Spotless Management Services’ former Chief Information Officer (‘CIO’) is $477,400 richer after the High Court refused leave to appeal a Victorian decision upholding the verbal deal he struck with the business’ Chief Executive Officer.
The parties entered into negotiations regarding terms on which the senior manager was willing to part ways with the company. The terms were more beneficial than those contained in the CIO’s written contract. When Spotless did not pay the CIO the termination payment he thought he had negotiated, the dispute ended up in Court.
The CIO’s written employment contract clearly stated that the contract could only be altered in writing, signed by each party. This is a standard risk management tool designed to keep contractual terms crystal clear. The surprise in this case was that the verbal agreement regarding the CIO’s terms of departure trumped this clause.
The message for business is clear; when significant terms change, make sure you get it in writing.
Practice Area: Employment