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  1. #1
    Join Date
    Nov 2016
    Posts
    4

    Unhappy Mistake made in Employment contract

    One of our HR officers made a mistake when they renewed the contract for one of our employees. The person has been employed for 3 years and had certain benefits. In the new contract a mistake was made - the staff member is entitled to airfares back to her home base. Previously we had a clause saying that she is entitled to airfares back to her or her spouse's home base (within Australia). In the new contract the Hr officer deleted "within Australia" so obviously the staff member wants to travel internationally as her husband is originally from Vanuatu. We tried to rectify the mistake and explained to her what happened but she doesn't want to agree to a corrected contract and threatened legal action. I would like to specify that her role and responsibilities haven't changed from the beginning of her employment. What are my options now? Can anyone give me some advice? We are unable to offer her to travel internationally as that would create a precedent for other employees and also we do not have a budget for it.

  2. #2
    Join Date
    Feb 2012
    Location
    Queensland
    Posts
    56

    Default

    I just read something about this the other day, but I can put my hands on it (i'll keep looking).

    Essentially, I remember the article suggested that although the court might recognize the error as an honest mistake - if the employee had made plans based on that mistake, the error would have to stand.

    Having said that I thought there was legal precedent that allowed you to get out of honest errors in contracts - like for example if I accidentally listed a salary as $1,000,000 rather than $10,000.00

  3. #3
    Join Date
    Feb 2012
    Location
    Queensland
    Posts
    56

    Default

    Found the article:

    Generally speaking if an employer overpays an employee by mistake the employee has an obligation to repay the over payment. However, there may be circumstances where an employer is not entitled to recover. For example, where an employer makes a representation to an employee about their entitlements and the employee relies on that representation and, in doing so, sustains a loss (such as unemployment benefits). See TRA Global Pty Ltd v K [2011] VSC 480 .
    Kinda of applies to your situation

  4. #4
    Join Date
    Aug 2007
    Location
    Melbourne, Australia
    Posts
    452

    Default

    jer3681, a few questions;

    1. Does the employment contract require both parties to sign? (the employer and the employee?) and has the employer signed it?

    2. How long ago did the new contract commence? (was the error picked up immediately?)

    3. Was there any discussion about the new contract with the employee? Was she aware that for all intent and purposes it was just an extension or additional term of the original contract? ("intent" is important)

    4. Worst case scenario - what termination clauses exist in the contract?

  5. #5
    Join Date
    Nov 2016
    Posts
    4

    Default

    1. Yes, the contract requires both parties to sign - which they did
    2. Contract was valid from 1 Jan but signed on 2 Feb. We didn't pick up the mistake until she actually applied for travel last week. We then apologised*
    *and admitted our mistake. She initially said in writing (by email) that she is disappointed but that she accepts our decision. The following day she sent another email saying that she changed her mind and she will be seeking legal advice.
    3. There was no discussion as we go through this process every three years. This was a simple renewal of contract - no terms or conditions changed from the previous contract.
    4. We can terminate with notice but I would prefer not to go that path as she's been with us for 4 years and she is a good worker.

  6. #6
    Join Date
    Aug 2007
    Location
    Melbourne, Australia
    Posts
    452

    Default

    The reason I asked about termination, is with a view to terminating the contract, then offering her a new corrected one.

    If it ends up in court the relationship isn't going to be very good afterwards ...

    I would have thought that any lawyer who has her best interests at heart would recommend that she accept that it was an honest mistake. Could she honestly say that she thought the intent of the new contract was to pay for her to fly to Vanuatu?

    How about offering her the value of the flights she would have taken within Australia which she can use towards a flight to Vanuatu?

  7. #7
    Join Date
    Nov 2016
    Posts
    4

    Default

    To be honest if she wants to take us to Court I would not be interested to terminate and give her a new contract. We already offer this option as we actually give the money to a travel agent and shows up as a credit for the employee with the agency so they can go wherever they want using that credit.

  8. #8
    Join Date
    Apr 2012
    Posts
    192

    Default

    Good god, what a shamozzle! What I don't understand is why there was a whole new contract issued? If a permanent employee and only one or two things being changed, you'd issue a Variation on those changes with a para "all other terms and conditions remain unchanged". Clearly this not done but then the experience level of many in HR these days leaves a lot to be desired.
    As others have written, surely common sense prevails!! the employee is angling to get as much out of this as she can to the detriment of her employment.. As someone else suggested, if this is not settled as reasonable adults, then (in my world anyhow) that particular employee won't have a job for long. Why is it that important documents like contracts are not checked by someone in authority before going out?? Redundant question but this whole scenario is ridiculous in it a) happened and b) was not nipped in the bud right at the start.
    Furthermore, you don't back date contracts and the new changes would not be valid until signed by both parties.
    Tiger

  9. #9
    Join Date
    Nov 2016
    Posts
    4

    Default

    You are perfectly right Tiger in all your points raised and it's something that I am dealing with internally to get it sorted.

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