A recent NSW Supreme Court case[1] considered the summary dismissal of a senior ANZ Bank employee. The employee was terminated for serious misconduct and then sought to sue ANZ for breach of his contract claiming over $9 million in damages.

The alleged misconduct involved a significant leak of information to a Financial Review journalist. The leak involved an internal ANZ email which was illegitimately altered and forwarded on anonymously to a journalist. The altered version claimed that there would be no more lending and that ANZ was ‘closed for business’. The journalist in turn contacted ANZ who conducted an investigation. The investigation concluded that Bartlett was responsible and he was subsequently terminated.

The court decision largely turned on the words of the executive’s employment contract. The contract provided that the executive could be summarily terminated if ‘in the opinion of ANZ’ he engaged in serious misconduct. The executive argued that ANZ needed to prove he was actually guilty of the alleged conduct or that there should be an implied term of reasonableness or good faith.

Justice Adamson found that the words ‘in the opinion of’ were not accidental and that they reflected the nature of the contract, the role held and the potential for reputational damage by someone in his position. What mattered was the opinion of ANZ rather than the precise evidential proof or that it needed to be proved to a particular standard. Without directly deciding the issue of whether an implied term should be factored in, Justice Adamson held that the bank had in fact acted reasonably. On the facts, an investigation had been conducted which included fingerprint analysis of the article mailed to the journalist.

Lesson for Employers

The decision reinforces the importance of a well drafted employment contract. Unlike unfair dismissal laws, all employees can bring a claim suing for breach of their employment contract. As this case demonstrates, the wording of these contracts need to be precise in order to best protect the Employer’s Business, and this extends to all clauses, not just relating to termination.

Sarah Waterhouse – Solicitor BlandsLaw

Andrew Bland – Solicitor BlandsLaw