Australia: Change of duties valid under contract

Workplace Directions
Last Updated: 3 April 2011
Article by Emma Reilly

Cameron v Asciano Services Pty Limited [2011] VSC 36 (21 February 2011)

Victorian Supreme Court found contract not repudiated

Malcolm Cameron was employed by Asciano Services Pty Limited between 26 October 1992 and 17 April 2009. He was engaged as a Business Development Manager. The two primary objectives of the Business Development Manager were:

  • Develop new profitable revenue with major Intermodal customers and develop strong customer relationships with them to achieve revenue and operating margin budgets
  • Oversee the major customer needs and develop strategies to meet service quality targets.

The plaintiff subsequently performed the alternative role of National Account Manager, with additional key responsibilities.

The plaintiff was called to a meeting in March 2009 and asked to relocate. This was including in the context of the global financial crisis. The plaintiff recalled that he was told to 'go down to the Dynon Road freight terminal and work in the position of Melbourne Customer Service Centre Manager for the next two years prior to retiring'. The plaintiff's manager gave a different account of the meeting. In any event, when an agreement was not reached as to the plaintiff's ongoing role, he was requested to take long service leave. Negotiations as to his proposed position continued until 6 April 2009 when the plaintiff alleged the contract of employment was repudiated by the defendant.

The plaintiff commenced proceedings in the Supreme Court of Victoria claiming $273,424.65 in damages as a result of the defendant's repudiation of the contract. As part of his claim, the plaintiff also contended that the defendant breached an implied term that it 'would not act so as to destroy or seriously damage the relationship of trust and confidence between it and the plaintiff, including by not acting unlawfully, capriciously, unfairly or unreasonably.'

In deciding that the requirement for new duties was not a repudiation of the contract, Beach J referred to previous High Court discussion as to what constitutes repudiation:

  • '[repudiation] may refer to conduct which evidences an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evidences an intention no longer to be bound by the contract or to fulfill it only in a manner substantially inconsistent with the party's obligations. It be may termed renunciation. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it
  • It is not necessary to prove a subjective intention to repudiate. The test is an objective one
  • Whether there has been repudiation is a question of fact
  • Repudiation is not to be inferred lightly. It is a serious matter
  • Repudiation may be evidenced by a single act or by an accumulation of conduct in circumstances where no individual act on its own constitutes a repudiation
  • Repudiation does not bring an end to a contract. It is necessary for the innocent party to elect to accept the repudiation
  • Repudiatory conduct may be 'cured' by the party in breach, but only prior to the acceptance of the repudiation. Accordingly, once the innocent party has elected to terminate the contract for breach, it cannot thereafter be cured
  • In the context of employment contracts, a significant diminution in remuneration, status or responsibility may constitute a repudiation. Whether or not this is so is a question of fact in each case
  • There may be a significant diminution in status or responsibility, even where the employee retains the same remuneration and title
  • However, there are circumstances where a considerable change in the nature of an employee's duties may not amount to a repudiation. Although an employer cannot usually force changes of status and responsibility upon an employee, the circumstances of a particular case may permit a degree of flexibility in approach, with each party being required to provide 'some reasonable give and take'. In such cases, repudiation may not be inferred in the absence of serious non-consensual intrusions upon the status or responsibilities of the employee.'

In the matter at hand, it was held that the issue was whether the contract in question gave the employer the right to make the changes.

The contract relevantly stated:

'(a) You agree to be employed by the Company and any of its subsidiaries as Business Development Specialist or such other position as the Company appoints you to on the terms and conditions contained in this Agreement.

(b) Your duties include, but are not limited to the duties set out in the Position Description attached as Schedule A. You may also be required, within your skills, qualifications and experience, to undertake other responsibilities and perform other such duties or projects from time to time as the Company may require to meet its operating needs.

(c) As an employee of the Company, you shall perform such duties and exercise such powers, within your skills, qualifications and experience, with regard to the management and conduct of the business of the Company as the Chief Executive, Divisional Manager or direct line manager shall from time to time lawfully determine.

(c) As an employee of the Company, you shall perform such duties and exercise such powers, within your skills, qualifications and experience, with regard to the management and conduct of the business of the Company as the Chief Executive, Divisional Manager or direct line manager shall from time to time lawfully determine.

(d) You agree to faithfully and diligently perform the duties and exercise powers consistent with the position to which you have been appointed and keep the Company's confidential information secure.

(e) You will devote the whole of your time, attention and skill, during normal business hours and at other times as reasonably necessary, to the duties of the position to which you have been appointed.'

Whilst clause 1(b) referred to duties set out in a position description attached as schedule A, no document answering this description was ever created.

Beach J stated that it could not be concluded that the defendant's conduct in attempting to negotiate a revised position in the context of financial restraints constituted a repudiation of the plaintiff's employment contract. The new Customer Service Centre Manager position being discussed was not outside the ambit of the plaintiff's employment contract. As such, the plaintiff's claim for damages failed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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