Easling v Mahoney Insurance Brokers

EASLING v MAHONEY INSURANCE BROKERS
[2001] SASC 22

Full Court: Doyle CJ, Olsson and Bleby JJ

1................ DOYLE CJ...... I have had the benefit of reading the reasons of Olsson J and Bleby J. The relevant facts have been stated by Olsson J, and have been supplemented by Bleby J. There is no need for me to repeat them.

I agree with Olsson J that the question of whether there was a constructive dismissal on 29 October 1998 does not arise. I agree also that the respondent cannot now rely on the appellant’s conduct before 29 October 1998 to justify a dismissal. The issue is whether the letter of 12 February 1999 gave rise to a resignation by the appellant or was an acceptance by him of a prior repudiation by the respondent.
In his reasons Bleby J suggests at [148] that, having regard to the nature of the duties performed by the appellant,
“... [T]here was no material variation in the contract for its duration, so far as it concerned the nature of the duties to be performed. The reversion to a single person office suggested in January 1999, with the appellant selling both taxi and other forms of insurance, in itself constituted no material change to the contract of employment.”
In other words, he suggests that the appellant was always employed under the contract of 11 June 1996, the only variation being an agreed variation as to the rate of remuneration.
On that approach it would follow that the proposals advanced by the appellant in late 1998 and in early 1999 did not constitute a repudiation of, or variation of, the existing contract, even if imposed on the respondent.
I agree. The question is essentially one of fact, although legal principles play their part. As Ashley J said in Quinn v Jack Chia(Australia) Ltd [1992] 1 VR 567 at 575:
“... [T]he facts of a particular case may show that a contract of employment between employer and employee has been supplanted by a new contract between them. Alternatively, the facts may disclose a continuing contract within which variation of circumstances may occur without there being any need for variation of contractual terms, or a contract which has been subject to specific variation.”
It will often be difficult to tell whether a change in what I will call the working arrangements has given rise to a new contract, to a variation of an existing contract, or merely represents a change to working arrangements which the employer is entitled to require under the terms of the original contract of employment. Obviously enough, the nature of the change in duties will be a relevant matter, and the more significant or substantial the change, the more likely a court is to conclude that there has been a variation of the contract and, ultimately, a new contract: see Quinn v Jack Chia at 576. The matter is summarised thus in Macken, McCarry and Sappideen’s “The Law of Employment” (4th edition, LBC Information Services, 1997) at 249:
“An employer can require employees to adopt a different method of doing the work they are engaged to do without precipitating either a variation or a termination of contract. In other words there is a distinction between a variation of contract and a variation in the scheme of working.”
To my mind, a court should not too readily assume that a change in working arrangements, or in the duties of an employee, involves either a variation to an existing contract, or the making of a new contract. In my respectful opinion Murray CJ stated the matter too widely when he said in Federated Mutual Insurance Company of Australia Limited v Sabine [1920] SALR 284 at 292:
“The true view, I think, is that unless the original agreement gave the employer the right to the services of the employee in any capacity he chose to direct from time to time there would be a new employment whenever a change was made in the duties to be performed, and it would be a question of fact in each case what the terms of the new employment were.”
In my respectful opinion the issue is whether the original agreement gives the employer the right to make the changes that have been made, and if it does, then neither a varied contract nor a new contract arises.
The application of the relevant principles to the facts of a particular case will often be difficult. In some fields of employment changes in the working arrangements and tasks performed will occur gradually. The application of the relevant principles of law may be difficult in such a case.
I acknowledge the force of the argument that the appellant entered into a new or varied contract in 1997 under which he was employed as an office manager or branch manager. However, my view is that the circumstances reflect nothing more than a gradual development of the business of the employer, involving appropriate adjustments of the office and working arrangements, with the appellant continuing to work as an insurance salesman in the manner always contemplated. It appears to me that it was always contemplated that the respondent would or might establish an office in Adelaide, with clerical staff, and that the appellant would be involved in the supervision of this office while working as an insurance salesman. That is what occurred. I do not consider that the changes that occurred in 1997 were of such significance as to lead to the conclusion that the existing contract was varied, or replaced by another contract.
Accordingly, I am not satisfied that the appellant was entitled, by virtue of his contract of employment, to require that the respondent continued to employ him in an office of about the same size, with about the same level of clerical staff, confining his attention to the activity of insurance in the taxi industry. Just as the employer’s business developed in 1996 and 1997, giving rise a need to make appropriate arrangements, so, as the business declined, in my opinion the respondent was entitled to continue to vary the working arrangements, including, within certain limits, the arrangements as to the type of insurance cover that the appellant would sell.
If I am wrong on that, I nevertheless agree with the conclusion reached by Bleby J, that when the appellant terminated the contract in February 1999, the respondent employer had not imposed a change of duties against the appellant’s will, in such a manner as to amount to a repudiation of the contract of employment. I agree with the analysis of the facts made by Bleby J. The respondent was negotiating with the appellant, and in the direct dealings between the appellant and the respondent the appellant was indicating that the proposed changes were acceptable to him. I do not agree that things had reached a point at which it could be said that the respondent had imposed, or was threatening to impose, changes upon the appellant. That might have come to pass, but things had not yet reached that stage.
I do not suggest that situation is clear cut. Things were complicated by the fact that in his direct dealings with the respondent, the appellant was indicating a willingness to enter into the changed arrangements. That is consistent with the evidence to which Bleby J refers. I consider that, in that context, the Court should be cautious before concluding that the employer was intending to require the appellant to submit to the proposed changes come what may. I acknowledge that the events that had occurred had made it plain that the appellant would not be restored to working arrangements precisely the same as those that had existed during 1998. But it does not follow that the working arrangements ultimately implemented would have been so different from those previously existing as to amount to a constructive dismissal, if imposed unilaterally upon the appellant.
For those reasons I would dismiss the appeal.
I should add that if I am wrong in all that, I agree with Olsson J that an appropriate award of damages would be the amount of $40,000 plus interest, the amount which the trial Judge would have awarded had he found for the plaintiff.

OLSSON J. This is an appeal against the dismissal, by a District Court Judge, of a claim by the appellant against the respondent for damages for wrongful termination of a contract of employment.
It is necessary to review the narrative facts in some detail in order to appreciate the issues which arise.
By letter dated 29 February 1996 the appellant was appointed for a probationary period of three months, as the Adelaide “agent” of the respondent. For that period he was remunerated by commission.
On 11 June 1996, after some further negotiations between the parties, the appellant entered into a written contract of employment with Michael V Mahoney Insurance Brokers Pty Ltd, which, according to its letterhead, traded as “Mahoney Insurance Brokers”. That contract stipulated that the appellant was to be employed by the respondent in Adelaide, as an insurance salesman, for a term of five years which was deemed to have commenced on a date mutually agreed by the parties. There was no evidence as to what that date was. He was to receive a salary package of $50,000 per annum, to be reviewed at least annually.
The written contract contained a termination clause expressed as under:-
“The Employee shall have the right to terminate the employment of the Employee pursuant to this agreement forthwith if the Employee shall at any time:
a)commit any serious or continuing breach of any of the provisions herein contained,
b)be guilty of any serious or wilful misconduct or neglect in the discharge of his duties hereunder,
c)be convicted of any criminal offence punishable by a term of imprisonment, or
d)be incapacitated for a period of six (6) months referred to in clause 11.2
and in such event the Employer shall forthwith from such termination be relieved of any liability to make any further payments of any kind to the Employee.”

The learned trial judge seems to have accepted the appellant’s evidence that he had a particular field of expertise in the selling of comprehensive motor vehicle insurance for the taxi industry; and that he was originally engaged because of his background in that type of work. The learned trial judge found that, effectively, the appellant was ultimately employed as the manager of the Adelaide office of the respondent.
The headquarters of the respondent were based in New South Wales. The appellant opened the Adelaide office and, very soon thereafter, engaged the services of a Ms Kate Nicholson as a receptionist/filing clerk. In late 1996 a Mr Hubbard transferred from the Sydney office to sell general insurance. It was said that some friction arose between Hubbard and Ms Nicholson, as the latter was engaged in insurance studies and considered that she could attend to the general portfolio. Be that as it may, Hubbard left in September 1997.
A letter written to the appellant by the respondent’s General Manager (“Norton”) on 19 February 1997 indicated that, as a result of a review which had been conducted in respect of the 1996 calendar year, his salary package was increased by $20,000 to $70,000 per annum, including a motor vehicle allowance. At, or shortly after, that time the respondent issued the appellant with personalised business cards, which described him as the “Office Manager” of the respondent. These were later superseded by cards which described him as the “Branch Manager”, copies of which are reproduced in the Appeal Book p 475. The evidence suggests that he fulfilled that role.
By January 1998 two other persons were employed in the Adelaide office. A Ms McCall took the place of Hubbard. She was involved in the selling of commercial, general, house and car insurance. A Ms Hendry was employed as a receptionist/filing clerk and to assist Ms Nicholson. The latter took a more active role in taxi insurance, by the processing of claims and renewals.
It is clear that, by mid February 1998, there were problems in the Adelaide office. On 16 February 1998 Norton wrote direct to Ms Nicholson warning her that her attitude towards training and assistance of other staff members was unsatisfactory. It referred to a specific incident in which she was said to have refused reasonable assistance to a new employee, on the ground that she was being paid more than Ms Nicholson and would have to learn “the best way she could”.
On 4 October 1998, Ms Nicholson wrote direct to the witness Cooper, the Managing Director of the respondent. This forwarded a lengthy and detailed statement in which she made a variety of complaints concerning the conduct of the appellant, including allegations of the nature of sexual harassment and general inappropriate treatment, by him, of her and another female employee. The evidence indicated that this letter followed a discussion had by Ms Nicholson with the witness Murnane, who was a senior female officer employed at the Head Office of the respondent in Newcastle; and also a subsequent telephone call from Ms Nicholson to Norton at his home. Norton requested Ms Nicholson to put her complaints in writing.
It was Norton’s evidence that he also received a written complaint from Ms Hendry, relating to statements said to have been made about her by the appellant to the effect that she had not been wearing underwear and “had flashed herself”. So far as I can determine, this complaint was not tendered in evidence.
There is no doubt that, on 29 October 1998, Norton and Cooper both came to Adelaide. Cooper first spoke with the appellant alone. Norton then spoke with him separately. The learned trial judge preferred their evidence to that of the appellant as to what occurred.
There was considerable dispute as to precisely what was said at that time. In the course of his reasons the learned trial judge recited the various versions of what was said to have taken place during these conversations.
In essence, it was the appellant’s evidence that, as soon as Cooper went into his office with him and closed the door, Cooper said that he had received allegations of sexual harassment “from the girls”, threw their statements on the appellant’s desk and instructed him to read them.
Cooper agreed with the appellant that his opening words to the latter were to the effect that “I feel like kicking you fair up the arse, because I didn’t need this.”
Cooper said that he thought that the appellant changed his glasses and read the documents for about three to five minutes. The appellant then said “Some of the stuff in this is a whole heap of crap”, although he admitted making the statement about Ms Hendry.
The transcript records the following testimony of Cooper:-
“A.... He said that some of this was a whole heap of crap. I said ‘Why would you even say it about her. Why wouldn’t you have asked Lorna to accompany you into a meeting with her and have an interview with her and ask her why would she do it’.
Q.What did he say.
A...... He said ‘I didn’t think about it’.
Q.Did you say anything to him about what might happen in relation to these complaints.
A...... Yes, I did. I said that there was [a] couple of ways we could deal with this. One, he could either resign and everything would remain in-house, or we would have to take the appropriate action to sort the complaint out.
Q.Were they the words you used ‘the appropriate action to sort of the complaint out’.
A...... The ‘appropriate action’, yes.
Q.Did you say what you meant by that.
A...... He said ‘I would prefer to take the resignation aspect’ and that was as far as it went.
Q.My question was did you tell him what you meant by that.
A...... No, I didn’t.
Q.Then he said what.
A...... He said ‘You and Michael have been very, very good to me. I prefer to take the resignation line issue’ and he said he would prefer it not to become public.
Q.When he said that, what did you do or say.
A...... He then asked me what his entitlements would be. I said ‘I don’t know what your entitlements are as to what your length of service has been, how many holidays you have taken etc. I will get Mr Norton into the office and he will organise what all your staff entitlements are regarding holidays’.
The appellant asserted that, when he attempted to express his version of what had occurred, Cooper said that he didn’t want to hear his side of it, “either you resign or I’ll sack you”.
As I understand the evidence, Cooper left the appellant’s office and Norton then entered. The appellant testified that Norton told him that there was little point in challenging the allegations made, because he would not be believed. He says that, after some discussion, Norton said “Well, you can clean out your desk in your own time, type up a resignation and leave it with the keys to the office at the Hyatt Hotel”.
The learned trial judge recited that Cooper contended that he gave the appellant the option of either resigning and “everything would remain in-house”, or action would have to be taken to “sort the complaint out”. He said that the appellant opted for resignation, whereupon he arranged for Norton to discuss the appellant’s entitlements with him.
For his part, Norton asserted that the appellant admitted the allegations against him and said that he had no option but to resign. The appellant volunteered that he would drop his resignation off at the hotel, together with the keys. Norton conceded in cross examination that he told the appellant that he would have a credibility problem, given that he had a young female complaining about the underwear issue and a married female complaining about the other issues.
Cooper then told the remainder of the staff that the appellant had resigned.
It was common ground that, later the same day, the appellant did leave the keys at the Hotel, but did not deliver any resignation.
The evidence of Cooper and Norton is not entirely consistent with their version of events, because it is plain that they did not, at the time, persist with a stance that the appellant had resigned. Norton testified that, after his return to Newcastle, he had a telephone conversation with the appellant, who advised him that he was seeking legal advice concerning the matter. Norton said that he told the appellant “that’s fine, that he was quite entitled to do that”.
With all due respect, it is impossible to discern from the reasons published by the learned trial judge any cohesive findings as to what thereafter occurred, in detail and sequence.
Certain correspondence passing between the parties and/or their solicitors is of vital importance in this regard. It becomes necessary to recite some of it in extenso.
On or about 4 November 1998, the appellant’s solicitors wrote to Cooper in the following terms:-
“Dear Sir
RE: RODERICK JAMES EASLING
We have been consulted by Roderick James Easling of Oakleigh Road, McLaren Flat, in relation to matters arising out of his employment with Mahoney Insurance Brokers Pty Ltd. Our client instructs us that he is currently employed by the company as the Manager of the South Australia [sic] branch, pursuant to a five year contract of employment entered into between our client and the company on 11 June 1996.
We are instructed that on the 29 October 1998 you attended at the Adelaide office of the company and demanded that our client tender his resignation from the company. You advised our client that a complaint had been made against him by other employees, alleging sexual harassment. Details of those allegations against our client were not provided to our client. However, our client strenuously denies any allegations of sexual harassment or misconduct, or any other breach of his contract of employment. Indeed, we are instructed that at that time our client advised you that the allegations were untrue, but that you indicated that the company had already made up its mind about the matter and demanded our client’s resignation.
The allegations made against our client appear to be highly defamatory of him. At the present time Mr Easling is taking advice in relation to taking action for damages for defamation against the authors of those allegations. He will certainly commence action in respect of any repetition of them.
The action on the part of the company in demanding our client’s resignation appears to be a gross breach of our client’s contract of employment. Our client has not been guilty of any serious or unlawful misconduct or neglect in the discharge of his duties, or any other serious or continuing breach of his contract of employment. Our client has been guilty of no conduct which would justify asking for his resignation or the termination of his employment.
The company’s behaviour in accepting the complaint without even seeking to hear from our client in relation to it suggests that the degree of mutual confidence and trust necessary to found the employment relationship has evaporated. In those circumstances, our client is prepared to resign from his employment, provided that he is paid an amount equivalent to the balance of any unexpired portion of the contract of employment and that he be provided with a written retraction of the allegations made against him and be given an apology for them. We ask that you give the matter your immediate consideration.”

Norton responded to that letter on the following day, by writing direct to the appellant, advising that the matter had been referred to the respondent’s legal advisers. On the same day, the respondent’s solicitors wrote to the appellant’s solicitors, inter alia, denying that, on 29 October 1998, Cooper had demanded the appellant’s resignation. It was said that the appellant had admitted the accuracy of the allegations.
This letter then went on to say:-
“... Mr Cooper then indicated to your client that the matters would be investigated and such investigations may suggest that counselling of all parties concerned would be appropriate. Given that your client admitted the matters put to him we cannot see how your client can deny that the conduct did not occur. At no time did Mr Cooper or Mr Norton demand your client’s resignation as alleged by your client.
We would respectfully suggest that as the matters complained of are matters which are rightfully and lawfully made to the Employer of the persons concerned that your threat regarding defamatory action is clearly inappropriate. Indeed it would appear that there may well be an ulterior motive in making such a threat.
As you will appreciate, and no doubt advise your client, our client is compelled to fully investigate any allegation of inappropriate activity and where necessary to require the parties to such a dispute to undergo such counselling as may be appropriate.
We deny any suggestions that we have ‘accepted’ the complaint if the inference is that the Company has made any decision as to the accuracy or otherwise of the complaint except in so far as your client has admitted to certain allegations put to him by Mr Cooper. Our client quite appropriately upon the receipt of the complaint decided to advise your client that such a complaint had been made and that investigations would have to be undertaken in order that the Company as Employer of both persons is able to undertake appropriate action as it may be advised in relation to the matters raised. We assume that your client will fully co‑operate in any such investigation and in any counselling or other steps which may be taken by our client to identify a resolution of any such matters.
Notwithstanding the terms of your letter we are instructed by our client that your client has requested that he be able to return to work. Our client has indicated to your client that our client has no objections to that course of action on the basis that your client co-operate fully with any investigation of any allegations and participate in the appropriate steps to resolve any dispute which may arise.
We are instructed by our client that our client agreed to your client returning to his place of employment on 5 November 1998 notwithstanding your client had previously offered his resignation. Such employment would however be subject to the matters outlined above.
We look forward to your advices.”
It is stating the obvious to say that the terms of this letter are somewhat difficult to reconcile with the unequivocal statements undoubtedly made by Cooper to the other members of the staff, after he had spoken with the appellant on 29 October 1998, to the effect that the appellant had resigned. Cooper and Norton also advised certain key Adelaide clients of the respondent to the same effect during that evening.
Be that as it may, a subsequent exchange of correspondence occurred as between the solicitors for the parties.
The appellant’s solicitors wrote in these terms:-
“10 November 1998
Messrs Rutter Morgan & Co
Solicitors & Attorneys
PO Box 123
WALLSEND NSW 2287 Facsimile: (02) 4955 8914
Dear Sirs
RE:.. MICHAEL MAHONEY INSURANCE BROKERS PTY LTD - RODERICK EASLING
We acknowledge receipt of your letter of 5 November 1998. Our client disputes much of the contents of your letter and we have been instructed to reply to the matters set out in your letter as follows.
The contract which our client has entered into is clearly a fixed term contract of employment for a period of five years commencing on 11 June 1996. Clause 11.1 of the Agreement provides for a limited right of termination of the employment. It provides, inter alia, termination only if the employee shall at any time have committed a serious or continuing breach of any of the provisions contained in the Agreement, or, is guilty of any serious, willful misconduct or neglect in the discharge of his duties.
Our client reiterates that Mr Cooper demanded his resignation in plain and emphatic terms. On our instructions, Cooper said to Easling ‘either you resign or we sack you’.
Our client emphatically denies admitting the allegations. In fact, when presented with a piece of paper which was said to contain the allegations our client attempted to read it, notwithstanding the fact that he did not have his correct spectacles with him, and then said to Cooper ‘This is crap’ and threw the paper down on to the desk. We fail to see how this could in any way be construed as an admission of the allegations or any concession that the matters complained of were accurate.
On our instructions, far from Mr Cooper indicating that the matters would be investigated, Cooper informed Easling to the effect ‘we don’t want to hear your side’. Further, we are instructed that Mr Lindsay Norton said to Easling ‘you are a white Caucasian male, you won’t have a chance in court’. It was made clear to our client that neither Cooper nor Norton were interested in ascertaining our client’s response to the allegations.
We do not understand the comment made at the top of page 2 of your letter that ‘your threat regarding defamatory action is clearly inappropriate. Indeed, it would appear that there may well be an alterior [sic] motive in making such a threat.’ The reference in our letter of 4 November 1998 to taking action for damages for defamation ought not to be construed as a threat. It ought to be regarded as a clear and unequivocal indication on our client’s behalf that he will not tolerate defamatory allegations being made against him and will take appropriate steps to protect his personal reputation.
Your client is now well aware that our client emphatically rejects any allegation of sexual harassment or impropriety as is apparently alleged against him. Any repetition of those allegations would almost certainly lead our client to taking action against the author of them. We reiterate that our client is considering his position in relation to the allegations which have been made. Our client is quite entitled to take action for damages for defamation for allegations falsely made about him. There is no ulterior motive in making such a comment. Our client is perfectly entitled to take appropriate and lawful steps to protect his reputation.
We note the comments in your letter that your client is compelled to fully investigate any allegation of inappropriate activity. Would you please advise us immediately of the full details of the allegations made of and concerning our client. We require those details in writing. We also ask that your client advise us when those allegations were first made to it and by whom.
Although in your letter you deny that your client has accepted the allegations made, we and our client are troubled by the references in your letter to ‘counselling’ when, according to your letter, your client has not yet considered whether the behaviour complained of has taken place. That comment in the light of what has occurred only confirms that your client has already formed its view of the matter.
We await your prompt response to this letter.
Yours faithfully
STANLEY & PARTNERS
Per: (signature)
Simon Langsford”
The respondent’s solicitors replied:-
“16 November 1998
Stanley & Partners
Barristers & Solicitors
PO BOX 6044
ADELAIDE SA 5000
Dear Sir
RE: RODERICK JAMES EASLING
We refer to your letter dated 10 November last. We note the outline of your client’s instructions and we do not intend to respond further thereto as there does not appear to be any point in further exacerbating this difficult matter.
We should not be understood however to be making admissions to any of the matters you have raised in your letter.
As to your request for full details of the allegations concerning your client, we are instructed to advise that it may not be appropriate to provide such details because:-
(a)... Our client does not intend to act on the complaints, other then [sic] to have brought them to your client’s attention in general terms so as to receive his response; and
(b)To conciliate between the complainants and your client;
(c).... Our client notes that Mr Easling denies having sexually harassed any fellow employee;
(d)The fact of having received the complaints does not provide grounds for terminating his employment;
(e).... Save for your concern about defamation; there is to our knowledge no threat of proceedings against or concerning your client;
(f)The complaints were made to our client on a basis that in general terms they be brought to your client’s attention, which has been done.
Your client has been a valued employee, and it is our client’s intention to provide your client with every reasonable opportunity to fulfil his talents as an insurance salesman within the company.
As the allegations concerning the harassment have been made, our client is not in a position to ignore them. Would you please advise us (on the basis of being without admissions by your client), whether he is prepared to enter negotiations to attempt to conciliate this matter, and if so would you provide us with your suggestion as to how this could be best achieved so that this matter can be brought to a satisfactory conclusion as soon as possible.
Yours faithfully
RUTTER MORGAN & CO
Per: (signature)”
It is by no means clear precisely when the appellant was, or was not at work. The learned trial judge seems to have accepted that he returned to work for a time as from 5 November 1998. He commenced consulting a medical practitioner as from 2 November 1998.
On 17 November 1998 the appellant was instructed by Mr Norton, by facsimile, to come to Newcastle on 18 November, returning on 19 November for the purpose of ‘discussing various issues including your role and the performance of the Branch’.
On the same day, the appellant’s solicitors wrote to the respondent’s solicitors in response to their letter of 16 November. That letter included the following:
“We also note that your client says that it is its intention to provide our client with a ‘reasonable opportunity to fulfill his talents as an insurance salesman within the company’. However, it appears to us that the events which have transpired since 29 October 1998 have led to a situation where the necessary degree of confidence and trust between employer and employee no longer exists. Those events include the following:-
·....... Serious complaints have been made against our client. It appears from your recent letter that your client company no longer accepts that these allegations are true. However, these allegations have been made to senior management who have put them to our client.
·....... Your client requires ours to work in constant contact with persons who have made untrue allegations of sexual harassment against him.
·....... The Adelaide office staff, having made baseless allegations, have without notice to our client now failed to attend for work on 6, 16 and 17 November. Apparently before doing so they advised officers in the Newcastle office of their intention not to attend for work, but no one in that office thought it appropriate to inform Mr Easling of their intended absence. On those days our client arrived at the office for work only to find it empty. He was required to telephone the Newcastle office in order to learn the movements of his own staff, notwithstanding that it is our client who has the responsibility for management of the Adelaide office.
·....... On 29 October 1998 Ms Nicholson advised at least one client of the company that our client’s employment was to be terminated. We enclose a statement provided by Mr Michael Bullock. It appears clear that either Ms Nicholson has fabricated the events or that management had informed her that it intended to terminate Mr Easling’s employment on 29 October 1998. In either case it is obvious that the employment situation is intolerable for Mr Easling.”

The letter then included a without prejudice proposal to resolve the matter and concluded:
“We point out that our client has an ongoing contract of employment with your client as an insurance salesman. He has not been in breach of the contract.”

On 19 November 1998, a meeting took place at the Newcastle office of the respondent between Mr Norton, the appellant and Ms Murnane. Comprehensive minutes of the meeting were prepared and admitted into evidence. The appellant did not challenge the accuracy of the record.
It was pointed out that the taxi insurance business in Adelaide was suffering increasing losses, although the general insurance losses were reducing. It was acknowledged by all that there was little prospect of increasing taxi insurance revenue for a variety of identified reasons. There was discussion about the prospect of increasing revenue both in general insurance and in life insurance. The appellant had conducted some life insurance business before joining the respondent, and had since become accredited with National Mutual. The record of the meeting continues:
“We then discussed that maybe the only area for real growth would be in the Life area. Rod agreed that he would like to get back into the life area. He had done 2 and a half years in life insurance prior to joining Mahoney’s and he enjoyed that area. He still had agencies with Zurich, Legal and General (possibly as they were now owned by Colonial) and Lumley’s up to next month.
He also said that he was accredited with National Mutual, Royal Sun and A C & L. He also said that working only on a part time bases (sic) before joining Mahoney’s his Life Income was approximately $20,000 in the 2nd year. He had kept his other job going at that stage as a taxi driver so that he did not have to depend fully on Life Insurance Commission as a living.
Rod said that he felt quite comfortable selling life insurance as he had learnt quite a bit from being with Mahoney’s on how to talk to the clients....
Rod agreed that he was prepared to commit to be the Life Insurance Representative for Mahoney Insurance Brokers and that with cost cutting in the sponsorship and conferences that perhaps in 2 years Adelaide would be in a profit area.
Rod was then asked what Role he would like to have he confirmed the following
He would be full time in the Life area and try to be fully accredited by 1st January, 1999. He also advised that it would be reasonable for him to achieve $30,000 in commission in the first year....
Lindsay also advised Rod that a lap top computer would be available and Liz discussed how Rod would not need to be in the office very much as he could operate from home or he would be out seeing clients. If he did not have to be in the office then he would be able to work much more efficiently as client’s (sic) for Life Insurance rarely come to visit the office rather the Life Insurance person goes to their home.”
There was then discussion concerning the problem of friction in the Adelaide office and the use of Ms Fleming to assist in resolving the problems. The record concludes:
“Rod agreed that he would like to become the Life Insurance person and focus totally on that area of insurance.”
The witness Fleming commenced a series of counselling sessions involving both the appellant and other staff (both individually and collectively) on 18, 24 and 25 November 1998. However, these did not resolve the problems in the office. If anything, they seem to have exacerbated the tensions between staff members.
On 26 November, the appellant went on sick leave and thereafter received medical certificates of sickness until at least 31 January 1999.
On 30 November 1998, the appellant wrote to Cooper reviewing the situation from his perspective. His letter reads as under:-
“Monday, 30th November 1998
Mr Roderick J. Easling
P.O. Box 668
McLAREN VALE SA 5171
CONFIDENTIAL
Mr Bob Cooper
Director
Mahoney Insurance Brokers
P.O. Box 275
HAMILTON NSW 2383
BY FACSIMILE (02) 4962 2357
Dear Mr Cooper,
Re Employment
I refer to previous communications including communications between my solicitors and the company’s solicitors.
Kate Nicholson and Lorna Hendry have made allegations of a very serious nature apparently involving sexual harassment against me. I do not know when these allegations were first made, but I do know that on the 29th October you attended at the Adelaide Office and demanded my resignation on the basis of them. It appears clear from Mr Bullock’s statement that Ms Kate Nicholson was aware well before I was that the company intended to demand my resignation from 29th October.
Although my solicitors have requested details in writing of these allegations, they have not been provided to me or to my solicitors. It now appears from the comments made to me and from the correspondence from your solicitors that you will not provide details of them. It is impossible for me to fully refute the allegations without knowing exactly what they are. I repeat what I have said from the outset - that I have not been guilty of any sexual harassment.
Up to the present time I have remained at work and carried out my responsibilities to the best of my ability. I have found this extremely difficult. As you well know, on a number of occasions and without warning to me, Kate Nicholson and Lorna Hendry failed to attend for work. On making inquiries, it became clear to me that they had informed the Newcastle office and presumably yourself of their intentions. No one saw fit to advise me of their proposed absence. On those occasions I was instructed to man the office. This made it difficult for me to carry out the full range of responsibilities as set out in my contract of employment and in my job description.
At the request of the company, I met with Ms Suzanne Fleming of Cutcher & Neale Consultants both in Newcastle and Adelaide. It appears clear to me that she had been instructed not to carry out any detailed inquiry into the truth of the allegations, but merely to provide some counselling. I cannot accept that counselling is appropriate where the allegations against me are entirely untrue.
From what little I know of the nature of the allegations made against me, the situation appears to me to be relatively straightforward. Either the allegations are true or they are not. If they are not true, they have clearly been falsely made against me. They are not, to my knowledge, allegations of innocent behaviour. It now appears to me that the company intends to avoid taking any steps to determine whether the allegations are true.
As a result, the situation has now become quite intolerable. It is apparently expected of me that I run the Adelaide Office in order to carry out my contract of employment, and to work closely in an unsupervised situation with those very staff members who have falsely accused me of sexual harassment. Of course in such a setting, I remain completely vulnerable to further false claims.
I am unable to return to work while this situation persists. Clearly, I cannot be offered an appropriate or even safe working environment. It is obvious to me that no-one in my position could be expected to put up with continuing to work with staff who have made such false complaints.
The company must take immediate steps to investigate the truth or falsity of the complaints made against me. If the company finds the allegations made against me to be false, then the company has no alternative but to terminate the employment of those persons who have made false accusations against me. I must, in the circumstances, treat the failure to take such effective action as a dereliction of the company’s duty to me and an obvious sign of its complete lack of the appropriate faith and confidence in me. My job description requires me to supervise Adelaide staff. Quite frankly, it is impossible for me to carry out this and other tasks in the current environment.
I must advise you that I am unable to return to work until or unless this situation is resolved. It obviously requires prompt and effective action to do so. Unless I hear from you within the next 48 hours indicating that the company intends to take proper steps to investigate and deal with the allegations, I will have to take appropriate legal action. In that regard it appears to me that the actions of the company must amount to a breach of my contract of employment. I would also be required to commence action for defamation in respect of the allegations made against me.
I believe that I have made numerous attempts to resolve the matter. The allegations made against me are serious, but entirely false. They have caused me and my family great distress. I ask again that you take prompt action to resolve the matter.
Yours faithfully,
(signed)
Roderick James Easling”

This letter evoked the following response, dated 30 November 1998, from Norton:-

“FAX DOCUMENTATION
DATE:  30/11/98
ATTENTION:  Rod Easling
ORGANISATION:  Mahoney Insurance Brokers
CITY:  Adelaide
AREA CODE & FAX NO:           08-83830532
NO OF PAGES:  2
SENDER:  Lindsay Norton
SENDER’S TELEPHONE NO:   (049) 622344
FAX NO:  (049) 623378
Dear Rod
I refer to your confidential letter to Mr Robert Cooper dated 30th November 1998 re employment issues.
I am deeply concerned that the current situation is causing you a stress related illness and am concerned that this in turn is having an adverse effect upon your family.
The situation is of course quite stressful to all. Please be aware that the Company is doing all that it legally can within its power to resolve the current situation to everybody’s satisfaction. It is not within our ability to determine whether the allegations are true or not, but believe that such deliberation will be made in the appropriate form by somebody who has the authority to make such a determination.
You advise that it is our duty to provide you with a safe working environment, and in fact it is our duty to provide all of our employees with a safe working environment. To this end, the Company engaged Suzanne Fleming to independently mediate with the hope that a resolution could be achieved. Suzanne thought that she had achieved this position. However, I gather that this is not so from the information provided in your letter.
Rod, as I see it there are several options available to you and they are as follows:
1...... You are free to return to your current position in the Adelaide Office at any time that you feel that you are able.
2.You are of course able to accept the role of selling life insurance products as discussed with Liz Murnane and myself on your last visit to Newcastle. This would enable you to work unsupervised from your home office where you would feel comfortable. The company will provide you with all of the necessary tools and assistance to enable you to perform this function.
3...... If you are continuing to suffer from the stress related illness, and your medical advisors claim that you are unfit for work, then you can stay on extended sick leave and the matter will be handled by the insurers of our Sickness and Accident Insurance Scheme.
4.Another alternative of course, is that you press on down the path of litigation.

Your advices to me today by telephone that you would be prepared to work if the Company dismisses Kate and Lorna, is simply not an option.
I await your further advices.
Yours sincerely
(signed)
LINDSAY NORTON
GENERAL MANAGER”

Norton also sent a separate fax to the appellant on the same date. This indicated that the respondent proposed to accept a recommendation from Fleming to conduct a full administration organisation audit of the Adelaide office.
This prompted the following response, dated 1 December 1998, from the appellant:-
“1 December 1998
Mr Lindsay Norton
General Manager
Mahoney Insurance Brokers
BY FACSIMILE:
Dear Lindsay,
I refer to your fax of 30 November 1998 dealing with matters arising out of my letter to Mr Robert Cooper.
I do not believe that the company is taking appropriate steps to ‘resolve the current situation’. It is not a matter which can be resolved ‘to everybody’s satisfaction’. False allegations have been made against me of a very serious and damaging kind. The company has given every indication to me that it accepts that there is some basis for these allegations. However, when I have pressed the company to provide me with details of them so that I might take appropriate steps to refute them the company has refused to provide me with them. In addition the company refuses to withdraw the allegations and to apologise to me for them.
In the circumstances I can only assume that the company believes that there is some basis for the allegations.
As long as that situation continues it is obvious that senior management of the company has no confidence and trust in me. It is equally clear that I can have no confidence and trust in management.
I simply do not understand the claim made in your fax that ‘it is not within our ability to determine whether the allegations are not true or not’. Allegations of the most vile kind have been made against me that have damaged my reputation not only at work but in the community generally and which threaten my future. It appears to me that the company is taking no steps to protect my position. Instead it suggests that I return to work alongside those very people who have caused harm to me.
The options which you suggest in your fax are not acceptable to me. Of course I am not free to return to my current position in the Adelaide office. The reasons are clearly set out in my fax to Bob Cooper of 30 November 1998.
Secondly, it is quite inappropriate that I should completely change my job. I was not employed by the company to sell life insurance products. I am currently employed as the South Australian Branch Manager. My duties are described in my contract of employment and in my job description.
I indicated to Cooper that I would be able to return to work if the company terminated the employment of the persons who had made false accusations about me. This is an option which must be considered by the company in order to protect my reputation and provide me with a safe place of work.
I am anxious for the matter to be resolved as quickly as possible. If the company is not prepared to take appropriate action to deal with the allegations made and to allow me to return to my employment I have no real option but to treat the company’s actions as a breach of my contract of employment.
Yours faithfully
Rod Easling”
A series of letters was exchanged between the respective solicitors for the appellant and the respondent between 7 December 1998 and 4 March 1999.
A letter written by the appellant’s solicitors to the respondent’s solicitors on 7 December 1998 indicated that the appellant adopted the stance that a refusal to further investigate the complaints made or to withdraw them, coupled with a requirement to work alongside the complainants placed him in an intolerable position in which he could not carry out his responsibilities, including those involving the management of the Adelaide office and the supervision of its staff. It was said by the appellant’s solicitors that the attitude of the respondent was such that it “has been calculated or is likely to destroy or seriously damage the relationship of confidence or trust between employer and employee. It is conduct which ... [the appellant] ... cannot be expected to put up with”.
The appellant’s solicitors demanded that, by 9 December 1998, the respondent withdraw the allegations against him, apologise and take action against those who had made the false allegations, failing which he would treat the contract as being at an end.
This letter was not responded to until 18 December 1998.
In the meantime, the respondent had received advice from a business consultant that, because the Adelaide office was then incurring continuing losses, it should be closed.
On 15 December, Norton wrote direct to the appellant raising a series of budgetary issues and asking him to advise when and how the Adelaide branch would achieve a profit. The appellant replied to the effect that the then recent events had caused damage, and that it would take considerable time to repair it. He also pointed out that it had always been accepted that a profit had not been expected in the first three years; and that there had, in fact, been a reducing loss each year.
On 17 December 1998 the appellant met Cooper at the Hyatt Hotel, at the request of the latter.
The sole comment made by the learned trial judge concerning this was that they “discussed work issues. The plaintiff said he was aware of a proposed major restructuring of the business because of lower commission rates dictated by Zurich. The plaintiff was on sick leave during this period”.
The significance of this situation is, of course, that, as at that time, both parties obviously considered the contract of employment to be still on foot. This was said to have been a “without prejudice” meeting and there was little evidence as to what transpired. As a result, the appellant, at Cooper’s direction, had some discussions with an officer of Zurich concerning future financial relations between that company and the respondent.
On the following day the respondent’s solicitors wrote a lengthy letter in response to the letter sent by the appellant’s solicitors on 7 December. No reference was made to the discussion of 17 December. The response sought to traverse various of the assertions made in the earlier correspondence and asserted that the respondent’s conduct had, at all times, been appropriate.
In the response it was pointed out that the appellant’s sick leave was due to expire on 31 December 1998.
The letter of 18 December concluded as under:-
“Our client has at all times confirmed that it is willing to comply with the terms of the employment contract that exists between our respective clients. However, your client must also comply with those terms. In his unwillingness to co-operate and comply with the reasonable directions of his employer your client has clearly demonstrated an unwillingness to comply with the terms of his employment.
We are instructed by our client that our client requires your client to resume his employment following the expiration of the time specified in the medical certificate that he has made available to our client. Should your client not resume his employment and comply with the reasonable directions of his employer both as to the continuation of his employment and our client’s continuing endeavours to resolve all outstanding issues our client will consider your client to be in breach of the terms of his employment with our client.
Would you kindly confirm or have your client confirm that your client will return to work following the expiration of the term referred to in his medical certificate.”
It is apparent that, as at 13 January 1999, the appellant was still absent on sick leave. On that date Norton sent him a fax advising of a pending company restructure and requesting him to advise when he anticipated being well enough to return to work.
On 14 January 1999 the appellant’s solicitors wrote a long letter to the respondent’s solicitors, in effect, traversing a series of issues which had been raised by them in their letter of 18 December. The final portion of that letter was expressed as follows:-
“8.... On 17 December 1998 Mr Cooper had a discussion with our client in which he advised that the company shortly intended to close its Adelaide office and from that time to offer Mr Easling work selling various forms of insurance from the offices of Zurich Insurance Limited and from his home. To date no written confirmation of that proposal has been received by us or by our client. If indeed it is intended that some further or other proposal of employment is to be made to Mr Easling such as that raised by Mr Cooper on 17 December, would you please provide the details in writing as soon as possible.
The request obtained [sic] in the final two paragraphs of your letter is a request which no one could reasonably be expected to comply with. We reiterate the views expressed in our letter to you of 7 December 1998 that Mr Easling is unable to comply with your requirement that he return to work and supervise Ms Nicholson and Ms Hendry.
Unless we hear from you or your client about this matter within the next seven days our client will have no option but to treat your client’s actions as a repudiation of the contract of employment”
Remarkably, the next development was the receipt by the appellant of the following fax from Norton:-
“18th January, 1999
Mr Rod Easling
Mahoney Insurance Brokers
PO Box 668
McLaren Vale SA 5171
Dear Rod,
Re: ADELAIDE OFFICE CHANGES
I confirm my telephone advices that due to enforced changes to our commission structure for our Taxi Insurance facility the Board of Directors has conducted a complete review of the company’s operating structure. Each individual office and business unit within each office has been reviewed and will be restructured, if necessary, to ensure that losses are eliminated and profits maximised.
As a result of the review it has been decided [to] take the following action:
1...... Reduce the staffing level from three (3) to one (1), thereby
2.Making Mrs K Nicholson redundant and
3...... Making Miss L Hendy [sic] redundant
4.Relocating the office to a much smaller and less costly office (perhaps your home office)
5...... Ask you to concentrate your efforts in retaining and developing the Taxi Insurance portfolio, and
6.Commence developing a Life Insurance portfolio.
This action is, as discussed, to take place as soon as your Medical Advisors advise that you are fit to return to your normal duties.
You will need to take the following action as soon as you return to work:
Ø...... Hand Mrs Nicholson the enclosed private and confidential letter terminating her employment
ØHand Miss Hendy [sic] the enclosed private and confidential letter terminating her employment
Ø...... Determine (subject to HO approval) the location of the new office
ØRetain one (1) computer, one (1) printer, one (fax machine), the dial-up modem, your mobile ‘phone and all Taxi Insurance files
Ø...... Pack and return all other computer equipment to Newcastle Office
ØObtain quotes for relocation of the telephone and the incoming call re-direction (to your mobile when you are out of the office)
Ø...... Sell all surplus furniture and equipment
Rod, would you please advise when you expect to return to work. We are asking you to perform the above tasks to save on the cost of a Head Office executive having to travel from Newcastle to Adelaide.
Please call me to discuss the issues.
Yours sincerely
(signed)
Lindsay Norton
General Manager
The appellant’s solicitors replied to this by letter to the respondent’s solicitors. They made the points that:-

.the proposal represented a fundamental change to his “existing contract of employment”; and
.the appellant was not in a position to terminate the employment of Ms Nicholson and Ms Hendry, as he had no power to do so and, having regard to the past history, it would be clearly inadvisable and inappropriate for him to deliver letters of termination to them - these could be sent by post.

On 27 January 1999 Norton further wrote to the appellant in these terms:-
“27th January 1999
Mr Rod Easling
Mahoney Insurance Brokers
PO Box 668
McLaren Vale SA 5171
Dear Rod,
Re ADELAIDE OFFICE CHANGES
I have attempted to contact you by telephone today to discuss the issues concerning Adelaide Office. You did advise me that you would send me confirmation that you intend to return to work, however as I have not yet received it, the following decisions have been made.
Notice has been given to Kate and Lorna that the staffing level of Adelaide Office will be reduced from three to one effective from 1st March 1999. If you are not well enough to return to work by that date the office will be temporarily closed with all business conducted by telephone from this office. It is however most likely that the actual closure will take place on 5th February 1999 as Kate is entering hospital for treatment and will be unfit for work for some time after that. It would be unreasonable to expect Lorna to run the office by herself, given her age and inexperience.
When you return to work it will be from a smaller and less expensive office.
Yours sincerely
(signed)
Lindsay Norton
General Manager”
On 28 January 1999 there were two further developments. The appellant personally wrote a reply to Norton. This was to the following effect:-
“Thursday, 28th January 1999
Roderick J. Easling
P.O. Box 668
McLAREN VALE SA 5171
Mr Lindsay Norton
General Manager
Mahoney Insurance Brokers
P.O. Box 275
HAMILTON NSW 2383
Dear Lindsay
I refer particularly to our telephone conversations of 22nd & 25th January and to your fax of 28th January. I understand that your solicitors have not responded to the letter from Stanley & Partners of 14th January, nor to their letter of 19th January.
The detail of the changes and the effect of those changes as proposed in your letters of 18th and 28th January are not really clear. What is clear is that they represent a very substantial change in the role that would be expected of me. I understand that what is proposed is that the office staff be reduced from three to one, and that much of my duties be changed to selling life insurance. These changes are substantial and fundamental and I would certainly not be prepared to undertake them unless and until there was a specific agreement in writing about the details of them.
At this point I do not believe that the necessary degree of confidence and trust exists for the employment relationship to be continued. Both my solicitors and I have made numerous requests of the company to retract the allegations made against me and to apologise to me for them. Despite those requests, no retraction or apology has ever been given to me. Will you please advise as a matter of urgency whether the company intends to withdraw the allegations, apologize for them, or even provide me with details of them so that I can take more appropriate steps to deal with the issues raised in them? Until this matter can be addressed, I am not in a position to return to work.
In any event, as I have indicated, I have few details about the nature and likely effect of the changes proposed by the company to the structure of the Adelaide Office. Quite frankly, I do not understand how it could be expected that I could efficiently do the work currently being done by three people. Indeed, in the past, four people have been required to run this office. To do so, I would certainly need the fullest support of the management of the company, which I clearly do not have in the absence of an apology and retraction for the allegations of sexual harassment.
Would you please let me have a response to these matters as quickly as possible?
Yours faithfully
(signed)
Roderick Easling”
On the same day the respondent’s solicitors wrote to the appellant’s solicitors in reply to their communication of 19 January.
This contained the following information:-

.the services of Ms Nicholson and Ms Hendry had been terminated;
.the Adelaide office had been closed for financial reasons; and
.upon the appellant’s recovery and return to work it was the intention to re-open the Adelaide office at a smaller and less costly location.

This letter concluded with an enquiry as to when the appellant would be able to return to work, so that arrangements could be made for an alternate office from which to conduct the business in Adelaide.
On 4 February 1999 the respondent’s solicitors wrote to the appellant’s solicitors in reply to their letter of 28 January 1999.
They reiterated that the allegations of sexual harassment had been made by the staff members concerned and that the respondent had merely sought to investigate them, as was its duty. It was for the persons making the allegations to withdraw them. The respondent was not in a position to do so.
For present purposes the important portion of the letter lies in these concluding paragraphs:-
“As to your client’s comments regarding the manner in which the Adelaide office will operate we would respectfully submit that discussions should be held between our respective clients to enable a clear understanding of both the manner in which the Adelaide office is to operate in future and your client’s responsibilities in relation to those operations. We understand that it is intended that a substantial proportion of administrative matters previously controlled in Adelaide are to be delegated to another office controlled by our client in order to allow your client to concentrate on the activities that may be agreed between our respective clients as a result of the restructuring of the Adelaide office.
We note that your client has indicated in his letter that he would not be prepared to undertake any work activities unless there is a specific agreement in writing regarding the details of those work activities. We assume however from the tone of the remainder of his letter that any specific agreement would be subject to our client ‘withdrawing any allegations’ and ‘apologising’ as referred to above.
Would you kindly let us have your advices as to whether your client is willing to discuss with our client the revised arrangements for the Adelaide office and the range of activities that will be expected of him within that re-arrangement or is it your client’s decision position that until such time as his [sic] receives a ‘withdrawal of allegations’ and ‘an apology’ your client will simply not return to work.
Should your client’s position be that he will simply not return to work until a ‘withdrawal of allegations’ or ‘an apology’ is received then our client would consider your client to be in breach of the terms of his contract of employment.
We look forward to your advices.

The appellant’s solicitors responded by letter dated 12 February. This purported to treat the contract of employment as being at an end on the following basis:-
“RE: EASLING - MAHONEY INSURANCE BROKERS
We refer to previous correspondence and communication between the parties, and to your letters of 28 January 1999 and 4 February 1999.
Although the employment of Ms Nicholson and Ms Hendry has now been terminated (and apparently not as a result of their false complaints against our client), nothing has been done by Mahoney Insurance Brokers to dismiss the allegations of sexual harassment made against our client, or even to investigate them.
It has become clear from your correspondence and from earlier communications that your client refuses to provide our client with details of the allegations made against him of sexual harassment or sexual misconduct. Clearly, the allegations are serious and have been treated seriously by all parties. Your client’s refusal to provide our client with the details of the allegations means that he is unable to refute them in a proper, detailed and convincing manner. At the same time, it is clear that your client has acted upon those allegations.
Your client also suggests that because it did not make the complaint it cannot either withdraw it or apologise to our client in respect of it. We cannot agree with that statement. The complaint was apparently made by employees of the company. Your client became aware of the complaint, adopted it and demanded our client’s resignation as a result of it. Clients of the company were told that our client had or would resign over the complaint. Further, the company attempted to embark upon some process of ‘conciliation’ of those complaints.
Your client has clearly acted upon the complaints and presumably continues to accept the validity of them without affording our client any opportunity to repudiate them.
No reason has been suggested why your client cannot or should not provide Mr Easling with advice in writing that the allegations have been fully investigated and found to be baseless. Such a step may have gone a considerable way to redressing the harm done to him.
In your letter of 4 February 1999, you comment [sic] make the comment, ‘the question of the employment of the other two employees is not an issue’. Clearly what is at issue is whether in these circumstances the relationship of confidence and trust has been destroyed or seriously damaged.
For reasons which are detailed at considerable length in our letter to you of 14 January 1999, our client believes that your client’s conduct is, and has been, of such a nature that he cannot reasonably be expected to put up with it. The company has conducted itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between it and our client.
In the circumstances, our client believes that he has no option but to treat your client’s actions as bringing the contract of employment to an end. Our client claims from your client damages for breach of contract. On that basis our client claims from yours payment of damages being an amount equal to the balance of the contractual term.
Unless we hear from you within the next 7 days making appropriate arrangements for compensating our client for his loss, we are instructed to commence proceedings for damages.”
The appellant thereafter initiated the present proceedings.
The bulk of the reasons published by the learned trial judge comprised a recitation of the evidence given by the various witnesses called by the parties. In general, they did not descend to really definitive findings in relation to many of the matters in contention between such witnesses. He expressed his conclusions in quite general terms.
As I understand his findings they were to the following effect:

.the appellant’s conduct, over time, towards Ms Nicholson and Ms Hendry was inappropriate and improper for an office manager, specifically having regard to an episode of slapping Ms Nicholson’s buttock, reference to her breasts, various references to sexual activity and a statement concerning an alleged failure of Ms Hendry to wear under garments;
.whilst the version of Cooper and Norton as to what took place on 29 October 1998 was to be preferred, the appellant was not given adequate time to peruse whatever material was placed before him and Cooper “was in no mood to hear any explanation from the plaintiff about his version of events”;
.the appellant had been employed primarily as an insurance salesman and no issue arose as to his performance in that regard. Indeed the only material forthcoming “was commendatory of his abilities”;
.the real issue was whether the appellant’s “misconduct or neglect was [sic] been ‘wilful’ or sufficiently ‘serious’ in terms of his employment contract.” There was a duty on the respondent to make proper enquiry into the allegations and accord the appellant a fair hearing in relation to them. This was not done and the language of Cooper on 29 October 1998 “was sufficient to amount to a constructive dismissal of the plaintiff’s services”.

In dealing with the situation post 29 October 1998, the learned trial judge had this to say:-
“In considering whether the conduct of both the plaintiff and defendant was reasonable following this meeting, it is difficult to fault the defendant’s actions in that:
(i) It acknowledged the right of the plaintiff to seek legal advice.
(ii)... It attempted to resolve the difficulties by the employment of a purported expert in these matters.
(iii)It outlined to the plaintiff the dramatic effect on income by the reduction of commission in the plaintiff’s specialised taxi insurance area.
(iv).. It outlined, in my view, its correct position that it was not in a position to withdraw, retract or apologise for its employees’ conduct.
(v)It was obliged to retrench all office workers other than the plaintiff and,
(vi).. It requested that the plaintiff continue with his duties on the basis of his employment contract as an insurance salesman, albeit with more emphasis on life insurance, an area in which the plaintiff had had some prior experience. The offer, indeed, there is nothing to the contrary, was on the same financial basis as previously agreed. I view the offer on the part of the defendant in all the circumstances as reasonable. I must not overlook, in essence, the employment contract where the plaintiff was employed as an ‘insurance salesman’. The plaintiff refused the offer.
Consequently, it is my opinion the plaintiff has no action in damages against the defendant.”
He went on to say that, if he was incorrect in such a conclusion, then the appellant had failed to mitigate his loss by taking up the respondent’s offer to him to resume employment, albeit on a different basis.
It has been necessary to dwell on the detailed correspondence post 29 October 1998 to illustrate that, with respect, the reasons published by the learned trial judge appear, in large measure, to be focused on issues which, at the end of the day are of somewhat peripheral significance.
Even accepting that there may be a substantial basis for concluding that the situation was badly handled by the senior officers of the respondent on 29 October 1998 and may well have entitled the appellant to adopt the stance that he had been constructively dismissed, he cannot now be heard to rely on that situation, per se, as a basis for electing to treat the contract of employment as being at an end. On the contrary, his return to work for most of November 1998 and the whole tenor of the later correspondence indicates that he elected to regard the contract as still subsisting, despite his ongoing contentions concerning the respondent’s attitude.
Equally, it is not now open, as its counsel would suggest, to the respondent to seek to rely on any conduct of the appellant pre 29 October 1998, as constituting serious misconduct as a ground for bringing the contract to an end. As at 29 October 1998 and the period immediately thereafter the respondent was well aware of the detailed allegations against the appellant and what he sought to say about them. It chose not to investigate the truth of the allegations and continued to regard the employment as still being on foot. It is now far too late to attempt to rely on them as a basis for regarding the contract as at an end. The principles of condonation and waiver are applicable. (See authorities referred to in Macken, O’Grady and Sappideen, Macken, McCarry & Sappideen’s The Law of Employment, 4th Edn, 213-215 (“Macken”).)
The instant situation falls to be contrasted with the quite different scenario discussed by the High Court in Concut Pty Ltd v Ivor Worrell & Anor [2000] HCA 64 (“Concut”), in which relevant misconduct warranting termination was not known to the employer at time of dismissal, but came to its knowledge at a later time.
In the course of his submissions counsel for the respondent seemed also to be contending that, post 29 October 1998, the appellant was not working or continuing to be paid under his original contract of employment, but under some other arrangement, or on some other basis. All that need be said about such a suggestion is that the evidence does not support that thesis and there is nothing to indicate other than that the contract in fact continued in operation until 12 February 1999. It was a classic case of the type adverted to in Concut.
The real and only substantial issue which arose for decision in this matter was whether the conduct and attitude of the respondent post 29 October 1998 was such as to entitle the appellant to elect to treat the contract of employment as being at an end by virtue of his constructive dismissal, or whether he unjustifiably repudiated it, thereby entitling the respondent to treat it as being at an end. As to these issues it was, with respect, inappropriate and unduly simplistic for the learned trial Judge merely to reflect, in very brief terms, on “whether the conduct of both the plaintiff and defendant was reasonable”.
First it is necessary to address the concept of constructive dismissal. This was explored by me in some detail in Blaikie v SA Superannuation Board (1996) 65 SASR 85. I adhere to what I there said at pages 102-105. Suffice to reiterate that the notion of constructive dismissal implies the existence of conduct on the part of an employer which is plainly inimical to a continuance of a contract of employment according to its express or implied terms. The authorities establish the concept that there is implied in a contract of employment a term that the employer will not, without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. An intention to repudiate need not be proved. Rather, it is a matter of objectively looking at the employer’s conduct as a whole and determining whether its effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it.
It follows that these proceedings fell to be disposed of in light of a review of the basis for termination relied upon by the appellant, as articulated by him in his letter to Norton of 28 January 1999 and further spelt out in his solicitor’s letter of 12 February 1999.
In essence, the right to treat the contract as being at an end was based on these propositions:-
the respondent had persistently failed both to adequately particularize the allegations of sexual harassment or misconduct against the appellant or to investigate or withdraw them, thereby destroying the relationship of confidence and trust between employer and employee; and
the respondent had, unilaterally, brought about substantial and fundamental changes to the employment situation and future duties of the appellant, to the extent that it has exacerbated the above situation, if not repudiated the contract.
It is fair to say that, in the course of his submissions, counsel for the appellant sought to widen the basis of termination rather beyond the content of the correspondence to which I have referred.
As I understand those submissions, he asserted that the conduct which brought about a destruction of the relevant confidence and trust had the following three compounding facets:-

(a)stress created by the conduct of Cooper on 29 October 1998 and the attitude then exhibited by him;
(b)stress created by the situation after the appellant returned to work in November 1998 to find that his staff were relating direct to the respondent’s head office and absenting themselves from work with head office approval given without his knowledge; and
(c)stress created by requests that the appellant indicate strategies to make the Adelaide office profitable when he was still on sick leave.

It seems to me that the learned trial Judge was correct in rejecting the suggestion that the conduct of the respondent continuing on from 29 October 1998 operated to undermine the confidence and trust between the parties. Given that the respondent may not have handled the whole situation in the most professional and efficacious manner, it is clear that the appellant became obsessed with demanding a formal rejection of the allegations and the proffering of an apology by the respondent. For its part, the respondent made it clear that it could not do so because it had not proffered the complaints in the first place and could not apologise for those who had. It also adopted the stance that it desired to rectify the rift within the staff ranks and had attempted mediation to do this.
The tone of the correspondence was that the respondent was anxious for the appellant to return to work after the failed mediation session and to involve the appellant in forward planning for the Adelaide office. All of this occurred against a background that, even on his own admissions, the appellant had not handled inter staff relations well prior to 29 October 1998 and what had transpired was, to no small extent, the product of his own actions.
Ultimately, of course, the services of the two staff members who had made the allegations were terminated, so that there was no impediment, based on staff relations, to the appellant returning. The tone of the respondent’s approaches to the appellant was in fact conciliatory, if not relatively cordial, bearing in mind the content of the solicitor’s correspondence. The requests to him to suggest forward strategies were, on the face of them, by no means designed to put undesirable or aggressive pressure on the appellant. They merely sought to involve him in resolving a deteriorating commercial situation in which he had a strong personal interest.
In my opinion, it is clear on the evidence that any ultimate breakdown in relationships was, in large measure, due to the appellant’s own dogmatic stance in persisting with a demand for something that his employer could not reasonably give him. The respondent had no means of resolving the conflicting versions of what had occurred, the two relevant staff members were no longer there and, far from apparently holding the past against the appellant, the respondent wished him to resume work and contribute to the future of the company.
I consider that the only issue of substance which arose was whether what was finally offered to the appellant was in breach of his original contract, which appears to have been novated when his salary package was increased and he was formally appointed Branch Manager.
I take the relevant law in this regard to be that stated by Macken at 137 in these terms:-
“The issue whether the employer is entitled to change the principal duties or the employee’s job is essentially concerned with the question of what are the express or implied terms of the contract of employment. As with change of location, some term must be present, and ‘the general rule is that a contract by which a person is employed in a specific character is to be construed as obliging him to render, not indeed all service that may be thought reasonable, but such service only as properly appertains to that character’.
Accepting that as the general rule of law, the answer to whether a change of duties is permitted in a particular case will almost always have to be derived from the facts of that case, unless, of course, there is express agreement. The change of duties question is sometimes raised in the context of determining whether the original contract of employment has been varied or has come to an end by mutual consent. If there is no express or implied term or variation allowing change of job or duties and there is a change without the consent of the employee the employee may sue for breach of contract for damages or for constructive dismissal.”

The Commissioner for Government Transport v Royall (1966) 116 CLR 314 at 322-323 stands as authority for Macken’s proposition.

It follows that the issue to be addressed was as to whether what was offered to the appellant as the basis for his return to work by Norton by letter dated 27 January 1999 (and also the respondent’s solicitors on the following day) constituted such a change in arrangements as to amount to a constructive dismissal.
The essential features of what was proposed were:-

.the appellant’s salary package remained unaltered;
.a new, smaller office would be opened when the appellant was fit for duty;
.he would, at that time, be the only staff member; and
.he was expected to concentrate his efforts in retaining and developing the Taxi Insurance portfolio (albeit in light of changed commission arrangements indicated by Zurich) and to commence developing a Life Insurance portfolio.

It is to be noted that the proposal advanced by the respondent was partly the product of the unilateral change in commission arrangements which had been announced by Zurich (a matter beyond the control of the respondent) and partly a response by it to losses being occasioned in the Adelaide office - no doubt exacerbated by the absence on sick leave of the appellant.
Neither of those factors would, of course, have entitled the respondent to negate the five year contract into which they had entered with the appellant, as novated.
Viewed realistically, the new proposal was substantially different from the pre-existing basis of employment. Virtually the only thing that remained the same was the salary package - or, at least, there had been no overt suggestion that this was to alter.
The appellant was expected to attend to all necessary local office duties without support staff and to focus his main endeavours on developing a new line of business which was outside his field of expertise. It would require a considerable stretch of imagination to view him as a continuing Branch Manager. There is great force in the appellant’s protest that the proposed office arrangements were such that he could not understand how it could be expected that he could efficiently do the work previously being done by several people, even given some assistance from the interstate office.
I find it impossible to escape the conclusion that the actions of the respondent sought to bring about such profound changes that they amounted to a constructive dismissal at the time at which the appellant elected to treat the contract as being at an end - however he may have expressed himself at that stage.
It follows that the plea in the statement of claim to that effect was plainly made out. It is not to the point that, in one sense, the respondent’s actions may have been reasonable - as a practical response to a commercial or business situation not of its own making. It had a five year contract with the appellant, which it was not entitled, unilaterally, to vary.
In my opinion the learned trial judge was in error in not recognising that situation.

In his reasons the learned trial judge said that, even if there had been a constructive dismissal, his primary conclusion was that there was no entitlement to damages, because the appellant had failed to mitigate his loss. This was on the basis that he could and should have taken up the respondent’s proposal. If he had done so there would have been no loss.
With all due respect, this appears to me to be a quite unrealistic approach. Quite apart from the fact that the appellant was requested to perform functions which were, in large measure, outside his field of competence and expertise, the requirement for him to operate without any support staff and personally perform all local office administration was plainly unreasonable. Moreover, it is clear that, at the end, relationships had broken down, for whatever reason. I do not consider that it can fairly be said that, by not taking up the respondent’s offer, the appellant failed to mitigate his loss.
What the appellant did do was to commence his own insurance broking business within his field of expertise. The learned trial judge accepted that there was evidence of its steady improvement.
As an alternative approach, leaving aside the question of mitigation and after making allowance for contingencies, the learned trial judge concluded that a proper quantum of damages was $40,000. I think that this was a fair and realistic figure in the circumstances, after proper allowance for contingencies, for the reasons which he expressed.
I would allow the appeal, set aside the order of dismissal and award damages in the sum of $40,000 plus interest. I would hear counsel on the question of quantum of interest and as to costs.

BLEBY J. The relevant facts giving rise to this appeal have been fully stated by Olsson J. I need not repeat them.
I agree that the trial judge appears to have focused most of his attention on issues which, at the end of the day, became irrelevant. In the circumstances, it was not necessary to make any findings as to whether or not there had been a constructive dismissal of the appellant on 29 October 1998.
The fact is that the appellant did not accept the suggestion of the respondent that he should resign. If he gave the impression that he would resign, he changed his mind and did not. If there was a threat that he would be dismissed if he did not resign, it was a threat that was never carried out, and the respondent, at all material times thereafter, accepted that it continued to employ the appellant, and that the contract continued in force.
In the view that I take of the position as it then evolved, it is not necessary to determine whether the respondent could continue to rely on any previous alleged misconduct to justify its subsequent termination of the appellant’s contract of employment. Nor is it necessary to determine whether the respondent was precluded from so relying by its condonation of that conduct. Therefore, I do not decide those questions.
I also agree that whatever the terms of the contract of employment, it continued until 12 February 1999, when the appellant treated it as at an end. The question is whether the letter from his solicitors on that day constituted a resignation or termination by the appellant, or whether it was an acceptance by him of a prior repudiation by the respondent.
I respectfully agree with Olsson J that the appellant could not rely on the failure by the respondent to withdraw the allegations of misconduct and to apologise for them. They were allegations by other members of the respondent’s Adelaide office. Whatever Messrs Norton and Cooper thought about them and of the consequences that the allegations were having on the operation of the Adelaide branch, they never acted on them in the sense of relying on the allegations as a ground for termination of the contract. On the contrary, they regarded the contract as continuing on foot unaffected by the allegations. They chose to ignore them as such, and to treat them only as allegations, the truth of which they sought not to judge. No doubt this was in the hope that the inter‑personal difficulties in the Adelaide office caused by the allegations would be resolved with the help of Ms Flemming.
The respondent took the view that it did not know the truth of the allegations apart from the limited admissions of the appellant made to Messrs Norton and Cooper on 29 October 1998. The respondent was in no position to withdraw the allegations, and could not apologise for them. It certainly did not at any stage rely on the truth of them for purposes affecting in any way the continuation of the contract of employment with the appellant.
The letter of the appellant’s solicitors dated 12 February 1999, read in the context of the previous correspondence, and in particular, the appellant’s letter to Mr Norton of 28 January 1999, made it clear that the appellant was relying, for his ability to terminate the contract, on the alleged repudiation by the respondent through its failure to particularise the conduct, its failure to withdraw the allegations and its failure to apologise to him. That did not constitute repudiation because there was never any reliance by the respondent on the allegations. It was the appellant’s apparent obsession with the fact that his employer was in some way relying on the truth of the allegations which seems to have caused him to take the position that he did, and as expressed in his solicitors’ final letter.
That is not to say that there may not have been grounds for accepting a repudiation of the contract based on other events which occurred between the middle of November 1998 and 18 January 1999. It was on the latter date that the appellant was informed that the remaining staff of the Adelaide office would be dismissed.
For whatever reason, the Adelaide office had become dysfunctional. The office staff were refusing to work with the appellant. Until 18 January 1999 the respondent was insisting, when the appellant was fit to return from sick leave, he should return to that dysfunctional situation which he was expected to supervise, without the employer having taken any steps to resolve the problem. That might well have been an intolerable situation for the appellant, and one which, if insisted on, he could have treated as a repudiation of his contract. However, that situation was resolved upon the termination of the employment of the staff concerned. If there had been a barrier to the appellant’s return to work on that ground, after 5 February 1999, the date on which it was anticipated that the office staff would cease to carry out any employment duties, that barrier was removed. The correspondence thereafter from the respondent’s solicitors made it clear that, subject to the resolution of the appellant’s precise duties and location, the respondent was unconditionally urging the appellant to continue in his employment with the respondent, with no retribution or disadvantage caused by any of the earlier allegations of misconduct. There could have been no undermining on that account, of the relationship of confidence and trust between the parties and no repudiation, on that account, by the employer.
There remains the question whether the intended work arrangements constituted such a unilateral change by the respondent so as to amount to a constructive dismissal. It is on this aspect that I have the misfortune to differ with the conclusion of Olsson J.
It is necessary at the outset to understand, so far as the evidence permits, what were the contractual arrangements between the parties from time to time. Apart from the initial period when the appellant was appointed as a commission agent of the respondent, the written contract specified that the appellant was to be employed as an insurance salesman. Clause 4 of the contract provided that the appellant shall:
“....carry out the duties of Insurance Salesman and in particular shall:
a)     undertake all such duties and exercise such powers in relation to the business of the Employer and any of its related or associate companies or associations as the Employer may direct,
b)     act in good faith and comply with all such orders and directions as may from time to time be given to him by the Employer, and
c)     in the discharge, performance and exercise of any such duties observe and comply with the policies laid down by the Employer, and
d)     use all reasonable endeavours at all times to promote the business and affairs of the Employer and any related or associated companies or associations of the Employer and to preserve and ensure the continuity and goodwill of the Employer.”
He was initially employed, without staff, to sell insurance to the taxi industry. There was a recognition that the appellant had previously sold life insurance, as the formal offer that was made to him on 24 May 1996, prior to entry into the contract, included the term that “your current life insurance business will remain yours and any new business written as a consequence of your employment will become the property of Mahoney Insurance Brokers.”.
At the time of signing the written contract, when the appellant was the sole employee in South Australia of the respondent, he spoke in evidence of how they shifted premises from Mile End to Hindley Street, Adelaide “....so there was some work involved for me in setting up the new office obviously, buying furniture etc etc. Then I just got on with the business of selling further taxi insurance.”.
A young lady was employed in the office in June 1996, but she only stayed for six weeks. Ms Nicholson was employed later in August 1996 “to be a receptionist, to do filing and generally assist me in the office”. In December 1996 Mr Hubbard was transferred from the Sydney office to sell general insurance. He left the respondent in September 1997. In January 1998 Ms Hendry was employed as an office assistant, and later the same month Ms McCall was employed to replace Mr Hubbard.
As at January 1998 the appellant described the function of the various members of staff as follows:
“A.... I was selling taxi insurance, trying to source new business. I was actually doing the taxi claims as well. Lorna [Hendry] was receptionist and filing. Kate [Nicholson] was processing all the work that was coming through, processing on the computer, be that general or be it taxi insurance. She had to do all the processing there. Sonya McCall was involved in generating new business on the general side of things.”
It is true that the appellant received a substantial increase in salary in February 1997. There was nothing in the evidence to suggest that this reflected anything other than satisfaction with the job he had done to that time. Nevertheless, shortly after that time he was issued with business cards which described him as “Office Manager” and later as “Branch Manager”. However, it is also necessary to glean what one can from the evidence as to what that entailed.
It seems that the appellant was involved in interviewing office staff, but the evidence is silent as to who made the decision to employ staff. There is certainly a suggestion in the evidence that the appellant could only recommend to Mr Norton who should be appointed, and he did not, at any stage, claim to have a power to dismiss staff.
Significant decisions continued to be taken in Newcastle. For example, it was a decision of management in Newcastle that Ms Nicholson should take on a more active role in the processing of taxi insurance claims and of renewals, pursuant to which she was given a greater public profile in the taxi insurance business. When management in Newcastle was dissatisfied with Mr Hubbard’s sales figures they made that known to him directly. It was not the appellant’s responsibility to take that up with Hubbard. The appellant said in evidence how he was asked to start selling some life insurance “and to manage the office and still go out looking for new taxi business”.
When there was a complaint about Ms Nicholson’s attitude to training of and giving assistance to new staff members, it was Mr Norton from Newcastle who reprimanded her, not the appellant. It was Newcastle management’s decision to request the appellant to begin selling life insurance, not the initiative of the appellant, and he was supplied with a computer self‑training programme for the purpose.
Therefore, although he was described as “Manager”, the appellant’s “management” functions were extremely limited, and his primary duties continued to be the selling of taxi insurance, with some venture into life insurance at the respondent’s request during 1998. The evidence as to his management duties is sparse. Such as it is, it would suggest that the duties were a long way from managing an autonomous branch. He appears to have acted more as a supervisor of office staff rather than as Branch Manager. The reference in his letter of 30 November 1998 to Mr Cooper to that function seems to confirm that. The range of duties disclosed by the evidence suggests that even before February 1997 when he received the salary increase, and after Ms Nicholson was first engaged, he was setting up and organising the office and supervising the persons who worked as office assistants. Those duties would appear to be come within the requirements of Clause 4 of the contract in any event. As will be seen, that is essentially what he was asked to do whilst on sick leave and what it was proposed he would do in the restructured branch when he returned from sick leave. Over the whole period of his employment the number of people and the physical location and nature of the office changed. However, the functions essentially remained the same. That being so, there was no material variation in the contract for its duration, so far as it concerned the nature of the duties to be performed. The reversion to a single person office suggested in January 1999, with the appellant selling both taxi and other forms of insurance, in itself constituted no material change to the contract of employment. There was, therefore, no repudiation of the contract by the respondent.
Nevertheless, I am prepared to proceed on the assumption, for present purposes, that there was a material change in the nature of the appellant’s duties evidenced by the sudden increase in salary and the description that he was afforded on the business cards provided.
The meeting that was held on 19 November 1998 at Newcastle was a significant event. The appellant confirmed his past involvement in the selling of life insurance. It was an area he enjoyed. He had maintained his previous life insurance agencies. Since working for the respondent he had become accredited with two other companies. That could only be pursuant to an expectation on his part that he might be required to re‑enter that field. He described himself to Newcastle management on that occasion as feeling “quite comfortable” selling life insurance. He agreed to commit himself to being the life insurance representative for the respondent. He had agreed to suggested commission targets. He had even gone as far as to agree that he would “focus totally” on that area of insurance.
What was apparently agreed at the meeting on 19 November 1998 bore no relationship to and was apparently not influenced by the appellant’s relationships with the office staff. It was in recognition of the fact that, as then structured, the Adelaide branch of the respondent did not, in the longer term, appear to be commercially viable.
Subsequent investigations by the respondent confirmed that. By its letter to the appellant dated 15 December 1998, the respondent, through Mr Norton, invited comment from the appellant, in the light of that information, as to when he considered the branch would become viable. That was obviously the subject of further discussions which took place in what has been described as the “without prejudice” meeting on 17 December 1998. One infers from paragraph 8 of the appellant’s solicitors’ letter of 14 January 1999 that the resolution to that problem included continued employment of the appellant, details of which were then requested by the solicitors. The response came in part in the letter of 18 January 1999 from Mr Norton to the appellant with the advice that the two office staff members would be made redundant, that the office would be relocated, that a decision had been made to “ask” the appellant to concentrate his efforts in retaining and developing the taxi insurance portfolio and to commence developing a life insurance portfolio. Consistent with what had been his management duties in the past, he was informed that he would need to determine the new office location (subject to head office approval), pack up and return certain equipment, obtain quotes for relocation of communication equipment and sell surplus furniture and equipment.
By their letter of 4 February 1999, the respondent’s solicitors were suggesting discussions between their respective clients “to enable a clear understanding of both the manner in which the Adelaide office is to operate in future and your client’s responsibilities in relation to those operations”. The letter spoke of the intention to delegate to another branch a lot of the administrative matters previously controlled in Adelaide “....in order to allow your client to concentrate on the activities that may be agreed between our respective clients as a result of the restructuring of the Adelaide office”.
The correspondence thus indicates that far from repudiating the contract of employment, the respondent, both directly and through its solicitors, was actively encouraging the continuation of the contract of employment whilst at the same time indicating a willingness to negotiate mutually acceptable changes, without any suggestion of a reduction in salary. Not only was the nature of the changes something that had been agreed to in general terms at the November meeting, but the respondent was actively inviting further discussions with the appellant as to how they might best be implemented. Nothing had been finalised or imposed.
It was in those circumstances that the appellant alleged a repudiation of the contract by the respondent in the letter from his solicitors dated 12 February 1999. It is significant that in that letter the solicitors referred only to the refusal of the respondent to give particulars of the sexual harassment allegations, its failure to withdraw them and its failure to give an apology as constituting the alleged repudiation of the contract by the respondent. No mention is made in that letter of any alleged enforcement of change to duties as constituting the repudiation. The letter also incorporated reference to reasons given in the solicitors’ earlier letter of 14 January. That letter, also, dealt principally with the matters surrounding the alleged misconduct, and by paragraph 8, specifically left open the question of the appellant’s future duties.
Apart from the reference in the letter of 14 January there had been one complaint about the possible change of duties in a letter from the appellant to Mr Norton dated 1 December 1998. The relevant part of that letter was as follows:
“Secondly, it is quite inappropriate that I should completely change my job. I was not employed by the company to sell life insurance products. I am currently employed as the South Australian Branch Manager. My duties are described in my contract of employment and in my job description.”
In examination‑in‑chief he was asked why he said that. His answer was:
“I believe - I mean, a lot of that came from my lawyer from Simon Langsford. He felt that it was inappropriate that they should change my role. Personally I wasn’t that concerned about changing my role, provided that we had a retraction of allegations and an apology for them. I would have done whatever was reasonable to work with them.”
He also gave some significant answers in cross‑examination:
“Q.... Can I just interrupt you, sorry, as at February of 1998, if Mahoneys had withdrawn the allegations, and provided you with a written apology, those things would have meant you would go back to work.
A.Yes, I believe I would have done.
Q...... But they were the sticking points.
A.They certainly were the sticking points, yes.
Q...... They were the things in your mind that led you to regard your contract of employment with Mahoney as being at an end.
A.That’s correct.”

He later reinforced those answers in cross‑examination, after which the following exchange occurred:
“Q.... Is this the position though, that by the end of February of 1999, whereas you might have said in letters, or your lawyers might have said in letters, made a complaint about a proposed fundamental change in your work role, that wasn’t really a concern of yours, that the sticking point, as far as you were concerned, about going back to work was the lack of an apology and the lack of a withdrawal of these allegations and, as you say, the failure to discipline the girls for making the allegations.
A.That’s correct.”
The fact that the appellant was willing to undertake the selling of life insurance in a leaner office environment is not only borne out by his oral agreement to do so and the steps taken during the course of his employment to increase his qualifications to do so, but also by the fact that after termination of his employment he actively began building his own life insurance business. His attitude, as expressed in evidence, was consistent either with the view I have taken that there was no change in his role as set out in clause 4 of the contract or, that if there was, at all material times he was willing to negotiate an appropriate change to the contract.
It cannot be said, in the light of the correspondence and of the appellant’s oral evidence, that as at 12 February 1999, when the appellant terminated the contract, there had been any enforced change of duties against the appellant’s will, such as to amount to a repudiation of his contract of employment. The respondent had expressed a repeated willingness to discuss such changes with the appellant, and indeed to seek his advice as to how the restructuring could best be effected. He himself had expressed a willingness to undertake a different range of duties, and had frankly acknowledged in evidence that the prospect of some further change was not a major concern to him.
In those circumstances there was no repudiation of the contract by the respondent. The letter dated 12 February 1999 from the appellant’s solicitors to the respondent’s solicitors constituted an effective resignation by the appellant from his employment.
In my opinion, the trial judge reached the correct conclusion by dismissing the appellant’s claim for damages. I would dismiss the appeal.

[2001] SASC 22

14 February 2001