Employment Law: Case of Max and Creative Advertising Ltd.

The article discusses the case of Max, an advertising executive, who has recently started working with Creative Advertising Ltd. and the issue faced by him regarding the promise made by the company. It covers the rules and application of employment law in this case.

RUNNING HEAD: Employment Law
Employment Law

Employment Law 1
Contents
Issue.................................................................................................................................................2
Rules................................................................................................................................................2
Application......................................................................................................................................3
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

Employment Law 2
Issue
The given case focuses on Max, an advertising executive, who has recently started working with
Creative Advertising Ltd. on the acceptance of employment offer from the company. During
negotiations, the company made a promise regarding offering an immediate access of a generous
employee share scheme. However, the final contract signed by Max had no mention of such
term. Later on, Max also discovered a company policy that allows the employees an access to
such employee share scheme after the completion of two years in the organization.
Rules
An employment contract can be defined as an agreement that take place between an employee
and the employer that specifies the terms and conditions of the contract. Both duties and duties
of the employers and employees are contained in the employment contract (Cartwright 2016).
The employment contact covers the terms and conditions that are derived from a number of
sources including:
 the written and oral terms or express agreement,
 implied terms by law associated with the relationship between employee and employer,
 good faith and duties of fidelity,
 terms implied by the practice or custom of a specific industry or business (Buddelmeyer,
McVicar, and Wooden 2015, 257).
The parole evidence rule provides that the parties who have reduced their agreement to a final
written contract are prevented from making the introduction of other evidence at a later stage as
evidence having different intentions then the contract terms. However, there are some exceptions
to this rule. This means that the evidences are admitted in cases where the formation of the
contract has some defects, terms of the contract are ambiguous, there are certain problems with
the consideration, condition required to occur before the performance of the contract (Tsui 2015,
160). The prevention of introduction of other evidences is due to the reason that the parties have
reduced their agreement to a final contract and it is the decision of the parties themselves to leave
such evidences out of the contract (Epstein, Archer, and Davis 2014, 49).

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Express terms of the employment contract are the terms that are mentioned specifically either
orally (at the initial interview) or in writing and are agreed by both employee and the employer.
Express terms include terms related to working hours, pay, holidays, etc. On the other hand,
implied terms are the terms that are not the part of the written contract as they are obvious due to
which they are no recorded. Statutory rights are included in the implied terms such as duties like
duty of care and right to equal pay. Every employment contract implies a duty of mutual trust
and confidence (Chen- Wishart 2012).
Section 18 of the Australian Consumer Law (ACL) provides that misleading or deceptive
conducts must not be undertaken by a person in the context of trade or commerce (O'Gorman
2016, 307).
Furthermore, Clause 31 provides for the employment arrangements and specifies that a person
must not engage in a conduct which is expect to mislead the individual seeking employment with
regard to the terms and conditions or nature of employment (Hunt 2015, 7).
Application
The employment contract of Max should cover the terms agreed at the time of negotiations. The
decision taken by Max to join the organization was based on the pre- promise made by the
employer. Taking into consideration the company policies, the employees are eligible to access
employee share scheme after serving two years for the organization which can also be termed as
the post promise made by the company. In this case, Max will be eligible for employee share
scheme after the completion the said period in the company. Therefore, there will be no legal
access to the scheme at the time of joining the company (Freedland et. al. 2016).
Since the written contract of employment have been signed by Max, the parole evidence rule is
application which prohibits the parties for introducing any evidence relating to the previous
agreements in the court on the subject matter of contract. The judge or jury is permitted to
consider only the written contract in the cases where the parole evidence rule is applicable
(Dowling Jr 2016, 347). Therefore, generally the previous discussions made between the parties
are not considered by the jury. In Max’s case, the applicability of parole evidence rule provides
that the employer does consider it an important fact to be included in the employment contract.

Employment Law 4
May be the employer did not wanted to employ Max on the basis of such terms. However,
subsequent agreements can be introduced between the parties (Morris et. al. 2014, 144).
Since this term was agreed by the employer at the time of negotiations, it was an express term
and was required to be included in the employment contract. If it was not included, Max had no
legal access to the scheme (Poole 2016).
In the given case, the major promise made by the company in the course of negotiations was the
access to employee share scheme on the acceptance of employment offer. The decision of Max
to accept the offer was dependent on this offering by the company. In other words, the act of
Max was based on the reliance on such representations made by the company. Therefore, Max
should be compensated for damages because the contract was entered into due to the reason of
employer’s representation to provide the employee share scheme (Preston and Yu 2015, 30).
Similar facts were noticed in Rakic v Johns Lyng Insurance Building Solutions (Victoria) Pty
Ltd (Trustee) [2016] FCA 430 where it was decided that it was reasonable to expect that the
discussions made at the time of negotiations will be included in the employment contact. On this
basis, it was found that a claim is established under ACL and the employer was ordered to pay
the damage or loss suffered by the employee (Kryger 2015).
Therefore, in this case, Max is eligible for compensation from Creative Advertising Ltd. as his
decision to join the organization was based on this offer. He must have declined other
competitive offers in order to take the benefit of the employee share scheme. After completing
two years in the company, he can access the employee share scheme (Shields et. al. 2015).
The answer will be different in case the promise was made by the company after the completion
of 6 months at the workplace in recognition of excellent work done by Max. In such a situation,
Maxx will be able to avail such offer and no changes will required to be made in the employment
contract. It will become an express term of the employment contract. A copy of the agreement
specifying the benefits will be provided to Max. The terms of the employment contract will
remain intact. Such benefit provided to the employee in the form of employee share scheme will
not become the part of the employment contract (McKendrick and Liu 2015). Even it is not in
accordance with the company policy to provide employee share scheme to the employees before
the completion of two years in the organization, it will be valid as it is recognition of excellent

Employment Law 5
work done by the employee. The companies have provision to provide such benefits on the basis
of their performance.
Conclusion
The given case focused on Max, an advertising executive, who has recently started working with
Creative Advertising Ltd. on the acceptance of employment offer from the company. Issue was
faced by Max regarding the fact that the promise made prior to the formation of contract was not
covered under the contract. The applicability of the above specified rules in the context of the
given case provides that Max will not have legal access to the employee share scheme now,
however, he will be eligible for the scheme are the completion of two years in the company.
Parole evidence rule will prohibit the employee to introduce an evidence at a later stage. Max
should be compensated for damages because the contract was entered into due to the reason of
employer’s representation to provide the employee share scheme. In case, the promise was made
by the company after the completion of 6 months at the workplace in recognition of excellent
work done by Max, he will have legal access to the scheme.

Employment Law 6
References
Buddelmeyer, Hielke, Duncan McVicar, and Mark Wooden. "Non‐Standard “Contingent”
Employment and Job Satisfaction: A Panel Data Analysis." Industrial Relations: A Journal of
Economy and Society 54, no. 2 (2015): 256-275.
Cartwright, John. Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing, 2016.
Chen-Wishart, Mindy. Contract law. Oxford University Press, 2012.
Dowling Jr, Donald C. "How to Determine Which Jurisdiction’s Employment Laws Reach
Border-Crossing Staff." Lab. LJ 67 (2016): 347.
Epstein, David G., Timothy Archer, and Shalayne Davis. "Extrinsic Evidence, Parol Evidence,
and the Parol Evidence Rule: a Call for Courts to Use the Reasoning of the Restatements Rather
than the Rhetoric of Common Law." NML Rev. 44 (2014): 49.
Freedland, Mark, Alan Bogg, David Cabrelli, Hugh Collins, Nicola Countouris, A. C. L. Davies,
Simon Deakin, and Jeremias Prassl, eds. The contract of employment. Oxford University Press,
2016.
Hunt, Kate Mathews. "Gaming the system: Fake online reviews v. consumer law." Computer
Law & Security Review31, no. 1 (2015): 3-25.
Kryger, Tony. Casual employment in Australia: A quick guide. Parliamentary Library, 2015.
McKendrick, Ewan, and Qiao Liu. Contract Law: Australian Edition. Macmillan International
Higher Education, 2015.
Morris, Adrienne, Geoffrey Waghorn, Emma Robson, Lyndell Moore, and Emma Edwards.
"Implementation of evidence-based supported employment in regional Australia." Psychiatric
Rehabilitation Journal 37, no. 2 (2014): 144.
O'Gorman, Daniel P. "Closing a Parol Evidence Rule Loophole: The Consideration Exception
and the Preexisting Duty Rule." NEULJ 8 (2016): 307.

Employment Law 7
Poole, Jill. Textbook on contract law. Oxford University Press, 2016.
Preston, Alison, and Serena Yu. "Is there a part-time/full-time pay differential in
Australia?." Journal of Industrial Relations57, no. 1 (2015): 24-47.
Shields, John, Michelle Brown, Sarah Kaine, Catherine Dolle-Samuel, Andrea North-Samardzic,
Peter McLean, Robyn Johns, Patrick O'Leary, Jack Robinson, and Geoff Plimmer. Managing
employee performance & reward: Concepts, practices, strategies. Cambridge University Press,
2015.
Tsui, Mabel. "Pharmaceutical product liability and the Australian Consumer Law: Towards a
principled approach." Competition and Consumer Law Journal 23 (2015): 157-196.