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Changed bonus results in successful claim for misleading or deceptive conduct under the Trade Practices Act 1974 (Cth). |
Morton v Interpro Australia Pty Ltd & Anor [2009] FMCA 423 (14 May 2009 |
The employee was awarded damages having been induced to enter a contract of employment by a promise that was revoked.Morton brought an action against his employer Interpro Australia Pty Ltd (Interpro) alleging he was induced to relocate on the promise of a 1 per cent override commission on Interpro's gross profit in his second year of employment. This was not in his written contract. |
Interpro changed the override commission, reducing Morton's entitlements in his second year of employment. Morton disputed this and resigned. |
The Federal Magistrates Court said the contract was silent on the commission, but that Interpro made a binding representation:
- at the time of negotiations;
- relied on by Morton in accepting the offer; and
- dishonoured before Morton received the benefit.
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| Interpro is not state to Morton that the commission could be revoked at will. Interpro was found to have breached section 53B of the Trade Practices Act 1974 (Cth) and the contract of employment. |
Section 53B provides 'A corporation shall not, in relation to employment that is to be, or may be, offered by the corporation or by another person, engage in conduct that is liable to mislead persons seeking the employment as to the availability, nature, terms or conditions of, or any other matter relating to, the employment'. |
Extract from case
- 90. Taking exhibit MM-1 as a whole, Mr Morton would reasonably have assumed, and did assume, that he had a guarantee of the 1% override in year two. That is what was represented to him. Mr Hara did not say anything to suggest that the 1% override was removable at will. Had he done so, it is clear that Mr Morton would not have accepted the job.
- 91. I have already determined above that this became a binding term of the contract. It was also, however, a representation as to what would obtain in the second year of Mr Morton’s employment.
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http://www.austlii.edu.au/au/cases/cth/FMCA/2009/423.html |
