By
Mike Toten
Mike Toten is a freelance writer, editor and media commentator.
Australian Taekwondo claimed instead that she had been offered a new contract and voluntarily turned it down. In fact, she had accepted the contract, but a day later the board “resolved not to renew” her contract and announced that she had rejected it.
Facts of case
After a favourable performance review about six months before the contract was due to expire, the directors of AT told the employee that the board had agreed to extend her contract for three years and increase her salary. The employee accepted and AT announced internally that it had “secured her for three more years”.
A few months later, a board meeting reported that the employee wanted to amend her contract before signing it. The meeting passed a resolution expressing its full support for the employee to continue as CEO and committing to a timeline for finalising her contract.
A few days later, the employee emailed a list of suggested amendments to the contract, stating a date she would sign it if the amendments were considered. She used the phrase “some additions for the board to consider”. She also expressed some concerns about working with the chair of AT.
However, tension between her and the chair was inflamed when she asked him to step aside, which he refused. She had told him she would sign the existing contract in good faith and negotiate her amendments later, but the chair advised her not to sign until after the board considered the amendments. She signed the contract without amendments and emailed it to the board, but a board meeting the next day “allowed the contract to expire” (a week later). She received no prior warning that this might occur.
Decision
The FWC held that the various negotiations created the impression that a binding contract would be formed and that her “amendments” could be described instead as merely requests for further information, not a counter-offer. The contract became binding when she signed it and returned it to the board.
Therefore, when the board notified that it had decided not to renew her contract, it communicated her dismissal. This entitled her to make a general protections claim involving dismissal.
The FWC has now listed the matter for conciliation.
What this means for employers
An employment contract can be formed not only by explicit offer and acceptance but also by the conduct of the parties. Communications by both parties over several months followed by delivery of a signed contract indicated that a binding contract had been agreed to and formed. For the board to then change its mind and reject the contract amounted to dismissing the employee. In this case, the way the employee communicated her “suggested amendments” did not amount to a counter offer –she agreed to the contract in its original form.
Read the judgment
Heather Garriock v Australian Taekwondo Limited and Hugh Eagling [2024] FWC 350 (12 February 2024)