Case: Bruce v A W B Ltd (2000) 100 IR 129
Outcome: discussed
Bruce v A W B Ltd (2000) 100 IR 129 , an employee had been employed upon certain conditions, including that he report directly to the managing director and be a member of the executive committee. He was subsequently told that the organization was to be changed so that he would no longer be a member of the executive committee or report directly to the managing director. The employee asserted that the changes were in breach of his contract of employment, and that he was not willing to perform his duties on that basis. He remained willing to perform them in accordance with his understanding of the contract. He was dismissed upon the basis that he had repudiated his contract of employment. The contract provided that: "The duties of the above position are set out under establishment No 7100 or as directed by the Managing Director". The employer argued that the managing director was therefore empowered to dispense with the employee's "duties" of reporting to him and sitting on the executive committee, and to impose the duty of reporting to the general manager. Sundberg J concluded that the managing director was authorized to make the proposed changes. His Honour then had to consider the validity of the dismissal. At [15] his Honour said: Two conditions must be satisfied at common law in order to justify a summary dismissal. First, there must be a breach by the employee of the terms of the contract or a demonstrated intention not to be bound by those terms. Secondly, the conduct must be sufficiently serious to allow summary termination. Freedland observes: "The right to rescind a contract for breach of condition arises by reason of a failure of performance which has occurred in the past, provided the failure is of sufficient gravity or relates to a sufficiently major term of the contract. The right to rescind a contract in response to repudiation arises, not so much by reason of a failure of performance in the past as by reason of the manifestation of an intention not to perform contractual obligations in the future." See The Contract of Employment (1976) at p 217. The passage from Freedland which was cited in Bruce recognizes a distinction between breach and repudiation. In Bruce , as far as the report goes, there had been no actual failure by the employee to perform his duties in accordance with the proposed changes in arrangements, or any exercise of a purported right to do that which he was no longer required to do. Similarly, in Mona Homes , time not being of the essence of the contract, either the vendor had not yet breached the contract, or any breach did not provide a basis for determining it. In the present case, however, Mr Harrison not only indicated that he would not comply with the direction, but did not do so. This conduct continued from the time at which Mr Allard first raised the matter with him until he left the meeting on 2 May 2008. He has not demonstrated any basis for believing the direction to be unlawful. On his own version he wanted it reduced to writing for reasons that were extraneous to his employment. Whilst it is true that on 6 May 2008 Mr Bradley suggested that there was some question of discrimination or, perhaps, illegality about the direction, he also made no attempt to demonstrate any basis for that view. I see no basis upon which such a submission could be made. I do not accept that either man genuinely believed the direction to be unlawful. There is no basis for asserting that on 2 May 2008 Mr Harrison refused to comply with the direction because he considered it to be unlawful, or that he asserted a construction of his contract of employment which was inconsistent with that impliedly advanced by Mr Allard in giving the direction.