Repudiation of employment contract by unilateral change in status and responsibility

Whittaker v Unisys Australia Pty Ltd [2010] VSC 9 (29 January 2010) 

 

The plaintiff’s role was changed without his consent to one less in status and responsibility and another person was promoted to his position. The change in roles was ‘broadcasted’ via an email to other employees.

Ross J considered at length the law of repudiation in employment contracts and the judgment is a handy ready reckoner of the applicable cases and principles, starting with:

32 In Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd the High Court dealt with the different senses in which the term repudiation is used, and the majority (per Gleeson CJ, Gummow, Heydon and Crennan JJ) said, relevantly in the circumstances of this case,:

…it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party’s obligations. It be may termed renunciation. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it…[7] (citations omitted)

33 It is clear from the above extract and other cases that an actual intention to repudiate is not necessary; the issue is resolved objectively by reference to the effect it would have on a reasonable person. [8] Hence the question becomes whether the conduct of the employer, judged objectively, evinced an intention to no longer be bound by the contract. Repudiation may also be established by conduct that evinces an intention to perform the contract only in the manner in which it suits that party to perform.[9]

34 Whether there has been a repudiation in a particular case is a question of fact.[10]

35 Not every breach of contract is a repudiation and repudiatory conduct is not to be inferred lightly.[11] Repudiation may be evidenced by a single act or by an accumulation of conduct in circumstances where no individual act on its own constitutes a repudiation.

36 A repudiatory breach does not automatically terminate the contract but confers an elective right of termination on the innocent party.

Brisbane Barrister – David Cormack

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