time period of less than 14 days. Employee disclosure of confidential information is an example of conduct that is incapable of being remedied and, for that reason, is unlikely to attract the application of a contractual term that places an obligation upon an employer to give the employee a notice to remedy. Ms Ambrosini’s breach of the Implied Common Law Duties and the Fiduciary Duty was discovered by Mr Breeze on 21 November 2016. The breach related to Ms Ambrosini’s involvement in a proxy document of the Company for the purposes of a meeting of MEC to be held, three days later, on 24 November 2016. It is unlikely that the parties intended that the Clause 12.1 Process apply to a situation where the Clause 12.1 Notice Requirement of 14 days notice will have expired 11 days after the relevant meeting of MEC.
65 Thirdly, clause 13 of the Employment Document deals with employee entitlements following termination; the same entitlements apply upon termination for cause (for example, for one of the Clause 12.1 Termination Grounds) as apply upon termination by employee notice under clause 12.2 including remuneration ‘up to and including the date of termination’ (13.1(a)). The parties are free to so agree. However, anomalies may arise if the Clause 12.1 Process applies to repudiation. An employee may seek to avoid the obligation to give one month’s notice of termination required by clause 12.3(a) by repudiating the contract (for example, by announcing an intention not to return to the work place), in anticipation of the Company being required to comply with the Clause 12.1 Notice Requirement to give 14 days notice of remedy and to comply with the 13.1(a) obligation to pay remuneration up to and including the expiration of the 14 day notice period.
66 Fourthly, Ms Ambrosini’s entitlement, in clause 13.1(d) to ‘termination pay equal to one months (sic) base salary for each completed year of service’ is predicated upon termination ‘pursuant to clause 12’ (clause 13.1) of the Employment Document. The reference to “clause 12” may be distinguished from termination pursuant to any extant right such as repudiation.
67 My view is that, properly construed, the effect of the Employment Document is that the Company was not required to follow the Clause 12.1 Process when terminating the contract of employment on the grounds of Ms Ambrosini’s repudiation of the contract. I have already concluded that Ms Ambrosini’s Secret Conduct was evidence of a clear absence of a willingness by Ms Ambrosini to perform her obligations under the contract of employment and constituted repudiation of the contract. The Termination Letter constituted acceptance of the repudiation by Ms Ambrosini. Ms Ambrosini’s entitlements fall to be considered on the basis of such termination in accordance with the common law by the Company. The termination was not ‘pursuant to clause 12’ and there was no obligation on the Company to make the payment provided for in clause 13.1(d).
68 In addition to Ms Ambrosini’s Secret Conduct, the Company makes further allegations of conduct by Ms Ambrosini that is said to constitute a sufficiently serious breach of the Implied Common Law Duties as to justify immediate termination of the contract. Many of the further allegations have not been substantiated. There is no evidence of fraud by Ms Ambrosini by the use of Company property for personal purposes while employed and/or of theft of a Company computer by Ms Ambrosini other than assertions by Mr Breeze. Those assertions are denied by Ms Ambrosini. The same may be said of so much of the case of the Company that relies upon allegations of Ms Ambrosini having unauthorised absences from the work place by being late or taking annual leave without accrual and allegations of incompetence by conduct that was inconsistent with Company policies or involved serious errors. There is insufficient credible evidence to support those allegations.
69 One further allegation is substantiated. There is evidence of Ms Ambrosini engaging in communications with Company staff and with third parties that including comments that were disparaging of Mr Breeze. The Implied Common Law Duties did not require Ms Ambrosini to personally like the managing director of the Company. Indeed, it would be surprising if an employee did not occasionally reveal dissatisfaction about a supervisor to a fellow employee or a third party. However, in dealings with fellow employees and in business communications with third parties (for example, Company solicitors), Ms Ambrosini was obliged to refrain from gratuitous comments about the managing director that were inimical to the necessary confidence between employer and employee. Much will depend upon the nature of the comments and the context in which the comments are made. Having regard to the depth of antipathy revealed by the comments of Ms Ambrosini to fellow employees and to Ms Ellies (a solicitor), I am satisfied that those comments constitute a breach of the Implied Common Law Duties. However, the comments do not constitute a breach that amounted to repudiation. If the Company wished to terminate the employment of Ms Ambrosini by reason of those comments, it was necessary for the Company to engage the Clause 12.1 Process. It did not do so and so the disparaging comments may not be relied upon as grounds to terminate the contract of employment.
Section 323 of the FW Act Performance of Work Argument
70 Section 323(1) of the FW Act would be contravened by the Company failing to pay to Ms Ambrosini ‘amounts payable in relation to the performance of work’. The Company argues that the Alleged Termination Pay Entitlement, if proven, is an amount payable upon the end of work; it cannot be characterised as ‘an amount payable in relation to the performance of work’.
71 The Employment Document describes the relevant payment, in clause 13.1(d), as ‘termination pay’. The circumstances in which the making of the payment will arise are set out in clauses 12.1, 12.2 and 12.3. Those circumstances involve: matters affecting the suitability or the capacity of the employee to work, including a breach of the contract of the employment by the employee (12.1); a breach of the contract of employment by the employer (12.2); and notice of termination by either party (12.3). The quantum of the entitlement is to be calculated in accordance with a formula in clause 13.1(d): ‘one months base salary for each completed year of service’ (my emphasis).
72 I note that the Federal Court has held that s 323(1) of the FW Act applies to a term of contract of employment that requires an employer to pay a bonus to employee upon specified criteria being satisfied.39
73 My view is that the Alleged Termination Pay Entitlement, if proven, is an entitlement under the Employment Document to an amount payable in relation to the performance of work. It is significant to me that the entitlement is calculated by reference to the length of time that the employee has been in service of the Company i.e. performing work. It is also of significance to me that there is a nexus between the entitlement and the ‘performance of work’ in other respects. Incapacity of an employee to work triggers the entitlement under clause 12.1(e). An employee’s rights under clause 12.2 may arise because of a breach of the contract of employment by the employer that involves, ‘work’ for example, the failure of the employer to offer work. It might also be said that poor work performance by an employee, triggering an employer’s right to terminate under clause 12.1(a), constitutes a nexus between the entitlement and performance of work.
Section 323 of the FW Act Commencement Argument
74 Ms Ambrosini commenced employment with the Company in January 2008. The Company correctly observes that, accordingly, the parties obligations under a contract of employment were created before the commencement of the FW Act on 1 July 2009 and any calculation of Ms Ambrosini’s Alleged Termination Pay Entitlement and her Alleged Long Service Leave Entitlement also require reference to a period of employment before 1 July 2009. The Company also correctly observes that it is not liable for any contravention of section 323(1) of the FW Act that occurs before 1 July 2009. These observations of the Company found an argument that Ms Ambrosini’s claims, relying upon a period of work before 1 July 2009, has no statutory foundation under the FW Act and should be wholly struck out or struck out to the extent that reliance is made on any period before 1 July 2009.
75 The Company’s argument is misconceived. The plain meaning of the text of s 323(1) of the FW Act is that a contravention of the section does not occur unless and until the point in time when the Company has failed to perform the contractual obligation to make a payment to Ms Ambrosini. The date when the contractual obligation was created is of no consequence. The critical date is the date when the contractual obligation must be performed. The effect of clause 13 of the Employment Document is that the amounts the subject of Ms Ambrosini’s Alleged Termination Pay Entitlement and her Alleged Long Service Leave Entitlement did not become payable until the termination of the contract of employment in November 2016. Plainly, the word ‘payable’ in s 323(1) of the FW Act creates a provision that ‘takes account of antecedent facts and circumstances as a basis for what it prescribes for the future’; there is no occasion to consider the application of the principle against retrospectivity.40 Any contravention of s 323(1) of the FW Act that arose from the Alleged Termination Pay Entitlement and the Alleged Long Service Leave Entitlement occurred in November 2016. The fact that an obligation was created by a contract before 1 July 2009 or that a calculation of the entitlement required reference to a period before 1 July 2009 is of no legal significance.
Accrued Annual Leave Obligation has been Discharged Argument and the Section 90(2) of the FW Act Argument41
76 There is a small discrepancy between the amount claimed by Ms Ambrosini on account of her Alleged Annual Leave Entitlement ($4,015)42 and the sum of two payments made by the Company to Ms Ambrosini on account of the Alleged Annual Leave Entitlement, $871 on 24 January 2017 and $2,924 on 21 June 2017 (total being $3,795). The state of the evidence does not allow me to reconcile the discrepancy. It is sufficient to state that, having regard to the absence of evidence of Ms Ambrosini to the effect that, as at the date of trial, any amount remains outstanding to her on account of accrued annual leave and also having regard to the evidence of Mr Breeze that all obligations have been discharged, I am not satisfied that the Company has an obligation to make any further payments to Ms Ambrosini on account of accrued annual leave.
77 Ms Ambrosini argues that, in any event, a pecuniary penalty order should be made because of the Company’s belated discharge of the Alleged Annual Leave Entitlement. Ms Ambrosini’s employment ended in November 2016. Her claim was filed in this court on 29 May 2017. The Company’s final payment to her was on 21 June 2017. The Company’s answer to Ms Ambrosini’s claim is to argue that the obligation upon an employer contained in s 90(2) of the FW Act does not arise where employment ends as a result of the summary dismissal of the employee by the employer. Section 90(2) of the FW Act states:
If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.
78 The Company argues that if the words of section 90(2) are given their literal meaning, the result is to place an impossible obligation upon the Company; the Company would be required to calculate and pay to Ms Ambrosini her accrued annual leave at the same point in time as lawfully terminating her contract of employment upon the ground of (just discovered) serious misconduct. It follows, the Company argues, that the FW Act and text of section 90(2) in particular are to be construed as containing an implicit qualification with the result that the Company, having (lawfully) summarily dismissed Ms Ambrosini, has no obligation under section 90(2).
79 The Company’s argument overlooks the ordinary meaning of the words of section 90(2). The section does not have the effect contended by the Company. The section creates an obligation to pay accrued annual leave to an employee. However, there is a distinction between the point in time when the obligation is created and the point in time when the obligation must be performed. The effect of the section is that the point in time when the obligation to pay accrued annual leave is created is when ‘the employment of an employee ends’. The section is silent on the point in time when the obligation must be performed, stating, ‘the employer must pay the employee the amount of’ accrued annual leave. The ‘silence’ is filled in the usual manner; the obligation to pay accrued annual leave must be discharged within a time period of the end of employment that is reasonable in all of the circumstances. There is no warrant for the construction the FW Act or section 90(2) contended by the Company.
80 It remains necessary to determine whether there has been a contravention of s 90(2) of the FW Act by reason of the time that elapsed between the end of Ms Ambrosini’s employment on 22 November 2016 and the date of the payments to Ms Ambrosini, $871 on 24 January 2017 and $2,924 on 21 June 2017. Some delay was inevitable. The ending of Ms Ambrosini’s employment was not anticipated by the Company. She had been employed for a lengthy period of time. Ms Ambrosini was not available or ‘trusted’ to provide information to the Company to assist with calculations of her entitlements. Mr Breeze was distracted by the circumstances of the end of her employment. I note the evidence of Mr Breeze that ‘the GBA accounts administrator’ calculated that Ms Ambrosini was entitled to an accrued annual leave entitlement of $4,255.22 and that Mr Breeze subsequently made the $871 payment on 24 January 2017. I am satisfied that, in all the circumstances, s 90(2) of the FW Act required the Alleged Annual Leave Entitlement to be paid on or before 24 January 2017. The payment of $871 on that day partially discharged the obligation. However, the delay in payment of $2,924 until 21 June 2017 was a contravention of s 90(2) of he FW Act. Having regard to the evidence of Mr Breeze that he made a deduction to the payment made on 24 January 2017 and that he caused the subsequent payment to be made on 21 June 2017, I am also satisfied he was involved in the contravention and, as a result of s 550 of the FW Act, he is also liable for the contravention.
LSL Construction Argument
81 Clause 13.1(c) of the Employment Document states that ‘where the Agreement is terminated pursuant to clause 12, the employee shall be paid long service leave entitlements on a pro rata basis up to and including the date of termination’. Clause 7 of the document on ‘leave entitlements’ states that ‘during the employment period, the employee shall be entitled to long service leave in accordance with the employee’s statutory entitlement’.
82 The LSL Act provides:
· An employee is entitled, subject to provisions of the LSL Act, to long service leave on ordinary pay in respect of continuous employment with the same employer (s 8(1));
· An employee who has completed at least 10 years of continuous employment is entitled to long service leave of 8 2/3 weeks (s 8(2)(a));
· An employee who has completed at least 10 years of continuous employment and whose employment is terminated in any circumstances otherwise than for serious misconduct is entitled to an amount of long service leave, calculated as proscribed (s 8(2)(c)); and
· An employee who has completed at least seven years of continuous employment (but less than 10 years) and whose employment is terminated for any reason other than serious misconduct is entitled to long service leave, calculated as proscribed (s 8(3)).
83 For reasons already stated, I find that Ms Ambrosini’s period of continuous employment with the Company commenced in January 2008 and ended in November 2016. The Company argues that, notwithstanding any finding that Ms Ambrosini was employed by the Company for more than seven years but less than 10 years, any claim derived from the Alleged LSL Entitlement fails. It is said that the entitlement created by the Employment Document is conditioned upon Ms Ambrosini’s statutory entitlement as proscribed by the whole of the LSL Act. Accepting this proposition, the Company argues that Ms Ambrosini has no statutory entitlement because of a disqualification to the entitlement found in s 8(3)(b) of the LSL Act, namely her employment was terminated by reason of ‘serious misconduct’. The second proposition may be accepted. There is no relevant difference in meaning between ‘serious misconduct’, as discussed in the cases and employed in the FW Act, and ‘serious misconduct’, as discussed in the cases and employed in the LSL Act.43 If I am correct that the Company was entitled to terminate the contract of employment by reason of the repudiation of the contract by Ms Ambrosini, and if the Alleged LSL Entitlement is conditioned on a consideration of the whole of the LSL Act, Ms Ambrosini has no statutory entitlement by reason of s 8(3)(b) of the LSL Act providing that the entitlement is subject to the termination being for any reason other than serious misconduct.
84 Ms Ambrosini argues that it is not necessary for her to engage with the allegation that she engaged in ‘serious misconduct’ as defined in s 8(3)(b) of the LSL Act. She contends that her entitlement to long service leave under the Employment Document is conditioned upon her satisfying only so much of the LSL Act as proscribes the period of continuous employment before an entitlement to long service leave arises. It is said that it is not required or necessary for cl 13 of the Employment Document, in providing for an entitlement to ‘long service leave entitlements on a pro-rata basis’, to be construed as excluding entitlements which would not be paid under the LSL Act by reason of serious misconduct.
85 The construction of the Employment Document suggested by the Company is preferable to the construction suggested by Ms Ambrosini. The ordinary meaning of the phrase ‘long service leave entitlements’ which, by cl 13 of the Employment Document are payable on termination of the Agreement, invites examination of the remainder of the Employment Document. Such examination reveals clause 7 on ‘leave entitlements’ and clause 7(d) providing for an employee ‘entitlement to long service leave in accordance with the Employee’s statutory entitlement’. The ordinary meaning of the phrase ‘statutory entitlement’ invites a search for a statute whose effect is to provide for an entitlement to long service leave. The search starts and ends with the LSL Act. The summary of the Act above reveals that an employee in the situation of Ms Ambrosini, employed by the Company for more than seven years but less than 10 years and whose employment has been terminated would have an entitlement under section 8(3) save for the fact that the statutory entitlement is contingent upon employment being terminated for a reason other than serious misconduct. The ordinary meaning of the phrase ‘statutory entitlement’ in clause 7 of the Employment Document involves accepting and applying any statutory contingency upon which the statutory entitlement was dependant. Ms Ambrosini’s argument has the effect of omitting the contingency requirement from the statute that provides for the entitlement. Accepting this argument requires an interpretation of clause 7 so that the clause provides for an entitlement to long service leave in accordance with the employee’s statutory entitlement and ignoring any statutory provision resulting in disentitlement. There is nothing in the text, purpose or context of the Employment Document to warrant construing clause 7 so as to add such a qualification.
Conclusion
86 In the result, Ms Ambrosini’s claim for a pecuniary penalty order against the Company on the ground of contraventions of s 323(1) of the FW Act on the basis of the Alleged Common Law Termination Pay Entitlement, the Alleged LSL Entitlement and the Alleged Annual Leave Entitlement has been unsuccessful because the Company has been successful in responding with the Common Law Termination Argument. Ms Ambrosini’s Secret Conduct was a repudiation of the contract of employment. The termination of the contract of employment, by the Company accepting Ms Ambrosini’s repudiation, had the effect of termination of the contract. The Clause 13 Entitlements did not survive termination of the contract.
87 For the same reasons as the previous paragraph, and also because Ms Ambrosini’s Secret Conduct was ‘serious misconduct’ under the LSL Act, Ms Ambrosini’s claim for an order under s 545(3) of the FW Act that the Company pay the Alleged LSL entitlement of $19,531 has been unsuccessful.
88 Ms Ambrosini’s claim for a pecuniary penalty order against the Company on the ground of a contravention of s 90(2) of the FW Act has been proven. The FW Act required the Alleged Annual Leave Entitlement to be paid within a reasonable time of 22 November 2016 and any payment made after 24 January 2017 (i.e. the payment of $2,924 on June 2017) was a contravention of s 90(2) of the FW Act. Mr Breeze was involved in the contravention and, as a result of s 550 of the FW Act, he is also liable for the contravention. I will hear from the parties on the issue of the quantum of penalty for this contravention.



INDUSTRIAL MAGISTRATE
M. FLYNN
1 The parties to the contract were MEC, Trandcorp Pty Ltd (controlled by Mr Breeze) and Mr Breeze
2 LSL Act, s 8(3)(b).
3 LSL Act, s 8(3).
4 Jurisdiction, Practice and Procedure
1. The jurisdiction of this court under the FW Act is primarily defined by three provisions:
(1) section 539 of the FW Act which identifies the civil remedy provisions of the FW Act which may be the subject of an application to an eligible state or territory court;
(2) section 545(3) of the FW Act which describe the criteria for an eligible state or territory court to make an order for an employer to pay an amount to an employee upon the contravention of civil remedy provision; and
(3) section 546(1) of the FW Act which concerns the making of pecuniary penalty orders upon the contravention of a civil remedy provision.
2. Civil remedy provisions cast obligations upon national system employers to national system employees as set out in the National Employment Standards (Part 2-2), modern awards (Part 2-3), enterprise agreements (Part 2-4), national minimum wage orders (Part 2-6 ) and section 323(1) (‘an employer must pay an employee amounts payable to the employee in relation to the performance of work …in full’) . The Company is a national system employer and Ms Ambrosini is a national system employee.
3. Section 539 of the FW Act identifies, from among the several civil remedy provisions of the FW Act, the particular civil remedy provisions for which application may be made to an eligible state or territory court ‘for orders in relation to a contravention of the provision’. The provision also identifies, for each civil remedy provision, the person with standing to make application to the relevant court and, expressed in penalty units, the maximum penalty for a contravention.
4. Section 545(3) of the FW Act provides that an eligible state or territory court ‘may order an employer to pay an amount to an employee if the court is satisfied’ of two criteria. First, the failure to pay the relevant amount must be a contravention of a civil remedy provision. Secondly, the employer must have an obligation, ‘under the Act (for example, section 90 on annual leave) or under a fair work instrument’ (for example, a modern award or an enterprise agreement) to pay the relevant amount. The meaning of ‘under the Act’ as it appears in s 545(3) was the subject of examination in Sharrock v Downer EDI Mining Pty Ltd [2018] WAIRC 377 and Wright v Bechtel Construction (Australia) Pty Ltd [2018] WAIRC 00887 [38]ff with the result that where the claim concerns an allegation of the civil remedy provision created by s 323(1) of the FW Act, the claimant must identify another provision under the act that creates an obligation to pay the amount. For example, s 542(1) of the FW Act provides that ‘a safety net contractual entitlement’ has effect as an entitlement of an employee under the FW Act. A ‘safety net contractual entitlement’ is defined in s 12 of the FW Act to mean an entitlement under a contract between an employee and an employer that relates to any of the subject matters described in subsection 61(2) (which deals with the National Employment Standards); or subsection 139(1) (which deals with modern awards). It should be noted that ‘neither the particular terms of a minimum standard, nor the necessity to engage the terms of a particular modern award , are necessary to the existence of the statutory obligation which now exists to observe the terms of a safety net contractual obligation’: see Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Limited [2014] FCA 878 [19]ff per Buchanan J, especially at [22]. If proven, the Court has the jurisdiction to make the order for payment sought by Ms Ambrosini on the Alleged LSL Entitlement because “long service leave” may be the subject of a modern award.
Rules of Evidence and Procedure
5. Section 551 of the FW Act provides that ‘a court must apply the rules of evidence and procedure for civil matters when hearing proceedings relating to a contravention’.
6. There is authority for the proposition that the effect of the provision is that an ‘eligible State or Territory Court’ is required to apply the rules of evidence found in the common law and relevant state legislation when a claim concerns the contravention of a civil remedy provision of the FW Act: Gayle Balding, Workplace Ombudsman v Liquid Engineering 2003 Pty Ltd [2008] WAIRComm 350; Cuzzin Pty Ltd v Grnja [2014] SAIRC 36 [14]. In Qube Ports Pty Ltd v Maritime Union of Australia [2018] FCAFC 72 [94] – [108] White J (with whom Mortimer and Bromwich JJ agreed) undertook a comprehensive analysis of the issue in the context of contravention proceedings before a state court of South Australia, the former Industrial Relations Court of South Australia (IRCSA). In a schedule to the judgment in Stagnitta v Bechtel Construction (Australia) Pty Ltd [2018] WAIRC 886, I gave reasons for concluding that the law of evidence applied by a state court of general jurisdiction when exercising jurisdiction in non-criminal matters including the Evidence

Act 1906 (WA), was to be applied by this court when hearing a proceeding relating to a contravention of a civil remedy provision of the FW Act.
7. The onus of proving a claim is on the claimant and the standard of proof required to discharge this onus is proof ‘on the balance of probabilities’. When, in these reasons, I state that ‘I am satisfied of fact or matter’, I am saying that I am satisfied on the balance of probabilities of that fact or matter.
5 GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50; (2003) 128 FCR 1 at 62; Elvidge Pty Ltd v BGC Constructions Pty Ltd [2006] WASCA 264.
6 Commissioner of Taxation (Cth) v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520 at [22].
7 A contract of variation may be inferred from the conduct of the parties: Elvidge Pty Ltd.
8 LSL Act s 8(3). Note, however, the definition of continuous service in section 6(2)(f),(g)
9 Bruce v A W B Ltd [2000] FCA 594 [14].
10 Care and diligence: to ‘exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they (a) were a director or officer of a corporation in the corporation’s circumstances; and (b) occupied the office held by, and hand the same responsibilities within the corporation as, the director or officer’: s 180(1). (The duty of care is subject to the business judgment rule in s 180(2), see paragraph 1 – 460.)
• Good faith: to ‘exercise their powers and discharge their duties: (a) in good faith in the best interests of the corporation; and (b) for a proper purpose’: s 181.
• Use of position: ‘A director, secretary, other officer or employee of a corporation must not improperly use their position to (a) gain an advantage for themselves or someone else; or (b) cause detriment to the corporation’: s 182.
• Use of information: ‘A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to: (a) gain an advantage for themselves or someone else; or (b) cause detriment to the corporation’: s 183.
11 Respondents’ submissions at paragraphs: 9 – 16; 19 – 21.
12 Care and diligence: to ‘exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they (a) were a director or officer of a corporation in the corporation’s circumstances; and (b) occupied the office held by, and hand the same responsibilities within the corporation as, the director or officer’: s 180(1). (The duty of care is subject to the business judgment rule in s 180(2), see paragraph 1 – 460.)
• Good faith: to ‘exercise their powers and discharge their duties: (a) in good faith in the best interests of the corporation; and (b) for a proper purpose’: s 181.
• Use of position: ‘A director, secretary, other officer or employee of a corporation must not improperly use their position to (a) gain an advantage for themselves or someone else; or (b) cause detriment to the corporation’: s 182.
• Use of information: ‘A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to: (a) gain an advantage for themselves or someone else; or (b) cause detriment to the corporation’: s 183.
13 See Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [30] citing Blyth Chemicals Ltd v Bushnell [1933] HCA 8; (1933) 49 CLR 66 at 81 per Dixon and McTiernan JJ.
14 See Commonwealth Bank of Australia [61].
15 Mackens Law of Employment 8th edn C Sappideen et al 2016 at 5.550; Concut [17] ‘Further, as Mason J pointed out in Hospital Products Ltd v United States Surgical Corporation[8], the relationship between employee and employer is one of the accepted fiduciary relationships; their critical feature is that the fiduciary undertakes or agrees to act for or on behalf of, or in the interests of, another person in the exercise of a power or discretion that will affect the interests of that other person in a legal or practical sense.’
16 Concut [17] ‘Further, as Mason J pointed out in Hospital Products Ltd v United States Surgical Corporation[8], the relationship between employee and employer is one of the accepted fiduciary relationships; their critical feature is that the fiduciary undertakes or agrees to act for or on behalf of, or in the interests of, another person in the exercise of a power or discretion that will affect the interests of that other person in a legal or practical sense.’
17 Blackmagic Design Pty Ltd v Overliese [2011] FCAFC 24 [105]ff.
18 Fords Principles of Corporations Law 15th edn 2013 RP Austin IM Ramsay at 8.360 – 8.365.
19 Fords Principles of Corporations Law 15th edn 2013 RP Austin IM Ramsay at 8.355. Section 185 of the Corporations Act states that ‘sections 180 to 184: (a) have effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person because of their office or employment in relation to a corporation; and

(b) do not prevent the commencement of civil proceedings for a breach of a duty or in respect of a liability referred to in paragraph (a).’
20 J W Carter, Carter's Breach of Contract (2nd Edn LexisNexis Butterworths, 2018) [3-12].
21 Maguire v Makaronis [1997] HCA 23; (1996) 188 CLR 449, 467. On the jurisdiction of this court to grant an equitable remedy in case involving a claim based on s 323 of the FW Act, see Stagnitta v Bechtel [2018] WAIRC 886 at [59].
22 Commonwealth Bank of Australia [30]: ‘Employment contracts have attracted a number of implied terms in the course of the evolution of the employment relationship. All such terms are subject to the express provisions of the particular contracts and any applicable statutes.’
23‘[I]n my view, the wording of cl 14 of the employment contract is a clear indication that common law rights were intended to be displaced and that the grounds for termination are restricted to the specified grounds on which employment may be terminated, and the steps required to effect termination, and no others. There would seem to be little purpose in setting out the grounds, and steps required for termination, if that is not how the employment contract is to be read: Carter v Dennis Family Corporation [2010] VSC 406 [22] - [23] (Habersberger J). The common law right of the company to summarily dismiss Mr Heugh for misconduct is inconsistent with the company's contractual right to dismiss for gross misconduct. Gross misconduct is defined in a way which is narrower than misconduct at common law. For example, the conduct must have the direct effect of causing material damage or discredit to the company's business. Further, the company may only terminate for gross misconduct if Mr Heugh failed to rectify it within seven days of receipt of notice.
24‘[T]he detailed grounds and steps set out by cl 14 are such that properly construed, common law rights with respect to dismissal are intended to be displaced.
25 The Employment Document was signed by Ms Ambrosini and Mr Breeze (on behalf of the Company) before Ms Ambrosini commenced working for the Company in January 2008. This fact is not in dispute: Witness Statement of Mr Breeze at paragraph 5 (exhibit 3). The Employment Document is Attachment A to the Witness Statement of Ms Ambrosini (exhibit 1).
26 Justice F Gleeson “Proscriptive and prescriptive duties: is the distinction helpful and sustainable, and if so, what are the practical consequences?” 2017 Corporate and Commercial Law Conference, NSW <http://www.supremecourt.justice.nsw.gov.au/Documents/Publications/Corporate%20and%20Commercial%20Law%20Conference/2017/2017_Gleeson_JA.pdf>
27 Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17 [70].
28 Mr Breeze A1 at paragraph 53 and annexures referred to in that paragraph i.e. Mr Breeze 18, Mr Breeze 18A and Mr Breeze 19.
29 Adapting the language of the plurality judgment of the High Court in R v Byrnes & Hopwood [1995] HCA 1 [29].
30 North v Television Corp Ltd (1976) 11 ALR 599, 608 and 609; Concut Pty Ltd [51].
31 Sent v Primelife Corporation Ltd [2006] VSC 445 [17]; Concut Pty Ltd [51].
32 Carter v Dennis Family Corporation Pty Ltd [2010] VSC 406 [46].
33 Carter [46].
34 Concut Pty Ltd [51].
35 Transcript at page 20.
36 For example, Mair v Rhodes & Beckett [2018] VSC 132 (Digby J):
[99] Clause 5.1 has a plain meaning that is consistent with the purpose of that part of the [employment contract]. It provides for an exhaustive statement of the circumstances in which [the employee] can be dismissed from his employment by [the employer] without notice. That provision should also be read in its contractual setting as a whole and in its setting and in light of the other terms, implied by law into employment contracts, relevantly those requiring fidelity and loyalty.
…
[100] I consider that cl 5.1 of the ESA, read as a whole and in its context, is intended by the parties to be a comprehensive and exhaustive code wholly governing [the employee] and [the employer’s] rights and obligations in relation to the termination of [the employee], including to the exclusion of any right or obligation in that regard at common law. In particular, I consider that the parties’ intention is for cl 5.1 of the [employment contract] to comprehensively define the circumstances in which the [employment contract] can be terminated by [the employer].
37 Heugh v Central Petroleum Ltd [No 5] [2014] WASC 311 [87]:

in my view, the wording of cl 14 of the employment contract is a clear indication that common law rights were intended to be displaced and that the grounds for termination are restricted to the specified grounds on which employment may be terminated, and the steps required to effect termination, and no others. There would seem to be little purpose in setting out the grounds, and steps required for termination, if that is not how the employment contract is to be read: Carter v Dennis Family Corporation [2010] VSC 406 [22] - [23] (Habersberger J). The common law right of the company to summarily dismiss Mr Heugh for misconduct is inconsistent with the company's contractual right to dismiss for gross misconduct. Gross misconduct is defined in a way which is narrower than misconduct at common law. For example, the conduct must have the direct effect of causing material damage or discredit to the company's business. Further, the company may only terminate for gross misconduct if Mr Heugh failed to rectify it within seven days of receipt of notice.
Habitat 1 Pty Ltd v Formby [No 2] [2017] WASC 33, [392]:
the detailed grounds and steps set out by cl 14 are such that properly construed, common law rights with respect to dismissal are intended to be displaced.
38 The title of the document is, ‘Employment Agreement’.
Recitals stating that Ms Ambrosini’s employment by the Company is ‘on the terms and conditions set out in this Agreement’.
Clause 2 Engagement and Clause 3 Term have the result that Ms Ambrosini is employed full time ‘on a month to month basis’ as an ‘Accountant/Company Secretary’ until termination as provided in the agreement.
Clause 4 Duties lists Ms Ambrosini’s duties ‘as an employee of the Company’ including ‘carrying out duties with due care, skill and diligence and shall not cause any damage to the interest of the Company’.
Clause 5 Salary, Clause 6 Superannuation and Clause 7 CPI provides for: an annual (reviewable) salary of $130,000 payable monthly; superannuation ‘at the rate set down by relevant legislation’.
Clause 7 Leave Entitlements provides that Ms Ambrosini is entitled to annual leave (‘20 working days in respect of each completed year of service’ with outstanding accrued leave to be paid out in full at the expiration of service) and long service leave (‘in accordance with her statutory entitlement’).
Note that there are two clauses numbered, ‘7’, ‘7 CPI Increases’ and ‘7 Leave Entitlements’.
Clause 8 Acknowledgments, Clause 9 Confidentiality, Clause 10 Discoveries, Clause 11 Non-Competition provides for the protection by Ms Ambrosini of the intellectual property and confidential information of the Company and contains a warranty that she has no interest in a competitor.
Clause 12 Termination provides for:
1) Termination of the Agreement by Ms Ambrosini or the Company giving one month’s written notice in cl 12.3.
2) Termination of the Agreement by the Company ‘forthwith’ by the Company without prior notice if Ms Ambrosini:
a) ‘commits any serious or persistent breach of the Agreement and the breach is not remedied within 14 days written notice’;
b) ‘(is) guilty of any grave misconduct or wilful neglect in the discharge of her duties and the breach is not remedied within 14 days written notice’ (see cl 12.1).
Clause 12.2 Termination without notice by Ms Ambrosini if the Company is in breach of the agreement and the breach is not remedied within 14 days of written notice’ from Ms Ambrosini (see cl 12.2).
Clause 13 Payment on Termination states that ‘where the Agreement is terminated pursuant to Clause 12, Ms Ambrosini shall be paid’: annual leave entitlements accrued; ‘long service leave entitlements on a pro rata basis up to and including the date of termination’; ‘termination pay equal to one month’s base salary for each completed year of service’.
Clause 14 Consequences of Termination provides that, upon termination, an employee is required to deliver up Company property and destroy copies of electronically stored Company information.
Clauses 16 Variation and 22 Entire Agreement provides that the signed document ‘constitutes the sole understanding of the parties and replaces all other agreements’ (cl 22); ‘modification or alteration of the signed document must be in writing and signed by the Parties’.
It is sufficient to record the headings of remaining clauses: 1 Definitions and Interpretations; 15 Severance; 17 No Waiver; 18 Notices; 19 Further Assurance; 20 Governing Law; 21 Counterparts; 23 Time; 24 Legal Costs.
39 Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Limited [2014] FCA 878; Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908. Contrast: Coote v Mainline Access Pty Ltd & Anor (No.3) [2019] FCCA 383.
40 Robertson v City of Nunawading [1973] VicRp 81; [1973] VR 819 at 824 (Winneke CJ, Gowans and Starke JJ).

41 After the publication of these reasons and for reasons given orally on 8 May 2019, the respondents were granted leave to reopen the case on the ground that the court had a mistaken apprehension of a submission on the law that had been made by the respondents. The ‘strike through’ line in the sentences in this section reflect, in part, an oral ruling made consequential upon the reopening of the case. The balance of the oral ruling incorporated, in place of the ‘struck out’ sentences, paragraph 15 of the written submissions of the respondents filed on 8 May 2019.
42 The sum of $3,144.48 and $871.48.
43 Mendonca v Chan & Naylor (Parramatta) Pty Ltd & Anor [2014] FCCA 1042 [194].