Gilmore v Allied Express Transport Pty Ltd [2006] NSWIRComm 16 (30 March 2006)

Last Updated: 30 March 2006

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Gilmore v Allied Express Transport Pty Ltd [2006] NSWIRComm 16

FILE NUMBER(S): IRC 849

HEARING DATE(S): 02/11/2005

03/11/2005

04/11/2005

01/12/2005

DECISION DATE: 07/02/2006

PARTIES:

APPLICANT:

Anthea Gilmore

RESPONDENT:

Allied Express Transport Pty Ltd

(ACN 001 787 962)

JUDGMENT OF: Schmidt J

LEGAL REPRESENTATIVES

APPLICANT:

Ms M Stubbs of counsel

SOLICITORS:

Hunt & Hunt

RESPONDENT:

Mr P Newall of counsel

SOLICITORS:

Baker & McKenzie

CASES CITED: Allison v Bega Valley Council (1995) 63 IR 68

Beahan v Bush Boake Allen Australia Ltd (1999) 47 NSWLR 648

Bowker & Anor v Software Engineers Australia (NSW) Pty Limited & Ors [2004] NSWIRComm 104

Dare v Hurly [2005] FMCA 844

Police Service v Batton (2000) 98 IR 154

Hepstonall v Gaskin & Ors (No 2) [2005] NSWSC 30

Irvings & Ors v Kleinman [2005] NSWCA 116

Lawyers Duties to the Court (1998) 14 LQR 63

Port Macquarie Golf Club v Stead (1996) 64 IR 53

Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470

Rondel v Worsley [1969] 1 AC 191

Saliba v John Hearder Ltd (1986) 15 IR 36

Sydney Water Corporation v Industrial Relations Commission of NSW [2004] NSWCA 436

Truelove v Sydney Water Corporation Limited and Anor [2004] NSWIRComm 115

Western Excavating v Sharp [1978] QB 761

Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666

Westfield Ltd v Helprin (1998) 82 IR 411

LEGISLATION CITED: Industrial Relations Act 1996

Legal Profession Act 2004

JUDGMENT:

- 29 -

INDUSTRIAL COURT OF NEW SOUTH WALES

CORAM: Schmidt J

7 February 2006

Matter No IRC 849 of 2004

ANTHEA GILMORE v ALLIED EXPRESS TRANSPORT PTY LTD

Application under s.106 of the Industrial Relations Act 1996

JUDGMENT

[2006] NSWIRComm 16

1 These proceedings were commenced by Anthea Gilmore in February 2004 pursuant to s 106 of the Industrial Relations Act 1996 ('the Act'). Ms Gilmore was employed as the respondent's corporate counsel pursuant to a written employment contract entered in June 2001. The application concerns the fairness of that contract.

2 The orders sought were:

1. An order declaring void in whole or in part or varying in whole or in part either from its commencement or from some other time the contract of employment between the Applicant and Respondent under which the Applicant performed work in an industry in New South Wales (the Contract).

2. Further, in addition, an order that the contract of employment between the Applicant and the Respondent under which the Applicant performed work in an industry was unfair, harsh and unconscionable and contrary to the public interest.

3. Further, in addition, an order varying the contract of employment between the Applicant and the Respondent from its commencement so as to include the following terms:

(a) that the Respondent will observe the principles of natural justice and fairness in all dealings with the Applicant.

(b) that in investigating any allegations regarding the Applicant's performance and/or conduct, the Respondent will immediately upon receipt of such allegations disclose their content to the Applicant;

(c) that the Respondent will, after disclosing the allegations to the Applicant, afford the Applicant an opportunity to respond to the allegations in writing;

(d) that during the investigation of any allegations regarding the Applicant's conduct and/or performance, the Respondent will not suspend or terminate Applicant's employment, nor otherwise deal with the Applicant's employment adversely in any way;

(e) that upon finalisation of the investigation, the Respondent will communicate its decision to the Applicant and afford an opportunity to the Applicant to provide, in writing, any further material which the Applicant considers material to the investigation;

(f) that at all times during the investigation, the Respondent will keep the allegations confidential and will not cause or permit the public dissemination of any aspect of the allegations or the investigation;

(g) that the Respondent will conduct itself in all dealings with the Applicant in an ethical manner which does not cause the Applicant distress and/or anxiety, and which does not adversely affect the reputation and good standing of the Applicant;

(h) that the Respondent will not publish any allegations, or the fact that allegations have been made against the Applicant, until the completion of any investigation;

(i) that the exercise of any discretion permitted to the Respondent under the contract of employment or arrangement will be exercised towards the Applicant in a manner that is at all times, fair, just and conscionable and specifically, that the Respondent will exercise such discretion in a manner consistent with the previous representations made to the Applicant;

(j) that the Respondent will ensure that the Applicant will not be the subject of detrimental action as a result of raising allegations of poor performance. In this contract, detrimental action means action causing, comprising or involving any of the following:

(i) injury, damage or loss,

(ii) intimidation, victimisation or harassment,

(iii) discrimination, disadvantage or adverse treatment in relation to employment,

(iv) dismissal from, or prejudice in, employment,

(v) disciplinary proceedings.

(k) that the Contract will not be terminated by the Respondent unless the Respondent gives the Applicant two (2) years notice in writing, or pays the Applicant an amount in lieu of notice equal to the amount of two (2) years remuneration payable under the Contract, including the value of superannuation entitlements, bonuses and allowances.

4. Further, in addition, an order that the Respondent pay to the Applicant such amount of money in connection with the contract so avoided or varied as may appear to be just in the circumstances.

5. An order that the Respondent pay to the Applicant interest upon such amount of money as is ordered to be paid to the Applicant in connection with the contract as varied at such rates and from such time as this Commission considers appropriate.

6. An order that the Respondent pay the Applicant's costs of these proceedings.

7. Such further or other orders as this commission considers appropriate.

3 The money orders sought were:

i.

Should a finding of fact be found based on paragraph 3 of Part B

In the alternative, should a finding of fact be found based on paragraph 8 of Part B

Applicants total salary $100,000.00 (inclusive of superannuation)

Two years notice equals $200,000.00

Applicants total salary $120,000.00

(inclusive of Superannuation)

Two years notice equals $240,000.00

ii. Costs

iii. Interest at the rate from time to time prescribed by Schedule J to the Supreme Court Act 1970 (NSW)

4 The parties were not agreed as to the issues which required determination in the proceedings. It was common ground that the question of who brought the contract to an end and if it was the respondent, whether the contractual notice provision was fair, required determination. The issues raised by the applicant, which the respondent disputed as being in issue and within jurisdiction, were:

(b) What were the concerns the Respondent had in relation to the Applicant's performance of her work duties, whether those concerns had any substance, whether those concerns were raised with the Applicant, the form in which those concerns were conveyed to the Applicant, the opportunity afforded to the applicant to address any such concerns. Relevant to the issue of performance, and in dispute between the parties, are the duties which were required to be performed by the Applicant, and the nature of those duties.

(e) Whether Mr McDowell, a principle officer of the Respondent, conducted himself in a manner which destroyed or seriously impaired and/or damaged and/or rendered dysfunctional and/or unworkable the relationship of trust and confidence between the Applicant and the Respondent.

(f) Whether the Respondent unilaterally varied the Applicant's duties.

The Evidence

5 Evidence was given by Ms Gilmore, Mr Stephen Pasfield, Finance Broker, Mortgage Broker and Licensed Motor Dealer and Mr Jeffrey Choy, Solicitor. In the respondent's case, evidence was called from Mr Colin McDowell, Chief Executive Officer; Ms Michelle McDowell, Managing Director; Mr Peter Read, General Manager - Finance and Mr Grant Goodman, General Manager, Business. Various documents were also tendered.

6 The parties entered a written contract dated 15 June 2001, but signed on 27 June, after the employment commenced on 18 June. The offer originally made was for one week's notice of termination, in accordance with the respondent's standard terms. Ms Gilmore asked for four weeks, which was agreed by Ms McDowell. The salary package provided was $100,000, including superannuation. The duties were described as 'Your duties will be as previously outlined in discussions and also in accordance with the position description. You will report to Michelle McDowell'. There was no position description provided and there was disagreement in these proceedings, as to the duties discussed. The employment was terminated in 2004.

7 During the employment Ms Gilmore's remuneration was not increased. There was an issue as to whether any increase was, or was not, promised. On Mr McDowell's evidence, he promised in October 2002 to consider an increase if Ms Gilmore devised a written strategy showing how she could make a difference to the business. She never produced anything. Ms Gilmore denied this. On her evidence, she had been promised an increase if her husband also obtained one in his employment. She relied upon a document signed by Ms McDowell confirming the increase. Ms McDowell's evidence was that this was not what the document showed. It was the document which started the process of review, but it had not been taken further in Ms Gilmore's case.

8 Ms Gilmore initially reported to Ms McDowell, a director of the respondent, which is a privately owned company operating as a national transportation carrier. Mr McDowell is the managing director and owner and Ms McDowell's father. At times the applicant reported to Mr McDowell, later she reported to Mr Goodman, after his appointment as general manager Syntax Express. The respondent was described by Mr McDowell in his affidavit evidence as a $90 million business, with over 1500 employees and contractors. By the time Ms McDowell came to give her evidence, the business had grown to $100 million turnover. It was growth in the business in the late 90s and Ms McDowell's changing role at the time, which left her with less time to attend to legal matters, which had led to the decision to employ a general counsel and Ms Gilmore's employment. The evidence suggested that there was further significant growth in the business after her employment, including by acquisition.

9 Ms Gilmore's work included commercial, property, insurance, workers compensation, litigation and employment matters, as well as personal legal work for Mr McDowell. She represented the respondent's interests in proceedings before courts and tribunals throughout Australia, when she appeared herself, as well as briefing external legal advisers in other matters. She was also involved in debt recovery work. There was an issue as to whether this was work she was initially engaged to perform, or took on subsequently, as the result of changes implemented by Ms McDowell. Mr McDowell's evidence was that all Ms Gilmore's work was not properly attended to, including debt recovery work. Ms Gilmore's evidence was to the contrary and that she had too much work to deal with, to also take on increased involvement in debt recovery work. A junior solicitor was later employed to assist her with this work, whom she supervised. Ms McDowell also had concerns about how aspects of the work was undertaken and her interaction with other members of the executive team.

10 Ms Gilmore attended meetings of the respondent's executive for a period, until August 2003. It was the respondent's case that her attendance at the meetings ceased, as the result of concerns held about Ms Gilmore's competence.

11 Mr McDowell's evidence was that his initial views of Ms Gilmore were positive, but that they changed, after she began attending executive meetings. He formed the view that she was not organised and refused to follow his directions; she did not explain and adequately communicate legal risks to management and matters were not dealt with in an effective and timely manner. It was Mr Goodman's evidence that he, too, came to the view that Ms Gilmore was not doing a good job, which he discussed with Mr McDowell in December 2003.

12 It was Ms Gilmore's evidence that such concerns had no proper foundation and that she was victimised and bullied during this period of her employment. She suffered from a medical condition, which necessitated ongoing treatment, of which she informed the respondent in early 2003. This required her on occasions to arrive late or leave work early. It did not, however, impede the performance of her work. In mid-2003, Mr McDowell began accusing her of certain unprofessional conduct and questioning how she was spending her time attending to the respondent's legal affairs. In August she was reprimanded for a failure to win a workers compensation claim. In December, Mr McDowell informed Ms Gilmore she might no longer have a job.

13 On 10 and 11 December 2003, Ms Gilmore took sick leave, the first she had taken during the employment, while she had some surgery. She had to return early from sick leave to attend to work Mr McDowell was pursuing with her. He denied this. On 24 December, Mr McDowell raised his concerns with Ms Gilmore and advised that if there was no significant improvement, disciplinary action would be taken. It was common ground that at the meeting, Mr McDowell told Ms Gilmore that she should think about looking for another job.

14 In early February, Mr McDowell again met Ms Gilmore. He then gave her a letter dated 28 January, which he had settled with Ms McDowell, raising various concerns. Mr McDowell asked the applicant whether she was looking for another job. Ms Gilmore then advised him that she was pregnant. On Mr McDowell's evidence, he thereupon told the applicant: 'Well if you want you can work through until the baby is born'.

15 After further discussion, on 10 February Ms Gilmore rejected the performance issues raised and proposed, in writing, that a mutually acceptable arrangement as to the timing and financial basis of her departure from the respondent be arrived at. On Mr McDowell and Mr Goodman's evidence they understood the letter to be a resignation, which Ms Gilmore denied. In a later discussion Ms Gilmore proposed that on termination a payment be made to her of four months' pay.

16 Given Mr McDowell's views about Ms Gilmore's performance, he was not prepared to agree to such an arrangement. One month's notice was discussed, or as an alternative, Ms Gilmore continuing as a consultant until 1 September. Mr McDowell's evidence was that he and Ms Gilmore had a conversation to this effect:

When the meeting reconvened Mr Goodman and I attended the Applicant's office and I said words to the following effect to the Applicant:

Mr McDowell:

"Anthea, you can either leave with one months' notice or your(sic) can work your notice period and then after that work until you have the baby as a contractor."

Gilmore:

"My letter was not a resignation letter Colin"

At this stage I became frustrated and told the Applicant that she could leave with a month's notice if she wanted. The meeting ended. The Applicant and I then had a further discussion in my office where I said:

"Anthea, consider what I have offered. Talk it over with your husband."

17 The following day, 11 February, Ms Gilmore purported to accept the termination of her employment with one month's notice. The respondent's view was that Ms Gilmore had resigned. On 15 February, Ms Gilmore was given directions as to the work she was to perform during the notice period. On 16 February, the respondent advised Ms Gilmore in writing of its view that she had resigned. On 18 February, Ms Gilmore was away ill, but she sent an email denying that she had resigned and enquiring whether the consultancy position was still available, given that her position had been advertised in the press by the respondent.

18 On 20 February these proceedings were commenced. On 24 February, Mr McDowell confirmed his view that Ms Gilmore had resigned. She remained absent on sick leave until 12 March. On 15 March, the applicant's solicitors wrote, asserting that it was the respondent who had terminated the employment and that the conduct was repudiatory, which Ms Gilmore accepted, thereafter treating the contract at an end. On 24 March, Ms Gilmore was paid outstanding annual leave entitlements.

The parties' respective cases

19 The case advanced for the applicant by Ms Stubbs of counsel, was that the evidence had established the unfairness of the contract, the jurisdictional gateway to relief. This was not a case where all that was complained of was either unfair conduct, or a breach of contract. The complaints advanced included the deficiencies in the contract addressed in the summons, which had been made out on the evidence, in relation to the way in which the applicant was treated and dealt with during the course of the employment. The variations sought required fair treatment to be afforded the applicant in relation to matters of her performance and conduct, so as to protect her from intimidation, harassment, victimisation and bullying, as well as ensuring proper investigations of alleged deficiencies in her performance.

20 Given the express variations sought to the contract, while it remained on foot, the case must be regarded as one very different to that considered in Truelove v Sydney Water Corporation Limited and anor [2004] NSWIRComm 115. It followed that there could be no jurisdictional impediment in this case, to the relief claimed.

21 Once jurisdiction was accepted, it was submitted that the evidence had starkly illustrated the unfairness of the contract and that there was, in truth, finally little contest between the parties. The evidence given by Mr McDowell was relied upon to demonstrate the conduct directed towards the applicant and the absence of any mechanisms to protect her from such behaviour; the lack of any opportunity to respond to claims of poor conduct or performance; the absence of any clear delineation of duties and the unilateral alterations to her duties, as well as the failure to implement any fair review procedures for remuneration. It was submitted that these matters all inevitably led to the conclusion that the relief sought must be granted. Evidence called by the applicant was largely unchallenged and her evidence as to relevant matters was largely corroborated. While the evidence was submitted to be 'overwhelming and compelling', it was accepted that the Court was not bound to grant the elaborate variation sought to the contract in the summons. Relief of a lesser kind, appropriate to the nature of the position, could be ordered, as matter of discretion.

22 As to the question of who it was that brought the contract to an end, it was submitted that Mr McDowell's concessions in cross examination put beyond doubt that it was the respondent. There was no doubt that he had told the applicant to look for another job and that a constructive dismissal had resulted, at a time when the applicant was denied any opportunity to address questions of work performance raised with her. It was not the applicant who had sought to bring the employment to an end, but she accepted the inevitable, given what she was confronted with.

23 As to the money orders sought, it was accepted that mitigation was a relevant consideration, but argued that account would be taken of the fact that the new position obtained by the applicant was a contract position, not a permanent ongoing one.

24 As to credit issues, it was submitted that the applicant's evidence as to 'setting up' the respondent would be approached in the context that the words were used in email correspondence to her solicitors, at a time when litigation was in contemplation. They could not be understood as a suggestion that the applicant was setting out to orchestrate or manufacture evidence to support a claim.

25 The evidence would be contrasted with the evidence given by Mr McDowell - in chief, where relevant matters were denied, but which were later conceded in cross examination. It was submitted that it would be accepted that his evidence was not free and forthcoming, or entirely credible. It was simply not believable, on all of the evidence that he ever believed that the applicant had resigned. This would be taken into account in the conclusions reached.

26 The case advanced for the respondent by Mr Newall of counsel, was that the contract had not been demonstrated to be unfair and the claims advances were beyond jurisdiction in any event. In truth, the case was an unfair dismissal claim beyond jurisdiction, given the provisions of s 109A of the Act. Further, the complaints as to procedural unfairness and the failure to maintain the relationship of trust and confidence between the parties, was a breach of implied terms in the contract in any event - see Dare v Hurly [2005] FMCA 844; Police Service v Batton (2000) 98 IR 154, citing Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666 at 670-2. A claim that the contract failed to prevent conduct in breach of such a term was not within jurisdiction - see Sydney Water Corporation v Industrial Relations Commission of NSW [2004] NSWCA 436 at [35].

27 The claims advanced in relation to mistreatment in employment and that allegations of inadequate performance were unfounded, and were also irrelevant to the claim made in respect of unfair notice. The applicant's own evidence showed she was before the Court seeking compensation for unfair dismissal.

28 The evidence demonstrated that the notice provision was not unfair in any event, having been negotiated only three years earlier by a barrister and solicitor whose area of expertise was employment law. The Court should conclude that the bargain had been freely made by a person who was under no restraint or inequality. (See Port Macquarie Golf Club v Stead (1996) 64 IR 53.)

29 A finding of unfairness as to notice would, in any event, have no utility in this case, because on the evidence, it wasn't the employer who brought the employment to an end. It followed that there would be no practical utility in the variation sought and the Court would accordingly decline to make any order.

30 The evidence demonstrated that there was no constructive dismissal, rather, that the applicant, in her own words, had tried to 'set up' the respondent. The applicant's evidence that she believed she had been dismissed on 3 February would not be accepted. Her evidence could not be preferred on the matters in issue and in any event, constructive dismissal required that the employee regarded herself as discharged from the contract at once. That could not be demonstrated here. (See Western Excavating v Sharp [1978] QB 761 at 769.)

31 The applicant's belief on 3 February that she had been dismissed contradicted her communication to her solicitors on 16 February, that the respondent should be 'set up' for a constructive dismissal. She did not act upon the asserted constructive dismissal. While Mr McDowell was then of the view that she had no future with the respondent, that could not amount to constructive dismissal. To the contrary, when he learnt of the applicant's pregnancy, he was content for her to remain at least until her baby was born. No other date or circumstance was advanced for the alleged constructive dismissal.

32 The parties later conduct showed that:

'... while it is clear that Mr McDowell's preference is that the Applicant find another situation, it is equally clear that he has not done anything which strikes at the heart of the contract entitling her to regard the contract as over, and the conduct of the parties afterward shows this with unmistakably clarity.'

33 Even the applicant's solicitors later asserted on 15 March that notice had been given on 10 February. Constructive dismissal was not mentioned. The applicant's own evidence was on that day, she believed the employment could continue. No party treated the contract as at an end on 3 February. On 20 February the summons for relief was filed. It did not speak of dismissal. Later it was put in the applicant's affidavit evidence that the summons was filed in 'anticipation of the Respondent terminating my employment'. By way of contrast, the respondent had not had the notion that the applicant had been dismissed.

34 Even if a contrary view was reached, the applicant still faced an insurmountable hurdle. The evidence showed that the applicant had not come to the Court with clean hands when seeking equitable relief (see Saliba v John Hearder Ltd (1986) 15 IR 36). The applicant gave evidence both that she had set out to set up and manipulate her employer and had sought to use the Court to do so. She had also chosen not to be candid in her evidence and to advance untruths on her oath. In the circumstances, the Court would decline to grant any relief, as a matter of discretion. It also showed the general unreliability of the applicant's evidence.

35 In written submissions in reply, Ms Stubbs submitted that the respondent had failed to address at all various aspects of the unfairness complained about, particularly what was claimed at [61] of Part B of the summons and the resulting relief sought in paragraph A3. The case advanced concerned the unfairness of the contract in its failure to contain terms regulating its performance. It followed that the case advanced for the respondent was inconsistent with the conclusions of the Court of Appeal in Sydney Water.

36 The finding of unfairness sought was the precondition to orders declaring the contract void or varying it, as well as making appropriate money orders. The unfairness claimed had been made out. The allegations made concerned post contract conduct in relation to the performance of the contract. The claims advanced could not properly be characterised as an unfair dismissal case. The remedy available under s 106 was in addition to any available at general law, including breach of contract. That the applicant might also have such claims, was not a jurisdictional bar to the relief here sought.

37 Further, there was no authority binding on the Court to the effect that there is an implied term in employment contracts, that an employer must afford an employee procedural fairness. Dare v Hurley did not stand for the proposition asserted by the respondent. In Hepstonall v Gaskin & Ors (No 2) [2005] NSWSC 30, Hoeben J expressed reservations about the existence of an implied term of trust and confidence in Australian law. In Irvings & Ors v Kleinman [2005] NSWCA 116, the Court of Appeal did not strike out an allegation that there was a breach of an implied term of trust and confidence, but struck out other parts of the pleading as to implied terms relating to how investigations of allegations against an employee would be investigated. This approach was inconsistent with that taken in Dare. It followed that the respondent's submissions on the nature of any implied term were not sustainable.

38 In this case, the conclusion that the fairness of the notice period had to be assessed in the context of the other matters complained of, could not be avoided. The authorities showed the range of matters which the Court could properly consider in determining fair notice. What notice period the applicant might have thought fair was not relevant to this determination. The evidence demonstrated that the applicant was constructively dismissed. There had been no reluctance on her part to identify a specific date, it was not a question of evasiveness or untruthfulness, but the problems which flowed from Mr McDowell's conduct, which made identification of a precise date difficult. It was, in any event, unnecessary for the applicant to establish a precise date.

39 The conclusion that the respondent had brought the contract to an end through Mr McDowell's conduct was inescapable on the evidence, particularly given the evidence given by Mr McDowell in cross examination. What he proposed included that she become a contractor, which of necessity, would have brought the employment to an end. This evidence showed the entirely unfair conduct adopted towards Ms Gilmore, which continued, even during these proceedings, when generalised and unsubstantiated criticisms of her performance were made. It was nonsensical to suggest that Mr McDowell and Mr Goodman ever believed the applicant was resigning on 10 February. This was but a crude attempt to make the applicant responsible for what was taking place, the termination of her employment by the respondent. The test in Allison v Bega Valley Council (1995) 63 IR 68 was well satisfied on the evidence.

40 The evidence given by the applicant in cross examination as to a privileged document, should be approached with caution. She was not examined as to what she meant by the words used, 'set up'. Importantly, it was not put to her that she had set out to 'orchestrate' evidence, which in fairness should have been put, if that was the effect of the submission later made. There could, in fact, be no suggestion that she had manufactured evidence. Properly understood, Ms Gilmore was simply taking advice and examining her options, at the time. The contents of her correspondence to her lawyers, in fact, corroborated her evidence.

41 As to the submission that the applicant did not have 'clean hands', there was no evidence that the applicant had engaged in any misconduct or impropriety in relation to any issue in the proceedings. There was no basis upon which the exercise of this maxim could arise in this case.

42 The evidence in question was put to the respondent after a clearly privileged document had somehow come into its possession, without the nature of the document having been notified to the applicant beforehand. The fact that it had come to the respondent's possession did not deprive the document of its privileged character. The conduct of the respondent in failing to disclose the nature of the document, when asked by the applicant's counsel, even though no formal call was made for the document, was a matter which should now be taken into account by the Court.

43 As to slowing down work the applicant had been asked to undertake and the applicant's evidence that she had not done so, it was submitted that this also was not relevant at law. The equitable principle relied upon related to legal, not moral wrongdoing. A falsehood under oath was properly a moral wrongdoing. There was no scope at law, or on the facts, for the equitable discretion to operate against the applicant in this case, who had made out her case on the merits and the law.

44 In a further written submission filed for the respondent, Mr Newall argued that a falsehood under oath amounted to the offence of perjury, which here disentitled the applicant to belief and relief.

Consideration

45 This is a case where issues of credit loomed large, given the way both parties finally advanced their cases.

46 In cross examination, the applicant admitted that evidence she had earlier given in cross examination, was untruthful, when confronted with documents of she had, herself, created some years earlier. This became a matter of considerable importance in the case, to which it will be necessary to return. Similarly, in his evidence in chief, Mr McDowell denied various aspects of the affidavit evidence given by Ms Gilmore. In cross examination, however, he conceded that her version of events was accurate, in a number of important respects. There were obvious difficulties in the evidence given by both these witnesses to which consideration must be given, in resolving the issues which here require determination.

Who brought the employment to an end?

47 Both Ms Gilmore and Mr McDowell were present on 3 February when, on her evidence, Ms Gilmore understood that she was first advised of the termination of her employment. It was common ground that earlier in December, this possibility had already been raised with her by Mr McDowell.

48 The question of who brought the employment to an end must be decided on the basis of the evidence given by those involved in the discussions about that matter, Ms Gilmore, Mr McDowell, Mr Goodman and Mr Read. Ms McDowell was not directly involved in these discussions.

49 The respondent denied that Ms Gilmore was dismissed on 3 February, or at any time. On 11 February, Ms Gilmore wrote, purporting to accept the respondent's termination of the employment. The respondent denied that there had been a dismissal, but on 14 February, it advertised her position. On the respondent's case, this occurred because Ms Gilmore's letter of 10 February was understood to be a resignation.

50 The answer to the question of who had terminated the employment, was provided in the evidence given by Mr McDowell in cross examination, which in large part, finally corroborated Ms Gilmore's version of events. It was common ground that on 24 December 2003, Mr McDowell told the applicant 'you should think about looking for another job because I'm not happy with you'. The question of her performance was next discussed on 3 February. Ms Gilmore's affidavit evidence was that Mr McDowell then told her that:

"You have not been following any of my strategies in relation to any of these matters. You don't listen to what I want you do(sic) to(sic). I have to tell you what to do, and I don't trust you to do what I ask. You just go around doing whatever you want. You are a loose canon."

51 In his affidavit evidence, Mr McDowell generally agreed with this. On Ms Gilmore's evidence, he continued:

"It is time for you to start applying for other jobs. I've not been happy with you for about 9 months now, surely you must have noticed and known that this was coming? I have not wanted you on the board for a long time because I can't trust you, you just do whatever you think, haven't you noticed that I have left you out? I have spoken to Michelle and Peter and they agree with me that you just do whatever you want and don't discuss anything with them."

52 In his affidavit evidence, Mr McDowell denied having said this, although his own evidence was that on 24 December, he had already raised with Ms Gilmore his dissatisfaction with her performance and had told her that she should start looking for another job. His evidence in cross examination was that he did not alter his view about this in January, or at any time prior to meeting with Ms Gilmore on 3 February. He still wanted her to be looking for other work when he had the letter of 28 January prepared by his daughter and when he gave it to Ms Gilmore, on 3 February.

53 In cross examination, Mr McDowell also agreed, that at the meeting on 3 February, he did tell Ms Gilmore to look for other work. Mr McDowell explained that he was not angry with Ms Gilmore at that point, but:

'I am very impatient and I get frustrated and impatient and that leads to the belief of anger. It is only my impatience'

54 On Ms Gilmore's evidence, when Mr Read and Mr Goodman joined the meeting, Mr McDowell gave her the letter of 28 January which raised concerns about her job performance, saying:

I wasn't going to give this to you, I was just going to put this on your file, but I am now going to give it to you. You should start looking for another job.

55 Again, in his affidavit evidence, Mr McDowell denied having told the applicant this. Mr Read and Mr Goodman also denied that this was said, although they agreed that Ms Gilmore was given a letter at the meeting.

56 Mr Goodman's denial needs to be understood, however, in the context of a file note which he made after a later meeting on 10 February, where he recorded that:

'Anthea stated that on two occasions she had been asked to find work, Colin and my recollections were this was in fact only once - last week. Anthea stated that at Christmas the same discussion was had, I advised my recollection was that the Christmas discussion was around what might need to occur should a performance improvement not result from that discussion'

57 Given this file note, it is possible that Mr Goodman's own note may be in direct conflict with his affidavit evidence, although this was not explored with him in cross examination. As Mr Newall submitted, there are other possible explanations as to the occasions to which Mr Goodman was referring in his note. What was clear from the file note, however, was that Mr Goodman was by 10 February well aware that Mr McDowell had told Ms Gilmore the previous week, that she should look for other work.

58 Mr McDowell's earlier affidavit evidence was that on 3 February, it was only after Mr Goodman and Mr Read left the meeting that he asked Ms Gilmore: 'Well have you looked for another job yet?' It was common ground that Ms Gilmore then told Mr McDowell that she was pregnant. On his evidence, he then told her that 'Well if you want to you can work through until the baby is born'.

59 On all of this evidence, there can be no doubt that Mr McDowell told Ms Gilmore to look for another job on 3 February. Mr McDowell conceded that he had. By 10 February, Mr Goodman understood him to have done so.

60 In her oral evidence Ms Gilmore expressed the view that her employment was terminated on 3 February, although she later formed the view that it might be possible for terms to be negotiated, which would lead to the continuation of the employment. This evidence was the subject of various attack by the respondent, both in cross examination and submissions. I am satisfied, however, that there was, in reality, nothing contradictory in Ms Gilmore's evidence about these matters. While notice of termination, once given by either party cannot be unilaterally withdrawn, there is no doubt that employment can continue thereafter by agreement. The evidence showed that this possibility was discussed, but no agreement was finally reached.

61 The letter handed to Ms Gilmore at the meeting on 3 February, dated 28 January, raised various concerns with Ms Gilmore, including failure to adequately communicate with senior management; to act in accordance with instructions given; to attend to all duties under her control; to accept responsibility for those duties; to adopt an 'overall business approach as opposed to legal opinion only'; to prepare information for cases comprehensively; that there were an increasing number of cases 'beyond your experience' and that 'our legal bills have not reduced'. Mr McDowell had this letter prepared because by mid-January, he was tired of telling Ms Gilmore 'what I need her to do and her ignoring it.'

62 In cross examination, Mr McDowell explained that this letter, which he had earlier prepared with his daughter's assistance, was not given to Ms Gilmore at the time it was written, because he did not like giving warning letters and had not decided whether he would give this one at all, until he did so at the meeting on 3 February. He explained that he decided to give it to Ms Gilmore when he became frustrated with her at the meeting. What caused the frustration was unclear on his evidence. He called Mr Read and Mr Goodman into the meeting to discuss Ms Gilmore's performance. He had not given Ms Gilmore, Mr Read or Mr Goodman any prior warning that her performance was to be discussed at the meeting. He had not discussed the question of her performance beforehand with Mr Read. Nor had he discussed that matter with Mr Goodman since Christmas time, when his desire for Ms Gilmore to begin looking for other work was first raised with her. Ms McDowell, who had helped prepare the letter, did not attend the meeting.

63 This was entirely consistent with the approach Mr McDowell seems generally to have adopted to the question of Ms Gilmore's performance, and the termination of her employment. Mr McDowell agreed that when he gave Ms Gilmore the letter, it was entirely without warning or notice, although it was his evidence that he had discussed performance matters with her from time to time throughout 2003 and 2004. On Ms Gilmore's evidence, any such discussion took the form of loud berating for perceived mistakes and inadequacies, without she being given any proper opportunity to respond, or to explain what was being raised with her. This was denied by Mr McDowell, a matter to which I will return below.

64 At the meeting on 3 February, after Mr Goodman and Mr Read had left, Mr McDowell agreed that Ms Goodman first advised him of her pregnancy and her concern that she would not be able to find other work, while pregnant. Mr McDowell explained that this advice turned his thinking around and 'I obviously thought that there was some mutual ground that we could work together with at this time. And I would have thought, thinking pregnancy, thinking nine months, she could work to the eight or nine months and not have to look for another job then, that she could look for another job then.'

65 On Ms Gilmore's evidence, Mr McDowell then told her that 'I might agree to you staying if you sign a resignation now. I will put it in the bottom draw and I'll let you work up to the time you have the baby if you don't come back'. In cross examination, Mr McDowell agreed that he said this to Ms Gilmore, but not on 3 February. On his evidence, Mr McDowell said this to Ms Gilmore after he had later obtained legal advice which 'would have told me to get a resignation letter'. He also agreed that as at 3 February, as far as he was concerned Ms Gilmore was going, it was simply a matter of when.

66 On Ms Gilmore's evidence, on 6 February she told Mr McDowell that she wanted to respond to the criticisms raised in the letter of 28 January, but he told her that he was not interested in her response. Mr McDowell agreed in cross examination, that he also told her 'I'm not interested in anything you have to say, it won't change my mind.' He explained that it was not 'his style' at the time to give someone an opportunity to consider matters such as those he had raised in his letter, or to discuss his concerns with them.

67 On Mr McDowell's affidavit evidence, on 6 February he and Ms Gilmore had the following conversation:

"You haven't got back to me as to what you want to do."

The Applicant replied in words to the following effect:

"I want to respond to your letter first."

I recall saying to the Applicant:

"I need to know what you want to do. Are you leaving now? Are you leaving in a month or are you going through to September?" [Which I assumed was the date for the birth of the child].

68 In cross examination Mr McDowell agreed that he also then told Ms Gilmore, 'I have thrown you a lifeline by letting you work up to the end of your pregnancy so don't bother setting me up'. Mr McDowell's handwritten note, made after the meeting, recorded that:

It is a known fact at Allied if you are doing your job properly you never hear from Colin McDowell.

When I have to continually check people in our business who keep making mistakes or don't follow company strategy or policy it causes grave concerns and raises the pressure in a fast moving business.

I believe a person that makes a mistake is OK, but to keep making the same mistake is a fool. Sorry is for people who cannot get it right.

Anthea refuses to follow instruction on strategy and does it her way. On four occasions at least over the last 9 months she has been counsel(sic) by myself on these matters. Times and dates have not been recorded because she was in charge so I did not want to have a morale problem which I have now because I have now asked at her convenience to find a new position.

By this I mean as a good human being and trying to do the best by my whole (Family) Staff.

69 Ms McDowell's evidence was that she and her father had discussed the possibility of Ms Gilmore remaining until the birth of her child, in the following terms:

Mr McDowell:

"Anthea has just told me she is seven weeks pregnant. I have made it clear I am not happy with her performance. To do the right thing from a family viewpoint, rather than an Allied business point of view, maybe we can let her continue to work under contract until she has had the baby. I am thinking of telling her that she can stay on until she has the baby, what do you think?"

Ms McDowell:

"It think that is ok, if you(sic) that's what you want to do"

70 There can be no doubt on this evidence, that before 6 February, Mr McDowell had already decided to bring Ms Gilmore's employment to an end. Of necessity a contractor's position involved the termination of the employment contract. Mr McDowell had made Ms Gilmore aware of his decision and on his own evidence, all he was dealing with at this stage, was when the termination was to take effect. He clearly advised Ms Gilmore of his intentions on 3 February when he told Ms Gilmore to look for another job. He later pursued her on 6 February, as to which of the alternative times he was prepared to have the termination take effect, she was interested in pursuing - leaving immediately; leaving in a month or remaining until the birth of her child.

71 The latter possibly arose when Mr McDowell learnt of Ms Gilmore's pregnancy. On the case advanced by the respondent in the proceedings, it was not until the letter of 10 February, was received, that the respondent understood that Ms Gilmore was resigning. On 6 February, however on his own evidence, Mr McDowell was asking the applicant when she wanted the termination of her employment to take effect and she told him she wanted to respond to his 28 January letter first. He insisted that, 'I need to know what you want to do.'

72 Ms Gilmore advised in her letter of 10 February that :

You recently told me that you've been trying to get me to conform to your ways of thinking for the last 9 months.

More recently, I believe your objective has been to force me to resign, and on a number of occasions you've asked me to look for another job. The constant criticism, accusations and abuse has caused me a great deal of stress and turmoil, both professionally and personally, so much so that finally, over the weekend, I was not able to concentrate on the documentation of strategies as planned.

At this stage, I do not see any value in responding to your letter of 28 January setting out areas of so called unsatisfactory performance, although I do not believe that the allegations are warranted.

I have worked hard and professionally for almost 3 years and want to continue that way, and I while I am ready, willing and able to perform my duties I do believe this is what you want.

Accordingly, I would like for us to reach a mutually acceptable arrangement as to the timing and financial basis of our separation and the conducting of a professional handover of my responsibilities.

Please let me know if you are in agreement with this approach.

73 It was accepted that the third last paragraph of the letter was intended and understood to say:

I have worked hard and professionally for almost 3 years and want to continue that way, and I while I am ready, willing and able to perform my duties I do not believe this is what you want.

74 Mr McDowell agreed in cross examination that when he read the letter, he understood Ms Gilmore to be saying that she wished to continue, but that she did not believe that he wanted her to continue working for the respondent. That view was entirely consistent with Mr McDowell's earlier conversations with Ms Gilmore, in which he had clearly told her to look for another job - because he had decided her employment was coming to an end. As Mr Goodman's file note on 10 February recorded, both he and Mr McDowell recollected that this had been advised to Ms Gilmore the previous week. All that was being discussed at this point, was the date and the terms on which the employment was to conclude.

75 It was Mr Goodman's evidence, however, that Mr McDowell asked him on 10 February what he thought Ms Gilmore's letter meant. Mr Goodman's evidence was that he understood the letter to be a resignation and told Mr McDowell so.

76 That evidence is difficult to accept, given the terms of letter itself and the evidence given by both Mr McDowell and Mr Goodman in cross examination, that when asked, Ms Gilmore clearly advised them that she was not resigning by that letter. It is pertinent to note that the idea that Ms Gilmore's letter amounted to a resignation, was consistent with Mr McDowell's evidence, that he had received legal advice that he should get a letter of resignation. Ms Gilmore's evidence was that Mr McDowell raised the possibility of her resignation on 3 February. His evidence was that it was later, but he could not recollect when.

77 When Mr McDowell discussed her letter of 10 February with Ms Gilmore that day, he asked her if the letter was a resignation, which, unsurprisingly, she denied. In cross examination, Mr McDowell agreed that he understood Ms McDowell to be telling him she had not resigned. He also agreed that he did not tell her he wanted her to stay. It was common ground that payment of four month's salary was then raised by Ms Gilmore and refused by Mr McDowell. Mr McDowell's evidence in cross examination was 'that is where everything changed on that day because I didn't understand someone could ask for four months pay at that time'.

78 Mr McDowell's evidence was that he was again frustrated with Ms Gilmore when she told him that her letter was not a resignation letter. On Ms Gilmore's evidence, Mr McDowell then offered her the choice of going 'in a month or you can work as a contractor up to 1 September, but you have to make up your mind by midday today'. Mr McDowell's version of the conversation was that he said :

Anthea, you can either leave with one month's notice or your(sic) can work your notice period and then after that work until you have the baby as a contractor'.

79 The conversation finished with Mr McDowell telling Ms Gilmore to consider what he had said. He denied that he required an answer by midday.

80 Frustrated Mr McDowell may have been, but his own evidence was that he was offering Ms Gilmore options as to the basis upon which her employment would be brought to an end, as he intended and as he had earlier made plain to her. Clearly, either leaving after a month's notice or taking up a contractor's position involved the termination of the employment. This, no doubt, explains the view later communicated to the respondent by Ms Gilmore's legal representatives, that it was on 10 February that the employment was finally terminated. Mr McDowell's conduct that day was entirely inconsistent with a true belief that Ms Gilmore had resigned. That he did not, in truth, hold that view was apparent from the steps he had taken to that point to bring the employment to an end; Ms Gilmore's confirmation to him that she had not resigned in her letter of 10 February and the options he then presented her with, as to how the termination would, nevertheless, take effect.

81 Ms Gilmore had been sick and away from work on 9 February. In cross examination, Mr McDowell agreed that he also told her at the meeting on 10 February that he was not 'paying her to stay at home and sit on her backside. Four months is ridiculous'. He also agreed that he told her that 'I can't believe you pulled a stress leave day', but could not recall whether that was said on 10 February, or earlier. He agreed that he said 'Stress is something that people who are not doing their job properly suffer from. If you are stressed that just supports me, you are not able to do your job.' He denied saying on 10 February 'Stress is because of your financial situation and all the IVF and being so desperate to have a baby, that is what is causing your stress, not me'. On his evidence, he said this to Ms Gilmore before January. He recalled her response to be 'I have been working hard for nearly three years and until yesterday I only had three sick days for an operation, plus I then came back early to help you.'

82 On 11 February, Ms Gilmore advised Mr McDowell in writing:

I acknowledge your advice of termination of my employment, with a notice period of one month. Please provide me with your instructions relating to the duties to be performed during this period in writing.

83 This reply was entirely consistent with Mr McDowell's evidence of his conversation with Ms Gilmore the previous day and earlier on 3 and 6 February, as well as her confirmation on 10 February that her letter of that day was not a resignation. Having considered what he had offered, Ms Gilmore elected to work out the one month notice the respondent was obliged to give her under the contract. She declined the opportunity offered to work as a contractor until the baby was born.

84 Mr Goodman's evidence was that on 11 February he had the following conversation with Ms Gilmore:

Goodman:

"Have you considered Colin's proposal in relation to remaining with Allied as a contractor?"

Gilmore:

"I am not prepared to work as a contractor particularly as it would involve me not being able to leave the office. I also have to consider my health."

Goodman:

"Does this letter mean you are planning a future claim against Allied?"

Gilmore:

"It means I am reserving my options, I don't know what I am going to do. As you can see from the letter I am not resigning, I am accepting Colin's termination of my employment."

Goodman:

"The letter you gave us yesterday seemed to clearly be a letter of resignation Anthea, you wanted to negotiate a suitable separation package from the business."

Gilmore:

"Neither letter is a resignation letter, but I agree I do not have a future with "Allied. I will of course act professionally during my notice period."

Goodman:

"I will let you know what I want to(sic) you do in writing shortly."

85 In cross examination, Mr Goodman explained that he understood that the offer of a contractor position meant Ms Gilmore not continuing as an employee. He had earlier discussed this offer with Mr McDowell. On his evidence, it was offered as a 'solution that might meet both the business need and Ms Gilmore's need'.

86 The evidence showed that by 11 February, it was very apparent to those involved in these discussions that Ms Gilmore and the respondent could end up in litigation over the termination of the employment. The parties were each seeking to protect their respective positions accordingly.

87 In correspondence of 16 February, Mr McDowell denied that he had terminated Ms Gilmore's employment; asserted that 'if it is apparent that the employment must come to an end, then this is a matter which we must discuss and agree upon' and concluded:

So that there is no confusion, I am proceeding on the basis that you have not been given notice of termination and if you elect to act upon your letter of 11th February, then you do so in full knowledge of the fact that Allied will regard you as having resigned your employment.

88 This was said two days after Ms Gilmore's position had been advertised, a decision made on Mr McDowell's evidence, shortly after 10 February. He explained that he did not then intend to employ two corporate counsel and the decision to advertise was made to protect the respondent's position, because it was then involved in a lot of litigation.

89 Ms Gilmore was then also discussing with her solicitors the position she was in. She had legal experience in employment law. Having first denied ever suggesting that she would 'set up' the respondent, in cross examination she conceded that in seeking advice as to how she should respond to the letter of 16 February, she had said to her lawyers 'I think we should absolutely set them up for a 106, constructive dismissal and maybe we should start now'. The email of 16 February, where this was said, was later tendered.

90 On 18 February, Ms Gilmore responded to Mr McDowell, raising various of the complaints made in these proceedings with him and recounting why she asserted that it was he who had terminated her employment. Ms Gilmore concluded by asking whether Mr McDowell was withdrawing the offer of a contractor's position and/or the termination of her employment. These proceedings were commenced on 20 February. The summons does not identify a date upon which Ms Gilmore asserted her employment was terminated. In her affidavit evidence she said that the proceedings were commenced 'in anticipation of the respondent terminating my employment'. This was inconsistent with other parts of her affidavit and with her evidence in cross examination. On all of the evidence, I am satisfied that by the time the proceedings were commenced on 20 February, it was quite apparent that the employment would come to an end shortly, but that there was a dispute as to whether it was the respondent, or Ms Gilmore, who had acted to bring this result about.

91 On 23 February, Mr McDowell responded to Ms Gilmore's letter of 18 February, disagreeing with most of what was put in that letter; denying that she was entitled to 'regard the employment as terminated', and concluding:

So that there is no confusion, I will now take whatever steps as are necessary to replace your role and I am assuming that you are acting upon the basis that you believe that your employment has been terminated. You must now live with the consequences of this decision on your part.

92 The letter of 23 February was quite inconsistent with the evidence which both Mr McDowell and Mr Goodman gave in these proceedings, as to the steps Mr McDowell had earlier taken to bring Ms Gilmore's employment to an end, having come to the conclusion that he no longer wished to have Ms Gilmore work for the respondent. He had also been pursing steps to appoint a new general counsel since 10 February. On Ms Gilmore's evidence, while she had not wished to leave her employment, she also came to regard her position with the respondent to be untenable. I accept that there was good reason for that view.

93 A this time Ms Gilmore was not at work, having gone on sick leave on 18 February. She had earlier been directed to prepare summaries of all matters upon which she was currently acting and had begun to do so. Again, having first denied going slowly in attending to that work, Ms Gilmore conceded in cross examination that she was doing that work slowly, as she explained to her lawyers in writing, at that time. That work was plainly required by the respondent to brief the new general counsel it was recruiting. An advertisement for that position had appeared in the Sydney Morning Herald on 14 February.

94 Mr McDowell was not prepared to pay Ms Gilmore the four months' salary she had sought on termination, but was prepared to countenance her continuing to work for the respondent, albeit finally as contractor, until her baby was born, some seven months later. On his evidence, in re-examination, it was not his intention that Ms Gilmore would be without a job up until her baby was born. She could always have had work, had she asked for it.

95 Ms Gilmore was not prepared to accept such a position, on the terms offered and hence accepted the alternative - the one month's notice which the contract, in fact, required. On the evidence, Mr McDowell may well have believed that this was more than the notice which the respondent was obliged to give. The increased notice from the respondent's standard term of one week had been negotiated between Ms Gilmore and Ms McDowell. On his evidence, Mr McDowell had never read Ms Gilmore's contract and was not aware of its terms. Ms McDowell was not involved in the steps taken to terminate Ms Gilmore's employment, other than the discussion with Mr McDowell as to his proposed offer of a contractor's position.

96 Ms Gilmore denied that when she went on sick leave on 18 February, she had then planned not to return to work. On her evidence, even at the time of the hearing, the respondent still had certain of her personal possessions, she had not cleared them all out before she took that leave. On 23 February, Ms Gilmore's solicitors wrote to the respondent, asserting that notice of termination was finally given on 10 February.

97 I am satisfied that they were correct in the view that it was the respondent who, despite Mr McDowell's denials, acted to bring the employment to an end, by the steps he had taken.

98 Ms Gilmore later received a memorandum dated 28 February from Mr McDowell, asserting that he had had a further 'warning interview' with her that day and allegedly confirming various matters discussed concerning issues of poor performance. Ms Gilmore was away on sick leave at that time. No such meeting took place. Mr McDowell was unable to explain the memorandum. On his evidence, it appeared to have been signed by Mr Male, but Mr McDowell could not recall instructing that it be sent.

99 Mr Newall argued that the steps taken by the respondent could not amount to a constructive dismissal, because Ms Gilmore did not act upon them and did not regard the respondent as having brought her employment to an end. That submission was not properly open on the evidence, particularly having in mind Ms Gilmore's letter of 11 February. The law in relation to constructive dismissal is well settled. The decision of the Full Bench in Allison at 72 - 73 has been followed and applied both by the Commission and the Court on many occasions. On the evidence in this case, there can be no doubt that it was the respondent's conduct, through Mr McDowell, which rendered it the real and effective initiator of the termination of this employment.

100 In coming to that conclusion, as I noted earlier, there was a deal of cross examination of Ms Gilmore as to the precise date when she believed she was dismissed and whether she subsequently came to believe that it might have been possible for the relationship to continue. As I have earlier noted, once employers or employees, have acted to terminate a contract of employment by giving notice, the notice cannot be unilaterally withdrawn. While the parties may agree that the notice be withdrawn and the employment continue, neither one party, nor the other, can impose that outcome. Here, while that possibility was discussed, no such agreement was finally reached.

101 The evidence which established that the employment had indeed been terminated by the respondent, emerged from Mr McDowell's oral evidence, which in large measure corroborated Ms Gilmore's evidence. Regrettably, after careful consideration of the evidence, I have been forced to the conclusion that there was an attempt made by the respondent, both before and after these proceedings were commenced, through correspondence and affidavit evidence finally tendered in the proceedings, to orchestrate a scenario in which Ms Gilmore's actions would be construed to have amounted to a resignation. It is unnecessary that I determine who, apart from Mr McDowell, was involved in this endeavour. The attempt failed. Again, this is a matter to which it will be necessary to return.

102 Perhaps having realised the import of the various concessions he had made in cross examination, many of which were entirely inconsistent with what he had said to Ms Gilmore in correspondence and with his earlier affidavit evidence, Mr McDowell then gave evidence in re-examination, which directly contradicted many of these concessions. That evidence was entirely implausible in the context of Mr McDowell's other evidence and I am unable to accept it. The question posed by Mr Newall and the answer given, were:

Q My question is, had you as an officer of Allied made a decision any time before Ms Gilmore went off on sick leave that she definitely was not working for you anymore?

A No

103 On the totality of Mr McDowell's evidence, there can be no doubt that it was the respondent who brought this employment to an end.

The applicant's treatment in the employment.

104 Given these conclusions, it follows that consideration needs to be given to the fairness of the contractual term as to notice, in the circumstances of this employment, given that it was the respondent, not Ms Gilmore, who brought the employment to an end. On Ms Gilmore's case, the inappropriate treatment she received during the course of her employment was a factor to be taken into account in fixing a period of fair notice, as well as in relation to the other claimed variations to the contract. The respondent argued that this evidence was irrelevant to the notice period and that the other relief claimed, was a claim precluded by s 109A of the Act. I am unable to accept these submissions.

105 As has been repeatedly observed by this Court and the Court of Appeal, allegations that contractual arrangements before the Court in proceedings such as this are unfair in what they do not provide, fall squarely within the Commission's jurisdiction under s 106. In Sydney Water it was observed by Mason P at [32]-[33]:

32 A contract of employment may be found unfair because, in the words of Sheller JA (with whom Meagher JA agreed) in Walker (at 149):

[it] permitted termination which, in the circumstances, was unfair and discriminatory. By so permitting the contract was or became unfair.

33 Sheller JA was using the term “permitted” in the sense of that which the contract did not proscribe. Absence of proscription in the relevant particular meant that a party was at liberty to act unfairly without the general law’s sanctions for breach of contract. A contract may “permit” certain conduct either by sanctioning it expressly or by failing to prohibit it. In either circumstance the other party has no contractual remedy to prevent that conduct. Either type of “permission” may properly lead to an appropriate remedy in the Commission, if the Commission finds that the contract is unfair. If that finding is made, the remedies open to the Commission extend to declaring the contract wholly void or partly void, or varying the contract, with appropriate accompanying orders for the payment of money (s106(3) and (5)).

106 I am satisfied that the evidence as to the respondent's conduct through Mr McDowell, who had responsibility for dealing with the performance of senior managers such as Ms Gilmore, must result in a finding that the contract, which permitted this treatment, was relevantly unfair.

107 Ms Gilmore's evidence was that she was subjected to a course of inappropriate conduct by Mr McDowell, which commenced not long after she revealed to the respondent in early 2003, that she was suffering from a particular medical condition. Despite that condition, she had taken no sick leave at all during the employment, until late that year, when she had to undergo surgery. Mr McDowell unreasonably pursued her while she was absent on sick leave and she returned early to work. On Christmas Eve, he raised with her his dissatisfaction with her work and first suggested she should look for another position. Ms Gilmore took the advice seriously. On the evidence she was actively engaged in looking for other work at the time, entirely unsurprisingly, given the situation she found herself in.

108 Mr McDowell's evidence was partly corroborative of this evidence, although denying that it was Ms Gilmore's health which caused him to have concerns about her performance. On his evidence in re-examination, initially they had had a fairly good and fairly close working relationship, but he came to regard Ms Gilmore's work to be inadequate, for reasons he had explained.

109 What was never in issue in the proceedings was that the reason why Mr McDowell initially suggested to Ms Gilmore that she should seek other work in December 2003 and more forcefully in February, was because of his view that her work was inadequate, as the letter of 28 January advised. Ms Gilmore denied that this was so and complained of Mr McDowell's treatment of her, which included abuse and a refusal to let her explain, when he mistakenly took the view that things adverse to the respondent's interest had occurred.

110 Mr McDowell's own evidence showed that there was a foundation for Ms Gilmore's views of her treatment. On his own evidence, Mr McDowell is an impatient man, who gets frustrated and his frustration gives others the impression that he is angry. He agreed at one point that he raised his voice on occasions, but denied yelling. Later he conceded yelling too. In his affidavit evidence, Mr McDowell recounted a number of instances where he took the view that Ms Gilmore's performance was inadequate. In cross examination, his explanations of why he had that opinion, demonstrated why Ms Gilmore's view that Mr McDowell's views were unreasonable, was shown to have some foundation.

111 The respondent operates in the transport industry. It is a very large and successful business, having been built to its current position by the endeavours of Mr McDowell, over the course of decades. He takes a keen and close personal interest in all aspects of the business, which is now run with the assistance of his daughter, who is employed as the company's managing director.

112 As the business has grown, it has often been involved in litigation with employees, unions, debtors and others. In part, this was what motivated the employment of a general counsel. It appears that there was also an expectation that this would result in a reduction in legal expenses. There was dissatisfaction with Ms Gilmore when this was not achieved. Whether the expectation was a reasonable one in the context of this growing business, given the respondent's general approach to litigation, was not explored. The evidence clearly showed that at the time this was expected, the business was growing significantly, including by acquisition and the respondent was involved in frequent litigation.

113 Ms Gilmore's evidence was that in her experience, the respondent infrequently settled litigation. Ms McDowell explained that the respondent's attitude to litigation reflected that of Mr McDowell. This meant that on occasion the respondent received legal advice that a matter should be settled on a commercial basis, but declined to do so, because 'we have decided that we feel there is an ethical or moral reason we would like to continue matters'.

114 On Mr McDowell's instructions, the respondent initiated defamation proceedings against the Transport Workers' Union ('TWU). The respondent's solicitors, Baker & McKenzie, were instructed to act for it. The hearing took place over three days in July 2003. In August 2003, Mr McDowell accused Ms Gilmore of not acting in the best interests of the respondent in the matter and wasting time with the lawyers acting for the respondent. On Ms Gilmore's evidence, Mr McDowell refused to let her explain what she had been doing.

115 In his affidavit evidence, Mr McDowell explained that he was then concerned that Ms Gilmore was often away from the office and that 'work was not getting done'. He believed that:

In the period July 2003, Baker & McKenzie, Solicitors were acting for Allied in a defamation matter against the Transport Workers Union. This matter was essentially dealt with by the Queen's Counsel and Junior Counsel acting on behalf of Allied and the Applicant had some peripheral dealings with the matter in the area of assisting our solicitors, Baker & McKenzie. The Applicant appeared to me to have no experience in matters concerning defamation.

116 Ms Gilmore explained that she did have limited experience in defamation, hence the instructions given to Baker & McKenzie to act for the respondent in the matter. As well as her involvement in managing the day to day dealings with Baker & McKenzie over this matter, at the time she was also spending considerable time in court on other matters, including interstate; she was not behind in her work and no court timetables imposed on the respondent were extended, because of delay on her part.

117 In cross examination Mr McDowell, who had denied telling Ms Gilmore that 'After the TWU matter was over you wasted time with Jackie having girlie talks. You are not getting work done', conceded that he had said this to her. He explained that at the time, he found her work performance in relation to the matter inadequate, even though he agreed that Ms Gilmore had never suggested that she had any expertise in defamation law. Contrary to his earlier affidavit evidence, he explained that he believed at the time that she was handling the matter herself, not Baker & McKenzie. He agreed that his understanding was now different. He also explained that at the time he was concerned about the amount of time Ms Gilmore was spending out of the office, although he was not aware of what she was doing. He also agreed that he did not give Ms Gilmore any opportunity to explain what she had been doing, or what time she had spent with Baker & McKenzie in relation to the matter, when he did tell her that he believed she was wasting time over the matter.

118 In November 2003, when leaving to attend a conciliation conference before the Commission in an unfair dismissal matter, Mr McDowell asked if Ms Gilmore had prepared affidavits 'from everyone who has had anything to do with him to show the court'. While witness statements had been taken, Ms Gilmore had not prepared affidavits and sought to explain that affidavit evidence was not required at that stage of the proceedings and that affidavits could not be finalised, until the applicant had put on his affidavit. Mr McDowell responded:

"I told you I wanted affidavits from everyone to hand up to the court. Clearly you have not prepared this case like I asked you to. You have not followed my strategy.

119 Mr McDowell did not deny this and in his own affidavit, recollected that Ms Gilmore had herself represented the respondent in these proceedings and recalled telling her at the time that she seemed very unprepared. In cross examination, Mr McDowell's evidence was:

Q. At that stage what I suggest to you is that the Ming Bai matter had not even proceeded to a directions. There had been no directions at that stage for filing any affidavit material, are you aware of that?

A. My understanding of court is you go to court. And you go to court to take evidence. I couldn't understand at the time why no evidence could be taken.

Q. I am asking you whether you are aware or not that at that stage there had not even been a directions hearing requiring the filing of affidavits. Are you aware of that or not?

A. No.

Q. The fact of the matter is that the Ming Bai matter resolved at conciliation where Miss Gilmore got Mr Ming Bai to withdraw his application, that's what happened, isn't it?

A. Sorry, I can't recall.

Q. I am suggesting to you that was the result, and you are aware, aren't you, that the Ming Bai matter never proceeded to a court hearing?

A. I can't recall, I am sorry.

120 On Ms Gilmore's uncontested evidence, the matter was settled without going to hearing, or even a timetable for preparation of the matter for hearing being set.

121 Mr McDowell was also critical of Ms Gilmore's failure to prepare affidavits in a timely manner for an unfair dismissal matter, recounting that external advisers had to be briefed to do so after her departure. Ms Gilmore's evidence was that it was when it became apparent that she would be required to give evidence in the proceedings, that external solicitors were engaged in the matter. In cross examination, Mr McDowell's response to the suggestion that this was why Baker & McKenzie were instructed, was merely that he could not comment. There was no issue between the parties, that in such a position, Ms Gilmore could not act for the respondent in the matter, in the way Mr McDowell expected.

122 Mr McDowell was also dissatisfied with Ms Gilmore's advice in relation to stamp duty payable on a large acquisition. The evidence led by the respondent from Mr Read, however, was that the respondent had taken external advice in relation to stamp duty and when Ms Gilmore enquired of him what the advice was, he told her it was still awaited and he would let her know when he had a response. Ms Gilmore's evidence was that while she had prepared a spreadsheet for Mr McDowell as to the duty payable on the transaction in various States, she did not participate in obtaining the external advice, was not aware who provided it, or what it was. In late November, she had discussed with Mr McDowell the consequences of not paying the stamp duty.

123 By December 2003, Mr McDowell had formed the view that she 'was having difficulty in dealing with all aspects of the commercial transactions and litigation that were occurring at the time. It was apparent to me that many of the more simple legal tasks were not being attended to by the Applicant'. He explained in cross examination that before February 2004 he did not ever formally raise his concerns with Ms Gilmore, because he did not wish to create a morale problem. He asserted that he had discussed his concerns informally with her on many occasions and in December, began taking notes.

124 In the first note kept, Mr McDowell related various concerns, including a dispute involving the Viking/Blackwoods site, where Mr McDowell was also dissatisfied, believing that his instructions had not been followed. Ms Gilmore's evidence was that Mr McDowell never raised concerns about the matter with her. In cross examination, Mr McDowell could not recall whether, on the first occasion that this matter came before the Commission, it was resolved by the union's acceptance that it should stay off the site. Mr McDowell denied having not given Ms Gilmore any opportunity to respond to his concerns about the matter. He agreed however, that he never gave her a copy of his note.

125 Mr McDowell also agreed, that in other proceedings before the Commission, in January 2004 when Baker & McKenzie appeared on his instructions, even though the matter settled with the TWU filing a notice of discontinuance, he was also dissatisfied and disappointed with the discontinuance. He expected a different result and having denied in his affidavit that he had told Ms Gilmore that 'I am the only judge and only I know what is a good result', conceded in cross examination that he did say this to her at the time. In cross examination, he explained that he thought there should have been a different result that day, although what he expected, was unclear.

126 It is unnecessary to further outline Mr McDowell's explanation of his dissatisfaction and Ms Gilmore's explanation of why the views he held were unreasonable. It was very apparent from the evidence that the relationship between the parties had broken down as the result of the views which Mr McDowell had formed of the applicant and that it was the steps which he took as a result, which brought the employment to an end.

127 It was common ground that the letter of 28 January was the first occasion on which the respondent took steps to formally raise concerns about various aspects of her performance with Ms Gilmore. While both Ms McDowell and Mr Goodman also gave some evidence about having such concerns, I am unable to conclude that they were matters raised directly with Ms Gilmore.

128 In Ms McDowell's case, her concerns about the debt recovery work which Ms Gilmore was required to take on, suggested that in truth, the respondent's problems in relation to debt recovery could not fairly be laid at Ms Gilmore's feet, as was sought to be done in these proceedings.

129 Ms Gilmore's letter of appointment made no mention of responsibility for debt recovery work. Ms McDowell's evidence was that Ms Gilmore was required to assist with debt recovery work from the commencement of her employment and more particularly, from March 2003. Ms Gilmore's evidence was that she introduced a system of precedent letters and procedures in relation to the management of debt recovery, which had not existed before she was employed. It was common ground that initially a large part of this work was dealt with externally. After March 2003, a decision was taken to bring it in-house.

130 The debt recovery area was led by a succession of managers, who mismanaged the area to the point where more than $1 million was outstanding. This resulted in dismissals of the relevant personnel and Ms McDowell herself stepping in to take control of the area, 'micro managing it' as she described the process. On the evidence, it was not suggested that these were problems for which Ms Gilmore had responsibility. These problems appear to have developed after a period when Ms McDowell was away on maternity leave and after Mr Goodman was recruited. Thereafter Ms Gilmore reported to him.

131 When Ms McDowell began micro-managing the area, Ms Gilmore was required to become more involved in debt recovery work. When it was appreciated that given her other responsibilities, Ms Gilmore could not take on all of this debt recovery work, Ms Gilmore suggested and Ms McDowell agreed, that a more junior solicitor be engaged to take on the work. Ms Gilmore then supervised that work. This was undoubtedly a change in her duties.

132 Ms McDowell had a concern that Ms Gilmore did not take on enough of this work, as required, before the other solicitor was engaged. Even if there was in truth a real concern about this at the time, it does not appear to have been raised with Ms Gilmore and dealt with in any direct fashion. The significance of these concerns may be judged by the fact that they were not even dealt with directly in the letter of 28 January 2004, the first occasion that work performance issues were formally raised with Ms Gilmore. That letter was drafted together by Ms McDowell and Mr McDowell.

133 In cross examination, Mr Goodman explained that while Ms Gilmore reported to him, questions of performance of senior managers such as Ms Gilmore were a matter for Mr McDowell. He was present at the meeting in December, when Mr McDowell first raised Ms Gilmore's future with the respondent and he shortly afterwards also discussed her performance with her, or what she might do to improve the view which he shared with Mr McDowell, that the performance was inadequate. Mr Goodman explained that he never followed the matter up, either with Ms Gilmore or Mr McDowell, before the meeting on 3 February, given the intervening holiday period. He had nothing to do with the letter of 28 January then given to Ms Gilmore.

134 Mr Goodman's evidence of his concerns with Ms Gilmore's performance, related to Mr Male. There was an issue as to whether or not Ms Gilmore in truth had any responsibility for his work. Mr McDowell's evidence was that Mr Male was Ms McDowell's husband. While he had no qualifications or experience in human resources, Mr McDowell appointed him to the position of Human Resources Manager, reporting to Mr Goodman. Mr McDowell denied that Ms Gilmore had any responsibility for his work. His evidence was that when Mr Male was appointed he told Ms Gilmore in February or March 2003 that he expected her 'to provide him with any legal advice or support should he require it. I would like you to look after him and assist him as best you can.'

135 Mr Goodman's concern with Ms Gilmore arose in relation to a memo Ms Gilmore sent him in October 2003, raising her concerns as to Mr Male's handling of certain issues in relation to the staff of a business which the respondent had acquired. She asked to discuss this with Mr Goodman, when he had time. It is difficult to understand how drawing this concern to Mr Goodman's attention, demonstrated 'an unsatisfactory and unhelpful attitude to other managers'. On his evidence, Mr Goodman considered the matters raised and took the view that Mr Male had dealt adequately with them. There was no suggestion that he raised any concerns about Ms Gilmore's approach when he discussed the matter with her, as she had requested. In cross examination, when asked what he was concerned about, given Ms Gilmore's undoubted responsibilities for legal issues affecting staff, he explained:

I just felt that it was a means by which Ms Gilmore was trying to make things difficult for Mr Male and particularly when she wanted it to be brought to my attention and have no action taken against it, which I didn't do, I did act on what was raised in this email.

136 The memo however, clearly could not fairly be read in this way. Ms Gilmore sought to discuss her concerns with Mr Goodman, without drawing them to Mr Male's attention, in the first instance. She did not suggest that Mr Goodman do nothing about them.

137 By way of contrast, Mr McDowell's concerns from time to time were plainly raised forcefully with Ms Gilmore, as I have noted. The evidence showed, however, that it was not his practice to consider what Ms Gilmore was trying to convey to him at the time about concerns he was raising. Had he been prepared to consider her response to them, either at the time he raised them, or after they had been put in writing on 28 January, what concerned him might have been allayed. That this was so, was clearly demonstrated by concessions made by Mr McDowell in cross examination in these proceedings. On his own evidence, he did not give Ms Gilmore such opportunities at the time, because that was not 'his style' at that time.

138 What also requires consideration is the evidence of Mr McDowell's treatment of Ms Gilmore during her employment, corroborated as it was by the evidence of Mr Pasfield and Mr Choy.

139 On the evidence, that Mr McDowell's behaviour was inappropriate towards a senior member of his staff, such as Ms Gilmore, particularly in relation to her ill health, cannot be doubted. I have already earlier outlined some of that evidence. That Mr McDowell was himself conscious of how inappropriate his conduct may have been, was apparent from the evidence which he proffered in cross examination, by way of explanation of how his conduct might be perceived by others. His impatience and frustration, which he did not accept amounted to anger, was a matter Ms Gilmore dealt with in her own evidence. She explained how this resulted in Mr McDowell having expectations that steps would be taken or outcomes achieved, as he had directed, in circumstances where that was not reasonably possible, given constraints which the respondent was confronted with, which were not matters within Ms Gilmore's control. Mr McDowell, however, was not interested in hearing or considering any explanations about such matters. While that approach was one denied by Mr McDowell, it was consistent with the approach adopted to his letter of 28 January. As he explained, it was not his style to give people an opportunity to explain themselves. In this respect, I have come to the conclusion that Ms Gilmore's evidence as to the treatment she received must be preferred over Mr McDowell's denials, particularly when considered with other evidence called in Ms Gilmore's case, to which I will turn to below.

140 This was the foundation for the submission that this aspect of the claim was brought contrary to the section. As I noted earlier, I am unable to accept the submission. Section 109A of the Act makes clear, that these proceedings may not be brought if they are in truth but unfair dismissal proceedings, concerned with the fairness of the treatment Ms Gilmore received on termination. The proceedings were concerned with the fairness of the parties' contract and the claims made in the summons, by way of variation, to rectify the unfairness alleged. The complaints in this case concern not only unfair notice, but also matters which it was alleged the contract unfairly failed to provide for. Such a claim does not fall within s 109A as the Full Court explained in Beahan v Bush Boake Allen Australia Ltd (1999) 47 NSWLR 648 at 692.

141 No money orders were pressed in relation to this aspect of the claim, rather this and the unfair treatment during the employment were argued to be relevant to the notice claim.

142 A not dissimilar difficulty to that here in question arose for consideration in Westfield Ltd v Helprin (1998) 82 IR 411. Mr Helprin was a senior executive, dismissed in circumstances where his performance had not, in reality, been inadequate and where his required performance criteria were virtually impossible to achieve. There the conclusion reached was that the contract should be varied to require Westfield to fully inform Mr Helprin of any matters of concern which could impact upon his continued employment and to provide him with a period of not less than three months in which to improve his performance, before any action was taken to terminate his employment for reasons associated with such matters.

143 Here, the variation sought to the contract was entirely more elaborate. I am satisfied however, given the senior nature of Ms Gilmore's position, that a simple and just requirement such as that awarded in Helprin, would here also rectify the unfairness demonstrated, with the addition of a requirement that the respondent give fair consideration to any matters raised by way of explanation of such concerns.

144 I have come to this conclusion, given the evidence which demonstrated that there was no real consideration given by the respondent as to what Ms Gilmore had been employed to achieve and whether what was expected of her at particular points, which led to concern and criticism, and the ultimate termination of the employment, was realistic or achievable. There was also quite clearly on the evidence, no consideration given at all to constraints imposed on the respondent and Ms Gilmore, not of Ms Gilmore's creation.

145 In this case, it cannot be overlooked that Ms Gilmore was employed as the respondent's general counsel. This was the first time that the respondent had employed anyone in such a position. Undoubtedly, in that position, Ms Gilmore was obliged to ensure that the respondent was adequately and appropriately represented in litigation before courts and tribunals, given the respondent's instructions and otherwise, to properly and professionally attend to her work. When external legal advisers were engaged, she had to ensure that they were properly instructed, so that the same result could be achieved. As an officer of the court, Ms Gilmore also, however, had ongoing obligations to ensure that court and tribunal processes and procedures were adhered to and that litigation in which the respondent was involved, was conducted in a particular way.

146 Those are obligations which fall upon any legal practitioner, irrespective of whether they are employed direct, or are otherwise retained by a party to legal proceedings. They are obligations which cannot be overridden by an employer, no matter what instruction might be given in a particular case.

147 Not only is there a significant public interest in lawyers such as Mr Gilmore ensuring that these obligations are always met, so that scarce court resources are not wasted, unnecessary costs incurred and the administration of justice is not impeded, but it is also in the interest of employers such as the respondent, that this occur. Not only do they thereby minimise their own costs in the litigation, they also ensure that costs orders are not made against them. They also thereby ensure that the integrity of our legal system is upheld, a matter of ongoing commercial interest to any business such as that conducted by the respondent. It, after all, is a frequent litigator before the courts and tribunals, both as an applicant and a respondent.

148 In Rondel v Worsley [1969] 1 AC 191 at 227, Lord Reid conveniently explained these obligations which fall upon legal practitioners, often described as 'paramount' and now contained in the applicable Solicitor's Rules made pursuant to the Legal Profession Act 2004, in this way:

Every counsel has a duty to his client fearlessly to raise every issue, advance every argument, and ask every question, however distasteful, which he thinks will help his client’s case. But, as an officer of the court concerned in the administration of justice, he has an overriding duty to the court, to the standards of his profession, and to the public, which may and often does lead to a conflict with his client’s wishes or with what the client thinks are his personal interests.

149 This explains why legal practitioners may not simply appear before a court and there advance their clients' or employers' interests, in whatever way their client or employer may instruct. As the Court of Appeal in Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470 observed:

53 It is impossible to understate the confidence which courts must be able to place in the candour of those legal practitioners who appear before them. As Mahoney JA said in Law Society of New South Wales v Foreman (No 2), above at 445G-446C:

“The administration of justice would proceed more slowly and with greater costs if the courts before whom a solicitor practised felt it necessary to check the accuracy of what the solicitor had said to it .... if what the solicitor has done is such that the court will hesitate before acting upon what the solicitor has said, that is ... an important matter to be taken into account.”

54 In Council of the Law Society of New South Wales v A Solicitor [2002] NSWCA 62, Sheller JA (with whom Mason P and Giles JA agreed) said (at [101]) that:

“The solicitor’s duty is to be faithful to the oath of office, to the courts, to fellow practitioners and most importantly to the clients ... who should be able confidently to expect that the solicitor will honour the obligation and responsibility imposed by the relationship of solicitor and client. The sworn duty is a public duty. The administration of justice depends in large measure on the trust the courts and the public place in those who practise the law.”

150 The details of the obligation now appear in the applicable Advocacy Rules, a part of the Solicitors Rules. An employer who engages a general counsel, of necessity must accept the consequences of the employees' adherence to such obligations. Those obligations apply at every stage of the litigation cycle and affect matters such as the times at which affidavits are prepared and tendered; who may be involved in the preparation of such affidavits; who may appear before a court or tribunal; the conduct of conciliation proceedings and the basis upon which litigation may be resolved.

151 It is also relevant that here, one of Mr McDowell's concerns was Ms Gilmore's approach to the respondent's payment of stamp duty which fell due upon an acquisition made in 2003. External advice was eventually taken and a conclusion reached. The parties did not explore whether the concerns Ms Gilmore raised with Mr McDowell about the payment of the applicable duty, or how they were dealt with in the particular circumstances, were reasonable or appropriate. Mr McDowell's evidence in cross examination was not particularly illuminating as to the real nature of his concerns about Ms Gilmore's advice. Nevertheless, it was apparent on the evidence that Mr McDowell's concerns, which he viewed as ongoing and serious, were first raised in a direct way with Ms Gilmore in the letter of 28 January.

152 On his evidence, Mr McDowell declined then to permit Ms Gilmore to respond to those criticisms, because it was not his style and because nothing she could say could change his opinion at that point. Ms Gilmore's evidence that when he had raised his dissatisfaction with her in respect to particular matters on earlier occasions, Mr McDowell have not given her any opportunity to explain or respond. Given Mr McDowell's evidence in cross examination, Ms Gilmore's account of her treatment must be accepted, as I have already noted.

153 In my view, given the evidence in this case, it must be concluded that a contract of employment of a general counsel such as Ms Gilmore, which could permit such an approach by the employer can be nothing other than unfair, as that term must be understood, given the definitions appearing in s 105 of the Act.

154 Apart from litigation before the courts, when legal practitioners such as Ms Gilmore perform their duties for their employer, they may also have more general ongoing ethical and professional obligations to ensure that their employer is adequately advised as to how its legal obligations may be observed. How such obligations are approached by an employed legal practitioner in a particular case, may also be of considerable public interest. It is unnecessary here to come to any concluded views on questions such as this, given the conclusions which I have otherwise reached. These concepts, as well as legal practitioners' duties to the Court are, however, usefully discussed by Ipp J in Lawyers Duties to the Court (1998) 14 LQR 63 at 90.

155 Suffice it to observe that in the case of a general counsel employed by an entity such as the respondent, that as a matter of fairness, let alone commonsense and good business practice, the employee must be given an opportunity to understand and respond to an employer's concerns and criticisms of their conduct of legal proceedings for that employer, as well as their advice as to what is necessary to be done, to ensure the employer's adherence to legal obligations which fall upon it.

156 As a matter of very basic fairness, such employees must also be entitled to have their responses properly considered by their employer, before steps adverse to their employment interests are taken. I am well satisfied that there is a considerable public interest in that conclusion being formally reached in these proceedings, with the making of an order varying the contract in those respects. The variation which I propose to make addresses this conclusion.

157 The respondent also argued however, that the contract, in fact, contained an implied term relevant to this aspect of the case and all that in truth was being sought, was damages for breach of that term. I am satisfied that this is not a proper characterisation of the claim. The decision in Dare v Hurley relied upon was concerned with the implication of a term as to a reasonable and equitable process to be followed to determine whether or not an employee has engaged in misconduct. The Court of Appeal in Irvings does not seem to have come to quite the same conclusion as was reached in Dare.

158 In any event, even if the submission had force, I would adhere to my observations in Bowker & Anor v Software Engineers Australia (NSW) Pty Limited & Ors [2004] NSWIRComm 104, as apt in this context:

143 As to the unliquidated money claim, the starting point is the general duty of confidence and trust implied by the common law, which imposes reciprocal obligations upon employers and employees. I am satisfied that there is such a duty, as discussed in Malik by Lord Steyn at p45 and as earlier found by Marks J in his Honour's judgment in these proceedings. Peterson J came to a similar view in Gambotto. Indeed, the respondents' submissions did not seek to throw doubt on the existence of that duty. Rather, they sought to argue that properly understood, the applicants in reality sought damages for an alleged breach of that obligation, a claim beyond jurisdiction.

144 From the point of view of the employer, the common law obligation 'is apt to cover the great diversity of situations in which a balance has to be struck between an employer's interest in managing his business as he sees fit and the employee's interest in not being unfairly and improperly exploited' (Malik at p46). I am satisfied that it was well arguable that the respondents' disparagement of the applicants, both before and after the termination of the parties' relationship was inconsistent with that duty.

145 I am also satisfied that just as employers and employees are free to exclude or modify such an implied term in the agreements which they reach with each other, (see Malik at p45), this Court is empowered to vary an unfair contract, to incorporate an express term in relation to matters which fall within the compass of the common law duty, if a case be made out by an applicant for such relief pursuant to s106 of the Act.

146 Again, the existence of such a power was not seriously argued against, in the respondents' case. This is entirely understandable, given the wide powers granted to the Court under s106 of the Act. That an employee might have other rights to pursue such disparagement, either at common law for breach of the implied duty or in defamation, cannot detract from that view. It is not for this Court to refuse to exercise the statutory power granted by the legislature, because other relief might be available to an applicant at common law.

147 The question is thus not one of jurisdiction or power, but rather whether the applicants have made out a case for relief, given the evidence brought. It is pertinent at this point to repeat the claim for variation of the employment contract made in the summons.

Intimidation, victimisation and harassment

159 The claim also sought a variation to the contract to protect the applicant against intimidation, victimisation and harassment, amongst other things. I am satisfied that a variation to positively require the respondent to ensure that such conduct is not engaged in by any of its executives or employees, is warranted on the evidence in this case. In coming to this conclusion, I have been considerably influenced by Mr McDowell's concessions in cross examination and the unchallenged evidence of Mr Pasfield and Mr Choy.

160 Mr Pasfield was the respondent's former Queensland Sales Manager, employed for about six years, with responsibility for managing the respondent's Queensland operations, including legal issues. He reported to Mr and Ms McDowell, attended executive meetings in Sydney, six to eight times a year and worked with Ms Gilmore on about eight occasions over the course of her employment, in relation to Queensland legal issues. He spoke of the effective, professional and responsible legal assistance which Ms Gilmore provided from time to time and her commercial advice, communicated to him clearly and effectively. He could not fault her work and noted that even a case which was lost at first instance, was later won on appeal. There was no reason for that evidence to be doubted. It was not challenged.

161 By way of contrast, Mr Pasfield's evidence as to his experience of Mr McDowell suggested an autocratic management style, where Mr McDowell frequently interrupted those speaking to him, seeming disinterested in their views or responses to management issues. Mr Pasfield observed erratic treatment of employees, abuse at one point and then behaviour as if nothing had happened afterwards. He saw aggressive behaviour causing those present to shrink away. He observed Mr McDowell red in the face, irritated and raising his voice at senior employees. He saw Mr McDowell lose control and yelling at staff, including at executive meetings. He also saw such conduct being directed to Ms Gilmore. Again, there was no reason to doubt that evidence.

162 On Mr McDowell's own evidence, he and Mr Pasfield were in very frequent communication over the course of ten years, often on a daily basis. Mr Pasfield had left the respondent's employ. There was nothing which suggested that he had anything to gain or lose by giving evidence in these proceedings, as he did. I accept him as a witness of truth. Indeed, in cross examination, Mr McDowell agreed with much of Mr Pasfield's evidence, although he explained, for example, that what other people might perceive him to be yelling, he did not regard to be so. When pressed, he agreed that he did yell in executive meetings on occasions; he described again his impatience and frustration and agreed that this caused him to raise his voice, to slam his hands on the table, to throw back his chair and to storm out of meetings and so on. By way of explanation Mr McDowell described himself to be 'an uneducated mug'.

163 By way of contrast, it was Ms McDowell's evidence that on occasions she observed Ms Gilmore inappropriately cutting others off while they were speaking in management meetings. This was not put to Mr Pasfield, who also attended those meetings. Ms McDowell also recollected two occasions when this had occurred outside such meetings. She could not recollect when this had occurred. On one occasion she recollected directing Ms Gilmore to let the other manager to whom they were speaking, finish what he was saying. On her evidence, Ms McDowell regarded this conduct to be a serious problem, which caused her to form the view that Ms Gilmore had poor listening skills. Ms McDowell appears, nevertheless, to have done nothing further to deal with this problem.

164 It must be noted that I found this evidence entirely implausible and was left with the distinct impression that the nature of any difficulty which in truth existed in relation to Ms Gilmore's interpersonal skills, was being entirely overstated in these proceedings. This was apparent from Ms McDowell's approach to this manifestation of what was described to be a serious problem - she dealt with the matter in the way she thought appropriate at the time - a mild admonition to allow someone to finish what they were saying.

165 Ms McDowell's other concern related to her view that Ms Gilmore had an inability to shortly communicate the status of particular pieces of litigation at management meetings. Again, this was not put to Mr Pasfield, even though the particular example given was a matter which had arisen in Queensland, when at a management meeting, Ms Gilmore was directed to cut to the chase and only provide the headlines.

166 Mr Choy was the solicitor engaged to assist in the respondent's debt recovery work. His desk was adjacent to Ms Gilmore's office. His evidence was that he frequently heard Mr McDowell shouting at Ms Gilmore and on occasions saw her visibly shaken and upset afterwards. Ms Gilmore directed him not to intervene, because it would only make matters worse. In his experience, Ms Gilmore was a competent and skilled legal practitioner.

167 Mr Choy was not cross examined about this evidence. It must also be accepted.

168 It follows that the conclusion that Mr McDowell engaged in inappropriate conduct towards Ms Gilmore, which had gone beyond displays of mere irritation or frustration, which were mistaken for anger, as Mr McDowell sought to portray his behaviour, cannot be avoided. Mr McDowell's description of himself as an 'uneducated mug' belies the evidence that he has built the respondent from nothing, to one of the largest transportation companies in Australia. He is plainly a very astute and successful businessman. His education, or lack of it, is irrelevant to any assessment of the fairness of the contract which permitted him to behave towards the applicant as he undoubtedly did.

169 I am well satisfied that his conduct was inappropriate and consistently with the objects of this legislation, may not be condoned by this Court in proceedings such as this. (See s 146(2).)

170 In this case, I am satisfied that a variation to the contract to expressly deal with this treatment, must also be granted. Again, no money orders were pressed as to the aspect of the claim.

Were the notice provisions unfair?

171 I return then to the question of whether, in all of these circumstances, the contract was unfair in providing for a month's notice on termination. Interestingly, after all that had occurred to that point and despite his alleged dissatisfaction with Ms Gilmore's performance, in his own letter of 23 February, Mr McDowell raised with Ms Gilmore the prospect of them agreeing on 'a timeframe for your exit from the organisation which is more suitable to the business'.

172 This was raised in a context where the respondent's standard terms provided for one week's notice of termination. On commencement of the employment Ms Gilmore had negotiated a month's notice, which she regarded as fair at that time, but not fair, once the employment came to an end, having regard to the treatment she had received in the meantime and in the lead up to the termination; the alteration in her duties during her employment and the period of her employment by that time.

173 The variation to the notice provisions of the contract sought an increase from one month to two years' notice. I am satisfied that such a claim was not made out on the evidence, given the applicant's position, remuneration, years of service and the circumstances of the termination, which included of course that this was not a redundancy. Nor can it be ignored that the one month notice period Ms Gilmore negotiated, was one which she regarded fair at the time of the negotiation.

174 I have found that the applicant elected to take the month's notice which the respondent offered her, as an alternative to working as a consultant until the birth of her child, expected in the following September. That decision was an entirely understandable one in the circumstances and, as I have found, did not involve a resignation.

175 I am, nevertheless, satisfied, on all of the evidence as to the applicant's position and having regard to the conclusions which I have reached on the other variations which must be made to the contract, that justice requires that the notice period be increased by three months. That reflects not only the matters which I earlier mentioned, but also the variation to the contract which I propose to make, which requires that Ms Gilmore be provided with three months in which to make good any deficencies in the performance of her duties. It also has regard to the undoubted fact that, in reality, when Ms Gilmore had on 11 February advised the respondent that she elected to take one month's notice, one of the options Mr McDowell had offered, she already been on notice since 24 December, that she needed to seek other employment and was doing so. I am satisfied that this is a matter which cannot be overlooked, in properly balancing the parties' respective positions.

Money and other orders

176 In the ordinary course, money orders reflecting the above conclusions as to notice would follow. The evidence also showed that Ms Gilmore took steps to obtain other work, which she succeeded in obtaining not long after her employment with the respondent ceased, at a higher level of remuneration than she was receiving from the respondent. Consistently with the requirements of s 106(6), what she earned in that employment in the notice period, would have to be taken into account in formulating money orders.

Exercise of discretion

177 As earlier noted, the respondent argued that the Court would not exercise any discretion to grant Ms Gilmore relief, having regard to her disentitling conduct, upon which it could only be concluded that she did not come to the Court with clean hands. As Macken J observed in 1986 in Saliba at 38:

'There is a wealth of authority that one should not sleep on one's rights and that one should come before the Industrial Commission under s 88F with clean hands'.

178 Section 88F was, of course, a predecessor to s 106. I have found the parties' contract unfair in a number of respects, partly having regard to Ms Gilmore's position as a legal practitioner employed as the respondent's corporate counsel.

179 I take the view that this is a matter which also requires consideration at this point. I have come to the conclusion that the admittedly untruthful evidence which Ms Gilmore gave in these proceedings, cannot be ignored. It is unnecessary to outline that evidence in further detail. Suffice it to observe that the evidence related to the circumstances in which the employment came to an end and her conduct at that time. There can be no doubt on the evidence that to that point, Ms Gilmore been very unfairly treated, both during the employment and in relation to how it was brought to an end, and that the contract which permitted this conduct was unfair. This warrants the variations to the contract I have earlier dealt with. Ms Gilmore, however, had assured Mr Goodman that she would continue to do her work professionally until she left. Her initial oral evidence in these proceedings when cross examined as to what she in fact did and said at the time, was not truthful, on her own admission.

180 True it is that the cross examination in question arose in relation to documents which would appear to have been privileged. Having twice adjourned while the question which arose was considered and discussed between the parties, the cross examination continued without further objection. Later Ms Gilmore's email correspondence to her solicitors was tendered. This put the communication beyond doubt. I am quite satisfied on that material, that Ms Gilmore did not seek to manufacture evidence or concoct a version of how the employment was brought to an end. Mr McDowell's evidence confirmed that her evidence reflected what had in fact occurred, up to the time the documents were written. Most regrettably, however, Ms Gilmore also agreed that her oral evidence about matters dealt with in those documents had not been completely truthful and that she had not attended to her work in the way promised shortly before she departed on sick leave.

181 Contrary to Ms Stubbs submissions, I am unable to ignore this in considering whether, and how, the Court's discretion under s 106 should be exercised in this case. Even if the submission that this was a matter, of moral, rather than legal wrongdoing were correct, which I do not accept, given the jurisdiction granted to the Court by the section, this situation could not be ignored. Ms Gilmore's position as an officer of the court must be considered at this point of the exercise, as well as when consideration is being given to the fairness of her contract and the complaints she advances in these proceedings, as to the respondent's conduct towards her under that contract.

182 I am satisfied that while a case was made out as to the unfairness of the contract, which requires remedy, in the proper exercise of this Court's discretion, that the circumstances are such that I should decline to make any consequential money order, in favour of Ms Gilmore, given the conclusions which I have otherwise reached.

183 Having given careful consideration to the evidence as to the respective positions and conduct of the parties, both during the employment and in these proceedings, I am satisfied that the orders which I propose to make achieves justice as between them. It gives proper weight to the deficiencies in the approach adopted by Ms Gilmore, while not ignoring the serious deficiencies in the approach adopted by the respondent and Mr McDowell, in the case advanced.

184 It is necessary to observe how seriously I view the approach adopted by the respondent in this case. On the totality of Mr McDowell's evidence, even a question as to whether the solicitors acting for the respondent in these proceedings have adhered to their obligations to the Court, as required by the applicable Solicitor's Rules, may also be thought to arise.

185 I have given this careful thought and have concluded that given the way in which evidence as to the respondent's legal advice, was raised by Mr McDowell in an answer given in cross examination; Mr McDowell's general approach to his evidence; and the fact that the question of the nature of that advice; when it was received and how it was acted on, were not further explored in cross examination with Mr McDowell, it would be unsafe to come to any concluded view on such a serious question. At the end of the day these are adversarial proceedings. Were it otherwise, I would have taken the view that the matter would have required a reference to the Legal Services Commission.

186 What I have found is that there was an unsuccessful attempt made to orchestrate a scenario which would result in it being concluded that Ms Gilmore had resigned from her employment. This is also a most serious conclusion, but one that I am satisfied is unavoidable on the evidence. It has been necessary to set out in detail the nature of what was put for the respondent in correspondence and what was led by way of evidence in Mr McDowell's affidavit evidence, by way of comparison to what emerged in his oral evidence. Two directly contradictory pictures emerged, with the oral evidence, in fact, corroborating the case advanced for Ms Gilmore. On Mr McDowell's evidence, the idea of a resignation was one which came from the legal advice the respondent received, after steps had already been taken to bring the employment to an end. The proposal of a resignation was suggested by Mr McDowell in response to Ms Gilmore's advice that she was pregnant, to enable her to remain to the birth of her child. That proposal was never accepted, as Ms Gilmore made clear and as Mr McDowell understood. Despite this understanding, in these proceedings the respondent advanced a case that Ms Gilmore had brought the employment to an end.

187 Who was involved in what here transpired is not a matter necessary to consider further. It seems that both Ms Gilmore and Mr McDowell each adopted an approach to aspects of their evidence, inconsistent with a strict adherence to the truth. My conclusion that no money orders should be made in favour of Ms Gilmore is appropriate in these circumstances. So, too, is the conclusion that variation to the contract must, nevertheless flow. I am satisfied that they this achieves justice between these parties.

Orders

188 For the reasons given, I make the following orders

1. The contract is declared to be an unfair contract, as that term is defined in s 105 of the Act

2. The contract is varied to require:

(a) the respondent to promptly and fully inform Ms Gilmore of any matters of concern which could impact upon her continued employment;

(b) the respondent to give Ms Gilmore a proper opportunity to consider and respond to such concerns;

(c) the respondent to properly consider her response;

(d) that if concerns persist, Ms Gilmore be provided with a period of not less than three months in which to improve her performance in respect to matters clearly identified to her in writing, before any action be taken to terminate her employment, for reasons associated with any such concerns.

(e) the respondent to give Ms Gilmore four months' notice of the termination of her employment, in circumstances where such a period of three months improvement is not provided; and

(f) to ensure that during her employment, Ms Gilmore is not the subject of intimidation, victimisation and harassment by other more senior members of staff, or by the respondent's officers, directors or shareholders; and if such conduct occurs, to take active steps to ensure that it ceases and is not repeated.

3. As to costs, the parties have liberty to approach further. Such an application should be made within twenty-one days.

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LAST UPDATED: 20/02/2006