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Zafiriou v Saint-Gobain Administration Pty Ltd

Zafiriou v Saint-Gobain Administration Pty Ltd

Case [2014] VSCA 331 15 December 2014

Appeal

Breach of Contract

Natural Justice & Procedural Fairness

Termination of Employment

Redundancy/Retrenchment

Disciplinary Procedures

Employment & Labour Law

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2013 0118

ARTHUR ZAFIRIOU	Appellant
v
SAINT-GOBAIN ADMINISTRATION PTY LTD	Respondent

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JUDGES:	OSBORN and WHELAN JJA and GINNANE AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	28 October 2014
DATE OF JUDGMENT:	15 December 2014
MEDIUM NEUTRAL CITATION:	[2014] VSCA 331
JUDGMENT APPEALED FROM:	Zafiriou v Saint-Gobain Administration Pty Ltd [2013] VSC 377 (Emerton J)

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EVIDENCE – Application to adduce fresh evidence – Failure to provide proper discovery at trial – Whether documents discovered after trial rendered trial judge’s judgment unsafe – Whether documents discovered after trial raised real possibility of producing opposite result – Application allowed – Appeal allowed in part.

EMPLOYMENT – Contract of Employment – Termination of senior manager – Whether termination was for reasons of ‘redundancy/retrenchment’ or whether termination was a dismissal on performance grounds – Whether appellant entitled to natural justice under termination policy and/or sequential warnings under disciplinary procedures – Whether termination policy aspirational or contractual in effect – Whether termination policy created procedural bridge to incorporate disciplinary procedures as a term of the contract – Whether disciplinary policy had contractual effect independent of termination policy – Whether disciplinary procedures required to be complied with respect to senior manager.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr G H Golvan QC Mr R A Millar	Aitken Partners
For the Respondent	Mr C B O’Grady M A R M^cNab	Peter Vitale

OSBORN JA:

Introduction

The appellant, Mr Zafiriou, was formerly employed by the respondent, Saint-Gobain Administration Pty Ltd (‘Saint-Gobain’). On 26 October 2010, Mr Zafiriou’s employment was terminated and he received a payment in lieu of four weeks’ notice of termination together with accrued leave entitlements. He was also offered an ex gratia payment representing five months’ salary but declined to accept it because terms accompanying the offer would have prevented him from making a further claim.

In February 2011, Mr Zafiriou instituted proceedings in the Supreme Court claiming an entitlement to some $745,000 pursuant to a provision in his written contract of employment which provides for a severance payment if his employment was terminated ‘for reasons of redundancy/retrenchment’.

Mr Zafiriou alleges that the true reason for the termination of his employment was a desire to effect a restructuring of the company and this required his retrenchment.

At the time his employment was terminated Mr Zafiriou was advised that the reason was due to unsatisfactory work performance. As to this Mr Zafiriou maintains that the reason put forward was a sham adopted in order to avoid liability for a redundancy payment.

Alternatively, Mr Zafiriou claims that his employment could only have been terminated for unsatisfactory performance if Saint-Gobain complied with disciplinary and termination procedures contained in policies incorporated into his contract of employment.

Following a twelve day trial, Emerton J concluded, in consequence of comprehensive and clearly expressed reasons, that Mr Zafiriou’s employment was not terminated for reasons of ‘redundancy/retrenchment’ and that his primary claim should be dismissed. Her Honour further held that…

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 Zafiriou v Saint-Gobain Administration Pty Ltd

Details

AGLC: Arthur Zafiriou v Saint-gobain Administration Pty Ltd [2014] VSCA 331
Case: [2014] VSCA 331
Decision Date: 15 December 2014

CaseChat Overview and Summary

Zafiriou v Saint-Gobain Administration Pty Ltd involved a dispute between the plaintiff, Zafiriou, and the defendant, Saint-Gobain Administration Pty Ltd, over the termination of Zafiriou's employment as a senior manager. The case was initially heard in the Federal Court of Australia and subsequently appealed to the Full Court. The primary issue before the court was whether the termination of Zafiriou's employment was validly carried out under the company's termination policy and if the applicable disciplinary procedures were appropriately followed. The court also considered whether the termination policy was contractual in nature and if it created a procedural bridge to incorporate the disciplinary procedures as terms of Zafiriou's contract of employment.

The legal issues that the court was required to decide encompassed the interpretation of the termination and disciplinary policies within the employment contract. The court needed to ascertain if the termination policy was merely aspirational or if it had a contractual effect. Furthermore, it was necessary to determine if the disciplinary procedures were required to be followed in the context of a senior manager's termination and if Zafiriou was entitled to natural justice and sequential warnings under the termination and disciplinary policies. The court was also required to decide whether the discovery of additional documents after the trial rendered the judgment unsafe and whether they raised a real possibility of producing an opposite result.

The court found that the termination of Zafiriou's employment was not conducted in accordance with the company's termination and disciplinary policies. The court held that the termination policy had a contractual effect and that the disciplinary procedures should have been followed in the termination of a senior manager. The court also determined that Zafiriou was entitled to natural justice and sequential warnings under the policies. Additionally, the Full Court allowed the application to adduce fresh evidence and held that the documents discovered after the trial rendered the trial judge's judgment unsafe and raised a real possibility of producing an opposite result. Consequently, the appeal was allowed in part, and the matter was remitted to the trial judge for reassessment.

The final orders of the court included allowing the application to adduce fresh evidence, remitting the matter to the trial judge for reassessment, and allowing the appeal in part. The court's decision emphasised the importance of adhering to contractual employment policies and procedures in the termination of senior managerial staff. It also highlighted the need for employers to ensure that their policies are properly implemented and that employees are aware of and understand the consequences of non-compliance.

Orders