​Senior public servant redundant – no contract breach

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​Senior public servant redundant – no contract breach

A senior public servant has failed to convince a supreme court her employer breached the employment contract. Instead, it found her position was redundant.

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Evidence of a breach of contract by an employer was not established, therefore a senior Tasmanian public servant's redundancy was found to be valid.

This decision of the Tasmanian Supreme Court (Justice Shan Tennent) illustrates that a plaintiff whose employment has been terminated must satisfy a court on the evidence (on the balance of probabilities) that there has been a breach of contract.

Simply pointing to surrounding circumstances as possibly constituting the breach of contract is not sufficient.

In this case, alleging the employer acted on negative comments in the report of a commission of inquiry into the heath system were found not to be the reason for termination. It was a genuine redundancy.

The claim


The former chief of Tasmania Health Organisation South disputed her redundancy arguing that her termination was based on unproven conduct issues.

The plaintiff commenced her role in March 2012. She argued that a 2013 contract had revised her conditions of employment. Whichever contract was found to be in force at the time the plaintiff's employment was terminated, the central issue here was whether the defendant (government) had breached the contract by the way in which it terminated the plaintiff's employment. 

Background


Jane Holden was dismissed as CEO of Tasmania Health Organisation South on 3 June 2014. Closely coinciding with her dismissal, an Integrity Commission Report was released outlining nepotism in the health system. The plaintiff was involved by implication in certain allegations.

Ms Holden sued the government for $2.2 million for loss of income and damage to her reputation and she argued the unproven allegations contained in the report were behind her dismissal.

The government argued she was dismissed from her role because her substantive position had been made redundant and there was no other suitable role for her.

Court found contract not breached


The court found in favour of the government.

It found there was no formal appointment of Ms Holden to a new role by the 2013 contract and the court was satisfied a redundancy situation existed.

Breach of contract not established


The court was not satisfied that any new contract came into existence in August 2013 and so the plaintiff had continued in her role as acting CEO.

Ultimately it was the Tasmanian Premier's decision as to whether a new instrument of appointment was signed. There was no evidence of any assurance given by the then-Premier that she considered herself legally bound to sign the draft instrument and was not free to withdraw or not sign the instrument.

Termination of the plaintiff's employment


Ms Holden's employment was terminated by letter dated 3 June 2014, noting her position had been abolished.

She replied stating that the defendant actually terminated her employment as CEO, STAHS, not as a consequence of that redundancy, but in reliance on the conduct and performance issues in the IC report, which were not the subject of any findings by the defendant.

Evidence as to truth of allegations/findings in IC report


Ms Holden's case was run on the basis that her termination was largely as a consequence of the material in the IC report and had nothing to do with any "true redundancy". 

The court ruled that the question must be: 'what evidence was there as to the real reason behind the employer's decision to terminate the employment of the plaintiff?'

There was no evidence as to the-then Premier's views about the IC reports and what role either the draft or final report may have played in the decision by the employer to terminate the plaintiff's employment. There was also no evidence about what, if any, impact the performance issues generally referred to in the minutes of a relevant meeting on 25 April 2014 may have played in the Premier or his delegate’s decision.

The court was not satisfied the termination of the old contract was based on conduct or performance issues as asserted. 

Contractual duty?


The court also rejected the plaintiff’s argument that there was a contractual duty on the parties to the contract to facilitate the contract and not to harm each other in carrying out their contractual duties, stating:

"... in the words of Jessup J in Regulski, 'It is not as though there is a term in contracts of employment that the parties must co-operate with each other, in the broad as it were.' In the present case, there is no need for the term sought to be implied to be implied.

I am not satisfied in the circumstances of this case that any duty of co-operation term should be implied in the plaintiff’s contract of employment. ...’’

Conclusion as to breach


The court was not satisfied Ms Holden had proved on the balance of probabilities that the defendant has breached the old contract.

The case was dismissed.

The bottom line: Any termination of employment has a definable cause or reason behind it and that cause or reason can be open to argument. When there appears to be competing reasons, the party asserting a contractual breach against the stated reasons of the employer must present sufficient evidence on the balance of probabilities to succeed. 

Holden v State of Tasmania [2017] TASSC 29 (8 May 2017) 
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