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Whittaker v Unisys Australia Pty Ltd

Whittaker v Unisys Australia Pty Ltd

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 7236 of 2008

ANDREW WHITTAKER	Plaintiff
v
UNISYS AUSTRALIA PTY LIMITED	Defendant

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JUDGE:	ROSS J
WHERE HELD:	Melbourne
DATESOF HEARING:	1 and 2 December 2009
DATE OF JUDGMENT	29 January 2010
CASE MAY BE CITED AS:	Whittaker v Unisys Australia Pty Limited
MEDIUM NEUTRAL CITATION:	[2010] VSC 9

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EMPLOYMENT CONTRACT – Unilateral removal of an employee from his former position – Proposed new role constituted a substantial diminution in status and responsibility – Repudiation of contract – Employer’s actions evinced a plain intention not to be bound by the existing contract – Employee exercised election to terminate the contract – Entitlements to notice and severance pay – Task of construing the contract to be approached in a commonsense non-technical way – Meaning of ‘redundancy’ and ‘restructuring’ – Incorporation of Redundancy Policy by reference – No incorporation – Mitigation – Plaintiff did not act unreasonably – Entitled to six months’ pay.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C Gunst QC with Mr W Friend	AJ Macken & Co
For the Defendant	Mr J Fernon SC	Baker & McKenzie

HIS HONOUR:

Introduction

Mr Whittaker commenced employment with Unisys Australia Limited (‘Unisys’) on 12 March 2002 and in September 2005 he was offered and subsequently accepted the role of Vice President and General Manager Unisys Global Commercial Industries, Asia Pacific (‘the VP and GM position’).

In February 2008, Mr Andrew Barkla, the Vice President and General Manager, Asia Pacific for Unisys Australia, met with the plaintiff and discussed a change in his role. Mr Barkla was the plaintiff’s immediate superior. Mr Barkla said that he saw Mr Whittaker moving to a new role focussing on negotiating and closing ‘mega deals’ (‘the mega deal role’) and that Suzanne Carter would be promoted to the plaintiff’s former VP and GM position.

The change in Mr Whittaker’s role and the promotion of Suzanne Carter to the plaintiff’s position was communicated to the organisation in an email broadcast from Andrew Barkla on 12 February 2008.

At no stage did Mr Whittaker agree to undertake the proposed new role.

Mr Whittaker saw the mega deal position as a downgrading of his previous role and says that, by its conduct, Unisys repudiated his contract of employment. By letter dated 10 April 2008, he purported to elect to accept that repudiation and as a consequence his employment was terminated on that day.

The plaintiff claims that he is entitled to six months’ pay in lieu of notice (amounting to $275,304.50) and a redundancy payment based on two weeks pay per year of service (amounting to $176,153.77). The plaintiff also claims interest, at a rate prescribed by the Penalty Interest Rates Act 1983, and costs.

The defendant says that there was no repudiation of the plaintiff’s contract of employment and therefore no entitlement to the sums claimed.

The main issues in contention are as follows:

(i)Did Unisys repudiate Mr Whittaker’s contract of…

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.

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Details

Case: [2010] VSC 9
Decision Date: 29 January 2010

CaseChat Overview and Summary

The plaintiff, Whittaker, brought an action against his former employer, Unisys Australia Pty Ltd, in the Federal Court of Australia. The plaintiff, who was previously employed as a Director, alleged that his employer unilaterally removed him from his position and proposed a new role that was a substantial diminution in status and responsibility. This action constituted a repudiation of the employment contract, leading the plaintiff to exercise his election to terminate the contract. The plaintiff sought entitlements to notice and severance pay. The primary legal issues before the court were whether the employer's actions constituted a repudiation of the employment contract, whether the plaintiff was entitled to notice and severance pay, and the meaning of 'redundancy' and 'restructuring' in the context of the employment contract.

The court considered the task of construing the employment contract in a commonsense, non-technical way. It found that the employer's actions evinced a plain intention not to be bound by the existing contract, and therefore constituted a repudiation. The court also determined that the proposed new role constituted a substantial diminution in status and responsibility, which was a valid ground for the plaintiff to terminate the contract. Regarding the meaning of 'redundancy' and 'restructuring', the court held that the Redundancy Policy was not incorporated by reference into the employment contract. As for the plaintiff's entitlement to notice and severance pay, the court found that the plaintiff did not act unreasonably in rejecting the proposed new role and was therefore entitled to six months' pay. The court also held that the plaintiff was not required to mitigate his loss.

The court ordered Unisys Australia Pty Ltd to pay the plaintiff six months' pay, together with interest and costs.

Orders