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12th December 2018
Melbourne & Sydney time: 11:45 pm

Call 1300 789 302

12th December 2018 Melbourne & Sydney time: 11:45 pm

Select an article
  • A cautionary tale for would-be litigants
  • Constructive Dismissal
  • Repudiation: employee’s position advertised behind her back
  • Employers may be liable for providing negligent references on behalf of former employees
  • Demotion as a repudiation, not a variation, of an employment contract
  • Repudiation: employer varies contract, requiring unreasonable goals be met
  • Legal expenses incurred in enforcing period of notice held to be tax-deductible
  • An employee’s refusal to relocate may justify their termination
  • Microsoft executive terminated before he could exercise $14m share options
  • A managing director is an employee as well as a director


An employee’s refusal to relocate may justify their termination

Kweifio-Okai v RMIT University [1999] FCA 1686

 

The facts:

Dr. Kweifio-Okai was employed as a Senior Lecturer in Anatomy and Physiology by RMIT University. His contract of employment included a condition that he would be ‘based at the Bundoora Campus but may be required to work at other campuses’.

Between 1990 and 1996, Dr. Kweifio-Okai sent a series of letters and memoranda to other Bundoora campus staff, resulting in a significant breakdown of the working relationships between him and the staff. Following an investigation, the University directed Dr. Kweifio-Okai to relocate to the city campus. When he refused to do so, the University terminated his employment.

Dr. Kweifio-Okai took the view that he had been unfairly dismissed and commenced proceedings in the Federal Court of Australia under the then Industrial Relations Act 1988.  This legislation was the precursor to the Workplace Relations Act 1996, which subsequently became the Fair Work Act 2009.

Dr. Kweifio-Okai contended that he had a contractual right to be ‘based’ at Bundoora, and that the University – by ordering him to work elsewhere – had breached his contract of employment.

What the Court decided:

The majority of the Full Federal Court ruled against Dr. Kweifio-Okai, holding that it was reasonable in the circumstances for the University to relocate him to the city campus. His subsequent failure to obey the reasonable command of his employer was a valid reason for his dismissal.

Marshall J. in dissent concluded that the contract did not permit the University to unilaterally require Dr. Kweifio-Okai to relocate to the city campus, and accordingly his failure to co-operate with the University’s decision was not a ‘sound, defensible or well-founded’ reason to terminate his employment.

Notable quotes from the judgement:

Per Branson J:

‘… it was reasonable for the respondent to relocate the appellant to the City campus to achieve a solution for the breakdown in the working relationship between the appellant and most of the staff at the Bundoora campus.’

Per Dowsett J:

‘… [the University] retained the right to determine how it would deploy its resources, including its entitlement to call upon the appellant to perform his duties at any of its campuses.’

Per Marshall J (dissenting):

‘It will be a rare case where an employer can terminate an employee for a valid reason based on the operational requirements of that employer, when the basis for the termination is the employee’s failure to comply with an unlawful direction’

Take-away message:

This decision of the Court was made in the context of the previous Workplace Relations Act 1996. That legislation then, as now, requires there to be a “valid reason” for termination of one’s employment. This has been interpreted by the courts to mean “sound, defensible, well founded”.

However, most senior executives will not be able to avail themselves of unfair dismissal legislation where the concept of “a valid reason” is entrenched.  For executives who fall outside the reach of this legislation, the question will come down to what does the contract provide?

There are many factors to be taken into account in determining whether a request to relocate is reasonable in the circumstances. A court will consider express or implied contractual terms relating to variation of workplace, the type of employment, distances involved, as well as other specific circumstances such as a breakdown of working relationships.

Executives should seriously consider taking legal advice before refusing an employer’s directive to relocate. Failure to comply with a lawful and reasonable instruction may provide the employer with grounds for termination. This is particularly the case if the request to relocate is sanctioned by the contract.