Employment Contract: Tiago v John Hopkins Property Pty Ltd [2014] FCCA 2822

Isabel Tiago was employed by John Hopkins Pty Ltd in the position of Graduate Property Investment Advisor. Ms Tiago received a letter of offer which stated that she would be provided with a formal contract within the first few weeks of her employment.

Clause 17.3(b) of the Real Estate Industry Award 2010, which Ms Tiago’s employment was governed by, states that unless a written agreement specifies otherwise, an employee is entitled to commissions which they would have been entitled to had their employment continued.

On 13 August 2013 Ms Tiago was provided with a copy of the employment contract. She was offered a pay rise and a new job title which had been effective since July 2013. A term of the contract was that Ms Tiago would forego any commissions or bonus owing to her which she would otherwise have been entitled to following the date of termination.

Ms Tiago’s employment was subsequently terminated. She claimed that she had not signed the employment contract and, as such, she was entitled to commissions owing to her under clause 17.3(b) of the Award. John Hopkins claimed that as the employment agreement had specified that commissions would not be payable upon termination, clause 17.3(b) of the Award did not apply.

Decision

The Court found that just because Ms Tiago did not sign the contract, does not mean that the contractual terms did not apply to her. The Court said:

An employee may indicate agreement to the terms of a contract by taking the benefits offered… The general principle is that the performance of a contract after the receipt of an offer is a means of accepting the offer by conduct.”

Despite the fact that Ms Tiago did not execute the contract, by taking a pay rise and accepting her new job title, Ms Tiago signalled that she had accepted the terms of the contract. As such, she was not entitled to the commissions which would have been owed to her had her employment continued. 

 

* PCC Lawyers are a team of employment practitioners based in Sydney, with many years of combined knowledge and experience in workplace law, industrial relations, workplace investigations and training.  They provide a high standard of excellence and an exceptional level of personal service to a variety of clients in the Sydney metropolitan area, Central Coast, regional NSW and interstate.

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