Advise the Council on whether Barry is justified in summarily terminating Isobel’s employment.

Isobel was by day an Events Co-ordinator at East Sydney Council on a fixed term contract for 3 years, and by night a performer in the exotic aerial arts trapeze. Isobel’s supervisor Barry was aware that she wished to leave early at 3pm on Thursdays to do her aerial arts trapeze second job. 

Isobel’s contract expires in January 2021. It does not contain any notice provision. 

After several months, Isobel requested a reduction from her contracted 38 hours to 22 hours a week, so she could increase her hours in her secondary employment.

Because Council had a number of employees on, or soon to be on leave, and several projects that needed completing, it declined Isobel’s request. 

Following Council declining her request, Isobel then tendered her written resignation, claiming she had no choice if she was to pursue her ‘true passion’ of aerial trapeze.

After working out her notice period, Isobel filed an unfair dismissal claim.

(a) You are the Human Resources Advisor for the Council.  Advise the Council on the type of dismissal Isobel will likely be claiming, related case law and Isobel’s prospects of bringing a successful claim. 

Assume Isobel’s supervisor Barry was not aware she had been working as a trapeze artist as a second job. One evening, Barry happens to visit the club where Isobel works. Barry approaches Isobel the next day at work and asks her how her evening was, and whether she did anything “interesting.” Isobel responded that she “watched Netflix all night.” Barry fires her on the spot. 

(b) Advise the Council on whether Barry is justified in summarily terminating Isobel’s employment. In your answer explain the requirements for instant dismissal, related case law and what common law principles may apply in this situation.

Using Australia  Laws

This is a 1600 word paper that you need to produce. 

This assignment will be marked as follows:

Identifying the legal issue/s – 5

Discussion the relevant legal principles- 15

Application of principles to facts and conclusion – 15

Referencing/citation – 3

Issue

The issues to be address in this case is to establish if Max has a legal right to access the scheme or obtain compensation. If he has, would it be now or after he has served two years.

Relevant Law

On 1st January 2011, Trade Practices Act 1974 (Cth) was replaced by Australian Competition and Consumer Act 2010 (Cth.) (Morandin and Joshua, 2011).

Schedule 2 Australian Competition and Consumer Act 2010 (Cth.) Section 18(1) of the Australian Consumer Law (previously section 52of the Trade Practices Act 1974 (Cth)) states that, “A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”

Where ‘trade’ is the exchange of goods and services between two or more parties in consideration of money or worth. And ‘commerce’ is the exchange of goods and services between the parties along with activities that completes any exchange (Smith 2000, 408).

To determine if such conduct is misleading or deceptive, or likely to mislead or deceive, the end intent as a result(s) of such conduct must be untrue or deceitful (Thampapillai 2015, 462).

The failure to disclose any relevant information or promises may also be considered misleading or deceptive (Langevoort 1994, 481-503). This arises when a person(s) fails to make known such information to others which maybe significant to the decision made. This can also be critical information intentionally not conveyed to the relevant person(s). Changes in circumstances, resulting in the inaccuracy of all prior information provided (Hodgekiss 1999, 26).

Statements made in in the course of employment negotiations can also attract Schedule 2 Australian Competition and Consumer Act 2010 (Cth.) Section 18(1) of the Australian Consumer Law (Carson and Murrmann 1982, 13-22). If it is in relation to the ‘trade or commerce’ of the employer. It can also be applied in employment context if an employer is involved in hiring employees for its operations.

This was defined in the case of Barto v GPR Management Services Pty Ltd (1991), where Mr Barto had entered into a contract of employment that was partly written and oral, with GPR Management Services Pty Ltd. In the course of negotiations, Mr Barto claimed that he was offered an increased salary and commission other representations made to him about the company’s wish for him to continue in its service ‘indefinitely’ and that representations had also been made on his behalf to the Department of Immigration regarding his stay in Australia. However Mr Barto later claimed that such representations made by GPR Management Services Pty Ltd were false, erroneous and not fully mete out. The court then stated:

“…the better view is that conduct of a corporation which occurs in the course of negotiations with a prospective or present employee in respect of that person’s employment contract is conduct capable of falling within Section 52 of the Trade Practices Act.”

Schedule 2 Australian Competition and Consumer Act 2010 (Cth.) Section 31 states, ”A person must not, in relation to employment that is to be, or may be, offered by the person or by another person, engage in conduct that is liable to mislead persons seeking the employment as to:

a. the availability, nature, terms or conditions of the employment; or

b. any other matter relating to the employment.

An ‘employment’ is a relationship between two parties based on a contract where work is paid for, where one party is the employer and the other is the employee (Keynes, 2016). In a corporate context, an employee is a person who is hired to provide services to a company on a regular basis in return for benefits and does not provide these same services as an independent business (Arthur and Denise, 2001).

In the case of Rakic v Johns Lyng Insurance Building Solutions (Victoria) Pty Ltd (2016), Ms Rakic was offered a base salary plus profit shares to persuade her from joining a competitor during the course of her negotiations for her continued employment. However, when Johns Lyng did not make a profit that year, and with the business in bad shape, the company refused to pay Ms Rakic any profit share. The court held that misleading representations were made in the course of negotiations to induce Ms Rakic into entering an employment contract with Johns Lyng.

Also in the cases of Australian Competition and Consumer Commission v Jetstar Airways Pty Limited(2017) and AustralianCompetition and Consumer Commission v Virgin Australia Airlines Pty Ltd(2017), both airlines had failed to disclose an extra booking and service fee, which for Jetstar customers was $8.50 on a one-way ticket, and for Virgin customers $7.70, therefore misleading and deceiving customers on the actual total costs of their tickets to be paid.

Application

In the facts of the case, Creative Advertising Ltd had promised Max immediate access to a generous employee share scheme if he accepted the employment offer. However, the employment contract he eventually signed did not state down such terms. The intent to not state such offered (during the course of negotiation) terms in the contract is considered misleading and deceiving: Barto v GPR Management Services Pty Ltd (1991).

Max also discovered that there was a company policy stating that employees must have served two years before they can access the employee share scheme. This was different from what was promised to Max during their negotiations and can be considered misleading and deceptive conduct by the employer: Barto v GPR Management Services Pty Ltd (1991).

Creative Advertising Ltd had also failed to disclose the following information to Max prior to his employment:

a. the existence of their company policy

b. the contravening (as compared to the immediate access of employee shared scheme offered) terms of the company policy

Failure to disclose such information that was crucial for Max’s decision is considered misleading and deceptive conduct: Australian Competition and Consumer Commission v Jetstar Airways Pty Limited(2017) and AustralianCompetition and Consumer Commission v Virgin Australia Airlines Pty Ltd(2017).

Conclusion

As Creative Advertising Ltd had clearly contravened Schedule 2 Australian Competition and Consumer Act 2010 (Cth.) Section 18(1) and Section 31 of the Australian Consumer Law, Max has the legal right to have immediate access to the scheme or obtain compensation.

Part 2

If Creative Advertising Ltd had only made such a promise 6 months after Max’s employment in recognition of his excellent work, such a promise would not be subjected to Schedule 2 Australian Competition and Consumer Act 2010 (Cth.) Section 18(1) and Section 31 of the Australian Consumer Law. Therefore, Max would have no legal rights to access any employee share scheme based solely on the promise made.

However, as there is an existing company policy stating that all employees were entitled access to the share scheme once they have served the company for two years, Max would thus have the legal right to access this same scheme only after he has completed two years of employment with Creative Advertising Ltd.

Word Count: 1318

References

Arthur, Michael Bernard, and Denise M. Rousseau, eds. The boundaryless career: A new employment principle for a new organizational era. Oxford University Press on Demand, 2001

Carson, Thomas L., Richard E. Wokutch, and Kent F. Murrmann. “Bluffing in labor negotiations: Legal and ethical issues.” Journal of Business Ethics 1, no. 1 (1982): 13-22.

Hodgekiss, Christopher. “Misleading and deceptive conduct.” Commercial Law Quarterly: The Journal of the Commercial Law Association of Australia 13, no. 2-3 (1999): 26.

Keynes, John Maynard. General theory of employment, interest and money. Atlantic Publishers & Dist, 2016.

Langevoort, Donald C. “Disclosures that” Bespeak Caution”.” The Business Lawyer (1994): 481-503.

Morandin, Nicole, and Joshua Smith, eds. Australian Competition and Consumer Legislation 2011. CCH Australia Limited, 2011.

Smith, Rhonda L. “When competition is not enough: consumer protection.” Australian Economic Papers 39, no. 4 (2000): 408-425.

Thampapillai, Dilan. “Misleading and Deceptive Conduct.” Australian Commercial Law (2015): 462.

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Presentation – 2 

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