Manager argues he had 'implied authority' from past transactions
A manager recently filed a dismissal claim against his employer after the latter terminated his employment for entering into unauthorised contracts.
He argued that he had “implied authority” to perform the disputed transactions in the past and questioned the employer’s motive for firing him, claiming it was a “witch hunt.”
The worker, Andrew Souter, held the position of general manager at the Mornington Peninsula Junior Football League Inc (League) from January 2022 until 28 August 2023.
Despite ten years of prior voluntary service, the League summarily dismissed Souter, alleging misconduct such as dealing with unauthorised contracts and disabling security cameras. Souter contested their accusations, claiming unfair dismissal and compensation.
Initially employed under a contract in January 2022, Souter's role as general manager evolved with the creation of a board in November 2022. In January 2023, a new contract was offered to him, which increased his salary and introduced various terms.
Employer’s performance review
Concerns about Souter's conduct were raised during a performance review meeting on 4 August 2023. Subsequently, he was suspended on full pay pending an investigation.
The League directed him to show cause by 25 August 2023. Despite Souter's lawyers requesting an extension until 1 September 2023, the League, on 28 August 2023, deemed his lack of response as serious misconduct, leading to his summary dismissal.
Souter defended his actions regarding the allegations. A few of the allegations said he disconnected security cameras due to concerns about misuse, remotely accessed them briefly after suspension, and falsely believed he had authority for travel arrangements and contracts.
He denied financial mismanagement in club tours and outsourcing without authorisation, asserting that the board engaged in “a witch hunt” against him, and that its chairman, “wanted simply to get rid of him.”
In response, the League's chairman said that Souter failed to address concerns about a particular trip to New Zealand in 2023. The chairman alleged he paid an unauthorised deposit and engaged in various financial transactions without authority.
Souter argued that some expenses were for League-related purposes, while the League maintained a lack of due diligence on the part of Souter as its general manager.
Employer ‘never gave authority’
The FWC said there were “reasonable grounds for the League to believe that Souter had entered into contracts on behalf of the League without the board’s approval” and that “this was a serious matter justifying immediate dismissal.”
“It was reasonable for the League to expect that Souter would comply with his contract. In January 2023, the board had offered [him] a new contract in respect of his position as general manager, and he accepted it. The board had been created in November 2022 as part of an effort to make the League more professional.”
The FWC discussed the clause in this new contract which stated:
“The employee, except as expressly authorised by the employer, must not enter into any agreement or contract on behalf of the employer and must not make on the employer’s behalf any promise or representation or pledge the employer’s credit without the employer’s express authority in writing.”
The FWC said that “the board never gave Souter authority in writing to enter into [any] agreement.”
Manager had ‘implied authority’?
Souter said that he had implied authority, because in 2022, he organised the League trips. However, the FWC noted that these trips “were organised before the board was established, and before Souter agreed to the second contract.”
“Any implied authority he might have had in 2022 ceased when [he] entered into the new contract with the board, which now governed the League.”
“Not only did he require authorisation to bind the League, he needed express authority in writing,” the FWC added.
Was there unfair dismissal?
The FWC also found that it was wrong for him to disable the security cameras for a number of weeks. “The cameras had been installed as a safety measure following a spate of burglaries. The disconnection of the cameras created a safety risk, even if Souter may have had good intentions,” it said.
Thus, after considering all these circumstances, the FWC found that the employer had a valid reason to dismiss him.
It said the board held an expectation that “Souter would obtain [its] approval before entering into contracts on behalf of the League, as the contract plainly required,” as well as performing other conduct that had to be consulted with the employer.
Consequently, the FWC said that the employer did not unfairly dismiss him. It then rejected his claim against them.
