Sarri and Archer (Civil Dispute)
[2013] ACAT 23
•19 April 2013
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
SARRI & ARCHER (Civil Dispute) [2013] ACAT 23
XD 12/1262
Catchwords: CIVIL DISPUTE – debt application – whether amount claimed is loan or costs paid – whether amount paid for training and visa application by employer recoverable under terms of contract of employment – whether the payment of expenses was business investment: whether investment could be converted retrospectively as a loan – contract ‘conditional’ on future event - whether uncommunicated intention become a term of contract – constructive unfair dismissal
Tribunal: Mr A Anforth, Senior Member
Date of Orders: 19 April 2013
Date of Reasons for Decision: 19 April 2013
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 12/1262
BETWEEN:
ANDREW NICHOLAS SARRI
&
DEBORAH ANNE SARRI
Applicants
AND:
KELLY LYNN ARCHER
Respondent
TRIBUNAL: Mr A. Anforth – Senior Member
DATE: 19 April 2013
ORDER
The Tribunal Orders that:
1.The application is dismissed.
………………………………..
Mr A. Anforth – Senior Member
REASONS FOR DECISION
The Facts
This is a claim by the Applicants for recovery of the sum of $4,625.00 from the Respondent as a debt said to arise from an unpaid personal loan by the Applicants to the Respondent. The Respondent denies that the sums were a loan and said that they were costs paid by the Applicants’ company, Aquatots Pty Ltd (Aquatots), in its capacity as the employer of the Respondent for:
(a)work related yoga training undertaken by the Respondent, and
(b)visa application costs as part of the sponsorship by Aquatots P/L of the Respondent’s working visa.
The Respondent was a full time student in Australia on a student visa who had been doing some part time work with Aquatots. In June 2011, her student visa was about to expire and the Respondent entered an agreement with Aquatots for Aquatots to sponsor her for a work visa.
She commenced full time employment with Aquatots on 25 July 2011. The letter of appointment from Aquatots appointed the Respondent at level 4 under the Fitness Industry Award 2010, at a salary of $50,000.
For a reason that is not entirely apparent to the Tribunal, Aquatots reformulated the Respondent’s terms of employment in a new contract dated 18 August 2011. The Respondent accepted the revised contract. The terms of the contract were said to be conditional on a successful visa application and were for permanent employment at 38 hours a week, with a salary of $50,000 pa plus superannuation.
In August 2011, there were discussions between Aquatots and the Respondent about Aquatots expanding its service into yoga classes. There were discussions about the Respondent undertaking an identified yoga course to obtain instructor qualifications.
There is a disagreement between the parties as to what was agreed about the costs of this training course.
Emails from the Respondent to the provider of the yoga course in August 2011 state that Aquatots was going to pay for the course as part of her training.
There are emails in early August 2011 from Aquatots to the Respondent asking for invoices for the yoga training to claim as tax deductions.
A statement of evidence of Alena Sarri, tendered by the Applicant says:
Kellie was supposed to be working with us for the next three years as per her visa we said we could help her out gaining qualification. If the yoga business had gotten off the ground we could have our money back that we laid for her fees…The money paid out for her instructors course was expected to be paid back either through a growing yoga business at the centre or by her, in failing that. It most certainly was not a gift.
The Respondent undertook the yoga course to completion in January 2012 and Aquatots paid the course fees of $3300.
The Respondent’s visa application was denied. On 27 February 2012 she lodged an appeal with the Migration Review Tribunal (MRT). The lodgement fee was $1540. The Respondent had discussions with Aquatots in which it was agreed to retain the services of a migration agent to assist with the appeal. Aquatots was to pay the migration agent and did in fact pay the agent $1325.
The parties disagree about whether the payments to the migration agent were to be reimbursed by the Respondent.
On 10 April 2012, Aquatots wrote to the Respondent and informed her that due to the unsuccessful visa application they were revising her employment contract notwithstanding that the MRT appeal was still pending. The Respondent’s hours were reduced to part time hours including 6 hour per week of yoga instruction for Aquatots.
The letter of 10 April said that if the Respondent left the employ of Aquatots within 3 years of the original contract then the amounts paid by Aquatots for the yoga course and the migration agent would be repayable by the Respondent.
In mid May 2012, the Respondent commenced other part time employment which restricted her availability at Aquatots. She advised Aquatots accordingly.
On June 2012, the Respondent decided to lodge a spousal visa application on the expectation that it would be an easier case to establish. This visa was granted on 28 September 2012.
On 21 June 2012 the Respondent resigned from Aquatots
The issue
The issue is whether the payments made by Aquatots for the yoga course and the migration agent were recoverable by Aquatots from the Respondent.
The relevant law:
This case raises several basic issue of contract law which are neither complex nor controversial.
The Respondent’s contract of employment with Aquatots was that of 18 August 2011 which was said to be conditional upon the successful outcome of the Respondent’s visa application. That visa application was not successful at first instance and an appeal to the MRT was lodged. That appeal was never determined.
What does it mean to say that an employment contract is ‘conditional’ on some future event? It can only mean that the failure of the contingency to occur is a ground to terminate the employment contract in the future. It cannot mean that in some retrospective manner, the relationship between the parties to the point in time at which the contingency failed, ceased to be that of employer/employee.
The contract of 18 August 2011 was for full time and permanent employment on defined conditions, subject to termination if the Respondent’s visa application was to fail.
The negotiations concerning the yoga training and the extension of Aquatots’ business to yoga, occurred during the period of employment. There are contemporaneous emails in which Aquatots asking the Respondent to send an invoice for tax purposes, and emails in from the Respondent tells the yoga trainer that the costs will be borne by Aquatots. After her training was finished the Respondent did commence yoga classes at Aquatots for which charges were made. Whether the venture into this extended business was ultimately successful is not to the point. The point is that the contemporaneous records suggest that Aquatots determined to invest in the training as a business venture.
This understanding of the arrangement is confirmed by the statement from Ms Alena Sarri set out above.
If the money for the yoga training was to be advanced on some conditional basis by Aquatots then it was incumbent on it to communicate this fact to the Respondent. It is plain that Respondent did not have this understanding at when she enrolled and undertook the training.
It is a basic principle of contract law that only those terms that are communicated and agreed between the parties are binding. Unilateral subjective intentions do not form part of a contract and thus any uncommunicated intention on the part of Aquatots, relating to recovery of the training fees are not binding on the Respondent.
If Aquatots intended from the start of the contract that its payments were conditional, then it should have stated this clearly in the contract; or obtained a clear oral agreement with the Respondent to vary the prior written contract. This was not done.
Viewed objectively, the transaction has the appearance of an employer investing in training of staff in the expectation of recouping profit from the enhanced business flowing from the training. This is precisely the evidence of Ms Sarri. This is not a loan, it is a business investment for which Aquatots claimed a tax deduction. The mere fact that the business investment was not profitable does not permit the employer to retrospectively and unilaterally convert the payment into a loan.
The investment by the employer may have been based on a private assumption that the Respondent would remain in employment with them for 3 years; but there is no law that binds employees in this way, training of staff by employers is simply part of the risk of business.
In any event, the Respondent’s decision to leave the employ of Aquatots is arguably based on a constructive unlawful dismissal by Aquatots via its letter of 10 April 2012. The Respondent’s contract of employment of 18 August 2011 had not been terminated whilst the MRT appeal was pending. Thus the decision by Aquatots of 10 April 2012 to reduce the Respondent to a part time employee on reduced hourly rates was not a lawful decision at that time. The Respondent reacted negatively to this, and sought other employment.
It was only in the letter of 10 April 2012 that Aquatots raised the alleged contingent nature of the payments and said that they were repayable if the Respondent ceased her employment within 3 years. A party to a contract cannot unilaterally add a term of this kind after money has been expended on an employees training. Even if the letter of 10 April were not a constructive unlawful dismissal by Aquatots, it cannot effect the inclusion of new terms into the existing contract of employment.
Similar logic applies in relation to the migration agent’s costs. There was no agreement that these monies would be repayable in any particular event. It was a business investment.
Conclusion
There is nothing in the contract of employment between the parties that imported any obligation on the Respondent to repay either.
If an employer wants to impose terms of this kind in a contract of employment then it needs to do so openly and clearly before the contract is formed and preferably in writing,
………………………………..
Mr A. Anforth
Senior Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A
FILE NUMBER: | XD 12/1262 |
PARTIES, APPLICANTS: | Andrew Nicholas Sarri Deborah Anne Sarri |
PARTIES, RESPONDENT: | Kelly Lynn Archer |
COUNSEL APPEARING, APPLICANT | |
COUNSEL APPEARING, RESPONDENT | |
SOLICITORS FOR APPLICANT | |
SOLICITORS FOR RESPONDENT | |
TRIBUNAL MEMBERS: | Mr A. Anforth – Senior Member |
DATES OF HEARING: | 29 November 2013 |
PLACE OF HEARING: | ACAT Canberra |
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
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