FEDERAL COURT OF AUSTRALIA
Heldberg v Rand Transport (1986) Pty Ltd [2018] FCA 1141
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Details
- Case
- [2018] FCA 1141
- Decision Date
CaseChat Overview and Summary
In Heldberg v Rand Transport (1986) Pty Ltd, the Applicant, Mr Heldberg, brought a claim against Rand Transport for damages resulting from a breach of his employment contract. The case was heard in the Federal Circuit Court of Australia, where Mr Heldberg alleged that Rand Transport had failed to pay him bonus payments in accordance with the terms of his employment contract. Additionally, he claimed that Rand Transport breached an implied term of reasonable notice of termination and sought damages for the same.
The court had to determine whether the Applicant's employment contract contained an entitlement to severance payments beyond what was mandated by the Fair Work Act. The court also had to interpret the term "SA State budget" in the employment contract to ascertain if it referred to the annual or monthly budget. Furthermore, the court had to decide if the Applicant had suffered a loss as a result of misleading or deceptive conduct by Rand Transport.
The court found that the Third Contract superseded the previous contracts and that Mr Heldberg had no continuing entitlement to severance payments under the First Contract or the 2003 Manual. The court also determined that the term "SA State budget" in the Third Contract referred to the monthly budget rather than the annual budget. Consequently, the Applicant was entitled to bonus payments for achieving the monthly budget, and Rand Transport was found to have breached the contract by failing to pay him for a period of 31 months. However, the court dismissed Mr Heldberg's claim for an additional severance payment and his claim relating to misleading or deceptive conduct.
The court adjourned the matter to a later date for the entry of judgment and for submissions regarding costs and interest. The final orders of the court were to be made in accordance with Rule 39.32 of the Federal Court Rules 2011.
The court had to determine whether the Applicant's employment contract contained an entitlement to severance payments beyond what was mandated by the Fair Work Act. The court also had to interpret the term "SA State budget" in the employment contract to ascertain if it referred to the annual or monthly budget. Furthermore, the court had to decide if the Applicant had suffered a loss as a result of misleading or deceptive conduct by Rand Transport.
The court found that the Third Contract superseded the previous contracts and that Mr Heldberg had no continuing entitlement to severance payments under the First Contract or the 2003 Manual. The court also determined that the term "SA State budget" in the Third Contract referred to the monthly budget rather than the annual budget. Consequently, the Applicant was entitled to bonus payments for achieving the monthly budget, and Rand Transport was found to have breached the contract by failing to pay him for a period of 31 months. However, the court dismissed Mr Heldberg's claim for an additional severance payment and his claim relating to misleading or deceptive conduct.
The court adjourned the matter to a later date for the entry of judgment and for submissions regarding costs and interest. The final orders of the court were to be made in accordance with Rule 39.32 of the Federal Court Rules 2011.
Orders
Orders of the court
1. The matter is adjourned to a date to be fixed for the entry of judgment and for submissions with respect to costs and interest.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
For these reasons, I consider that the Third Contract wholly supplanted the earlier Contracts, and that the Applicant had no continuing entitlement under the First Contract or the 2003 Manual. That conclusion does not depend at all on the revision of the Manual which occurred in November 2004.Conclusion on the claim to an additional severance payment The 2008 Manual which was in force at 3 March 2014 did not contain any entitlement to severance payments. Nor did the AHG policies in force at 14 March 2017. The relevant clause in the latter was as follows: 7.13 Redundancy Payments7.13.1Managers and Supervisors must not intimate, infer or in any other manner create an expectation among employees that if positions within the organization become redundant that redundancy payments will be made. 7.13.2Relevant federal and state law will be scrutinized to determine whether any redundancy payment should be paid.7.13.3Any enterprise agreement will be scrutinized to determine whether any redundancy payment should be paid.7.13.4Where there is no obligation on Rand Transport to make redundancy payments any such payment will be at the absolute discretion of the General Manager.… As can be seen, cl 7.13 does not provide for any entitlement to severance payment. Instead, it creates an expectation to the contrary, and indicates that redundancy payments are at the absolute discretion of the General Manager. The Applicant has received the only amount to which he was entitled, namely, the entitlement for which s 119 of the FW Act provides. Accordingly, his claim for a further severance payment must be dismissed.Breach of contract – the incentive payments The Applicant’s claim is that Rand breached the Incentive Scheme provision in the Third Contract by failing to pay bonus payments in the period from May 2014 to November 2016. This was said in the Statement of Claim to be a 30 month period – it is in fact 31 months. The Applicant did not make any claim with respect to December 2016 nor with respect to the first three months of 2017. As noted earlier, the Third Contract provided for the Applicant to be paid a bonus of $3,400 per month (paid two months in arrears) “for achieving the SA State budget”. In addition, the Third Contract guaranteed that the Applicant receive the incentive payments for the first three months of his employment. It was common ground that the Applicant did receive incentive payments for the months of February, March and April 2014 and that he had not been paid any incentive payments thereafter. This claim of the Applicant gives rise to two issues: one of construction and one of fact.The construction issue The parties disagreed as to whether the achievement of the SA State budget to which the Third Contract referred was the annual budget or the monthly budget. The Applicant contended for the former and Rand for the latter. It emphasised that its budgets for South Australia were set annually. Many of the matters to which Rand referred in support of its submission concerning the construction of this part of the contract were inadmissible, for example, its reliance on the Applicant’s evidence that, after February 2016, he had been involved in preparing annual budgets, that he had been periodically updated on the performance of the South Australian Branch by reason of his participation in management meetings, and his evidence concerning the declining financial performance of the South Australian operations.
Ratio Decidendi
Legal Principle Established
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