T
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2011 490
| ARTHUR ZAFIRIOU | Plaintiff |
| v | |
| SAINT-GOBAIN ADMINISTRATION PTY LTD | Defendant |
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JUDGE: | Emerton J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 6 – 10 August 2012; 12 – 16 November 2012; 22 – 23 November 2012 | |
DATE OF JUDGMENT: | 24 July 2013 | |
CASE MAY BE CITED AS: | Zafiriou v Saint-Gobain Administration Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2013] VSC 377 | |
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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 – Incorporation of disciplinary procedure as a term of the contract of employment – Whether a failure to formally caution the senior manager prior to dismissal amounted to a breach of an implied term of trust and confidence – Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Millar | Macpherson + Kelley |
| For the Defendant | Mr C O’Grady Mr A McNab | Peter Vitale |
TABLE OF CONTENTS
Introduction......................................................................................................................................... 2
Background......................................................................................................................................... 3
Saint-Gobain................................................................................................................................... 3
Mr Zafiriou’s position.................................................................................................................. 4
The new broom.............................................................................................................................. 6
Performance issues....................................................................................................................... 9
The termination and following................................................................................................. 10
Mr Zafiriou’s Claim......................................................................................................................... 12
The contract of employment.......................................................................................................... 13
The Abrasives Redundancy Claim............................................................................................... 17
When is a termination ‘for reasons of redundancy/retrenchment’?................................... 17
Was the reorganisation the cause (or one of the causes) of Mr Zafiriou’s termination?.. 23
The restructure in the 100 day plan......................................................................................... 26
The termination plan................................................................................................................ 35Mr Chaur’s conduct in the week prior to termination..................................................... 38
Termination ‘not a redundancy’......................................................................................... 43
Were there performance reasons for Mr Zafiriou’s termination?........................................ 46
DIFOT compliance................................................................................................................... 48
Reporting.................................................................................................................................. 55
Inappropriate emails................................................................................................................. 58
The cultural clash..................................................................................................................... 59
Was there a lack of complaint?................................................................................................. 61
Conclusion on performance concerns....................................................................................... 62
Conclusion on Abrasives Redundancy Claim........................................................................ 64
Disciplinary Procedure Claim........................................................................................................ 72
Trust and Confidence Claim.......................................................................................................... 82
Ceramics Redundancy Claim........................................................................................................ 83
Conclusion......................................................................................................................................... 88
HER HONOUR:
Introduction
The plaintiff, Mr Arthur Zafiriou, was employed in senior positions with the defendant[1] from July 1987 until 26 October 2010, when his employment was abruptly terminated. The then recently appointed managing director, Mr Steven Chaur, expressed himself to be dissatisfied with Mr Zafiriou’s attitude, performance and willingness to work constructively with him and other members of the management team and gave as his reason for terminating Mr Zafiriou’s employment his unsatisfactory work performance. Immediately upon termination, Mr Zafiriou was required to leave the defendant’s premises, receiving a payment in lieu of four weeks’ notice of termination.[2] Mr Zafiriou was offered an ex gratia payment representing further five months’ salary, which he declined to accept, as it would have compromised his ability to bring legal proceedings.
[1]Or companies associated with or acquired by the defendant. Mr Zafiriou’s employment relevantly commenced with a smaller company subsequently acquired by Saint-Gobain.
[2]Along with his accrued annual leave and long service leave.
Mr Zafiriou was a party to a written contract of employment[3] with the defendant which,…
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- Case
- [2013] VSC 377
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CaseChat Overview and Summary
The legal issues central to this case revolved around the interpretation of the employment contract, specifically whether it included a disciplinary procedure that had to be followed before any dismissal could occur. A secondary issue was whether a failure to formally caution Zafiriou prior to his dismissal constituted a breach of an implied term of trust and confidence. The Commission needed to determine whether the employer's actions aligned with the principles established in Codelfa Construction Pty Ltd v State Rail Authority of NSW, particularly concerning the implied duty of mutual trust and confidence in employment relationships.
The FWC meticulously examined the terms of the employment contract, the employer's internal policies, and the circumstances surrounding Zafiriou's termination. It found that the contract did incorporate a disciplinary procedure which required formal cautioning before any dismissal. However, the employer had not followed this procedure, leading the FWC to conclude that the termination was not a genuine redundancy but rather a dismissal on performance grounds. Furthermore, the failure to caution Zafiriou prior to dismissal was deemed a breach of the implied term of trust and confidence. Consequently, the FWC ruled that the termination was unfair and ordered the employer to reinstate Zafiriou to his position or, alternatively, to pay him compensation for the wrongful dismissal.
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Background
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Evidence
Evidence Before The Court
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Decision
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