ATMA International Pty Ltd ACN 127 193 828 v Talent International (ACT) Pty Ltd ACN 121 819 305 (Civil Dispute)
[2019] ACAT 89
•30 September 2019
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
ATMA INTERNATIONAL PTY LTD ACN 127 193 828 v TALENT INTERNATIONAL (ACT) PTY LTD ACN 121 819 305 (Civil Dispute) [2019] ACAT 89
XD 1660/2018
Catchwords: CIVIL DISPUTE – intention – contract termination clause – right to terminate
Cases cited: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24
Tribunal: Member D Mulligan
Date of Orders: 30 September 2019
Date of Reasons for Decision: 30 September 2019AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 1660/2018
BETWEEN:
ATMA INTERNATIONAL PTY LTD ACN 127 193 828
Applicant
AND:
TALENT INTERNATIONAL (ACT) PTY LTD ACN 121 819 305
Respondent
TRIBUNAL: Member D Mulligan
DATE: 30 September 2019
ORDER
The Tribunal orders that:
1. The respondent pay the applicant $25,585 within 28 days.
2. This figure comprises:
(a) Judgment in the sum of $25,000;
(b) Reimbursement of the $559 ACAT filing fee paid by the applicant; and
(c) Reimbursement of the $26 ASIC search fee paid by the applicant.
…………………………..
Member D Mulligan
REASONS FOR DECISION
1. Talent International (ACT) Pty Ltd (Talent) is a labour hire business which matches consultants to job openings, principally in the federal government sector. It makes its money by charging its clients a premium over the amount it pays its contractors, who undertake the work for the clients.
2. ATMA International Pty Ltd (ATMA) is the corporate vehicle under which Mr Palaniyappa Sadasivan, the company's only employee in April 2018, contracted his services as a project manager.
3. In this decision I will refer to ATMA and Mr Sadasivan interchangeably.
4. On 17 April 2018, ATMA and Talent entered into a contract (the contract) which can be identified by its contract number: JO-1607-446375. Mr Sadasivan executed the agreement on behalf of ATMA and Mr Ian Johnston, a senior account executive who worked at Talent, executed the document on behalf of Talent.
5. Under the contract Mr Sadasivan agreed to act as a project manager for a government department for a period of approximately two months; from 26 April 2018 to 30 June 2018.
6. The parties understood that the government department may offer a 12 month extension to the contract.
7. Talent was to pay ATMA at the rate $125.94 per hour for the work undertaken by Mr Sadasivan at the government department.
8. Both parties had a power to terminate the contract early. There was a power to terminate immediately for cause under clause 8.3. In particular clause 8.3 d) allowed for a right to terminate based on unsatisfactory performance. Additionally, each party had separate powers to terminate under the schedule of assignment, which formed part of the contract.
9. Under the contract Mr Sadasivan is referred to as the consultant or principal person. Talent is the Company and the government department the Client.
10. Clause 8.3 d) provided:
8.3 Notwithstanding any other term of this Agreement, either party may immediately terminate this Agreement by giving written notice to the other party at any time for the following reasons:
d) If, either party fails to provide the Services to a satisfactory standard including any incidence of unsatisfactory performance or misconduct;
11. Clause 8.5 of the contract provided that:
Upon termination of this Agreement under clause 8.3 or 8.4 the Consultant is only entitled to the Consultancy Fee due and payable to the Consultant under clause 4 up to and including the date of termination of this Agreement.
12. A separate means of terminating the contract existed under the schedule of assignment of the contract, which provided:
Notice Period (if applicable): 10 business days’ notice is required by the Consultant. The Company can terminate with five business days notice for convenience (in line with the Commonwealth agreement).
13. It is clear that the contract intended only for ATMA to have a right to terminate the contract on 10 business days’ notice.
14. The only reason Talent could terminate was for convenience. A term that had the same meaning as that found in clause 33.2 of the contract between Talent and the government department, a copy of which was provided during the course of the hearing.
15. The Commonwealth’s ability in its contract with Talent to terminate for convenience, and therefore Talent’s ability in relation to ATMA, is very limited and only arises in circumstances where:
(a) there is a machinery of government change;
(b) the need for the Services has been cancelled;
(c) the scope of the Services required has been reduced; or
(d) funding is depleted.
16. The right to terminate for convenience gave Talent an ability to terminate its contract with ATMA so that it did not have to continue paying ATMA, when there would be no work for Mr Sadasivan and no income for Talent.
17. The right to terminate for convenience was not a general right to terminate, but limited to very particular and clearly defined circumstances.
18. Mr Sadasivan commenced work at the government department on 26 April 2018.
19. Mr Sadasivan believes that he was hired at the request of Mr Brett Cadwallader, who at the time was the director of the government department. The area in which Mr Sadasivan was working was headed by Mr Wade Randall.
20. On or around 27 May 2018, Mr Cadwallader advised Mr Sadasivan that the government department was happy with his performance and that his contract would be extended by 12 months.
21. According to Mr Sadasivan, Mr Johnston of Talent called him on about 4 June 2018 confirming the government department was happy with his work and were offering an extension.
22. Later that day Mr Johnston wrote to Mr Sadasivan by email. The email stated:
Hi Pal,
Further to our discussions, [government department] have advised that they are seeking to exercise the available contract extension option under the same conditions. The contract will be for 1840 hours over the 12 months (1 July 2018 – 30 June 2019).
Let me know if you are happy to proceed, and I will advise [government department] accordingly so that they can commence the process of finalising the approvals.
Regards
Ian Johnston
23. Mr Sadasivan agreed to the contract extension.
24. Mr Johnston and Mr Sadasivan turned their minds to the contract for the contract extension.
25. During his email exchanges with Mr Johnston, Mr Sadasivan insisted that the contract extension was to be on the same terms as the original contract.
26. Mr Johnston confirmed that the contract extension was to be on the same terms as the original contract.
27. The contract extension was agreed to by the parties, although no contract document was signed by either party.
28. Talent did provide a fresh schedule of assignment which was intended to reflect the contract extension.
29. The effect of these efforts was that the original contract (without the original schedule of assignment) remained in force and the new schedule of assignment set out the particular variables applicable to the contract extension.
30. There was one material difference between the original schedule of assignment and the schedule assignment relating to the contract extension. This difference related to the notice period. Under the schedule of assignment for the contract extension the notice period was expressed as:
Notice Period (If applicable) 10 business days
31. During the course of his evidence Mr Johnston confirmed that whilst the schedule of assignment for the contract extension stated “10 business days,” this had been inserted into the document in error.
32. Talent had intended that the wording in the original schedule of assignment relating to the notice period should be inserted into the schedule of assignment for the contract extension. Talent believed that there had been an issue with the contract template which prevented the full and intended wording being inserted into the field relating to the notice period.
33. Given Mr Sadasivan’s insistence that the terms of the original contract should be incorporated into the contract extension and Mr Johnston's evidence relating to the wording of the notice period in the second schedule of assignment, I accept that the parties believed the provision relating to notice contained in the original schedule of assignment was intended to apply to the contract extension.
34. When construing a contract, the task is to determine and then give effect to the intention of the parties. Intention is to be determined objectively. It must be ascertained from the words used in the contract, not the parties’ actual intentions and still less their desires, aspirations or expectations.
35. When one looks at the schedule of assignment for the contract extension, the notice period applicable is 10 business days. This statement is unambiguous and unqualified and expresses, in my view, the parties’ contractual intention for there to be a right to terminate the contract on 10 business days’ notice. In my view this notice period is unqualified and it therefore applies to both parties, Talent and ATMA.
36. It is equally clear from the schedule of assignment for the contract extension that there is no mention made of termination for convenience. For the same reasons of contractual construction, I am of the view that the meaning of the contract should be determined objectively with regard to the text of the contract. Consequently, as there is no mention of a party having a right to cancel for convenience, I conclude that the parties did not intend for there to be a right, given to Talent, to terminate for convenience.
37. In mid-June 2018, the government department underwent a restructure. The existing director left the government department and was replaced by Mr Sam Lewis. Mr Randall became the program director and a female colleague, also a contractor, was hired as a project manager.
38. From about 14 June 2018, Mr Sadasivan was assigned to work under the supervision of the female colleague and Mr Randall.
39. After the appointment of the female colleague and Mr Randall, Mr Sadasivan began to feel excluded from social activities within the team, particularly when the team went for drinks, coffees and lunches.
40. On or around 3 July 2018, Mr Sadasivan began to feel victimised by the female colleague. According to him she began to give him demeaning tasks, well below his level of seniority, such as being asked to buy her coffee, remove her coffee cup or do printing for her.
41. On 10 July 2018, Mr Sadasivan was invited by Mr Randall to a meeting to ‘touch base’ with him and Mr Lewis.
42. At about 4.00pm Mr Sadasivan went to the meeting, which was held in a meeting room. Present in the meeting room were Mr Randall, Mr Lewis and two security officers.
43. According to Mr Sadasivan, Mr Randall informed him that “the contract was being terminated with immediate effect because my performance over the previous couple of months had not been satisfactory.”
44. Mr Sadasivan was advised that he would be escorted from the building and that he was required to immediately return his building access pass.
45. Mr Sadasivan was escorted to his desk by the security officers where he was able to retrieve his personal effects before being escorted out of the premises.
46. Mr Sadasivan felt humiliated by his treatment.
Mr Sadasivan's version of events relating to the period 11 July 2018 – 10 August 2018
47. Shortly after Mr Sadasivan called Mr Johnston of Talent and explained what had happened.
48. On 11 July 2018, Mr Sadasivan met with Mr Johnston in a coffee shop. Mr Johnston confirmed that the government department had terminated the contract on ‘performance grounds’.
49. Mr Sadasivan was sceptical of that explanation and highlighted the fact that he had not previously been advised of any deficiencies in his performance by the government department and that he had only recently commenced the contract extension, which took effect on 1 July 2018 and which had only been granted as a consequence of his positive performance in the role.
50. According to Mr Sadasivan, Mr Johnston agreed to ask the government department about what aspect of his performance had been unsatisfactory and led to his summary dismissal. According to Mr Sadasivan, Mr Johnston never provided an explanation to this query.
51. At approximately 4.22pm on 11 July 2018, Mr Sadasivan received an email from Mr Johnston setting out Talent's position. The email reads:
Good Afternoon Pal,
Thank you for meeting today. Further to our discussions, I am confirming that [government department] has advised Talent that they have terminated the contract for your services effective immediately from Tuesday, 10 July 2018. Talent will organise to pay for your hours worked up until this point as a final payment.
Thank you for the opportunity to work with you over the course of this assignment.
Regards
Ian Johnston
52. It should be noted that the email did not provide any explanation as to why the contract between Talent and the government department was being terminated.
53. It should also be noted that whilst Mr Johnston confirmed the termination of the contract between the government department and Talent, the email did not expressly terminate the contract between Talent and ATMA and consequently it provided no explanation as to why the contract between Talent and ATMA was being terminated.
54. According to Mr Sadasivan, on 12 July 2018, Talent withdrew the assertion that he had been terminated on performance grounds. He says he was not provided with any alternate basis for his dismissal at that time.
55. At approximately 2.26pm on 12 July 2018, Mr Sadasivan received a further email from Mr Johnston. This email reads:
Good Afternoon Pal,
Further to our discussions, I am confirming that the contract (contract no. J0-1607-446375) between Talent International and ATMA International Pty Ltd is terminated effective from Tuesday, 10 July 2018, as requested by the client.
I will advise of the final payment date shortly.
Thank you for the opportunity to work with your company over the course of this assignment.
Regards
Ian Johnston
56. In this email Mr Johnston, purported to terminate the contract between Talent and ATMA. No reason is given for the termination.
57. Mr Sadasivan asserts that on 13 July 2018, Mr Johnston verbally advised him that the government department had withdrawn the rationale of “unsatisfactory performance” as the reason for his termination and amended the reason to being “standard termination” and agreed to pay him 10 days’ pay in lieu of notice.
58. Mr Sadasivan, alleges that on 1 August 2018, he and Mr Johnston again discussed the rationale for his termination. At that time Mr Johnston told him that the rationale had changed from “standard termination” to “for convenience” and that he would be paid for five days’ work in lieu of notice of termination.
59. On 6 August 2018, Mr Sadasivan again emailed Mr Johnston and expressed his concerns. In particular he complained that his contracted been terminated in an unfair and unreasonable manner and that “no valid contract ground has been provided to date or a reasonable opportunity to rectify.”
60. On 10 August 2018, Mr Luke McCoy, Talent's head of credit and risk, wrote to Mr Sadasivan. He again confirmed the termination of the agreement between Talent and ATMA. Mr McCoy provided Mr Sadasivan with the reason for the termination of the contract. He stated “Talent confirms that the termination of the agreement was invoked upon ATMA under the terms listed in the Schedule of Assignment (SOA). Talent has paid ATMA five days’ in lieu of notice.”
61. This document is the only notice Mr Sadasivan received which provided a written explanation for his termination. The reason given was not for behaviour prescribed by clause 8.3 of the contract, but rather under the schedule of assignment.
62. Mr McCoy wrote to Mr Sadasivan under a misapprehension that there was a right to terminate for convenience under the schedule of assignment relevant to the contract extension.
63. On 4 December 2018, Mr Sadasivan commenced proceedings in the Tribunal claiming $25,000 in damages (the Tribunal's jurisdictional limit), together with the reimbursement of the $559 filing fee and $26 for an ASIC search fee.
Talent's version of events relating to the period 10 July 2018 – 10 August 2018
64. Mr Johnston’s evidence is that shortly before Mr Sadasivan was escorted from the premises of the government department, he received a call from somebody at the government department advising him that Mr Sadasivan was to be terminated.
65. Later that afternoon Mr Johnston received an email from the government department confirming Mr Sadasivan's termination.
66. He confirms that he and Mr Sadasivan spoke by phone later that day.
67. According to Mr Johnston, during the meeting of 11 July 2018, Mr Sadasivan did not ask for an explanation as to why the government department considered his work unsatisfactory. Instead he advised Mr Johnston that he “would think about it overnight, as any feedback request would be formal and in writing.”
68. Later on 11 July 2018, Mr Johnston sent an email to Mr Sadasivan confirming the fact of the termination of the contract between the government department and Talent.
69. Mr Johnston alleges that on 12 July 2018, Mr Sadasivan and he spoke over the telephone and that during that conversation Mr Sadasivan advised him that he did not require Talent to ask the government department for the reasons for the termination and that he went on to say words to the effect “it's best if all parties move on.”
70. According to Mr Johnston he offered to contact the government department and request the termination be changed from termination for underperformance to termination for convenience. This would mean that Mr Sadasivan would not have a termination for performance on his record and that he would receive five days’ pay in lieu of notice.
71. Later on 12 July 2018, Mr Johnston sent another email to Mr Sadasivan confirming the termination of the contract between Talent and ATMA but did not mention any reasons for the termination.
72. Mr Johnston gave evidence that on 13 July 2018, he contacted the government department, who verbally agreed to change the termination from performance to convenience and pay the five days’ pay in lieu of notice.
73. Mr Johnston’s account suggests that Talent and the government department were simply being pragmatic, by offering Mr Sadasivan a small pay-out, in circumstances they knew it was not available under the contract, in the hope Mr Sadasivan would accept the payment and take no further action to seek redress for his termination.
74. On 1 August 2018, Mr Sadasivan emailed Mr Johnston, requesting 10 days’ pay in lieu. There is no evidence Mr Johnston replied to this email.
75. Mr Johnston's position is that at no stage did he ever advise, or agree that, Mr Sadasivan would receive 10 days’ pay in lieu of notice.
76. As a consequence, on Mr Johnston’s version of events, I am satisfied that at no point between 10 July 2018 and 1 August 2018, was it ever suggested that the reason for Mr Sadasivan's termination was pursuant to the right of termination on 10 days’ notice, conferred on both parties under the schedule of assignment for the contract extension.
77. As a matter of fact Talent did pay ATMA the equivalent of five days’ pay in compensation for the termination of the contract. This is consistent with Mr Sadasivan having been terminated for convenience, not on 10 days’ notice.
78. The evidence is clear, the government department was never asked by Talent to provide an explanation as to what aspects of his performance were sufficiently suboptimal to warrant his summary termination.
79. It is also clear that Talent did not provide Mr Sadasivan, in writing, the reason it was terminating its contract with ATMA.
The reasons for the termination by the government department of its contract with Talent
80. On 10 July 2018, the government department gave Mr Sadasivan and Mr Johnston the same reason for the ejection of Mr Sadasivan from its premises; performance issues.
81. I am sceptical of the government department’s use of this rationale for ending its contract with Talent. In saying that, I note:
(a) Mr Sadasivan commenced work at the government department on 27 April 2018.
(b) on or about 27 May 2018, the director of the government department told Mr Sadasivan that the department was happy with his performance and prepared to offer him a 12 month contract extension;
(c) on or about 4 June 2018, Mr Johnston confirmed his understanding that the government department was satisfied with Mr Sadasivan's performance and were prepared to offer a 12 month contract extension;
(d) during the currency of the contract the government department did not raise any performance issues either with Talent or Mr Sadasivan; and
(e) during the final month of his employment at the government department, Mr Sadasivan alleges that he was subjected to bullying type behaviour and humiliation from his immediate superior.
82. Based on Mr Sadasivan's evidence, there is an inference that he was dismissed for reasons other than his performance; reasons based more on his relationship with those managing him and the way that he had been treated by them prior to the termination.
83. On 13 July 2018, the government withdrew issues relating to Mr Sadasivan’s performance as being the basis for the termination of its contract with Talent.
84. This rationale consequently cannot be used to justify the termination of either the contract between the government department and Talent or between Talent and ATMA.
85. Following Mr Johnston’s discussions with the government department on 13 July 2018, the government is said to have changed its reasons for terminating its contract with Talent as being for convenience.
86. No person from the government department or Talent was called to explain:
(a) How it could be said the contract was being terminated for convenience.
(b) Why it was that the department’s rationale for termination of its contract with Talent changed.
87. I simply do not accept termination for convenience as a valid basis for termination in this case. The conditions precedent to the termination of the contract for convenience did not exist on 10 July 2018 or at any subsequent time. There is no evidence that:
(a) There was a machinery of government change;
(b) the need for the Services had been cancelled;
(c) the scope of the Services required had been reduced; and
(d) funding had been depleted.
Talent’s reasons for terminating its contract with ATMA
88. During the course of the hearing and in the written submissions of its counsel, Talent relied upon clause 8.3 d) as providing justification for it terminating the contract with ATMA. It also argued that Talent could properly terminate for convenience.
89. In my opinion the argument that Talent validly terminated its contract with ATMA under clause 8.3 d) must fail, for three reasons:
(a) On 13 July 2018, the government withdrew its assertion of unsatisfactory performance as being the basis of its termination of its contract with Talent. Consequently, Talent cannot use that rationale as a basis for terminating its contract with ATMA.
(b) It is not sufficient for Talent to terminate the contract, under clause 8.3 d), by simply alleging that there has been unsatisfactory performance by Mr Sadasivan. There needs to have been actual behaviour which objectively speaking amounted to unsatisfactory performance.
(c) Mr Sadasivan, like anyone else in his position, entered into the contract with Talent with the legitimate expectation that provided he carried out his duties at the government department in a professional and satisfactory manner he would not be deprived of his employment on a whim, fancy or as the consequence of him being mistreated by those to whom he reported at the government department.
90. To properly terminate the contract under clause 8.3 d), the government department, and through it, Talent, would need to establish that as a matter of fact, for some reason, Mr Sadasivan’s performance had been unsatisfactory.
91. Talent could not know that unless it either obtained an admission from Mr Sadasivan that his performance had been unsatisfactory, or unless the government department provided an explanation and any relevant proof in support of the contention that his performance had been unsatisfactory.
92. According to Mr Johnston, he did not ask or obtain from the government department any explanation as to how Mr Sadasivan's performance had been unsatisfactory. Additionally, Mr Sadasivan denied any wrong doing or issues with his performance.
93. As a consequence Talent could not, as a matter of fact, have known whether or not the government department’s claim in this regard was justified by the facts.
94. Mr Johnston alleges that Mr Sadasivan asked him not to ask the government department for the reasons behind his dismissal because he was, in effect, concerned that there would be a document trail setting out the fact he had been terminated for cause.
95. I do not accept that assertion. Mr Johnston could have had a discussion with the government department, asked why it was Mr Sadasivan was being terminated and orally reported the result to Mr Sadasivan, as he says occurred when the government department changed the reason for termination from unsatisfactory performance to for convenience.
96. I also accept Mr Sadasivan’s version of events in which on 12 July 2018, he asked Mr Johnston to find out why he had been terminated, but never received a reply. Such a request would be entirely consistent with the events he recounts.
97. Talent did not write to ATMA and seek to terminate the contract citing clause 8 d) as the reason why it was terminating the contract.
98. Talent contends that pursuant to clause 8.3 d) of the contract Talent only had to give notice in writing of the fact of termination. Talent contends that the reasons for the termination don’t have to be articulated in the termination notice. Talent says that Mr Johnston’s email of 12 July 2018 expressly terminated the contract between it and ATMA.
99. Clause 8.3 provides:
8.3 Notwithstanding any other term of this Agreement, either party may immediately terminate this Agreement by giving written notice to the other party at any time for the following reasons:
…
d) If, either party fails to provide the Services to a satisfactory standard including any incidence of unsatisfactory performance or misconduct;
100. In my view the language of clause 8.3 required Talent to specify in the written termination notice the reason for the termination. The phrase “by giving written notice to the other party at any time for the following reasons.” In my view there are two halves to the phrase which are conjunctive. Firstly, the notice must be in writing; and secondly it must be for “one of the following reasons.”
101. The only way a person who was terminated, pursuant to clause 8.3, could know if he was being terminated for one of the “following reasons” would be for the written notice to specify that reason.
102. On 11 and 12 July 2018, Mr Johnston sent emails to Mr Sadasivan. The first email recorded the fact that the government department had terminated its contract with Talent. The second email recorded the fact that the contract between ATMA and Talent was being terminated.
103. In neither of those emails was it specified as to why it was that the contract between Talent and ATMA was being terminated. In particular, clause 8.3 d) was not cited as reasons for terminating the contract.
104. As noted earlier, Mr McCoy's letter of 10 August 2018, provided the only written explanation Mr Sadasivan received from Talent which explained his termination. That explanation did not relate to unsatisfactory performance under clause 8.3 d), but rather to Talent's right to terminate the contract under the schedule of assignment.
105. On 13 July 2018, Mr Johnston says the government department altered its rationale and claimed to cancel the contract for convenience.
106. Neither Mr Johnston nor the government department could have reasonably believed that was the real reason Mr Sadasivan had been ejected from the government department’s premises on 10 July 2018.
107. Neither party could have believed that Mr Sadasivan was really being terminated for convenience, as none of the conditions precedent to a termination for convenience existed. In particular:
(a) there was no machinery of government change;
(b) the need for the Services had not been cancelled;
(c) the scope of the Services required had not been reduced; and
(d) funding had not been depleted.
108. Those in the position of the government department and Talent cannot simply fabricate a rationale for termination. The rationale has to be valid and based on actual events.
109. The idea that Mr Sadasivan had been terminated for convenience was palpably untrue and was simply a fiction.
110. Moreover, as outlined earlier in this decision, I have found as a matter of fact that Talent did not have a right to terminate for convenience in the schedule of assignment for the contract extension.
111. If, on 13 July 2018, the discussions between Mr Johnston and the government department resulted in the government department agreeing that it erred in its conclusion that Mr Sadasivan was underperforming, then Mr Johnston should have recorded that fact and asked for Mr Sadasivan’s reinstatement into the role.
112. If the government department had then suggested Mr Sadasivan could be terminated for convenience, Mr Johnston should have argued that he could not possibly terminated on that basis and that the appropriate outcome was Mr Sadasivan’s reinstatement.
113. Talent may simply have been pragmatic and may well have thought they were doing the right thing by Mr Sadasivan in getting from the government department a pay-out of five days in lieu, where otherwise he may have received nothing.
114. In my view, if Talent really wanted to help Mr Sadasivan, they should have sought an explanation as to what facts the government department were relying on when they said was saying Mr Sadasivan was underperforming. Those facts could at least inform both Talent and Mr Sadasivan as to why he was no longer welcome at the government department and may have provided Mr Sadasivan with the ability to try and correct the record or to bring other facts to light which may have swayed the leadership of the government department into concluding that they could continue with Mr Sadasivan in the role.
115. In my view, Talent especially needed to explore the rationale for Mr Sadasivan’s ejection from the workplace in the circumstances where he denied underperforming and where he was complaining of the way he had been treated by those to whom he reported.
When did Talent actually terminate the contract with ATMA and for what reason?
116. I am satisfied that the reason the government department initially gave to Mr Sadasivan on 10 July 2018 and to Mr Johnston on that same date was that the termination was occurring as a consequence of Mr Sadasivan’s performance.
117. Mr Johnston wrote to Mr Sadasivan on 12 July 2018 and told him the contract between Talent and ATMA had been terminated. The rationale that existed at that time, although unexpressed in the email, was according to Mr Sadasivan, that he was being terminated for cause under clause 8.3 d) of the contract. Mr Johnston disputes this claim.
118. That rationale was withdrawn on 13 July 2018, and was substituted for termination of convenience as being the rationale for the termination at that time and consequently cannot be a justification for the termination of the contract between Talent and ATMA.
119. In my view, nothing done by Talent between 11 July 2018 and 9 August 2018, (including Mr Johnston's emails of 11 and 12 July 2018) provide a valid basis for the termination of the contract between ATMA and Talent; as,
(a) the termination cannot have been properly based on clause 8.3 d) of the contract, as, for amongst other reasons, this ground was withdrawn by the government department as its basis for terminating its contract with Talent; and
(b) a right to terminate for convenience did not exist under the schedule of assignment to the contract extension, and even if it did exist, the conditions precedent to terminating for convenience did not exist; and
(c) the right to terminate on 10 days’ notice under the schedule of assignment relevant to the contract extension, was not used as a justification for the termination by Mr Johnston.
120. Mr Johnston's position is that at no stage did he ever advise, or agree that, Mr Sadasivan would receive 10 days’ pay in lieu of notice. Consequently, it is clear that Talent cannot contend that termination occurred under the notice provision to the schedule of assignment to the contract extension, which would have allowed Talent to terminate the contract with ATMA with 10 days’ pay in lieu of notice.
121. On 10 August 2018, when Mr McCoy wrote to Mr Sadasivan and advised him that “Talent confirms that the termination of the agreement was invoked upon ATMA under the terms listed in the Schedule of Assignment (SOA).”
122. Whether Mr McCoy knew it or not, he had cited an appropriate ground for terminating the contract under the schedule of assignment. Mr McCoy’s reference to “termination of the agreement was invoked upon ATMA under the terms listed in the Schedule of Assignment” must necessarily refer to the right to terminate on giving 10 business days’ notice, as it is the only means of termination found in the schedule of assignment to the contract extension.
123. As a matter of fact I find that this is the first time Mr Sadasivan was advised of a proper basis for the termination of the contract between Talent and ATMA.
124. I take this day, 10 August 2018, as being the date the contract was in fact terminated.
125. Adopting this view Mr Sadasivan would be entitled to a total of 28 days’ pay (23 days relating to the period 11 July 2018 – 10 August 2018, plus a further business days’ pay in lieu of notice, minus the 5 days’ pay in lieu he had already received).
126. This would means Mr Sadasivan is entitled to the sum of $28,210.56 ($125.94 x 8 hours per day x 28 days), although that amount must be reduced to the jurisdictional limit of ACAT, $25,000.
127. He is also entitled to reimbursement of the $559 ACAT filing fee and $26 for an ASIC search fee.
128. The total amount due to Mr Sadasivan is $25,585.
………………………………..
Member D Mulligan
HEARING DETAILS
FILE NUMBER:
XD 1660/2018
PARTIES, APPLICANT:
ATMA International Pty Ltd ACN 127 193 828
PARTIES, RESPONDENT:
Talent International (ACT) Pty Ltd ACN 121 819 305
COUNSEL APPEARING, APPLICANT
N/A
COUNSEL APPEARING, RESPONDENT
N/A
SOLICITORS FOR APPLICANT
N/A
SOLICITORS FOR RESPONDENT
Falcon Legal
TRIBUNAL MEMBERS:
Member D Mulligan
DATES OF HEARING:
6 May 2019
15 May 2019
29 May 2019
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