find the latest legal job
Corporate Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Highly-respected, innovative and entrepreneurial Not-for-Profit · Competency based Board
View details
Chief Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Dynamic, high growth organisation · ASX listed market leader
View details
In-house Projects Lawyer | Renewables / Solar | 2-5 Years PQE
Category: Generalists - In House | Location: All Australia
· Help design the future · NASDAQ Listed
View details
Insurance Lawyer (3-5 PAE)
Category: Insurance and Superannuation Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Dynamic organisation ·
View details
Legal Counsel
Category: Corporate and Commercial Law | Location: North Sydney NSW 2060
· 18 month fixed term contract · 3-5 years PQE with TMT exposure
View details
Companies warned over pay promises

Companies warned over pay promises

AS COMPANIES seek to preserve profitability in the face of a global economic slowdown, employers have been cautioned to check their employee contracts as well as their undertakings made at the…

AS COMPANIES seek to preserve profitability in the face of a global economic slowdown, employers have been cautioned to check their employee contracts as well as their undertakings made at the time of recruitment, before taking action to cut salary costs.

This is especially the case for senior executives with large bonus incentives, where the propensity for litigation against companies by employees has risen steeply in recent times.

Joydeep Hor, managing partner of Harmers Workplace Lawyers, said that the days where companies slashed or significantly adjust bonuses and incentives without consultation were numbered, and that such unilateral actions could increasingly be challenged in courts by disgruntled senior staff members.

“The notion of promises and representations, both formal and informal, could potentially be applied in legal challenges in circumstances where employees believe they had been misled by their employers into expecting certain levels of bonus and/or incentive payments regardless of economic conditions,” he said

Speaking at a recent HR conference in Sydney, he said that while there had only been a small number of matters thus far invoking the relevant section (Section 53B) of the Trade Practices Act (1974) into misleading representations by employers over remuneration and bonus payment expectations, the propensity for employees to launch legal challenges on these grounds could be on the rise.

Hor cited a recent example of a case in which a senior employee of a company took his employer to task over pre-employment representations made by an executive search firm about the probability of large increases in the company’s share price and the financial benefits he would receive.

The court found the representation to be misleading and that the executive had relied upon them. As a result, the court ordered that the executive be paid the equivalent of 10 months’ notice (in excess of $1 million) plus interest and the majority of the executive’s legal costs.

While the recruiters were not held directly liable, the case has set the stage for the potential for orders to be made against recruiters in the future.

“The legal risks involving senior company executives who believe they have been unfairly treated by their employers are now greater than ever,” said Hor.

“One could argue that the exposure from recent high-profile discrimination cases involving senior executives has potentially opened the floodgates for disgruntled senior executives to take their employers to court over issues in which they believe they have been unfairly treated,” he said.

This article first appeared in Lawyers Weekly sister publication, Human Resources magazine

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Companies warned over pay promises
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
LCA president Fiona McLeod SC
Aug 17 2017
Where social fault lines meet the justice gap in Aus
After just returning from a tour of the Northern Territory, LCA president Fiona McLeod SC speaks wit...
Marriage equality flag
Aug 17 2017
ALHR backs High Court challenge to marriage equality postal vote
Australian Lawyers for Human Rights (ALHR) has voiced its support for a constitutional challenge to ...
Give advice
Aug 17 2017
A-G issues advice on judiciary’s public presence
Commonwealth Attorney-General George Brandis QC has offered his advice on the public presence of jud...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...