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Reilly v Praxa Ltd

Reilly v Praxa Ltd

Case [2004] ACTSC 41 9 June 2004

Employment & Labour Law

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PHILLIP LAWRENCE REILLY v PRAXA LTD
[2004] ACTSC 41 (9 June 2004)

EMPLOYMENT LAW – change in responsibilities of employee – whether new contract – implied terms – reasonable notice – termination of contract of employment by employer on payout of one month’s notice in lieu – six months notice reasonable in the circumstances.

EMPLOYMENT LAW – termination of contract of employment – whether entitlement to redundancy payment to be implied.

EMPLOYMENT LAW – calculation of damages for breach – whether voluntary redundancy payment should be taken into account.

Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567

Easling v Mahoney Insurance Brokers (2001) 78 SASR 489

Walker v Andrew [2002] 116 IR 380

Macauslane v Fisher & Paykel Finance Pty Ltd [2003] 1 Qd R 503

Rankin v Marine Power International Pty Ltd [2001] 107 IR 117

Irons & Merchant Capital Ltd (1994) 116 FLR 204

Reynolds v Southcorp Wines Pty Ltd (2002) 122 FCR 301

Cerberus Software Ltd v Rowley [2001] EWCA Civ 1210 (unreported, 18 January 2001)

Abrahams v Performing Rights Society Ltd [1995] ICR 1028

Patterson v Middle Harbour Yacht Club (1996) 64 FCR 405

Coles Myer v Sweeting & ors (1993) 47 IR 345

Black v Brimbank City Council (1998) 152 ALR 491

Furey v Civil Service Association (WA) (Inc) (1999) 31 FCR 407

Kirchner v Mayne Nickless Ltd [2000] VSC 459 (unreported, 23 November 2000)

Haley v Public Transport Corporation of Victoria [1998] VSC 132 (unreported, 13 November 1998)

Reynold v Southcorp Wines Pty Ltd (2002) 122 FCR 301

Macken, McCarry and Sappideen, Law of Employment (4^th ed, 1997)

Macken, O’Grady, Sappideen and Warburton, Law of Employment (5^th ed, 2002)

No SC 267 of 2001

Judge: Gray J
Supreme Court of the ACT

Date: 9 June 2004

IN THE SUPREME COURT OF THE       )
  )          No SC 267 of 2001
AUSTRALIAN CAPITAL TERRITORY    )

BETWEEN:PHILLIP LAWRENCE REILLY
Plaintiff

AND:PRAXA LTD
Defendant

ORDER

Judge:  Gray J
Date:  9 June 2004
Place:  Canberra

THE COURT ORDERS THAT:

There be judgment for the plaintiff in the sum of $91,430.12.

The employment of the plaintiff, Phillip Lawrence Reilly, with the defendant, Praxa Ltd, was terminated by the defendant by letter dated 24 July 2000 with effect from 30 July 2000. The plaintiff was informed that the defendant had decided to abolish the role of “General Manager, Federal Government and Defence” in the company structure and this was the position that the plaintiff held. The plaintiff claims that the defendant’s termination of the plaintiff’s employment was in breach of the contract of employment between them and was wrongful and accordingly claims damages.

Initial employment with the defendant

By letter dated 24 June 1993 the defendant offered the plaintiff a position as Account Manager with Praxa Limited’s Central District based in Canberra. In effect, the position required the plaintiff to act as the defendant’s sales person to sell the defendant’s products in computer software and hardware solutions to the Federal Government. At that time, the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Reilly v Praxa Ltd

Details

AGLC: Reilly v Praxa Ltd [2004] ACTSC 41
Case: [2004] ACTSC 41
Decision Date

CaseChat Overview and Summary

Phillip Lawrence Reilly commenced proceedings against Praxa Ltd in the Supreme Court of the ACT, claiming damages for the termination of his employment. The defendant had terminated his employment by letter dated 24 July 2000, stating that they had decided to abolish the role of General Manager, Federal Government and Defence. The plaintiff claims that the termination was in breach of his contract of employment and seeks damages. The court had to determine whether the termination of the plaintiff's employment was in breach of the contract of employment between the parties and if so, what damages the plaintiff was entitled to claim.

The court found that the plaintiff's employment with the defendant had undergone several changes over the years, culminating in the plaintiff's appointment as General Manager, Federal Government and Defence. The court held that the changes to the plaintiff's role and responsibilities amounted to a fundamental variation of the original contract of employment, resulting in a termination of the existing contract and replacement by a new contract of employment. The court further held that a term implying reasonable notice should be incorporated into the plaintiff's contract of employment.

The court considered the appropriate period of reasonable notice to be six months, taking into account factors such as the level of the position in the organisation, the plaintiff's relatively young age, the length of time since his first appointment to a position in the company, and his prospects for employment in a relatively specialised but Australia-wide industry.

The court also rejected the plaintiff's claim for redundancy payments, finding that such a term could not be implied into the plaintiff's contract of employment. The court held that the payment made by the defendant to the plaintiff should be regarded as a voluntary or ex gratia payment which did not reflect company policy.

The court awarded the plaintiff damages of $67,357.12, less the gross amount calculated by the defendant as payable in lieu of notice and severance pay, together with interest, making a total sum of $91,430.12.

Orders