BUS228 Workplace Law: Case Study on Max's Employment Contract Claim

This case study examines a dispute concerning Max's employment contract with Creative Advertising Ltd, focusing on promises made during the interview process regarding an employee share scheme. Despite initial assurances, the signed contract did not reflect these promises, leading Max to discover the scheme was only accessible after two years of employment. The analysis applies legal principles such as promissory estoppel, Australian Consumer Law (specifically sections 18, 20, and 31), and contract law to determine Max's legal rights. Key cases like Masters v Cameron and Central London Property Trust Ltd. v High Trees Ltd are referenced to support the argument that the initial promises are binding, and Max has a legal right to claim the benefits under the promised scheme. The study concludes that the company's actions may constitute misleading conduct, and Max is entitled to the benefits initially offered, irrespective of the standard two-year waiting period.

Running head: BUSINESS LAW
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Table of Contents
Issue:..........................................................................................................................................2
Rule:...........................................................................................................................................2
Application:................................................................................................................................4
Conclusion:................................................................................................................................6
Reference:..................................................................................................................................7

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Issue:
The main issue of the case is to determine whether Max has any legal right to
access in the employment scheme regarding the compensation or not.
Rule:
The subject matter of the case is based on the employment contract and validity of
the same. Considering the case study, it has been observed that certain preliminary
agreements made in between Max and the company, where the company has made certain
offer to Max. According to the general rule of employment contract, preliminary contracts are
binding in nature. According to Masters v Cameron (1954) 91 CLR 353, in any preliminary
agreement, those terms upon that the subject matter of the contract is based on, known as
subject to contract. According to the case, when the subject matter of a contract can change
the nature and character of the contract, the terms become legally binding. There are certain
legislations present in Australia against the misleading conduct of the parties. According to
section 18 of Australian Consumer Law, no person is allowed to make any comment that is
misleading in nature. Further, he should not engage in any commerce, which is deceptive in
nature. The application of the section has been observed in Australian Competition and
Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 that the main aim of the
section is to protect the interest of the consumer. In addition to this, it has been mentioned in
section 20 of the Australian Consumer Law that an individual should not engage him in an
unconscionable conduct. The term unconscionable means an unreasonable statement that
defies the good conscience. Such behaviour has been prohibited by section 21 of the
Australian Consumer Law. According to the Protected Disclosures Act 2000, unfair act
should not be conducted or tolerated in a workplace. Further, it has been stated under section
31 of the Act, it is not expected that an individual engaged in any work by which certain offer

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has been made to mislead any person who is seeking an employment. According to the
section, no person is allowed to make an offer to a new employee, which is deceptive in
nature. In Holloway v Gilport Pty Ltd (1995) 59 IR 305, it has been held that in case a
company makes any offer to an employee to give him certain benefits on his acceptance of
the job, those offers become the subject matter of the contract. The employers are obliged to
maintain all those offers promised to them to the workers. In case of any failure, legal
proceedings can be issued against them. In Coal Cliff Collieries v Sijehama (1991) 24
NSWLR, it has been mentioned that there should be certain clarities regarding the
commercial terms offered by the employers and it can be presumed that the parties have an
intention to bound by the terms of the contract. To certain extent, rules regarding verbal
contract is applied in this case. It has been observed that the company has assured certain
employment schemes to Max and Max had accepted those offers. After signing the contract,
it has been observed that the scheme has not been mentioned in the contract and an employee
can become a part of the scheme after two years of employment. When the employee has
accepted the offer made by the company, it becomes a contract and both the parties become
bound by the contract. The employer could not change his statement afterwards, as the
employee has accepted the offer with a believe that he will get that opportunities and any sort
of change will be proved as harmful to him. According to the principle of promissory
estoppels, if a promise has been made and the other party has depended on the promise that
much where he could suffer from huge loss if the promise could not be maintained properly.
However, three essentials required to be maintained such as:
 A person who has made the promise;
 A person who has accepted the promise;
 Chances of substantial detriment can be happened.

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According to the general principle of law, in promissory estoppels, the promise maker is
restricted to non-performance of the promise. The reason behind the same is that the non-
performance of the promise will cause loss to the person to whom promise has been made.
The principle of promissory estoppels is based on Central London Property Trust Ltd. v
High Trees Ltd [1947] KB 130. In Woodhouse A.C. Israel Cocoa Ltd. v. Nigerian Product
Marketing Co. Ltd. [1972] AC 741, it has been stated that the terms of the promise should be
clear and unambiguous. In the case of D & C Builders v Rees [1966] 2 WLR 28, it has been
mentioned that if the promise maker could not perform the promise, the nature should not be
inequitable to the other person. Further, according to the consumer law of Australia, it has
been clearly stated that the employers are restricted to promise anything to the employee that
can affect the nature of their employment. In addition to this, it can be stated that the
employment benefits are the part of the employment contract and when the terms of the
contract has been accepted orally, the offer maker should have to comply with the same.
Further, the contract has been signed between the parties with all the conditions that included
express and implied terms of the contract. All those terms that are mandatory for the contract
but does not mentioned in the contract, could form part of the implied terms of the contract.
Application:
In the given case, it has been observed that Max began his work with Creative
Advertising Ltd and during the course of interview; the employer had made certain offers to
him. He has been offered to become a part of the employee share scheme. After the contract
has been signed, it has been observed that the condition regarding the scheme has not been
mentioned. Further, it has been learnt by Max that he could become a part of the scheme only
after he served two years in the office. This supports the deceptive nature of the offer and
attracts the provision of section 18 of the Australian Consumer Law. Further, as per the case

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of Masters v Cameron, it can be stated that the offer stated by the employer is one of the
subject matters of the contract and therefore, the employers are required to maintain the terms
of the offers. In addition, the employers are restricted to make any deceptive statement to the
employee during any service. In this following case, Max was assured by the employers that
Max will get the benefit of employee scheme once accepted the employment contract and
believing the same, Max has signed the contract. Therefore, the employers could not make
any changes regarding the topic and they have to perform all the offers made by them during
pre-contract negotiation. Considering the case, the provisions of the consumer law is applied
in this case and it has been mentioned in TPG Internet Pty Ltd [2013] HCA 54 that the main
aim of the consumer law is to protect the interest of the customers. However, in this case,
different observation has been made. According to the Australian Consumer Law, no person
is allowed to make any misstatement during the course of the business. It has been clarified
by section 31 of the ACL that a person should not make any statement that is misleading in
nature and for that, harm can be caused to the other person. In this case, the statement made
to Max by the company regarding the employee scheme, which is wrong and this has caused
certain loses to him. He will be deprived of all the benefits of the scheme. From the aspect of
the contract law, the employers are required to maintain all the terms of the offer, as they
have accepted by Max. It can therefore, be stated that employers could not deny this fact and
the original rules regarding the employee scheme will not be applied on Max. Further, the
principle of promissory estoppels will be applied in this case. Non-performance of the
contents of the promise will harm the interest of Max. In addition, the terms of the offer at the
pre-contractual negotiation are mandatory for the employers and therefore, the employer
could not take the plea for the original rule of the employee scheme, as separate offer has
been made against the same and that offer will be prevailed in this case.

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Conclusion:
It can therefore, be stated that Max has the legal right to claim for the benefits
under the scheme now. Further, if the company has promised to Max regarding the scheme
after six month for his performance, the original rule would not apply then too.

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Reference:
Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54
Australian Consumer Law 2010
Central London Property Trust Ltd. v High Trees Ltd [1947] KB 130
Coal Cliff Collieries v Sijehama (1991) 24 NSWLR
D & C Builders v Rees [1966] 2 WLR 28
Holloway v Gilport Pty Ltd (1995) 59 IR 305
Masters v Cameron (1954) 91 CLR 353
Woodhouse A.C. Israel Cocoa Ltd. v. Nigerian Product Marketing Co. Ltd. [1972] AC 741